Private Household Transfers and Poverty Alleviation in Rural India

A transfer function for private household transfers in rural India is estimated from the National Council of Applied Economic Research's (NCAER's) ARIS-REDS survey for 1998–99. It is found that till a threshold, income (close to the rural poverty line) transfers are altruistically motivated. There is partial ‘crowding out’ of private transfers by public transfers of Rs 0.56 for every rupee of public transfer. About 10 per cent of rural households participate in the rural private ‘transfer economy’, with transfers going to relatively well-educated, pensionless, aged destitutes who have a number of adults to support.