The Effect Of Benazir Income Support Programe Economics Essay

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If a country wants to accelerate its growth it should invest in physical and human capital and increase its productivity Vincelette, 2006. And for investment saving is important. One per cent increase in income boosts saving to 1.82% and 5.14% respectively (Farhan & Akram, 2011) .Economic growth leads domestic saving and there is causality from economic growth to saving rate (Mohan, 2006; Shahbaz & Khan, 2009). East Asian countries have achieved higher growth rates only just because of their saving and investment but Pakistan is still lagging behind.

Saving comes from income i.e. S=I-C. Normally we have four types of savers like Government, household, foreigners and business but here we are interested in household savings. It is found that saving is positively affected by Per capita income (Farhan & Akram, 2011) and there is a positive relation between growth and savings (Ahmad, Atiq, Alam, & Butt, 2006).As Cash transfer program is also treated as a part of income so here we want to find that either it has any positive effect on saving or its only consumed by the households and nothing is left to save.

As income has a relation with a saving so nowadays conditional cash transfer programs are widely used by the governments to alleviate the poverty .So cash transfer programme is support in income so it's also considered as a part of income.

Social safety programme also called social welfare programme of the country mainly for the poor and aim to reduce poverty, help them to manage risk, and to increase growth. Cash transfer comes under the ambit of social protection which provides cash to the most vulnerable so they can afford basic items (Paqueo, 2009). Unconditional cash transfer social protection program named Benazir income support program was started by the government of Pakistan for the year 2008-09 with the cost of Rs.34 billion (US $ 425 million approximately) The program cover all regions of the country and aimed to cover 40% of the population below the poverty line (USAID, 2011).It is a gendered targeted programme which provides a monthly 1000 rupees to each women and would enhance the family earning Rs.5000 and its almost covering each area of Pakistan (USAID, 2011).Money is given on the basis of poverty score card there is a process through which the poor can register themselves and can benefit. When BISP along with other sources of income bring change in consumption and also in savings.

BANZIR INCOME SUPPORT PROGRAM

Increase Cash

Increase Saving

Increase Consumption

2. Problem Statement

To investigate beneficiaries perception of Benazir income support program and its effect on household saving.

3. Literature Review

Pakistan is among the developing countries and the life style of general public is not of a good standard. It is found that during 2007 to 2009 poverty raise to 40% in Pakistan due to fuel prices and increase in consumption prices (Ahmad, Ahmad, & Abbas, 2010).So the people were also hit by the inflation apart from natural disaster that were taking place in the last few years. The decrease in real income of rural house hold was not greater than the urban household because the rural were compensating somewhat from the sales of agriculture products (friedman, Hong, & Hou, November 2011).At micro level in Pakistan there is4% increase in poverty and 1.2% decrease in food consumption (Ahmad, Ahmad, & Abbas, 2010).

Social protection is a tool to alleviate the poverty .It was first introduced in the developed countries and after its results it was implemented in developing countries. The poverty is reduced through social protection in developing countries of Asia and Pacific region (Edes, 2009).Cash transfer has a positive effect on poor's life and other people are also indirectly benefiting from this (Devereux, 2006).Cash transfer reduced the poverty and its results are fruitful and now they are able to spent their income on health and their children schooling (Skoufias, 2009)and its provided as an important tool for a rapid injection in support for income of the poor household (Fiszbein, Ringold, & Srinivasan, 2011).Cash transfer programs are not reserved only for the developed countries but it can also be implemented in low income countries (Devereux, 2006; Hagemejer & Kim, 2009).

Government of Pakistan started Benazir support programme as a social security programme for the poor women in the name of ex-politician to empower women (USAID, 2011).It is a unconditional cash programme for the poor's so that it to some extant compensate them in the recession crisis. It's found that the social protection programme targeted women has somewhat effect their decision making power but there must be some other reforms to really empower the women of Pakistan (Arshad, 2011).With the initiation of this programme women become more empowered in spending their income and they can easily take loans from their neighbours and other relatives because there is a hope for repaying (Holmes & Jones, 2010).It's also found that the effect of cash transfer programs are greater after they stop receiving the cash and there were positive impact on their income and consumption (Paqueo, 2009).

Investment in cash transfer program is good for the countries and as well as for the people because it will able them to bear the burden and make them ready for the next crisis (Vincelette, 2006)

Pakistan is developing country and to accelerate its growth investment in human and capital is necessary (Vincelette, 2006).South Asian countries achieve higher growth rates and this became possible due to their savings (Husain, 1996) It is found that saving is effected by per capita income and the relation is positive (Farhan & Akram, 2011) and there is a positive relation between growth and savings (Ahmad, Atiq, Alam, & Butt, 2006).One per cent increase in income boost saving by 1.82% and 5.14% respectively (Farhan & Akram, 2011) .It is also found that Pakistani people save more from uncertain source of income than normal income (Richard H, 2002).Economic growth leads domestic saving and there is a causality from economic growth to saving rate (Mohan, 2006; Shahbaz & Khan, 2009).In long and short run both public and private savings has a positive relation with GDP in case of Pakistan (Sinha, 1999).It's also found that Growth is good for the poor people so higher the growth less severe be the poverty (Gafar, 2004).

Benazir income support programme is for the purpose of increase in poor income so it has effect on consumption and saving because increase in income increase saving and there is a positive relation between them (Ahmad, Atiq, Alam, & Butt, 2006; Ahmad & Asghar, 2004; Farhan & Akram, 2011)and a country income represents a household income and if Pakistani Government sustained the high rate of saving many problems including foreign debt will be reduced (Azam & Shakeel, 2012).

Social protection in which women are targeted like BISP poor women benefited from such programs and their earnings were increase relatively to their husbands and which boosted household savings( (Arshad, 2011; Floro & Seguino, 2002). Many natural disaster has taken place in last few years in Pakistan BISP can turn out to be helpful in food crisis or some other disaster if its monitored properly (friedman, Hong, & Hou, November 2011).Income has a positive but there is a negative relation between inflation and savings (Ahmad, Atiq, Alam, & Butt, 2006; Mphuka, 2010) 1% increase in inflation decreases saving by 3.50 to13.60 respectively (Farhan & Akram, 2011). In low income countries it's found that inflation has a positive relation with the GDP relatively to middle income countries and it should be allowed in the range of 1- or somewhat higher for higher growth (Pollin & Zhu, 2005).

It's found that the rural household save more than the urban household and put especially the uncertain source of income for the rainy day (Richard H, 2002).An opposite view is found that the urban household head save more than the rural house hold (Burney & Khan, 1992).It is also found that the urban household head male save more than the rural household head man (Ahmad & Asghar, 2004).

To know the beneficiaries perception about this BISP and also its effect on household saving as income has a positive relation with the savings. But Pakistan is also facing a high rate of inflation from the last few years so keeping in mind the rate of inflation this income support programme really help them and they are able to save something or not. It elevates women position in the society.

3.2. Research Question

Social protection can be used further to reduce poverty?

Does it really effect the position on women in society?

Does it increase saving or to what extent it increase savings?

4. Purpose of the Research

To know the effects of social protection and can we mobilize it further to reduce the poverty in Pakistan. To which extent it increase saving. Does it really effect the position of women in the society and increase their decision making power.

5. Objective of the Research

To investigate beneficiaries perception of Benazir income support program and its effect on household saving.

6. Significance of Research

If the objective is achieved it will help the policy makers to make it as a tool to alleviate poverty in Pakistan. The government and public both will benefit in the long term. It will help in empowering the women. They can make different targeting strategies to encourage the public to put their money in financial institutions. We can also give recommendation to the government that what beneficiary perceive and how it should be resolve to make it more convenient.

7. Scope of the Research

The scope of studies will be limited Peshawar and Swabi.

8. Methodology

8.1 Population and Sample

Total sample size is 40 from 2 districts 20 beneficiaries will be selected from each Union Council and the population will be Peshawar and Swabi.

8.2 Data Collection

Primary data in study will be used and the tool for collection data is interview.

8.3 Data Analysis

Descriptive statistics for data analysis will be used like Frequencies.

8.4 Data Interpretation

The data will be statistically interpreted.

9. Limitation

Limitation of study is that descriptive statistics can be of little use when population and sample is small.

It can be misused and misinterpreted.

It needs proper calculation and explanation.

It gives little information about cause and effects.

If not analysed properly it can create a problem.

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