The ₹15 Lakh Dream: Why Mass Cash Transfers Could Wreck the Economy

Crediting ₹15,00,000 to every citizen of a country — known as universal cash transfer or helicopter money — may sound appealing but would have massive economic consequences. Let’s break down the likely impact on India's economy:

Immediate Effects:

1. Inflation Surge (Hyperinflation Possible)

A sudden increase in money supply without a matching increase in goods/services would decrease the value of money.

People would have more money to spend, but since goods are limited, prices would skyrocket.

Example: A packet of milk costing ₹50 could shoot up to ₹500 or more.

2. Collapse of Currency Value
₹ would depreciate heavily against other currencies.

Investors would lose faith in the Indian rupee and pull out their money, leading to capital flight.

3. Savings and Pensions Devalued
Inflation erodes the value of money saved in banks.

Senior citizens living on fixed pensions or interest income would struggle to survive.

Short-to-Medium-Term Effects:

4. Consumption Boom Followed by Supply Shock
Massive buying would cause a short-term economic boom.

But soon, factories couldn’t meet the demand, leading to shortages and hoarding.

5. Workforce Disincentivized
With ₹15 lakhs in hand, many might choose not to work.

Labor shortages in key sectors (agriculture, healthcare, services) would cripple production.

6. Real Estate and Gold Bubble
People would rush to buy assets like gold and property, pushing prices to unsustainable levels.

A crash would eventually follow, wiping out wealth.

 Long-Term Effects (If Mismanaged):

7. Economic Instability and Collapse
If not controlled, this could cause stagflation (inflation + stagnation) or even economic collapse.

Institutions like banks and insurance firms would be bankrupted.

8. Dependence on Government
A one-time bonanza could lead to public expectation of more handouts, worsening fiscal deficit.

Is There a Better Way?
Rather than crediting ₹15 lakhs to everyone, targeted investments in:

infrastructure

education

healthcare

job creation

would produce sustainable economic growth and reduce inequality without destroying the economy.

 Conclusion:

Giving ₹15 lakhs to everyone sounds populist, but economically, it's disastrous. It would likely:

Destroy the currency’s value

Cause hyperinflation
Collapse the economy within months unless tightly controlled

It’s a textbook example of good intentions with bad outcomes when not backed by economic logic.

Sanjay Pattnayak 
Sundargarh