By KR Sudhaman Feb 23 2012 , New Delhi
The direct transfer of government subsidies on kerosene, cooking gas and food grains to the beneficiaries and wages to those working under various rural jobs schemes may become a reality in the entire country within a year.
On Wednesday, the task force on Aadhaar-enabled unified payment infrastructure — which was headed by UIDAI chairman Nandan Nilekani — submitted its final report, laying the roadmap for electronic transfer of such payments to the beneficiaries. Nilekani submitted the report to finance minister Pranab Mukherjee.
Mukherjee said the Aadhaar-enabled e-payment system would help in direct and timely transfer of payment to the beneficiaries, bring in transparency and reduce transaction costs and leakages.
He wanted pilot projects on direct e-payment to be upscaled and implemented in more states, indicating that it could be widened in the budget.
The government has been trying out pilot projects after the task force submitted its interim report last year.
At present, a pilot project for MGNREGA is being carried out in Jharkhand, one on cooking gas distribution in being tried out in Mysore and a third one on opening bank accounts is being implemented in Tumkur, Karnataka.
One pilot project for mobile verification is proposed in Hyderabad.
The task force suggested appointment of 10 lakh business correspondents in the country’s six lakh villages to facilitate electronic transfer of funds. The business correspondents would act as mini-ATMs in the country’s 2.25 lakh gram panchayats, covering six lakh villages.
The government should bear the last mile transaction fee of 3.14 per cent for this electronic payment transfer, subject to a cap of Rs 20 per payment. The government spends 3.5 per cent of GDP, i.e. Rs 3,00,000 crore, on subsidies and social schemes meant for the poor.
Apart from minimising graft and leakage in the transfer of this huge amount of money to the intended beneficiaries, the government would save a large amount on cash transactions. Studies have shown that the cost of cash transactions amounted to 5-7 per cent of GDP in the country.
Nilekani also made a presentation on the report to Mukherjee, agriculture minister Sharad Pawar, rural development minister Jairam Ramesh and food minister KV Thomas.
At present, the rural banking infrastructure consists of merely 30,000 bank branches and 1,20,000 post offices, which is grossly inadequate to carry out direct electronic transfer of money to the beneficiaries.
“We have recommended a network of 10 lakh micro-ATMs around the country, which are going to be small electronic devices,” Nilekani said. “We have also recommended a transaction fee. But the government will take the final decision. This is a platform for any payment to anyone, be it entailment pay, subsidy or procurement payment. We have been told to work on this and roll it out in next one year,” he said.
The (task force’s) proposal is to use aadhaar as basis of crediting money to bank accounts in order to make this much more efficient. “Due to its uniqueness, the aadhaar number serves as a natural financial address for sending payments to the accounts of beneficiaries at banks and post offices,” the report said, adding that it enables authentication of the beneficiary in real time in a trusted manner during last-mile payments using micro-ATMs.