A A SANTOSH TIWARI: NEW DELHI, APR 09 2013, 00:20 IST
Tags: UPA Government | Direct Benefit Transfer | Welfare Schemes | Business News
The UPA government has pinned its hopes on the direct benefit transfer (DBT) scheme, its likely plank for the next general elections, to reduce the cost of welfare schemes and said this would help slash the Centre’s subsidy bill itself by a whopping 70%. But given the slow pace of its rollout, the Aadhaar-enabled scheme might prove unequal to the task.
Consider: The government has succeeded in disbursing only R40 crore through the DBT scheme in 43 selected districts during January-March. The scheme has been introduced in these districts in three phases from January 1. A senior official told FE that under the DBT scheme, which covered 26 entitlements in the first phase of the scheme, R40 crore had been transferred to the beneficiaries’ bank accounts, mostly scholarships and benefits of health schemes.
In most of these districts selected for DBT launch, Aadhaar penetration is now either more than the required 80% level, or is fast getting there. The reason for the poor performance is not the lack of Aadhaar penetration, it is the poor coordination between various departments. An Aadhaar number is useless unless the relevant department gives names of beneficiaries and the bank account to which the money is to be transferred directly, and in cases where beneficiaries don’t have bank accounts, the coordinating agency needed to ensure the bank account got created.
Planning Commission deputy chairman Montek Singh Ahluwalia, who has been one of the top government functionaries associated with formulation and implementation of DBT, said, “The amount is small but this is just the beginning. By the end of the year you will see a real big build-up.”
Pointing out that DBT was a multi-dimensional system which required a lot of coordination and technical work, Ahluwalia added that this was just the for first quarter and in 43 districts only, and even at this rate, the annual amount would be about R600 crore.
Considering the fact that payment of subsidies on the LPG head alone would mean the transfer of about R4,000 per year to the accounts of the holders of 14 crore connections, which the government is embarking upon next; the current performance on DBT falls miserably short of the expected results. Prime Minister Manmohan Singh last week declared that the DBT scheme would be rolled out in 78 more districts effective July 1, and that the Aadhar-enabled scheme would soon be used to disburse LPG subsidy as well.
The Nandan Nilekani Task Force in its report to the government in February last year had suggested that the government shift entitlement and subsidies payments adding up to R3 lakh crore, or roughly 3.5% of GDP, and also R1 lakh crore worth of remittances, to the Aadhaar-enabled unified payment infrastructure.
While the Prime Minister had clearly hinted at teething troubles coming in the way of a speedy implementation of the scheme at a high-level meeting last week to analyse the performance of the first phase and prepare a road map for extending it to other districts, finance minister P Chidambaram skirted questions on the total amount disbursed into the beneficiary accounts by saying it was modest and stressed that problems would be overcome in the coming months.
The finance minister said that the government would achieve its goal provided the problems were addressed. The government has now decided to roll it out in 78 more districts in the same 26 schemes, which will take the number of districts with DBT to 121, roughly covering 20% of the country.
Officials handling the scheme pointed out that the government was facing several problems in implementing the scheme at the ground level beginning with seeding of the correct beneficiary data to opening of the bank accounts and then in transferring the payments to the real beneficiaries’ bank accounts. They added that assimilation of Aadhaar identification for transfer of money to the beneficiary accounts was also an issue till all the beneficiaries in the selected districts get Aadhaar numbers.
The Prime Minister had remarked at the DBT stock-taking meeting last week, "We have come some distance since direct benefits transfer programme was rolled out in January. In this period, we have resolved a number of operational issues. I am encouraged by this progress and hopeful about the future. But we have also run into difficulties that we had not anticipated when we began the programme. We must therefore renew our efforts for successful implementation of the programme.”
Direct blow
* Lack of coordination between ministries & banks led to low disbursement through DBT
* Problems in seeding of correct beneficiary data, opening a/cs & transfers to real beneficiaries
* Most of the transfers to bank a/cs of beneficiaries related to scholarship & health schemes