Author(s): Jitendra @jitendrachoube1 , Aparna Pallavi @AparnaPallavi1 , Akshay Deshmane @DeshmaneAkshay , Alok Gupta @alok227 , M Suchitra
Jun 30, 2013 | From the print edition
With an eye on the 2014 general election, the UPA government is expanding its ambitious Direct Benefit Transfer programme that promises welfare as cash in bank accounts. But without any groundwork it is only creating more trouble for beneficiaries
Come July 1, the UPA government will roll out the second phase of its ambitious programme, Direct Benefit Transfer or DBT. The programme aims to transfer welfare benefits, such as scholarship, pension and subsidies, directly to the bank accounts of the beneficiaries. When the government kicked off the first phase in 43 districts in January this year, it hyped DBT as a “game changer” in the way it provides benefits to the people.
The controversy-hit UPA sees the programme as its trump card for the 2014 general election. It plans to expand DBT to 78 districts, covering almost a fifth of the country.
At the core of the scheme are bank accounts that have to be “seeded”—paired in lay lexicon—with a biometric-based Aadhaar card that assigns a unique identification number. As Down To Earth reporters travel to five states under DBT they report that thousands of beneficiaries are left out of the DBT coverage at every step of opening the Aadhaar-paired account
‘WHAT’S ACCOUNT SEEDING?’
When it comes to percolation of benefits through the UPA government’s ambitious direct benefit transfer (DBT) programme, Jharkhand fares the worst among states that Down To Earth visited. The programme remains a nonstarter in all the four districts in the state where it was rolled out in the first phase. And it is not difficult to figure out why.
Senior officials of the districts open up the discussion on DBT with a fundamental question: “What is seeding of bank account?” To the uninitiated, it means integrating one’s bank account with his or her unique identity (UID), or Aadhaar number. This helps the government access the details of the beneficiary and transfer welfare benefits as cash to his or her bank account. Thus, it is the single most important procedure to roll out DBT.
This ignorance among government officials is indicative of the state’s progress in implementing the ambitious programme of the UPA government. Seraikella-Kharsawan, the first district in the state under DBT since January, has more than 46,500 beneficiaries of different schemes. Only 500 are receiving the benefits.
In state capital Ranchi, District Information Officer Deepak Kumar claims 53,671 people are benefitting from 11 schemes under DBT. But the figure does not remain this impressive when Kumar divulges that the government has so far disbursed only Rs 16,454. This means each beneficiary has received Rs 3.20. This is a serious mismatch.
Confusion over numbers also reigns in Hazaribagh. At a recent review meeting of DBT, state chief secretary lauded Hazaribagh for the maximum Aadhaar coverage in the state. District UID officer Neetu Bharti says her department has issued Aadhaar cards to 9,000 people in Hazaribagh and all of them have seeded the card number with their bank accounts. But she admits that only 2,023 are receiving benefits.
According to the status report of the National Payments Corporation of India, the gateway for payment under DBT, released in March this year, cash benefits have returned from the bank accounts of 10-15 per cent beneficiaries even though the accounts were integrated with Aadhaar.
Lack of expertise or vested interest?
Till date, the UPA government has brought 25 Centrally funded schemes under DBT. But in Jharkhand, most schemes under DBT are state government sponsored. The Hazaribagh district administration claims to have brought 14 Central schemes under DBT, but 80 per cent of the beneficiaries are those enrolled for the state-sponsored scholarship and pension schemes. The Seraikella-Kharsawan district administration is yet to bring any Central scheme under the programme.
Khauri Pradhan Devi of Dugdha gram panchayat in Seraikella-Kharsawan is one of the 10 people who are receiving benefits through DBT. Another 440 are waiting
Analysts say such biased implementation could be politically motivated. The district is the Assembly constituency of Chief Minister Arjun Munda who belongs to the Bharatiya Janata Party in the opposition at the Centre.
The district authorities fail to give a clear answer for the tardy implementation of DBT. Sangram Besra, deputy development commissioner of Seraikella-Kharsawan, blames it on poor Aadhaar coverage. “Kuchai and Rajnagar blocks of the district that have seen Maoist violence in the past have not been even visited by UID teams. This is when there are 357 UID enrolment centres across the state,” says Besra. “I have no qualms in revealing that the 16,162 people enrolled for UID in the district, belong to urban and semi urban areas, not rural areas.” Until Aadhaar cards are made, Besra plans to use the database of workers under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) to disburse benefits.
Recently at a press conference in Ranchi, Nandan Nilekani, chairperson of the UID Authority of India, claimed that 20 million of a total 32.4 million people in the state have been enrolled for Aadhaar card. He also said every day about 69,000 people in Jharkhand are enrolling in Aadhaar. This means, within a year every resident of Jharkhand will have an Aadhaar card. But Nilekani evaded one crucial number, which is how many Aadhaar cards have been delivered to people and especially to those living in the hinterlands.
In Seraikella-Kharsawan’s Dugdha gram panchayat all the 450 tribals have enrolled in Aadhaar. Only 10 of them have received the card and are receiving old age pension through DBT. The rest are waiting for the card. And they are not the only ones. People in Maharashtra are also facing this problem.
On record, Wardha, Maharashtra’s pilot district for DBT, has the highest percentage of Aadhaar registrations for any district in the country. According to the Unique Identification Authority of India, 1.08 million Aadhaar cards (84.6 per cent) have been generated against a population of 1.3 million. Some 360,000 beneficiaries have linked their bank accounts with Aadhaar and the district administration has disbursed Rs 2.07 crore to these accounts.
The district administration now showcases an award it received in January from management consulting firm Skoch Development Foundation for successful transfer of funds under Janani Suraksha Yojana to mothers’ bank accounts through DBT (see ‘Suraksha compromised’). But the situation is not as hunky-dory as it appears.
Despite high number of enrolments and generation of Aadhaar IDs, cards are yet to reach many in the district. Worse, the administration has no clue about the number of missing cards and the reason they are missing.
Consider Seloo tehsil. With 88 per cent cards generated, the tehsil tops in Aadhaar coverage in the district. But in Seloo’s Yelakeli gram panchayat, nearly 50 per cent of the population of 6,000 do not have Aadhaar cards. “Only 15 per cent of them had failed to enrol in Aadhaar. The rest are waiting for the cards despite enrolment for some six months now,” says sarpanch Bandu Gawhale. “In April we sent a plea to the district collector to organise an Aadhaar camp in Yelakeli, but we are yet to hear from him,” Gawhale says.
The situation is baffling in neighbouring Paonar village where people have not received Aadhaar cards even after two years. The large number of missing Aadhaar cards means equal deprivation of entitlements covered under DBT. Since January, nine Central schemes, including Janani Suraksha Yojana, education scholarships and pension for the old and widows, are under the DBT regime in Wardha.
A poster in Wardha giving information on the linkage of cooking gas subsidy with Aadhaar from June 1 (Photo: Aparna Pallavi)
In Yelakeli, 70-year-old Kaushalyabai Shete has stopped receiving old age pension since January after she failed to produce her Aadhaar card. In nearby Babhulgaon village, 17-year-old Sonali Hajare informs that six students, including her, did not receive scholarship for want of the card.
A sense of panic grips people as the district has begun disbursing important subsidies like those for cooking gas through DBT from June 1. Plans to disburse MGNREGA wages and fertiliser subsidy through Aadhaar-enabled bank accounts are also in the pipeline. These schemes target a larger mass of people. As the kharif season approaches, the greatest anxiety is regarding fertiliser subsidies.
“I could not enrol when the Aadhaar camp was organised in my village. I was visiting my relatives,” says 68-year-old Moreshwar Lonkar from Yelakeli. “Now the camp is over. The sowing season is very close and we will have to pay double the price for fertiliser, which we can ill afford,” says he.
District collector N Nawin Sona admits that the Aadhaar enrolment drive did not turn out as it should have been. The district started with 35 UID machines and is now left with only 17. “With most of the works done here, the machines have been moved to other districts,” says Sona.
Social activists and panchayat members give a different reason for the poor Aadhaar coverage. They say camps were held without proper awareness among people about the programme and without any coordination with panchayats. “The UID team shut camps and left when they pleased, regardless of whether all people in the village had been enrolled or not,” says Aruna Bahadure, panchayat member of Yelakeli.
Card or no card, one thing that worries everyone is whether the subsidies that are proposed to be DBT-linked will really be credited to the bank account, and in time. “Once the linkage is made, the price of fertilisers will double,” says Pilaram Champatrao Raut, a farmer from Ghorad village, one of the showcase villages of the district administration for DBT implementation. If subsidy reaches late, farmers will be in deep trouble, says farmer Ambadas Chambhare. “It will not make fertilisers any cheaper. What is wrong with the subsidy system?” he asks.
Input dealers are equally apprehensive. “Once the subsidised supply stops we will have to make a higher investment to procure stocks,” says Pankaj Kamdi, a dealer from Seloo. “We will not be able to give farmers the informal loan because of high risks. It will impact farmer’s economy as well as our business,” he adds.
Sona says his administration is
making all efforts to ensure that subsidies are credited to the beneficiary’s account within 24 hours. However, at this moment, assurances are cold comfort. The poor of Wardha have their fingers crossed.
“How can a government, which is not able to transfer welfare benefits even after months, credit subsidies within 24 hours?” asks Pushpa Behade of Ghorad. Behade, a farm hand, has not received widow pension since January, although she has an Aadhaar card and a bank account. It appears Behade’s Aadhaar number has not been integrated with her bank account. This lack of knowledge has left thousands of beneficiaries like Behade bereft of their dues, particularly in Rajasthan.
Suraksha compromised
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No bank account meant no benefit for Deepali Thakre (Photo: Aparna Pallavi)
The Wardha district administration has been much lauded for its prompt implementation of Janani Suraksha Yojana through DBT. It was one of the first schemes to be brought under DBT in Wardha. The administration held camps to enrol pregnant women all over the district and roped in anganwadi workers and auxiliary nurse midwives to open their bank accounts. Anupam Hivlekar, medical officer of Wardha Civil Hospital, says there were initial hitches in transferring the benefits due to lack of Aadhaar cards. But that has been sorted out. “We now have the district collector’s instruction to pay all beneficiaries regardless of Aadhaar. Women who do not have bank accounts are being paid through account payee cheques,” says Hivlekar.
But everyone appears to have missed out the fact that a disturbingly large number of women do not have bank accounts, a must for encashing account payee cheques. The civil hospital’s own figures show 1,718 of the 1,873 beneficiaries were paid through account payee cheques till May 23. The cheques have a validity of three months. Bearer cheque option has been stopped since DBT was introduced.
Even the cash-on-bedside through micro-ATM option works only for account holders. The civil hospital’s report mentions that beneficiaries paid through cheques could not cash them in the absence of bank accounts, but provides no numbers. There is no explanation why such a situation has arisen. When Down To Earth shared the report with district collector N Nawin Sona and Mohan Mahshankar, general manager of Bank of India, lead bank for DBT in Wardha, they expressed bewilderment. Sona said there may have been laxity in implementation, and that he would ask hospitals to refer all cases where cheques have been issued to the bank for action.
Cycle of despair
Udaipur, Ajmer and Alwar of Rajasthan are among the first 20 districts in the country to roll out DBT in January. Five months on, many beneficiaries say they prefer the earlier system of payment through cash or bearer cheques. Their aversion is not unreasonable. Barely 23 per cent of the beneficiaries in these districts have received government benefits in their accounts since DBT was introduced. Of the rest, most have been left out of DBT as their accounts are not seeded with Aadhaar. As of April, 24,000 of the 33,000 beneficiaries in Udaipur were not receiving benefits due to this reason.
Those who have Aadhaar-enabled bank accounts also face problems, mostly due to technical glitches at the bank. M P Dungarwal, manager of the Malwa Ka Choura branch of Punjab National Bank, that has been assigned to facilitate DBT, told Down To Earth that increasing workload without a robust technical backup is hindering the roll-out. Before DBT, the bank had 4,500 accounts. Now there are 15,000. All these accounts must be seeded with Aadhaar and linked to the electronic payment system. But the branch suffers from poor internet connectivity that cripples the programme, says Dungarwal. Incomplete information on the Aadhaar card is another problem. Many names do not have surnames. It is difficult to process such incomplete identity information from banking point of view, he adds.
People’s woes do not end here. The account opened for DBT does not accept cheques that the beneficiary receives under government schemes yet to be brought under the DBT regime.
Dharamchand Grecia, a banking correspondent of Punjab National Bank for Kyari panchayat in Udaipur, says he has helped people open some 200 DBT accounts. “But they have limited features and people end up opening another bank account by shelling out Rs 1,000 to encash government cheques.”
In February, Naveli Bai of Piparmal village in Udaipur received a cheque of Rs 1,400 under Janani Suraksha Yojana, which offers incentive for institutional delivery. “The cheque will lapse next month if I fail to open another account by then,” she says. Naveli already has an Aadhaar-enabled bank account.
Maternity benefit programmes are losing appeal since DBT was rolled out in Rajasthan. Consider Indira Gandhi Matritva Sahyog Yojana. The scheme promises Rs 4,000 to a pregnant woman after she attains a certain nutrition status and receives vaccinations before and after delivery. Documents available at the Integrated Child Development Scheme (ICDS) office of Jhadol block in Udaipur show only 10 of the 35 pregnant women registered under the scheme have availed the incentive since January 2013. Maya Parmar, supervisor of Mahila Bal Vikas Kendra under Jhadol ICDS, says, “We have been asked to provide benefits to only those who have Aadhaar cards. But very few have the card.” Most do not have the required documents like voter identity cards and other residential proofs to get themselves enrolled in Aadhaar. It is difficult for expecting mothers to stand in the long queue for enrolment, she adds.
Bhagwan Choudhury from Kotasim block buys diesel for lighting his house after government stopped providing kerosene through PDS as an experiment to disburse subsidies through DBT (Photo: Jitendra)
Metro malaise
Aadhaar card a dream in Mumbai
Applicant Yash Rathod may have to wait for months for Aadhaar card
The urban poor is worse off than his rural counterpart when it comes to getting benefits through DBT. Mumbai’s poor have redefined DBT to Delayed Benefits Transfer, and twisted UPA’s slogan aapka paisa, aapke haath (your money in your hands) into aapka paisa, Aadhaar bharose (your money depends on Aadhaar). They have a reason. Most of them have stopped benefitting from government schemes since the launch of DBT. Mumbai City and Mumbai Suburban fare the lowest when it comes to distributing Aadhaar cards to the target sections. The worst affected are students belonging to Scheduled Castes (SCs), Scheduled Tribes and other backward sections who receive scholarships. It provides for the course fees and a nominal grant for students’ expenses.
Pratik Jadhav, a student of South Mumbai’s Siddharth College, says he did not receive the Post-Matric scholarship for SCs this year as he does not have an Aadhaar card. “My father had to take loans for paying the fee,” he says. At Shindewadi municipal school, Kiran Rathod was taken aback when the school authorities told her that her children would not receive Pre-Matric scholarship this year. The scheme supports education of children whose parents are engaged in occupations such as manual scavenging and tanning. When asked why the children were deprived of the benefits, an official from the Social Justice and Special Assistance Department says, inadequate Central grants for scholarship schemes is always a problem. Unavailability of Aadhaar cards is making it worse. Since the introduction of DBT, only 2,471 of the 10,920 SC students and 1,459 of the 8,796 Other Backward Class students have received the annual scholarship. Of the 8,405 beneficiaries from manual scavenging and tanning professions, the administration could reach only 689. Though the Rathods have applied for Aadhaar cards, officials say it would take them four to five months to issue the cards.
What is complicating the scenario is the state’s changing decision. “Soon after launching DBT, the government made Aadhaar card mandatory for all schemes. However, when questions were raised in the Assembly about the inconvenience to people, the government relaxed it in last week of March. Now it has again made it mandatory.
Only tall claims
The Delhi government claims 95 per cent success in providing an Aadhaar number to citizens. But its achievement does not seem to be trickling down to the poor of the national capital.
According to Dharampal, divisional commissioner of Delhi and nodal officer of DBT for the state, Delhi has brought nine Central schemes under DBT. Though 22,000 beneficiaries have Aadhaar cards and their UID numbers seeded with bank accounts, only 9,000 are receiving benefits. Dharampal says the state-sponsored Annshree Yojana is doing well in comparison to the Central schemes under DBT. All the 45,000 identified beneficiaries of Annshree Yojana are receiving benefits. Their number would increase to 100,000 in next couple of months, he claims. Ground realities paint a different picture.
All 50 Bengali Muslim families living in Shahbad Dairy slum in North Delhi earn their bread by ragpicking on the streets. They are eligible for Annshree, under which a BPL family without a ration card receives Rs 600 a month for food. Almost all of them have enrolled themselves in Aadhaar and have seeded their UID number with their bank accounts.
Murshid Bibi is a chance beneficiary of Annshree in Shahbad Dairy slum (Photo: Jitendra)
Yet they are running from pillar to post to avail the benefits. So far, only seven families have received the benefits. One of them is Murshid Bibi’s family.
In April, Bibi’s account was credited with Rs 7,199. But her relatives Hadisa Bibi and Tojila Bibi are yet to receive the benefit. In January, they had spent Rs 1,000 each for opening new accounts after bank officials told them that their old accounts cannot be integrated with Aadhaar. But their hopes have turned into frustration.
Gas gamble
Andhra Pradesh is arguably the only state that was prepared to roll out DBT. It ran a two-year campaign to enroll people under Aadhaar and also experimented with models to implement DBT. In the first phase, the state selected five districts where it had already implemented a state-initiated cash transfer programme for scholarship and pension schemes. According to M V S Rami Reddy, deputy director general of UIDAI, Andhra Pradesh, about 75 million of the 85 million population in the state have been enrolled in the programme as of May 15. More than 58 million cards have been generated. The five first-phase districts have a population of 27.5 million, of which 90 per cent have been enrolled in Aadhaar. Reddy says the postal department is now grappling with the problem of delivering the huge volume of cards.
The state launched Aadhaar-linked scholarship in Hyderabad, Chittoor and East Godavari on May 1 on a pilot basis. And it was a cake walk. The state was already making scholarship payments through bank accounts and had streamlined the process. “We do not see a distinct value-addition in Aadhaar linkage in terms of disbursement, because we had cleaned the data system and almost eliminated duplicates and bogus holders,” says P V Ramesh, principal secretary, finance, and nodal officer for implementing DBT. However, Ramesh says, Aadhaar is certainly one more check. Every year the state government disburses Rs 5,000 crore as scholarship to 2.7 million students. Even before DBT was launched, 80-85 per cent of scholarship holders had seeded their Aadhaar numbers with bank accounts. In East Godavari, the seeding percentage is 90 per cent, says Ramesh.
Yerra Ravi of Rangareddy says he first needs cash to buy gas cylinder (Photo: M Suchitra)
Housalla Bhujappa, a security guard in Malkapur village in Rangareddy district, whose two daughters receive scholarships, says there will not be much difference if scholarship is linked to Aadhaar since it is already being disbursed through banks. Pension is the other programme that was brought under DBT on May 1. It was rightly launched in Chittoor district as a pilot project. In Chittoor, post-office linked disbursement of pension through women’s self-help groups (SHGs) was already in place. SHG members are given hand-held devices linked with the bank or post office accounts. The pensioners go to the SHGs and give their thumb impression and get the money. After introduction of DBT all they had to do was link their Aadhaar numbers with the bank accounts.
The state’s real test began on June 1 when it brought subsidies for cooking gas under DBT. It has to cater to 4.6 million cooking gas consumers in the five DBT districts. Though 80 per cent of them are enrolled in Aadhaar, the challenge lies in linking their Aadhaar numbers with bank accounts as well as with the database of gas agencies. As of May, 55 per cent of the consumers had got their Aadhaar numbers seeded with gas companies but only 25 per cent with their bank accounts. Sensing a big trouble the government has extended the the deadline till August.
People are rushing to get their Aadhaar numbers integrated with gas agencies and bank accounts. But they are apprehensive about the new scheme, under which one has to buy cooking gas at unsubsidised rate and the Rs 435 subsidy will be credited to their accounts later. “No one knows how many days the government will take to credit the subsidy in our accounts,” says N D N Kishore, a stationery shop owner in Hyderabad. M Sathyanarayana, an internet cafe owner in the city, prefers the earlier system of getting subsidised cylinders. Both Kishore and Sathyanarayana point out that there is a possibility of the subsidy being capped and prices of cooking gas going up.
Neither ready nor steady
Challenges ahead are immense
(Photo: Soumik Mukherjee)
UPA’s political leadership has focused all its attention on DBT. The ruling alliance is only a few months away from the general election and its two other big-ticket initiatives—the Right to Food Bill and the Land Acquisition Bill—are uncertain. But the first phase of DBT is unfolding more like a nightmare than a sweet political dream. At the core of the mess are poor banking coverage and lack of foolproof planning before launching the ambitious programme.
DBT aims at reducing the administrative cost of delivering benefits and weeding out siphoning off of benefits (see ‘Kind to cash’, Down To Earth, February 1-15, 2011). It does so by pairing the unique identity number in the Aadhaar card with the bank account of a person. This enables the government to identify the right beneficiary and to send monetised benefits directly to his or her account. The International Monetary Fund has estimated the impact DBT can have in India, and according to it, the combination of cash transfer and the Aadhaar system of identification will reduce wrongful diversion of benefits in welfare programmes by 15 per cent. This can save the government Rs 56,859 crore in 2013-14 which is more than half the rural development budget.
Using the Planning Commission’s data on DBT, Down To Earth (DTE) calculated the current status of the programme’s actual reach in the 43 districts covered in the first phase. The findings are a harsh verdict on its progress. In the past four months, of the estimated 1.6 million beneficiaries of some 25 schemes, only 4 per cent have been able to get benefits in their accounts (see ‘Not so direct’ ). The benefits include mostly old age pension and cash incentives for institutional delivery. In fact, in the five states DTE travelled to not all schemes have been implemented under DBT. This is despite the fact that states like Jharkhand, Rajasthan and Andhra Pradesh have almost two years of experience in direct benefit transfer.
Illustration: Anirban Bora
There are three key reasons for this dismal performance which are also fundamental to a cash transfer programme. They are: low coverage of formal banking system; Aadhaar enrollment not keeping pace with the rolling out of the programme; and significantly low level of pairing of beneficiaries’ accounts with their Aadhaar numbers.
Currently, there is one bank branch for every 12,100 people, making India one of the least covered countries. DBT increases the demand for coverage by several times. The government either has to set up new branches or increase the existing branches’ capacity. Going by the state of banking in rural areas, one rural branch has the capacity to open up not more than 15 accounts in a day. But DBT experience in various states shows that a branch has to manage 70-90 accounts a day. In October 2011, the government made it compulsory for banks to open branches in all habitations with a population of 5,000 or more. There were 3,925 such habitations to be covered. By April 2013, nearly 15 per cent habitations were yet to have a bank. Then, there are not enough ATMs for people to access their money easily. According to RBI’S estimate, the country needs at least 34,668 on-site ATMs but only 1,097 ATMs could be opened till April. This has affected DBT’s outreach because absence of ATMs means the already overburdened banks have to handle the withdrawal transactions as well.
Opening an account under DBT is a little different. For this people require enrolment with Aadhaar. This presents the next obstacle. Only half of the beneficiaries have enrolled with Aadhaar till date and one-third have opened the account. Importantly, there is hardly any visible effort to pair the accounts with the Aadhaar numbers, thus, leaving out 96 per cent of the beneficiaries.
The recently launched cooking gas subsidy transfer also faces this problem, with added intensity. An LPG consumer has to pair his Aadhaar number with not only the bank account but also the service provider. Soon after bringing LPG under DBT, the government celebrated a million transactions by June end. But there are widespread complaints also. Only 20 per cent of the consumers had paired their numbers with accounts, while about 58 per cent paired with service providers. This is despite the fact that the 20 districts where LPG was brought under DBT have more than 90 per cent Aadhaar coverage. Sujata Chaturvedi, deputy director general of the Unique Identification Authority of India (UIDAI), says, “Some states started late, so they lagged. We want to keep pace but problems like lack of machines, staff and awareness among people came to the fore.” She warns, “The process of seeding of account would be another uphill task.”
On April 29, the Planning Commission convened a meeting to take stock of DBT’s progress. Collectors of all the 121 districts to be covered under the programme from July 1 and other key players attended the meeting. Sources inform that to the shock of Finance Minister P Chidambaram, the banks and district officials blamed each other for the shortcomings, reflecting a sorry state of affairs. Notable was the absence of any representative from the DBT gateway, National Payment Corporation of India (NPCI), which came under severe criticism at the meeting.
It seems nobody wants to take responsibility (see ‘Initial hiccups...’). The Union Ministry of Rural Development (MoRD) blames the banks for not expanding their reach. The ministry is implementing a pilot programme of direct cash transfer of wages under the rural employment guarantee programme in five states. It is using the national electronic fund transfer system, the usual money transfer one does electronically using individual account. Since its launch in October 2012 it has transferred Rs 389 crore till the end of May this year. “The value addition under DBT will be when the money is paid at the doorstep. It is only possible if banks recruit business correspondents in every panchayat with micro-ATM,” suggests Rajesh Bhushan, joint secretary of MoRD. But banks informally blame the Aadhaar system and the high administrative cost of the programme that is not adequately compensated. DTE reached out to many banks but none of them agreed to speak on the subject.
Banks also refuse to take responsibility for the identity generated under the Aadhaar number. All banks are supposed to keep a record of their customers’ identity under RBI’s “know your customer” rules. UIDAI has refused to take the responsibility, saying its job is only to create the identification number.
The troubles do not end there. “Many accounts seeded with Aadhaar numbers still do not get direct payment,” points out Vaibhav Galeria, district collector of Ajmer. “There is lack of coordination among different agencies, largely between banks and NPCI.” A P Hota, managing director and CEO of NPCI, blames banks for the glitches. Responding to DTE queries, Hota denies any technical problem at the gateway. “For felicitating DBT, NPCI maintains the Aadhaar Mapper (software that keeps all the subscribers’ data). This Mapper is updated remotely by banks by logging into the NPCI system. If banks do not update the Mapper, the transactions are likely to be returned unprocessed. Therefore, it is necessary that banks update the Mapper on a day-to-day basis.”
The problems are set to multiply as the government rolls out the second phase of DBT with 78 more districts from July 1. In June, it launched transfer of subsidy for cooking gas. In October, the rural employment guarantee programme will be brought under DBT. From 1.6 million beneficiaries at present the programme will cover close to 25 million beneficiaries by July. With coverage of MGNREGA, the number of beneficiaries will jump to 34 million. That the government is nervous is visible. Since April, there have been hectic attempts to salvage the situation, with the Prime Minister’s Office taking direct charge of DBT monitoring.
However, there are pertinent lessons for the government to make the future transfers smooth. The experiences of transferring pension in Andhra Pradesh and transferring wage under the rural employment programme in Rajasthan are instructive. In both the cases, the government embarked on a preparatory stage. This resulted in innovation. In Andhra Pradesh, the pension receivers go to the local self-help group and give thumb impression to a hand-held device for verification to get pension right there. This device is linked to the person’s account in post office or the local bank. In Jharkhand, government simply used the electronic transfer system to give wages. There are merits in these experiments in terms of simplifying the system. But these experiments may not be leakage-proof. Teething problems like delay in benefit transfer and absence of value addition in DBT also need to be addressed innovatively.
But the question that still needs to be asked and answered is whether the country is prepared for this roll-out? If not, will this election initiative backfire on the ruling UPA? Clearly, god is in the details, and the details are missing.
Different schemes Have different challenges
Rajesh Bhushan,
Joint Secretary, Ministry of Rural Development
Till date, the 25 schemes rolled out under DBT are Centrally funded. So it has been easy to send money directly to the beneficiaries' accounts. But implementing those pension schemes that have state budgets as well is going to be tough. The finance ministry is the key body for such schemes, but it is unable to send money directly to the beneficiary’s account because of varying structures of schemes across states. I believe the scheme will be effective if payment is made at the doorstep. And this can be made possible by recruiting millions of business correspondents of banks in every panchayat with Micro-ATM
Jitendra reported from Rajasthan and Delhi; Aparna Pallavi and Akshay Deshmane from Maharashtra; Alok Gupta from Jharkhand and M Suchitra from Andhra Pradesh
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