May 6, 2014, 12.04 AM IST
Strange, this was a great idea
At its launch, the Aadhaar-based Direct Benefit Transfer scheme had been touted as an electoral game-changer by Congress. Yet the scheme finds little mention in the party's campaign today. Then, Rahul Gandhi had quoted his father's complaint that only Rs 15 out of Rs 100 that the Centre sends reaches beneficiaries, promising that DBT would provide a radical fix for this problem. Then, a punchy slogan was raised, 'Aapka paisa, aapke haath' (your money in your hands). Today, that slogan should have been lending muscle to, 'Har haath shakti, har haath tarakki' (power in every hand; progress for everyone).
Perhaps Congress lost conviction in its most far-reaching reform by far. But this is a great miscalculation. The idea of DBT is a winner on many fronts. In transferring government benefits and subsidies directly into the hands of beneficiaries, it has tremendous vote-winning appeal. In reducing leakages that eat away a significant chunk of India's GDP, it can dramatically improve the expenditure side of the fiscal challenge. It combines the business of improving governance with the promise of becoming the world's largest anti-corruption programme. One study estimates that just the benefits in time savings to beneficiaries are larger than the costs of creating this new payment system!
Like any other major scheme, this one has been having its teething problems. As expected, the major opposition party has made much of such matters. But Congress should have fought back instead of ceding ground on this one. The fact is that given that Aadhaar has already captured data for more than 60% of India's population, and given the basic strengths of DBT, BJP is mostly unlikely to roll back these projects even if it is the one to form the next government. DBT is indeed a game-changer and Congress should have tom-tommed it instead of fighting shy.
COUNTERVIEW
Don't buy the game-changer hype
Pyaralal Raghavan
The rather hasty eclipse of the direct cash transfer scheme from the Congress's election campaign comes as no surprise. Though once hailed as a game-changer with the potential to make a substantial positive impact on the electoral prospects of UPA-II the Congress-led government now has no choice but to stop listing direct cash transfer scheme as a major achievement. This is because the scheme was unviable and didn't really take off. While the initial plan was to use Aadhaar-enabled bank accounts to deliver direct cash assistance to beneficiaries under 13 centrally-sponsored schemes in chosen districts from January 2013, it soon ran into rough weather as the district administration on the ground was ill-equipped to handle such a massive exercise at short notice.
The result was that the roll-out of pilot cash transfers in selected districts was less than satisfactory. But what finally ensured the informal termination of this experimental venture was the Supreme Court order forbidding the government from making Aadhaar mandatory for availing financial assistance from the state. This was the final nail in the coffin as exclusion of Aadhaar numbers from the programme would have ensured poor targeting and large leakages like in earlier schemes. This left UPA-II no option but to pull down the curtains on DBT on the campaign trail.
The Indian experience with direct cash transfer plans is no great surprise. Such schemes are usually effective only in countries with reasonable governance structures and political commitment. That is what needs to be fixed, because in their absence any scheme, no matter how well-devised, will fall short. Even if money does find its way into beneficiaries' hands they may not be educated enough to be able to utilise it well, spending it instead on drink.
