Anurag Jain believes subsidy can also be provided without a compulsion of Aadhaar card as money can be directly transferred into bank accounts of individuals
Along with the announcements on diesel deregulation and the gas price hike, the government made another important announcement about relying on direct benefit transfer (DBT) to save money especially for liquefied petroleum gas (LPG).
However, the government's preparedness on DBT will depend on hassle free banking system and reach of Aadhaar cards. Speaking to CNBC-TV18, Anurag Jain, Joint Secretary, Department of Financial Services says the Pradhan Mantri Jan Dhan Yojna (PMJDY) aims to provide bank accounts to everyone in the country and the movement has been initiated in a very big way.
According to him, the government wants to ensure that every micro planning area is being serviced via bank. The move will give way to the DBT of the subsidy into the account. Nearly 291 districts are ready for the DBT rollout.
He believes subsidy can also be provided without a compulsion of Aadhaar card as money can be directly transferred into bank accounts of individuals.
Jain further suggest that DBT must be of two types, one is the Aadhaar-based and the other non-Aadhaar as there are only 69 crore people (out of 125 crore) with Aadhaar account currently.
"Aadhaar connectivity is 55-60 percent and increasing. Legal framework needs to be put in place for Aadhaar,” adds Jain.
"Aadhaar connectivity is 55-60 percent and increasing. Legal framework needs to be put in place for Aadhaar,” adds Jain.
Below is verbatim transcript of the interview:
Q: How prepared is the banking system plus the Aadhaar, how much of Aadhaar is seeded into the bank accounts? If you can give us some numbers especially in the below poverty line (BPL) families where DBT will be effective?
A: We have already undertaken PMJDY as one of the major programmes for the country and are pressing hard. We review it almost on a weekly basis. New 6 crore accounts have been opened.
Under PMJDY, our first target is to ensure that we are able to provide banking facilities in every corner of the country.
There the planning is that we have got microplanning areas, about 5 kilometre radius circles have been drawn on the map of the country and we are trying to ensure that every such microplanning area is served either by a bank branch or by a fixed point online interoperable banking kiosk.
If we have a banking facility like that, for a citizen or an user there is no difference in the experience whether he is going to be a branch or banking kiosk and they are all technology enabled.
We are undertaking this drive in a big way and we need to set up about 1.55-1.56 lakh such centres out of which about 1.2 lakh centres have already been set up.
However, there are issues like all machines not being there. So that is going to take some time maybe, before the end of the year we will have all these places ready barring some 3,000-4,000 places where there are some connectivity issue.
By and large the whole country will have such banking points through which our citizens, villagers can access the cash-out points and that is one of the most important things for being DBT ready.
The second issue is Aadhaar connectivity. Aadhaar generation is between 55 percent and 60 percent in the whole country and is increasing by the day, an updated figure would be available with the UID authority.
When I looked at the data last week, 69 crore out of 125 crore population had Aadhaar number.
If you look at the seeding, which is also increasing by the day, overall about 8.75 crore bank accounts have got seeding done and out of the 6 crore accounts, which are opened under PMJDY, about 2 crore accounts have got Aadhar seeding done and that is the way we are going forward.
However, there will be certain issues, there was an order by the Supreme Court (SC) where it said that Aadhaar cannot be a compulsion for giving services.
Therefore, till the time the legal framework is put in place, what UID authority is trying to do and they are able to explain and get a revised order from SC whenever we want to do this DBT, it will have to be of two kinds, one is the Aadhaar-based and another is non-Aadhar based.
We were having this in LPG earlier which was discontinued in March 2014 and by that time we had extended it to 291 districts, there is a ministry of petroleum which was doing it, we were assisting.
In 291 districts the work has already begun, 2.9 crore LPG holders out of about 9 crore total connections have got their Aadhaar number seeded in the bank account and LPG data base both.
So they were the DBT ready customers and that was being done. In 42 districts, work had already been completely switched over to market price mechanism or transfer of subsidiary only through the Aadhaar based accounts.
