The government has set March 31, 2018 deadline to fully roll out Aadhaar-enabled Direct Benefit Transfer (DBT) for food, fertiliser and kerosene subsidies, which together account for more than 70% of the government’s annual R3-lakh-crore budget for various welfare payouts.
By: Prasanta Sahu | New Delhi | Updated: October 12, 2016 7:40 AM
Although the DBT transfers are gradually picking up, there is still a long way to go. The success would depend on integrating the subsidies on fertiliser, food and kerosene into the scheme.
The government has set March 31, 2018 deadline to fully roll out Aadhaar-enabled Direct Benefit Transfer (DBT) for food, fertiliser and kerosene subsidies, which together account for more than 70% of the government’s annual R3-lakh-crore budget for various welfare payouts.
Through the DBT platform, it has disbursed R32,141 crore benefits in the first five months of the current fiscal. This takes the total transfers via DBT since it was rolled out in a limited way in 2013 to close R1.4 lakh crore. Bulk of the transfers have been of LPG subsidy and the wage payments under the job guarantee programme.
Although the DBT transfers are gradually picking up, there is still a long way to go. The success would depend on integrating the subsidies on fertiliser, food and kerosene into the scheme. The government had earlier said welfare programmes other than the the above three subsidies would be linked to DBT by March 31, 2017. These include scholarship schemes, crop insurance, transfers related to skill development etc.
While DBT pilots are underway for food subsidy in several parts of the country since last year, the government rolled pilot on fertiliser subsidy in eight districts including four bordering Nepal and Bangladesh early this month. Kerosene DBT has been rolled out in four districts of Jharkhand on a pilot basis. The food subsidy, will be largely paid in cash in urban areas of the country while PDS’ will be automated by integrating Aadhaar of beneficiaries in rural parts of the country to give benefits in kind.
Beneficiaries getting subsidies through DBT into their bank accounts stood at 31.9 crore, out of which 23.24 crore or 73% were seeded with Aadhaar. However, the Centre transferred only 31% of R3,459 crore through the DBT platform in August 2016, using the Aadhaar Payment Bridge (APB) while the rest were transferred through bank accounts not linked with the unique number. The monthly transfers through DBT has been largely uneven — R9,155 crore in April while it was R5,941 crore in July this year, partly due to delayed disbursements, accounting flexibilities and seasonal nature of demands.
Keen to utilise the DBT platform to plug leakages in delivery of sundry benefits and doles, the government has already put 74 schemes on the DBT platform. The DBT enabler, JAM (Jan Dhan, Aadhaar and Mobile), has resulted in cumulative savings of R36,500 crore for the Centre in subsidies such as on cooking gas, food, wages under the employment guarantee Act etc.
The Centre has advised the states to use Aadhaar-based DBT platform for delivery of state-level benefits as provided in Section 7 of the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016. The section provides that the Centre/state may require individuals getting government benefits to undergo authentication or furnish Aadhaar number. The Act was passed by Parliament during the Budget session in the wake of the Supreme Court’s interim order against making Aadhaar mandatory for receiving such benefits. Out of the 128 crore population in the country, 83% or 1.06 crore are Aadhaar enrolled. The Centre is now making it mandatory to seed Aadhaar for government benefits.
The number of beneficiaries currently under different schemes are as follows: MGNREGS (11.02 crore), LPG-Pahal (17.48 crore), National Social Assistance Programme (2.94 crore), scholarship schemes (38.61 lakh) and others (34.66 lakh).
To reform the Public Distribution System (PDS) and Food Subsidy, it is targeting 100% Aadhaar-enabled ration cards for all beneficiaries for benefit transfers in kind. In the case of fertiliser, since subsidy components vary on different fertilisers, the government is looking at a seamless transfer to the DBT platform without altering the experience of farmers.
Kerosene subsidy, which is pegged to be about R7,000 crore in FY17, is deemed to be a dying benefit as consumers are being encouraged to shift to cleaner fuel such as LPG. Nonetheless, the benefit will be shifted to DBT platform as some far-flung areas where cooking gas is not yet available, may need it.
