13757 - Aadhaar linking boosts NREGS: Modi’s JAM trinity fast tracks workers’ payment disbursals - Financial Express

Aadhaar linking boosts NREGS: Modi’s JAM trinity fast tracks workers’ payment disbursals

Narendra Modi government’s apparent insistence on mandatory linking with Aadhaar may have drawn criticism from various quarters with people raising eyebrows, but the project has given a big boost to rural employment by aiding assured jobs and quicker disbursals of payments under the National Rural Employment Guarantee Scheme (NREGS).

By: FE Online | New Delhi | Published: June 28, 2018 3:22 PM

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Aadhaar linking boosts NREGS

Narendra Modi government’s apparent insistence on mandatory linking with Aadhaar may have drawn criticism from various quarters with people raising eyebrows, but the project has given a big boost to rural employment by aiding assured jobs and quicker disbursals of payments under the National Rural Employment Guarantee Scheme (NREGS). The NREGS benefitted from faster wage transfers and easier allotment of work due to the biometric Aadhaar identification, which nearly 90% of the country’s population has already received, a study by the Indian School of Business shows.

NREGS, previously known as MNREGA, was floated in 2005 for the rural farming population, mainly to help the people tide over any farm distress due to harsh conditions, such as drought. The scheme mandates the state government to offer minimum 100 days of employment for at least one member of each family that asks for it.

“The interesting part of NREGA is that it does not have the biometric authentication requirement because the job card is directly linked to the Aadhaar and the bank account, the wages are paid directly into the bank, so there is no need for biometric authentication,” said professor Ashwini Chhatre, Executive Director, Indian School of Business.

JAM session

“We did not expect such a big effect,” Ashwini Chhatre told FE Online when asked if the researchers had expected this result. “What we thought was that expenditure will go up, because of the efficiency improvement — but not that it will be the opposite of what it was before or the change to be this swift. Even we did not expect this magnitude of difference!” he said.

NREGS was launched to increase employment opportunity during the times of distress, thus making it counter-cyclical. But after studying NREGA data of the Financial Years 2011-2017, it has been found that prior to the advent of JAM trinity of Jan Dhan Yojana, Aadhaar and Mobile linking, the employment scheme used to work in a procyclic manner. That is, average employment decreased with the increase of drought and distress.

The possible reason behind this is the long process of payment reimbursement by the government — which included gram panchayat, mandal, district administration and state government, which meant the workers had to work for days, practically without payment. Thus, many used to back out from availing the scheme or used to opt for schemes that would pay much less.

However, since the Jan Dhan Yojana, which covered 90 per cent of the country’s population under the mainstream banking system, and linking of the biometric identity proof of Aadhaar, the payment reimbursement has become faster and easier, and the scenario has changed. Since the introduction of Aadhaar-linked payment the blocks, where the study was conducted, showed a substantial increase of 19.21% in the number of households applying for the scheme during the time of adverse weather conditions or drought. The increase in the years unaffected by drought was 18.9%.

While the total fund dispersed in FY2015 was Rs 92 billion, it jumped to Rs 140 billion in the consecutive year when Aaadhaar was implemented — a significant jump of nearly 50% in a single year, stated the study. Persons and households working also increased by 12 and 17 per cent, stated the report.

The JAM trinity — linking of Jan Dhan Yojana, Aadhaar Card and Mobile phones — has led to the wages reaching the workers’ bank accounts within estimated 15 days of employment as compared to as long as a month previously, the study shows. Further, the direct transfer of wages to the bank accounts also facilitated into removing any caste-based bias that prevails in various parts of the country while it comes to payments, and even the amount of work done by the backward classes also increased subsequently, said the study.

12018 - Social revolution in a JAM - The Hindu

Social revolution in a JAM

Pulapre Balakrishnan

SEPTEMBER 08, 2017 00:15 IST

Safe metal box money secure concept symbol vector  

Equality in the digital space is different from empowering Indians in the bricks-and-mortar world

In a post on Facebook made on the third anniversary of the Pradhan Mantri Jan Dhan Yojana (PMJDY) last week, the Finance Minister reportedly said: “Just as GST (goods and services tax) created one tax, one market, one India, the PMJDY and the JAM revolution can link all Indians into one common financial, economic, and digital space. No Indian will be outside the mainstream.” The suggestion of equality as a criterion of governance that is conveyed by this is to be welcomed. JAM, deriving from Jan Dhan, Aadhaar and Mobile, combines bank accounts for the poor, who barely had the money to deposit in them, direct transfer of benefits into these accounts and the facility of making financial payments through mobile phones. Aadhaar is the pivot here, allowing the government to ensure that benefits reach the poor and enabling them to make payments through ordinary mobile phones. For furthering the latter the government has devised the Bharat Interface for Money (BHIM) app. The Minister spoke of these developments as a “social revolution”, perhaps alluding to the feature that the poor are the most direct beneficiaries.

Beyond bank accounts

There is no doubt that eliminating leakage in the transfer of welfare payments and enabling the poor to have bank accounts are worthy objectives, and when achieved should be considered significant. Indeed, it is damning that a largely nationalised banking sector had done very little to extend banking services to the poor till recently, and credit goes to this government that it made this a priority. But claims of having achieved inclusion by operationalising the JAM trinity appear somewhat exaggerated. A financial inclusion, in the sense of everyone having a bank account and access to reliable and free electronic payments system, is not the same as economic inclusion. At its most basic level, inclusion from the economic point of view would entail equal access to opportunities for earning a livelihood. This in turn implies employment opportunities. As the demand for labour is a derived demand, in the sense that it exists only when there is demand for goods and services, a significant element in ensuring inclusion is to maintain, directly or indirectly, the level of demand in the economy. Next, even when the demand for labour exists, potential workers must be endowed with the capabilities to take advantage of the opportunity offered. The potential of the JAM trinity for bringing about either of these conditions for economic inclusion is limited. This is so because JAM functions in the digital space while much of our life is lived in the brick and mortar world. In the latter space we have seen very little improvement, not just recently but since economic reforms were launched over 25 years ago.

The economic reforms of 1991 were largely in the nature of liberalisation of the policy regime, meant to make it easier for firms to produce while at the same time exposing them to international competition with a view to increasing efficiency in the economy. What a strategy based exclusively on liberalisation overlooks is that an ecosystem of production is constituted not only by the laws and regulations determining the ease of doing business, but also the access that firms have to producer services ranging from water supply to waste management. These producer services require large capital outlay, often deterring private firms. When private entities do provide these producers services they tend to be expensive, deterring their off-take. It is for this reason that globally they are generally provided by governments. In India the case for public provision of producer services, and there is no reason to provide them free of charge, is particularly high as the overwhelming part of employment is in the form of self-employment. These units are scraping the barrel as it is. Even when producer units employ workers they are poorly capitalised, making it almost impossible for them to generate producer services themselves. Thus the public provision of producer services should be an essential part of public policy. Empowerment in the brick and mortar space would require public infrastructure on a gigantic scale compared to what we have now.

Focus on capabilities

Moving from production to being, JAM cannot even claim equalisation, leave alone empowerment. Amartya Sen effectively settled a longstanding debate on the question of the metric to be used to gauge equality when he proposed that it should be human capabilities. These are the endowments that allow individuals to undertake functionings they value. We would have achieved a social revolution when we have equipped all individuals with the essential capabilities. This happens when a society has, at a minimum, universal health and education infrastructure accessible to all.

We have in recent weeks witnessed governance failure on a major scale in many parts of the country. In U.P.’s Gorakhpur district children have died due to systemic failure that meant that a district’s only hospital is not able to maintain a steady supply of oxygen. Later a heavy downpour in Mumbai led to a complete shutdown, widespread loss of livelihood and some of life. And most recently, in Delhi’s suburb of Ghazipur a garbage mountain came crashing down, again causing death and disruption. But we would need to turn to Bengaluru to recognise the limits to information technology in solving problems of living. Lakes that are toxic when they haven’t been gobbled up by the real estate mafia, traffic snarls and inadequate sewerage make life less than easy in this IT hub aspiring to play first cousin to Silicon Valley.

Given the extraordinary challenges faced by India in the provision of public infrastructure ranging from health and education to drainage and sewerage, the claim made for JAM is breathtaking in its simplicity. JAM ensures seamless transfer of welfare payments and facilitates the making payments in real time. Once again, these are worthy objectives, but fall well short of the social revolution the honourable minister claims for them. Our social revolution will arrive when all Indians are empowered through an equality of capabilities. This would require committing resources to building the requisite social and physical infrastructure and investing time to govern its functioning. JAM may have achieved equality in the digital space but is far from having empowered Indians in spheres in which they are severely deprived at present, an empowerment that they clearly value. The government has leveraged IT smartly in operationalising JAM but the possibility of replicating this to transform the ecosystem of production for firms and the ecosystem of living for individuals is limited. The widespread disempowerment faced by the people of this country predates the arrival of Narendra Modi, but his government appears to give false comfort through its claims.

Slip-sliding economy

In a market economy one of the markers of what the public think of the government’s policies is the response of private investors. Private investment in India has declined steadily over the past few years. Overall growth had however been maintained, partly through the demand generating impact of public investment. But now even growth appears to be stalling. The latest GDP figures from the Central Statistics Office show growth in the first quarter of the current financial year to be lower than the average for 2016-17. Data actually point to a steadily slowing economy with growth having been successively lower in the past five quarters. There appears to be a mismatch between the government’s own assessment of its policies and the private sector’s valuation of their worth. The jubilation over JAM is an instance of this.

Pulapre Balakrishnan is Professor of Economics at Ashoka University, Sonipat and Senior Fellow, IIM Kozhikode. Views are personal

11981 - Counting every household in - Indian Express

Counting every household in

Financial inclusion of the underprivileged is an article of faith for the NDA government

Written by Arjun Ram Meghwal | Updated: September 2, 2017 8:56 am

“I dream of a digital India where mobile and e-banking ensures financial inclusion.” — Prime Minister Narendra Modi

Financial inclusion is the way governments strive to take the common people along by bringing them into the formal channel of the economy, thereby ensuring that even the last person in the queue is not left out from the benefits of economic growth. The poor, by becoming a part of the mainstream economy, are encouraged to invest in various financial products and to borrow from formal channels.

The lack of financial inclusion is costly to the individual as well as to society as a whole. For the individual, a lack of financial inclusion forces the unbanked into informal banking sectors where interest rates are higher and the amount of available funds much smaller. Because the informal banking structure is outside any legislative framework, any dispute between lenders and borrowers cannot be settled legally. As far as the social benefits are concerned, financial inclusion increases the amount of available savings, the rate of capital formation, efficiency of financial inter-mediation, and thereby allows the tapping of new business opportunities.

State sponsored universal banking has, therefore, contributed to a greater economic diversification in rural areas than is the case in the more competitive banking environments. With structural adjustment programmes being introduced in the 1980s and 1990s, financial market reforms swept over many developing countries. At the beginning of the 20th century, India had insurance companies (both life and general) and a functional stock exchange.

The scope of financial inclusion is not limited to banking services. It extends to other financial services like insurance, equity products, pension products etc. Thus, financial inclusion is not just about opening a bank account or a branch in an unbanked area.

Financial inclusion also helps government plug gaps and leakages in public subsidies and welfare programmes as the government can directly transfer the subsidy amount into the account of the beneficiary. In fact, the government has saved more than Rs 57,000 crore in its subsidy bill and ensured that the benefit of the subsidy reaches the real beneficiary directly.

The NDA government, led by Prime Minister Narendra Modi, committed itself since the beginning of its term to give special emphasis to the financial inclusion of every person in the country. One of the most crucial of the several steps taken by this government to that end is JAM — Jan Dhan, Aadhaar and Mobile.

With a view to increase the penetration of banking services and to ensure that all households have at least one bank account, the Pradhan Mantri Jan Dhan Yojna was announced by PM Modi in his Independence Day speech on August 15, 2014, and the scheme was formally launched on August 28, 2014. Within a fortnight, the scheme entered the Guinness World Records for opening a record number of bank accounts. By mid-August 2017, 29.48 crore accounts were opened, out of which 17.61 crore accounts were in rural/semi-urban areas and 11.87 crore in urban areas. On opening an account under the Jan Dhan Scheme, a customer gets the additional benefits of a RuPay debit card with an inbuilt insurance cover of Rs 1 lakh and an overdraft (OD) facility of Rs 5,000 is granted to the customer for satisfactory operation of the account for six months. A life cover of Rs 30,000 has also been granted for opening accounts in a certain time period. The scheme has been a great success and the 99.99 per cent of the 21.22 crore households surveyed have been covered under this scheme by December 2016. More than 44 lakh accounts have been sanctioned the OD facility of which more than 23 lakh account holders have availed the facility involving an amount of around Rs 300 crore.

In order to provide social security to all citizens and especially to the poor and underprivileged, the present government launched the Pradhan Mantri Suraksha Bima Yojana (PMSBY) and Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY).

The PMSBY covers persons between 18 to 70 years and a risk cover of Rs 2 lakh is provided at an affordable premium of Rs 12 per annum. As of April 12, around 10 crore people were enrolled under the PMSBY, which covers persons between 18 to 50 years with a bank account. A life cover of Rs 2 lakh is provided to the insured, payable in the event of the death of the insured due to any reason.

The Atal Pension Yojana, launched in 2015, is open to all bank account holders between 18 to 40 years and they can choose different premiums based on the pension amount. Under this scheme, a monthly pension is guaranteed to the subscriber and after him to his spouse and after their death, the pension corpus as accumulated till the age of 60 years is given to the nominee of the subscriber. The central government also contributes 50 per cent of the premium subject to a maximum of Rs 1,000 per annum. As on March 31, a total of 46.80 lakh subscribers have been enrolled in the Atal Pension Yojana with a total pension worth Rs 1713.214 crore.

To expand the network of ATMs, the RBI has allowed non-bank entities to start ATMs (called “White Label ATMs”). RuPay Cards have significantly increased its market share to 38 per cent (250 million) of the total 645 million debit cards in the country so far. The card has been provided to the account holders of PMJDY (170 million).

Financial Literacy Centres were started by commercial banks at the request of the RBI. The central bank’s policy is that financial inclusion should go along with financial literacy. The launch of direct benefit transfers through the support of Aadhaar is a major biggest factor that led people to open new bank accounts and continue to use them. To further strengthen financial inclusion in the country, the government has advised the banks to deploy micro ATMs in rural areas and consequently, 1,14,518 micro ATMs had been deployed by December 2016.

With the venture capital scheme, SC/ST groups were encouraged to become job providers instead of job seekers. Initially, in this scheme, loans were provided from Rs 50 lakh to Rs 15 crore and from Rs 20 lakh to 15 crore. The government had encouraged SCs/STs to stand on their own. The schemes of 70 ventures and funds to the tune Rs 265 crore have been approved, and funds to 40 ventures have already been distributed. These ventures, on average, provide employment to 20-25 people.

11929 - How Aadhaar brings India's poor to the mainstream - Khaleej Times

How Aadhaar brings India's poor to the mainstream

Filed on August 28, 2017

A man gives his thumb impression to withdraw money from a bank using his Aadhaar card in Hyderabad. The last date for taxpayers to link their PAN with Aadhaar remains August 31.
(AFP)

Every month now, the poor make 70 million payments using their Aadhaar identification

Finance Minister Arun Jaitley on Sunday said Jam (Jan Dhan, Aadhaar and Mobile) trinity has ushered in a social revolution which will eventually bring all Indians into a common financial, economic and digital space, similar to how GST has created a unified market.

"Within reach of the country is what might be called the 1 billion-1 billion-1 billion vision. That is 1 billion unique Aadhaar numbers linked to 1 billion bank accounts and 1 billion mobile phones. Once that is done, all of India can become part of the financial and digital mainstream," he said.

In a Facebook post on the third anniversary of the Pradhan Mantri Jan Dhan Yojana (PMJDY), he said: "Just as GST created one tax, one market, one India, the PMJDY and the Jam revolution can link all Indians into one common financial, economic and digital space. No Indian will be outside the mainstream."

Noting that Jam is nothing short of a social revolution, the finance minister said it offers substantial benefits for government, the economy and especially the poor. Highlighting the benefits, he said the poor will have access to financial services and be cushioned against life's major shocks while government finances will be improved because of the reduced subsidy burden and weeding out of leakages from the system.

Currently, the government makes direct transfer of ?740 billion to the financial accounts of 350 million beneficiaries annually at more than ?60 billion per month. These transfers are made under various government anti-poverty and support schemes such as Pahal, National Rural Employment Guarantee Act, old age pensions and student scholarships, he said.

Talking about linking Aadhaar with bank accounts, the minister said about 524 million unique Aadhaar numbers are linked to 736.2 million accounts in India.

"As a result, the poor are able to make payments electronically. Every month now, about 70 million successful payments are made by the poor using their Aadhaar identification," he said.

Besides, he said, with the launch of Bhim app and the Unified Payments Interface, Jam has become fully operational.

"A secure and seamless digital payments infrastructure has been created so that all Indians, especially the poor, can become part of the digital mainstream," he said.

Jaitley said total PMJDY accounts opened increased from 125.5 million in January 2015 to 295.2 million as of August 16, 2017 while the number of RuPay cards issued increased from 110.8 million to 227.1 million in the same period.

At the same time, the number of rural accounts opened under PMJDY has grown from 75.4 million to 176.4 million and the average balance per account increased from ?837 to ?2,231 as of August 16.

Jaitley said the total balance in beneficiary accounts rose to ?658.44 billion while zero balance accounts declined from 76.81 per cent in September 2014 to 21.41 per cent in August 2017.

He said the government has taken steps to provide security to the poor via life insurance under the Pradhan Mantra Jeevan Jyoti Bima Yojana (PMJJBY) and accident insurance Pradhan Mantra Suraksha Bima Yojana (PMSBY).

As on August 7, total enrolment was 34.6 million under the PMJJBY and 109.6 million under PMSBY, with 40 per cent of the policy holders being women in both the schemes.

PMJDY, launched on August 27, 2014 by Prime Minister Narendra Modi, was aimed at providing financial services to the poor. These included opening bank accounts for the poor, giving them electronic means of payment (via RuPay cards) and placing them in a position to avail themselves of credit and insurance.

"The vision underlying it was much broader: nothing short of ending the financial, and hence economic, digital and social exclusion faced by India's poor. India's poor would not only be able to overcome their economic deprivation but they would also become an integral part of the social mainstream," he said.

- PTI

11908 - Jan Dhan, Aadhaar, mobile ushered in a social revolution: FM - The Hindu

Jan Dhan, Aadhaar, mobile ushered in a social revolution: FM

Special Coresspondent

NEW DELHI , AUGUST 27, 2017 12:37 IST

Finance Minister Arun Jaitley on Sunday wrote an article highlighting the benefits of the Pradhan Mantri Jan Dhan Yojana, which has completed three years, saying the combination of the scheme with Aadhaar and the mobile revolution would bring all Indians into the mainstream and would end economic and social exclusion.

“JAM, a term coined, and a vision conceptualized, by our Chief Economic Adviser, is nothing short of a social revolution because it has brought together financial inclusion (PMJDY), biometric identification (Aadhaar) and mobile telecommunications,” Mr Jaitley wrote.

“Today, about 52.4 crore unique Aadhaar numbers are linked to 73.62 crore accounts in India,” Mr. Jaitley added.

Cushion against shocks

“As a result, the poor are able to make payments electronically,” he added. “Every month now, about seven crore successful payments are made by the poor using their Aadhaar identification.”

“The JAM social revolution offers substantial benefits for government, the economy and especially the poor,” Mr. Jaitley wrote. “The poor will have access to financial services and be cushioned against life’s major shocks. Government finances will be improved because of the reduced subsidy burden; at the same time, government will also be strengthened because it can transfer resources to citizens faster and more reliably and with less leakage.”

The Finance Minister also added that the government now makes direct transfers worth ₹74,000 crore to the financial accounts of 35 crore beneficiaries annually under various government schemes such as PAHAL, MNREGA, old age pensions and student scholarships.

The number of PMJDY accounts opened stood at 29.52 crore as of August 16, up from 12.55 crore in January 2015. The number of rural PMJDY accounts grew from 7.54 crore to 17.64. The number of RuPay cards issued increased from 11.08 crore to 22.71 crore.

The total balance in beneficiary accounts stood at ₹65,844.68 crore and the average balance per account increased from ₹837 in January 2015 to ₹2,231 as of August 16, 2017 and the proportion of zero balance accounts fell from 76.81% in September 2014 to 21.41%.

“As of March 2014, women constituted about 28% of all savings accounts, with 33.69 crore accounts,” Mr. Jaitley wrote. “As of March 2017, according to data from top 40 banks and regional rural banks, women’s share has risen to about 40%..”

11789 - Linking Aadhaar to mobile numbers finds few takers - TNN

Linking Aadhaar to mobile numbers finds few takers

TNN | Updated: Aug 16, 2017, 09:00 AM IST

HYDERABAD: Nearly two months after the government urged denizens to link their Aadhaar numbers with telecom service providers for security reasons, most people are taking the notification casually. 

Telecom company officials say denizens are reluctant to reveal their Aadhaar identities despite being bombarded by text alerts. 

Arvind who manages the customer care unit of one of the largest telecom service providers in the city said, "At the most, 40 mobile owners visit our office for Aadhaar in a day and this figure is very low, considering the number of people using our connection," he said. 

"The process of Aadhaar linkage that is basically recording thumbprints with other details takes less than five minutes, yet people are not taking it seriously," he said. 

While some of them are still unaware that their mobile numbers have to be linked with Aadhaar, others said they are willing to ignore the government notification as they find it difficult to turn up at retailers' outlets for processing.

Some complained of receiving spam phone calls and messages threatening to deactivate their mobile connections. "I updated my Aadhaar with mobile number last Monday at a retailer outlet in Panjagutta. After a week, I got a call from the telecom company that I am yet to comply with the notification. I don't know how the whole process is going about," said V Rao, a businessman. Along with the panic, confusion also looms large on people about the system. Sampa Majumdar, a housewife and resident of Kompally rued, "Some people in my apartment are saying that it is not mandatory to link my Aadhaar with mobile connection. I tried to contact customer care for correct information but did not get through."

The notification created a space for mobile shop owners to make additional income in the city. They are collecting Aadhar documents from people and getting them processed for a nominal charge. A shop keeper in B S Makhta said he processed around 50 Aadhaar linkages last week and earned extra Rs 1,000.

LATEST COMMENT

Fevicol Aadhaar

3519

#AADHAAR authentication fails for half billion Indians even after updating bio-metrics and waiting for 90 days. How the hell do we verify mobile using fingerprint. AADHAAR is Trillion dollar scam to enslave billion Indians. You can throw AADHAAR in dustbin by putting Fevicol in finger before you are forced to give fingerprint. It will blind the fingerprint scanner. Jai Hind! 0

Fevicol Aadhaar

"Keeping my shop shut, I go to the offices of different telecom companies. Hence, I charged each customer Rs 20 for the work," he added.

Going by the Reserve Bank of India's notification, the account holders need to submit Aadhaar and PAN numbers to their banks for getting a subsidy amount credited to their accounts. While Aadhaar is compulsory for both new and existing accounts, PAN is optional.

10799 - 'Govt Wants To Merge Jan Dhan Accounts, Aadhar And Smart Phones' - Huffington Post

'Govt Wants To Merge Jan Dhan Accounts, Aadhar And Smart Phones'

To boost the country's economy.

 18/01/2017 4:01 PM IST | Updated 17 hours ago

BLOOMBERG VIA GETTY IMAGES

NEW DELHI -- Minister of State in the Prime Minister's Office Jitendra Singh has said the Union Government is contemplating to merge Jan Dhan, Aadhar and Smart Phones for boosting the country's economy and for easy transfer of money.

"In a few years, the mindset of the common masses would have a drastic change to adopt the digital technologies," he said while speaking on the occasion of a Digi Dhan mela, a Government of India initiative, aimed at incentivising digitally enabled transformation in the country following the recent demonetisation drive.

Singh emphasized the need for digitisation in the country for easy transfer of money. Digitisation will pave the way for a new revolution in which paper currency will be replaced by digital transactions thus proving beneficial to curb black money, he added.

Minister of State for Finance Arjun Ram Meghwal, who was also present on the occasion, said the menace of the shadow economy will be curbed by the adoption of digitisation in the country.

Jammu and Kashmir Chief Minister Mehbooba Mufti, Jammu and Kashmir Finance Minister Haseeb Drabu, Jammu and Kashmir Information Technology Minister Imran Raza Ansari and other dignitaries were also present on the occasion held at Gulshan Ground, Gandhi Nagar, Jammu, on Tuesday.

At the event, a huge public participation was seen thronging different stalls put up by various banks, telecom companies, Aadhar and different departments of the state government to gather first hand information about various digital schemes of the Government of India.

Also on HuffPost India

10604 - Govt saved Rs 36k cr in one year by plugging leakages via JAM - Money Control

Nov 14, 2016, 03.53 PM | Source: PTI 

Govt saved Rs 36k cr in one year by plugging leakages via JAM 

Jan Dhan-Aadhar-Mobile trinity, commonly known as JAM, helped the Government save leakages worth Rs 36,000 crore in subsidies and benefits provided to the poor, during the last one year, Union Minister Ravi Shankar Prasad today said. Jan Dhan-Aadhar-Mobile trinity, commonly known as JAM, helped the Government save leakages worth Rs 36,000 crore in subsidies and benefits provided to the poor, during the last one year, Union Minister Ravi Shankar Prasad today said. "We linked their (Jan Dhan) account with their Aadhaar, to their mobile and to the bank. By giving them all the pro-poor subsidies and benefits we have saved Rs 36,000 crore in the last one year because of application of digital technologies," Prasad said addressing the inauguration of India International Trade Fair in the national capital. Observing that the government wishes "to bridge the digital divide," Prasad, Minister for Information and Technology (IT) said, India is "very soon" going to have 50 crore Internet landline and wireless connections. "To awaken the latent potential of Indians, we are going with a mass digital literacy programme of making 6 crore Indians digitally literate," the Minister said. He pointed out that in a population of 125 crore, India today has over 103 crore mobile phones (users) and 107 crore Aadhaar cards for verifiable digital identity. Prasad, who also holds the charge of Law Minister, said the government is "not ignorant" of the need for cyber security initiatives to be strengthened further. We are also encouraging electronic manufacturing in a very big way, he said. "When our government had came, we had only Rs 11,000 crore of investment. Now it has crossed Rs 1,26,000 crore. In the last one year 40 new mobile manufacturing units have come in India and 10 new units making spare parts. We want to make India a big hub of electronics manufacturing," Prasad said. He further said, the government plans to connect 2,50,000 Gram Panchayats of India through optical fibre network. 

Read more at: http://www.moneycontrol.com/news/economy/govt-saved-rs-36k-crone-year-by-plugging-leakages-via-jam_7957461.html?utm_source=ref_article

10321 - Delta ID's iris software to make Aadhaar authentication more secure - TNN

Delta ID's iris software to make Aadhaar authentication more secure

ANI | Aug 10, 2016, 03.05 PM IST

NEW DELHI: A leader in consumer-grade iris technology for mobile devices Delta ID, has announced its ActiveIRIS software for performance testing of integrated mobile devices used for Aadhaar authentication. 

The performance testing was held by STQC in collaboration with C-DAC and Unique Identification Authority of India (UIDAI), under the Ministry of Electronics and IT of the Government of India, during May 2016 in New Delhi. 

Delta ID's ActiveIRIS software integrated in the Samsung Galaxy Tab Iris was also the first to be awarded provisional certification by STQC prior to the Performance Testing. 

"We want to congratulate Delta ID on passing the Performance Test for its iris software for integrated mobile devices for Aadhaar. The Performance Testing required a pass rate of better than 99 percent when tested with 5000 residents," said Director General of STQC, Umesh Kumar Nandwani. 

"With the availability of iris integrated mobile devices we hope to make the use of Aadhaar even more convenient and reliable for our residents," added Nandwani. 

Samsung Galaxy Note 7 with iris scanner, octa-core SoC launched

With Aadhaar enrollments crossing the one billion mark, the use of Aadhaar for resident authentication and eKYC is expected to rapidly spread across services for government and private enterprises. 

The need for a biometric modality that works reliably is critical for the use of Aadhaar, a key component of the government's Janadhan Aadhaar Mobile (JAM) led initiatives. 

The iris is widely accepted as a more secure and reliable modality to identify and authenticate people. The iris works across a broader population, across all age groups and occupations. 

"I believe we are at that the cusp of a major change in how biometrics, particularly, iris will play a role in enabling access to a variety of services we use in our daily lives," said President and CEO of Delta ID Inc, Dr. Salil Prabhakar.

10272 - How JAM Trinity will transform lending, propel growth - Money Control

Jul 25, 2016, 03.25 PM | Source: CNBC-TV18 

How JAM Trinity will transform lending, propel growth 

In CNBC-TV18's 'Indianomics' series, Nandan Nilekani, Former Chairman, UIDAI; Mentor, Ispirt and Ashish Gupta, MD & Head of Research, Credit Suisse discuss how Aadhar, along with government’s financial inclusion program and a smartphone will change the face of banking system.

Read more at: http://www.moneycontrol.com/news/economy/how-jam-trinity-will-transform-lending-propel-growth_7099701.html?utm_source=ref_article

As of last year, as many as 60 percent of Indians did not have access to formal banking -- a statistic the Narendra Modi dispensation is keen to change. 

Last Budget, Finance Minister Arun Jaitley announced the JAM (Jan Dhan-Aadhaar-Mobile) Trinity, through which the government envisages it will revolutionise the way Indians transact. Further, recently, the Reserve Bank of India introduced the unified payment interface (UPI), which will enable all payments to be made through an SMS. As every purchase is made through Aadhaar enabled phones on the unified payment system, a zillion gigabytes of data will be available to banks on the spending habit and indeed the lifestyles of their customers. The father of Unique Identification Authority of India (UIDAI), Nandan Nilekani, believes that there will be a shift in business models and banking system from low volume, high value, costs and fees to high volume, low value, costs and fees. Not just this, Jan-Dhan, Aadhaar and Mobile (JAM) will lead to a dramatic upsurge in accessibility and affordability of credit. Extending the argument forward, brokerage Credit Suisse estimates that total consumer loans will rise from USD 600 billion today to USD 3 trillion in 10 years –that opportunity will be shared by the savviest public and private banks, the new banks and new age non-bank finance companies. Therein is also an opportunity. A five-fold jump in retail consumption can mean a five-fold jump in India's gross domestic product (GDP): a USD 10 trillion India will be a middle income country. Below is the verbatim transcript of Nandan Nilekani and Ashish Gupta's interview to Latha Venkatesh on CNBC-TV18. Q: First the Aadhaar was conceived by you like 5 years ago and it got a big push from the current government. Are you satisfied with the way things have progressed? Nilekani: It’s gone on as perfectly as it could have. It's actually 7 years since 2009 but the fact that the new government under Prime Minister Modi has wholeheartedly supported Aadhaar, for me, is a great news. So, I am very happy with the commitment and the use of that for subsidiary reforms, for biometrics attendance and the whole host of applications. So, I think that’s a terrific story and I am delighted. The pace has accelerated since the time I stepped down in March 2014 when 600 million people had Aadhaar. Now it has crossed the billion mark, and is the fastest growing digital platform in the world. Ours is the only non-US government that owns a billion user platform. So, this is quite an achievement and the current government is fully behind it and they are doing a huge effort on that. What I am thinking about is what the next step will be because the use of Aadhaar in the government is well established, but the real use is for transformation of businesses like the financial services and that’s what led me to partner with Ashish in doing this report. Q: What would you want to see in terms of next steps? The government has given a catalyst in the form of Aadhaar and the Reserve Bank probably in the form of unified payment interface and now it is to be taken over by the private sector. Nilekani: The government has done an amazing job in building the Aadhaar platform. RBI has done an amazing job in supporting Aadhaar and then supporting UPI. Now it’s really for banks whether they are private, public sector banks, new age banks or NBFCs; all these guys can start leveraging the entire stack we have built. Q: You all have given a very, very big call. You are saying that at the moment it is a USD 600 billion retail loan market, USD 600 billion to USD 3,000 billion is actually Rs 40 lakh crore rising to Rs 200 lakh crore that’s huge. Today the retail loan market at Rs 40 lakh crore is about one-third or one-fourth of the GDP, so it means the GDP also grows 5 times, will we be an USD 8 trillion to USD 10 trillion economy in 10 years. Gupta: While there is total consumer loan penetration, SME loans in India are only about 26-27 percent of GDP and by most global standard that is very, very low. Now, over the next 10 years our GDP will grow at least at a nominal compound annual growth rate (CAGR) of 12-13 percent and if the penetration increases by 10 percent of GDP, we will get to these numbers over 10 years. So, there is lot of power of compounding that will kick in and today unfortunately we find a lot of skew in the total private sector credit out there. The concentration is much higher on the corporate side and not as much on the consumer and the SME side and even the loans that are going to SMEs they are relatively very high priced and in fact there is some data from RBI that indicates that even for SMEs borrowing from the banking sector, where the ticket size of the loan is less than Rs 50 lakh, the average cost of credit is 18-20 percent. Q: This is sounding like wide-eye enthusiasm, it feels like probably when India became independent in 1950 Gandhiji and Jawaharlal Nehru would have looked at electricity and rural roads that’s all I have to give and this nation is going to become like Britain. It didn’t happen that way it didn’t pan out that way. Do you think we are getting ahead of ourselves in this dream that India is going to become a middle income country in 10 years? Nilekani: Well, there are lot of other challenges and I don’t dispute the seriousness of those challenges. But I also do know that India now has the best digital infrastructure for financial inclusion or financial universalisation and the fact that we have the Jan-Dhan, Aadhaar and Mobile (JAM) layer, we have Indian stack that allows you to paperless, presence-less and cashless transactions. The fact that India is going to go from being data poor to data rich, which allows lending to be based on data, will actually make it safer.  All these are incredibly powerful things that didn't exist earlier and we have the perfect trifecta because India is going to grow. So let’s say GDP plus interest rate, nominal GDP growth at 12-13 percent, credit is going to deepen because more people will get loans, so lets say that institute to 20 percent and then the fact that the PSU bank lending is going to be muted for whatever issues they have NPAs, lack of capital and so on. So a good private sector lender whether it’s a bank or NBFC, I see no reason why they can’t grow at 30 percent compounded for the next several years simply because of the market situation. Q: Coming back to the huge expansion in retail loans that you are expecting, the caveat is poverty and illiteracy. In India even if you take a much diluted version of people below the poverty line, it comes to about 25 percent. If you make it slightly more decent, like people with three meals a day and some healthcare, almost 35 percent of India would by definition be below poverty line. We are not growing or not taking loans because there is no money to save. Digitisation cannot solve that. Nilekani: That is where the direct benefit transfer (DBT) comes in. Look at what is happening in DBT. India has run the world\\'s largest DBT programme, has done 1 billion transactions where Rs 100 crore transactions have been credited. Q: That will be with people who are literate? Nilekani: No, Rs 28 crore Aadhaar linked bank accounts exists today and maybe liquefied petroleum gas (LPG) is more a middleclass thing but if you look at other payments; loans, scholarships, National Rural Employment Guarantee Act (NREGA) wages which are also going to Aadhaar linked bank accounts. They are touching the people who matter and as more and more subsidies become cash transfer, the government will take kerosene, fertiliser, PDS etc and then the state subsidies. Electricity should be a cash transfer. Why are we giving free power? Charge power at normal rates and give cash subsidy to the farmers. So, as more and more people convert existing implicit subsidies into explicit cash transfers, we are going to have billions of transactions which will be going directly into the bank accounts of the poorest. So that will create that momentum. Q: What analogy should we take? Should we take the analogy of electricity which would have led to a huge revolution in India many-many decades ago but didn\\'t because the state didn\\'t intervene correctly or should we take the analogy of telephone, which in 1995 didn\\'t show any promise but by 2015 is a revolution, which trajectory might this take? Nilekani: It is more because of the mobile phone as there is a great case of leapfrog. We had landlines which had tapered off at 60 million for many years and suddenly boom; we have a billion mobile phones because technology made it possible. The same thing is going to happen here. The combination of technology, government push, regulatory push, market forces and demand all that is coming together.  Q: Would there be a worry that you are selling, as Ashish puts it, not just consumer durables or loans, you are going to sell a lot of financial products and that is expected to be the engine of growth. There a lot of buyer awareness is needed and we do not have that level of awareness. So can this get short circuited? These are my worries. You try to sell an insurance product, for instance the Atal Bima Yojana is a great idea but is there enough awareness in the mind of the man or a woman who is insured to go and claim that money at the right hour from the right brick and mortar space. Do you see all these becoming impediments to the revolution that you can see? Nilekani: Yes, obviously there will be challenges and misselling and all is a big part of the challenge of financial services and that is why we need to have proper information. But this particular argument we are making is only in lending. We are not talking about any other financials. The argument that Ashish and his team are saying is 5x growth in lending because technology and growth will deepen the credit market - that 5x growth in lending will lead to USD 600 billion marketcap creation which is up for grabs. It can be done by existing private sector banks, new private sector banks, payment banks, small banks, public sector undertaking (PSU) banks, non banking financial companies (NBFCs). I do not think we are taking a call on who will win this or maybe they are taking a call, I am not taking a call. Q: You have pinned your hopes, a great deal on the private sector banks and some of the NBFCs. Where is payment bank in the scheme of things? You don\\'t see that as a big vehicle of taking advantage and operationalising this? Gupta: Absolutely. I think payment banks will play two roles. Q: So telecom companies are to be purchased as a bet? Gupta: I would not like to name because we do not know what are the individuals and their strategies. They still have to launch their product, but the two roles they will play. One is they themselves will come in and second, because of the set of them coming in, the banks themselves will get their act together because otherwise left to themselves the banks would have dragged their feet because all of them are incumbents, they do not want too much change and they would have resisted change but it is only because the payment banks will get launched in the next two-three months, the talk is that in next 15 days 15 of the banks will be launching the Unified Payment Interface(UPI) app. So that is the catalyst that was needed and an external disrupter coming, so that there is a faster change in the incumbents.  Q: You are speaking about NBFCs as a potential vehicle because they are the savviest, least constraint by regulation. What about the microfinance institution (MFI) segment? Gupta: They will certainly be beneficiaries. They will be beneficiaries because their operating cost model comes down because of technology. They will be beneficiaries because you will have better cash management system in place but the lending opportunities for MFIs, in my view, will not grow because the MFI model is not based on underwriting. So the data availability will benefit those kinds of loans where you want to do underwriting. So of course some of the foreign institutional investors (FIIs) do slightly higher ticket size loans for enterprises - that is part of their business that will get a big boost but if you are lending to self-help groups etc - that will not change much. Q: Since you come from Bengaluru, the land of start-ups and apps. Do you see a lot of these analytics getting used to lend small and medium enterprises (SME) loans? For the current banking sector, if you speak even to HDFC; HDFC is not using so much of analytics to lend loans. It's actual due diligence that they do on a case by case basis, for a Rs 25 lakh loan to put one officer and do the due diligence is not economical for them. Do you see a whole lot of analytic based, algo based lending? Nilekani: Ispirit, a group which I am a volunteer with, has identified that there are 35 alternate lending start-ups which are going to use data for lending and when those start-ups further use India stack, they are going to further reduce cost and so we see a massive thrust to use database lending and that is all happening because of platformisation. So let's say if you have Uber or Ola or Amazon or Flipkart; they have 200,000 drivers on their platform or they have half a million merchants. Those merchants are now digitally connected to a platform and now you have data of their business - that data can be used to lend and since there is money flow between the platform and the vendor - that money flow can be intercepted to pay the loan. There are lots of things you can do today that you couldn't do earlier. Q: Since you look at businesses more closely has this already caught on to just look at married man, two children in convent schools less likely to default. This kind of lending has already begun? Gupta: Not at the banks and as we talked about the payment banks earlier that it is innovation that is starting in the newcomer rather than incumbents and I think banks will also learn from them and in my view lot of banks will partner with them and you will see banks tying up with alternative lending company, banks have already tied up with payment banks and that will really lead to change in the Industry. Nilekani: In fact, one of the biggest quickest banks of the block has been Bank of Baroda, which on its foundation day tied up with 5 or 6 start-ups. Federal is doing an amazing job, Shyam has brought great thinking there, but if you look at Bank of Baroda which is a public sector bank they have just tied up and lot of many surprising things happening. Q: What would you be worried about? Which are the red flags that you would want to keep in mind as a person who is visualising this? Nilekani: I think there are many red flags. One is that whenever there is excessive enthusiasm about lending money is usually indigestion later, so you are dead bubbles and we have seen them the US and here. So if you don’t do this well, if you don’t use the guardrails of data and just indiscriminately give loans without doing proper checking you are going to have a problem tomorrow so that’s the risk. It is not just that we are saying retail lending should grow 5 times. Retail lending should grow on a platform of data, that’s the only way you are going to make sure there is no crisis in few years that is number one. Number two is the argument about mis-selling. I think in financial services especially with a population they may not know all the things, mis-selling is a huge challenge we need to guard against that. You create the wrong incentives for people to make money by selling and getting their bonuses upfront, it sounds something like the global financial crisis to me is a dangerous thing, so that’s number two. Number three is that obviously governments and regulators may also have a view on this, but we felt that our obligation was to call the opportunity. Look guy this can happen, so don’t tell us tomorrow that you didn’t tell us that’s all. Q: One of the important statements that you are making is that the share of the public sector banks can go down from the current 70 percent to probably 63 percent or thereabouts. Now the state in which the public sector banks are and more importantly the state in which NBFCs and private sector are is this is a very modest call. I would have thought that in the next 10 years public sector banks will be 50 percent if that of the market? Gupta: See, for the market share to shift for banks there are two aspects that need to shift. You need to shift the assets loans, but they can only move if the deposits can also move, because the balance sheets has to be equal on the both side and the challenge till now has been that the deposit side has not been moving, so while all of us are happy to go shopping for loans and we take loans from the guy who is most efficient, who gives the best rates but on the deposit side there is still a lot of incumbency advantage to the public sector banks and that has not broken down yet. Of course, one of the changes that you talked about earlier coming of UPI in my view will accelerate that process as well, but that is what we need to see and you are probably right that market share shift away from public sector banks can be faster, but for that we need to see the UPI platform working quicker. Q: Do you think that regulators play a big role. Do you think that it is important that we should have a younger regulators you will not be even able to take the leap of apps and digitisation if you are already digitally per se. Nilekani: Well, I am 61 so I shouldn’t be making a statement about this, but I think people who are on top of things is what we want, whether they are young or old, lot of young people are not on top of this revolution. So I think whoever it is should have a sensitisation to the digital revolution happening. Q: Will too much conservatism be our problem? Nilekani: It could be because regulation is how do you do calibrated innovation and getting that is a judgement call and so that judgement call is very important. Obviously we need a person who makes the right judgement calls on balance. Q: So what’s your forecast therefore in the next 5 years what is the most outlandish thing that you expect in India? Nilekani: I think whatever you said that the financial inclusion will reach everyone. Every adult will have a Smartphone, a bank account and Aadhaar number and with one click on his phone he will be transacting, buying, selling and transferring money all that is reality. Q: Will cash be outlawed you think in 5 years? I think Denmark is thinking of outlawing cash. Nilekani: Not outlawing, but certainly with all the revolution that is happening will drive the pace of a cashless society.

Read more at: http://www.moneycontrol.com/news/economy/how-jam-trinity-will-transform-lending-propel-growth_7099701.html?utm_source=ref_article

10075 - Cut out middlemen: Modi is right in backing technology to choke corruption in welfare benefits - TNN

Cut out middlemen: Modi is right in backing technology to choke corruption in welfare benefits

May 31, 2016, 2:00 AM IST TOI Edit in TOI Editorials |

Prime Minister Narendra Modi’s call for Middleman Mukt Bharat resonates, for a simple reason. All political parties see themselves as ‘pro-poor’ and plough enormous funds into social welfare schemes. However, the bulk of those funds are siphoned off by middlemen. Almost three decades after then Prime Minister Rajiv Gandhi famously argued that only 17 paise of every rupee spent on the poor actually reaches them, the ghost of corruption and inefficiency still hangs over the sarkari system of social welfare.

However, the overlapping potential of technology and the universalisation of banking – through the trinity of Jan Dhan, Aadhaar and Mobile technology (JAM) – now makes it possible to eliminate middlemen from the delivery of welfare schemes. 

Any political party that succeeds in doing this while in government will transform India’s democracy and win the gratitude of the electorate for a long time to come.

Social welfare schemes have always been a boon for middlemen who have exploited various loopholes to profiteer. The system of delivering welfare such as food grains at highly discounted price has provided incentives for large scale pilferage. Ghost beneficiaries are one symptom of this flawed approach. 

Building on Direct Benefits Transfer initiated by its predecessor, NDA has managed to weed out 3.5 crore bogus beneficiaries saving over Rs 21,000 crore under the LPG Pahal scheme in 2015 and 2016. The use of Aadhaar in Public Distribution System (PDS) by states like Delhi, Andhra Pradesh, Telangana and Puducherry has already yielded results with Rs 10,000 crore as savings in the kitty. As many as 1.6 crore bogus ration cards were culled from the list of beneficiaries. UPA’s flagship programme – MGNREGA – too has managed to save Rs 3,000 crore in 2015.

The drive to loosen the hold of middlemen needs to extend to other areas. Millions of small farmers are in the grip of middlemen linked to agricultural mandis or markets. Eliminating the monopoly of agricultural mandis on sale of farm produce will introduce competition and help farmers get a better deal. If NDA wants to make good its promise of doubling farmers’ income, it should free them from the clutches of middlemen. 

Today, it is possible to directly transfer cash or food coupons to poor households. The time is ripe for the country to move away from the traditional mai baap sarkar towards a vibrant social democracy that thrives on innovation.

DISCLAIMER : Views expressed above are the author's own.

10021 - Mann ki baat: Modi emphasises need for digital payments - Live Mint

Last Modified: Sun, May 22 2016. 08 16 PM IST

Mann ki baat: Modi emphasises need for digital payments

Narendra Modi says Jan Dhan, Aadhaar and mobile (JAM) together can help the nation move towards a cashless economy

Preetika Khanna

PM Narendra Modi said that the government had started various measures including RuPay card and online transactions to make the transition easier. Photo: Bloomberg

New Delhi: Prime Minister Narendra Modi in his monthly radio address Mann ki Baat emphasised on the need to move towards a cashless economy.

“We need to make India modern, transparent and have to implement procedures across the country. There was a time when transactions happened through barter system. Then notes and coins came. But now the world is moving towards a cashless economy. The start will be difficult but once you get used to it, will be simple,” Modi said in his address.

He added, “Jan Dhan, Aadhaar and mobile (JAM) together can help us move towards a cashless economy. If we use the measures (made available by the government) we will able to bring transparency and reduce black money.”

He said that the government had started various measures including RuPay card and online transactions to make the transition easier.

Modi also asked people to store water effectively in the coming monsoon season. “We need to think about water storage as well. We should not become careless and then suffer shortage. With the rainy season coming we should strive to store water. We should conserve it and not waste the coming season.”

Modi, who in the last month has met heads of 11 states which have declared drought, said that some innovative steps to tackle this issue had come up.

“I have asked Niti Aayog to look into how the best practices can be implemented in other states as well,” he said.

Large parts of the country are facing drought after two successive years of below-average rainfall. The 2015 southwest monsoon, which waters over half of India’s crop area, was 14% short of normal last year, after a 12% deficit in 2014. According to the India Meteorological Department, monsoon is expected to arrive in Kerala on 7 June, six days later than normal.

Pretika Khanna

10020 - Use Jan Dhan, Aadhaar, Mobile for cashless transactions: PM Modi - dna India

Use Jan Dhan, Aadhaar, Mobile for cashless transactions: PM Modi

(File Photo)

Sun, 22 May 2016-02:53pm , New Dehli , ANI

Modi was speaking to the nation in the 20th edition of 'Mann ki Baat' programme.

Prime Minister Narendra Modi on Sunday called upon the people to promote cashless transactions through Jan Dhan, Aadhaar and Mobile (JAM) to move forward to cashless society.

The Prime Minister, who was addressing the nation in the 20th edition of his 'Mann ki Baat' programme, said the world is moving towards a cashless society and more technology is being used.

Referring to employment of 1.25 lakh banking correspondents, he said it is his government's resolve to bring banking services to people's doorsteps.

Prime Minister Modi said post-offices are also being sensitized to serve as banking institutions, adding these measures will bring transparency and put a check on the use of black money.

9981 - The Aadhaar of inclusion - Financial Express

The Aadhaar of inclusion

The govt must ensure that the JAM platform is not jammed by last-mile issues

By: Rana Kapoor | Updated: May 12, 2016 7:41 AM

Jan Dhan-Aadhaar-Mobile (JAM) is turning out to be exactly like its namesake, the sweet and sticky accompaniment to bread. Since its launch in August 2014, JAM has proved to be the only credible tool for the transformative governance that India seeks to usher in inclusive growth, socio-economic development and transparent governance.

With 21.68 crore Jan-Dhan accounts opened till date—13.3 crore in rural India—the reverberations for financial equality are of great significance. It can be turned into a tool for advancing equitable growth. With 4.2% of GDP dedicated to subsidies, it is imperative to plug gaps and guarantee delivery to the targeted population in order to ensure greater impact. The JAM trinity has spurred the hope that plugging pipeline leakages and financially empowering the target population may just become possible.

Even though the Supreme Court has ruled that Aadhaar can’t be taken as a proof of citizenship, the finance minister, in Budget FY17, emphasised on developing the platform for social security platform and the government has accorded it statutory status.

The Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Bill, 2016, paved the way for direct transfer of benefits (DBT) through JAM, beyond the 15.38 crore customers who are already DBT (LPG) beneficiaries. JAM is now proposed to be used at over 3 lakh fair price shops and also for delivering fertiliser subsidies. Transfers like MGNREGA funds are also proposed to be tied to JAM. Though Aadhaar provides one of the largest digital identity infrastructure, the government realises that it must bridge the digital gap and has thus proposed the Digital Literacy Mission of Rural India covering 6 crore households.

The PM has said that JAM is about ‘Just Achieving Maximum’. For banks and financial institutions, there is the access to the unbanked population to consider. With R36,795.55 crore already in Jan Dhan accounts, the retail portfolio of these accounts will surely turn profitable with time.

Incidentally, formal finance’s penetration in India is abysmally low—according to the World Bank, only 35% of Indians have an account with a formal financial institution. The all-India Inclusix (financial inclusion index) score is relatively low at 40.1 as per rating agency Crisil. Only one in seven Indians has access to banking credit. Rural India constitutes nearly 70% of the country’s population but has only 40% of bank branches.

It is essential to recognise that financial inclusion is one of the steps for achieving the goal of inclusive growth and not the goal in itself. JAM moves us towards empowerment, but financial inclusion will need awareness, participation and an ecosystem of social infrastructure. Finalising beneficiary identification and dealing with distributor opposition will be a key challenge.

It will need allies like the Fertiliser Association of India who would have to synchronise their customer base with Aadhaar card data to make it a success. Involvement and positive mindset of third-parties is imperative in creating the enabling ecosystem for inclusion. As the Economic Survey points out, bank-beneficiary linkage still needs to be strengthened for JAM’s success.

The government has also proposed a digital depository for school leaving certificates and mark-sheets. The digital locker will be tagged onto Aadhaar. Going forward, syncing financial and social information with Aadhaar will make financial inclusion much easier.

As JAM and Aadhaar gain momentum, the government needs to ensure that the platform is not jammed by last-mile issues like grass-root financial linkages, digital access and basic infrastructure like power supply and skills to operate the same. JAM can help scale up banking transactions and make themcost-effective. Ubiquitous connectivity, cross-data correlation and digital identity may make sustainable business a real possibility. Financial inclusion will materialise only with responsible borrowing and lending practices and Aadhaar will empower future transaction decisions.

The author is MD & CEO, Yes Bank and chairman, Yes Institute

9947 - Two years of NDA… a lot better than UPA - Financial Express

Two years of NDA… a lot better than UPA

Social sector schemes led by Jan-Dhan and crop insurance, along with efforts to resolve knotty issues like spectrum availability, show a clear change from the UPA’s time, but a forward movement on retrospective tax and multi-brand retail FDI is still pending

By: Santosh Tiwari | Updated: May 8, 2016 9:02 AM

Take the case of Jan Dhan-Aadhaar-Mobile (JAM). It is a refined and much better form of the UPA’s Aadhaar-based direct benefit transfer (DBT) scheme that was launched in January 2013 – the difference is, while the former failed, the latter is progressing well. (Reuters)

Two years is a good enough time to judge performance of a government, especially one that has come to power promising to completely change the way its predecessor worked. In that sense, with the NDA government, led by its star campaigner in the 2014 Lok Sabha polls, Prime Minister Narendra Modi, completing its two years in office on May 26, the UPA sympathisers have reason to ask ‘what has changed from 2014’, if more or less the same policies are being pursued. But, on the ground, the reality is that the government functioning, especially in furthering social sector schemes and policy reforms, is a lot better than the UPA’s last few years, even though in terms of investments and the economy picking up to usher in so called ‘achhe din’ promised by PM Modi, a lot of distance still needs to be covered.

This makes the setting perfect for a Congress-NDA battle on the achievements of PM Modi government as the ongoing Parliament session ends. While the government machinery is all set to blow its trumpet of the successes through punch lines like ‘Zara Muskara Do’, as reported by The Indian Express, which will be the theme of a grand event to showcase NDA success stories, the opposition ranks will cry ‘nothing has changed’. That may be an unending debate, but net-net, the policy paralysis and despondency witnessed during the UPA regime due to the scams like 2G, coal and Commonwealth Games, among others, has taken a back-seat. And though it is a fact that the NDA government has focused predominantly on fine-tuning and better implementation of the already existing policies and schemes under a repackaged brand to make them attractive and look new, the exercise has been fairly successful and has yielded good results.

Take the case of Jan Dhan-Aadhaar-Mobile (JAM). It is a refined and much better form of the UPA’s Aadhaar-based direct benefit transfer (DBT) scheme that was launched in January 2013 – the difference is, while the former failed, the latter is progressing well. The core of the NDA’s DBT model to disburse subsidies and all social sector entitlements such as scholarships and pension, Jan Dhan scheme, launched on August 28, 2014, boasts of 21.68 crore bank accounts now with Rs 36,796 crore of deposits in them along with 9.42 crore Suraksha Bima policies and 2.96 crore Jeevan Jyoti Bima policies. Facing the threat of being left in the lurch as a scheme not to be touched because it was touted as a game-changer by the UPA regime, when it left office, Aadhaar has in fact been pursued by the NDA government with the zeal that is required for pushing such a scheme. The number of Aadhaar enrolments surpassing the 100-crore mark last month, along with the enactment of the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits, and Services) Act, 2016, has no doubt created one of the biggest reform platforms in the country. Going by the success of the DBT in LPG, which helped government save Rs 21,000 crore in the last two financial years, the implementation of Aadhaar-based DBT across all government social spending, including those on food and fertiliser, is expected to ensure substantial savings by curbing leakages that could be as high as 40-50% in some areas.

Another significant measure that will help farmers across the country far more than any of the vote-catching loan waivers is the liberal crop insurance schemes, as only 5% of them are covered by it because of higher premiums. Under the new scheme announced by the government now, in which it will bear a major chunk of the premium, farmers will have to pay a uniform premium of only 2% for all Kharif crops and 1.5% for all Rabi crops. For commercial and horticultural crops, the premium will be only 5%.

If the steps taken for improving the returns on the government’s social sector spending are looking impressive, in case of dealing with some of the pending issues in areas like telecom also, such as the handling of spectrum shortage to improve telecom services and support Digital India and other government flagship schemes, there is a clear change visible in the approach.

Though the UPA government did the groundwork for releasing 3 carriers of 5MHz each in the 2100MHz band, it could not happen because the agreement with the defence ministry could not be worked out, that led to high bids in the 2015 auctions. Not only the defence ministry has now been brought on board making this spectrum available in the July auctions, the permission to allow spectrum trading and sharing has ensured the optimum use of the available spectrum by telecom operators through tie-ups.

While these are bright spots and big hits, among others, including those in the power sector, such as promotion of LED bulbs and streamlining of the coal block allocation and linkages, there are quite a few concern areas. Despite PM Modi and finance minister Arun Jaitley hinting at the scrapping of the 2012 retrospective tax amendments a number of times, it is still in the statute, and the two top cases, Vodafone and Cairn, are no way near any resolution. Unless these two cases are resolved, the ghost of retro tax will be around, even if the government doesn’t take up any new cases.

Not being able to pass the Land Act changes to improve the land acquisition environment crippled by the 2013 Act and also the critical goods and services tax (GST) because of lack of majority in the Rajya Sabha is another big dampener for reforms, and the NDA dispensation has failed to build enough pressure on the Congress for co-opting the party to support these Bills. If it succeeds in getting the Bankruptcy Bill passed in the Rajya Sabha, its score card on this will improve to a certain extent, as the Real Estate Bill has already been passed with the Congress support earlier in the session.

Indeed, the two years of the NDA government are more of a mixed bag in terms of results, but the overall atmosphere is far better than the UPA period – foreign direct investment in the country touching an all-time high of $51 billion in FY16 (till February) is an indication of that. The biggest concern, however, of the investment not picking up still remains, and the situation is unlikely to improve at least in the next two years in any significant manner – private sector investment slowed down to 29.4% of GDP in FY16 from 38% in FY08, and capacity utilisation in factories is 71-74% for the past two years. In the absence of any betterment of the global growth scenario in the near future, the government needs to target big reform measures like opening up multi-brand retail window for foreign investment and the passage of the GST and labour reform Bills in Parliament by finding ways to ensure Congress support to the reform legislations.

The road ahead in the next three years for the NDA government is going to be no less bumpy, even though with a GDP growth of around 7.5%, India is being considered a bright spot globally.

9942 - IDFC Bank partners with Govt. of Andhra Pradesh for Direct Benefit Transfer through Aadhaar-enabled Interoperable Micro ATMs - New Kerala

IDFC Bank partners with Govt. of Andhra Pradesh for Direct Benefit Transfer through Aadhaar-enabled Interoperable Micro ATMs

• 05-05-2016

Mumbai/Vijayawada, May 5 : IDFC Bank has partnered the government of Andhra Pradesh, Krishna District, to enable Direct Benefit Transfer through interoperable AEPS (Aadhaar Enabled Payment System) Micro ATMs that are within easy reach of citizens in every village

The partnership is the first to demonstrate the implementation of JAM based transfers (technology-enabled transfer of benefits using the Prime Minister Jan Dhan Yojana + Aadhaar + Mobile Number).

It also makes IDFC Bank the first to deliver Direct Benefit Transfer like social security pensions, and in coming days, others schemes like scholarships, LPG subsidies, MGNREGA benefits etc., through an interoperable AEPS Micro ATM model, at scale, in a district, in a concentrated manner. IDFC Bank will soon implement this model for the public distribution system (PDS) as well, making PDS payments cashless, thereby taking cashless digital banking in rural India to the next level.

The first interoperable social security pension was drawn through an IDFC Bank AEPS Micro ATM on May 1 at Ganapavaram, Mylavaram mandal by Shri Samdipaamu Guravayya in Krishna district. Nearly 32,000 pensioners will be using the IDFC Bank Micro ATM infrastructure to access their benefits in coming days. Over time, the concentrated coverage of banking services at a village level offered by IDFC Bank is expected to touch the lives of 46 lakh citizens in Krishna district alone.

The banks Micro ATM is owned and operated by women members of the self help groups (SHGs) approved for financial support by the government of Andhra Pradesh. IDFC Bank along with the Krishna district administration, has identified, trained, assessed and certified SHG members as individual Banking Correspondents (BCs). For some members, a Micro ATM ownership is the start of a new livelihood micro enterprise, while for others - it means the addition of a new revenue stream. An IDFC Micro ATM agent will cater to customers at Panchayat offices (in the first few days of every month) and later from their respective residences/work areas. These Micro ATMs offer all basic banking services to customers of any bank including deposits, withdrawals and transfers.

Citizens of Krishna district can now draw their entitlements in their neighbourhood itself, by transacting on any of the 500 Micro ATMs deployed by IDFC Bank across villages.

Dr. Rajiv Lall, Founder MD CEO of IDFC Bank, said, The Krishna district initiative is a milestone in last mile financial access, made possible through the intervention of technology. It emphasizes the benefits of JAM in reducing leakages, efficient targeting of beneficiaries and delivery of state welfare schemes based on biometric authentication. The initiative is also expected to encourage women entrepreneurship in local communities. It underlines IDFC Banks objective of being a private bank with a public purpose.

Speaking on the occasion, Babu. A, District Collector of Krishna, said, Krishna District has become the first district to initiate Direct Benefit Transfers, starting with pensions, through interoperable AEPS Micro ATMs at scale, run by SHG members in villages. We realized that citizens spend a lot of time and money on travelling to draw their benefits from bank branches and ATMs that are located at a distance from their residence.

The governments aim is to provide easy access to banking services, while also bringing in transparency and preventing leakages. We believe digital rural banking will address these concerns. IDFC Banks innovative and interoperable Micro ATM enables citizens to draw benefits in the vicinity of their homes at all times. It not only saves them time, money and effort; they can now stagger withdrawals, drawing smaller amounts, as the facility is close at hand. We are pleased that IDFC Bank shares our vision and has joined us in our journey to deepen financial access in the state like never before, he added.

9867 - Aadhaar's Identity Crisis - Business Today

Aadhaar's Identity Crisis

Aadhaar enrolments have crossed a billion. But will the project make the desired impact on the ground?

By Joe C. Mathew   New Delhi     Print Edition: May 8, 2016

Nikhil Dey, a renowned social activist who has been working with peasants in the villages of Rajasthan for decades, is finding more disgruntled poor around him these days. It all began with the decision of Rajasthan government to make Aadhaar-based authentication mandatory for supply of subsidised foodgrains through the public distribution system (PDS), a couple of months ago. While the objective of biometric authentication was to ensure that the subsidised foodgrains (wheat at Rs 2 and rice at Rs 3 a kg) reaches the real beneficiary by avoiding leakages, the process seems to have made life difficult, instead of making it easy, for most beneficiaries in Rajasthan.

"If you see what is happening in ration (PDS) shops in Rajasthan, the POS machines that are meant to identify the people are a complete disaster. Not even 50 per cent of the people are able to validate themselves through these machines," Dey says.

Dey agrees that in a theoretical sense, if his fingerprint is authenticated and if it works seamlessly, it is quite a breakthrough. "But it needs to work with, say, 98 per cent efficacy, because then, for the rest of the people, you can provide subsidised rice or direct cash transfer through manual mode. But when you are identifying only 30 or 40 per cent, and majority of the genuine beneficiaries is failing to make use of the POS system, and will have to be served manually, you are not ending corruption, you are inviting corruption." All three claims made in favour of Aadhaar-linked direct benefit transfer (DBT) are doubtful, he says.

There is this claim of efficiency, stopping corruption, and of inclusion. All three are going in the opposite direction, points out Dey. "When I am going to a ration shop, putting my thumb impression, maybe the Internet is not working or the machine is malfunctioning. I am in a situation where everyone in the village, including the dealer, says I am Nikhil, but my benefit gets delayed or deprived, only because the machine says I am not Nikhil.

Here I am not included, I am excluded." Multiple attempts mean time and frustration. It's costing money, it's costing time, it's costing resources and it is not accurate, asserts Dey. "We have to delink from this theoretical world of everything working perfectly to understandwhat is practically happening." Dey says that all the "song and dance" about DBT has no meaning as it was happening very effectively even without Aadhaar. "NREGA is already a DBT. The money goes into people's post office account or bank accounts. So people are getting the benefits directly. All I am saying is that even without Aadhaar, NREGA was already DBT, and pension was already DBT."

D.K. Mittal, former mission director, DBT Scheme, and ex-secretary, Financial Services, Ministry of Finance, agrees. "There are two aspects to the Aadhaar programme.

One is to identify a person by providing him a unique number, and the other is to provide direct subsidies by using the Aadhaar bridge payment platform." While Aadhaar is a wonderful programme for the purpose of identification, it was a mistake to converge the benefit transfer scheme and the Aadhaar, believes Mittal.

"Why do you mix the two? Fiftysixty per cent of the country's population work using their hands (depend on manual labour). Their fingerprints are subject to wear and tear even within a year. Even if the finger prints remain recognisable, there are connectivity problems, which makes payments through Aadhaar bridge payment system difficult," Mittal adds.

The Elixir

The statutory backing the citizen's unique identification number got with the enactment of The Aadhaar (Targeted Delivery of Financial and other Subsidies, Benefits and Services) Act 2016, in March and its high rate of enrolment (over 100 crore) has made it convenient for governments - Central and states - to project Aadhaar and biometric identifications as the best solution for all kinds of hurdles that trouble government-citizen interface.

The Central government has already introduced Aadhaar bridge payment system to transfer cooking gas subsidy to LPG customers across the country. Four states - Andhra Pradesh, Telangana, Puducherry and Delhi - have attempted Aadhaar-linked PDS system that Rajasthan is busy experimenting with now. Some others are trying Aadhaar-linked scholarships and pension payments to eligible citizens. The government claims that all such attempts resulted in saving public money.

The DBT mission, which is now under the direct administrative control of the Cabinet Secretariat, has identified about 30 schemes where direct cash transfer can be implemented. The scope of the project has been enlarged to cover all Central sector schemes and Centresponsored schemes. Of the Rs 6,031 crore that was disbursed through the DBT mode in January 2016, 37 per cent funds were transferred using the Aadhaar bridge payment system. This includes about 61 per cent of the benefit schemes implemented by the Rural Development Ministry (including NREGA) and 62.5 per cent of cooking gas subsidy payment by the Petroleum Ministry.

Delivering a lecture on 'the new economics of financial inclusion' in Australia on March 31, Finance Minister Arun Jaitley said that the Indian financial inclusion model - of which Aadhaar is an integral part - has received international acclaim. "The deployment of JAM trinity of Jan Dhan Yojana, Aadhaar, and mobile telephones is a hugely innovative intervention to carry this (financial inclusion) forward and place government finances at prudent levels," he said.

The government's financial inclusion policy has three objectives. It aims at providing social security, affordable credit to entrepreneurs and to fix the subsidy leakage problem through targeted DBT programmes. Jaitley claims that the database of 1.2 billion bank accounts when linked with 900 million mobile phones and a billion Aadhaar numbers would effectively ensure that the subsidy flow only happens to those who actually need it.

The importance of JAM trinity has been emphasised in the government's Economic Survey 2015/16 in a dedicated chapter that talks about 'spreading JAM across India's economy'. It clearly states that the project should meet all three objectives - the government must be able to identify beneficiaries; it must be able to transfer money to beneficiaries and the beneficiaries must be able to easily access their money.

The failure of the first category leads to inclusion errors and leakage - benefits intended for the poor flow to rich and 'ghost' households, resulting in fiscal loss. The failure of the other two leads to exclusion errors - genuine beneficiaries being unable to avail benefits. The survey wanted the government to be especially sensitive to exclusion errors, which typically hurt the poorest and can be invoked as reason - and highlighted by leakage beneficiaries - to roll back DBT schemes. The second alert becomes very significant in the backdrop of the Rajasthan experience.

The survey also acknowledges that despite huge improvements in financial inclusion due to Jan Dhan, the JAM preparedness indicators suggest that there is still some way to go before bank-beneficiary linkages are strong enough to pursue DBT without committing exclusion errors. "In that sense, the JAM agenda is currently jammed by the last-mile challenge of getting money from banks into beneficiaries' hands, especially in rural India," it says. The problem highlighted by the survey is not Aadhaar authentication but absence of last-mile connectivity for banking institutions for seamless transfer of cash into the hands of the beneficiary.

P.D.T. Achary, former Secretary General of Lok Sabha

"Aadhaar Bill comes under the category of financial bills, which should have been passed by both Houses of Parliament"

While the government insists that the Aadhaar Act is meant only to facilitate DBT by identifying the genuine beneficiaries and weed out duplication and corruption, it is being proposed for all kinds of authentication purposes, including e-verification of income-tax returns to mobile SIM issuance. And it is not just the governments that are excited about Aadhaar and DBT.

Early this year, an investor note from stock broking firm Ambit Capital Pvt Ltd said that the implementation of DBT for food subsidies can result in Rs 45,500 crore annual rise in disposable incomes of targeted households, which in turn can drive a 14 per cent increase in rural FMCG demand. Hindustan Unilever, Colgate and Dabur are likely to be the biggest beneficiaries, the brokerage said.

While the methodology adopted by Ambit could be questioned, there cannot be any doubt over the business opportunity Aadhaar and DBT linkage offers for another segment - the mobile phone operators and the software companies.

While the JAM Trinity talks about mobile banking, and thereby increase the scope of services and reach of mobile phone-linked payment solutions, the technology companies are getting huge assignments from banking establishments and government agencies to turn their core systems Aadhaar-friendly.

For instance, while the current National Electronic Fund Transfer (NEFT) platform was capable of handling any load of electronic cash transfer, it needed a tweak to handle DBT through Aadhaar-linked authentication. And any change meant business for technology firms. "By compelling banks to enable Aadhaar platform, you have made them change their core banking architecture. The National Payment Corporation of India (NPCA) itself is known to have spent a substantial amount to change its core banking solutions (CBS)," says an ex-bureaucrat, who was associated with the banking sector. In fact, every bank has done, or is doing it. The front-end of all the departments that handle DBT are working on their software to have it handle Aadhaar-linked payment demands. And all this simply means huge, long-term and recurring business opportunities for the IT companies that are facing margin pressures due to the economic lull in their traditional developed country markets.

Technically Sound?

The Aadhaar Bill was introduced as a Money Bill to avoid Rajya Sabha scruitiny, where the ruling NDA government is a minority. Experts, including members of the opposition Congress Party, have expressed doubts over the constitutionality and legitimacy of this action. Some are even moving the Supreme Court, which is already hearing some public interest litigations that were filed against the plans to make Aadhaar mandatory for DBT.

"Subtle attempts have been made to give Aadhaar Bill the appearance of a Money Bill by referring to the Consolidated Fund of India (CFI) in certain clauses. But this does not alter the character of the Bill, which does not deal with the CFI," P.D.T. Achary, former Secretary General of the Lok Sabha, says. According to him, the Aadhaar Bill comes under the category of financial bills, which should have been passed by both Houses of Parliament.

Gopal Krishna, an activist associated with Delhi-based Citizens Forum for Civil Liberties (CFCL), fears that a universal Aadhaar will have far-reaching implications that go beyond an effective DBT rollout. "There are ownership risks, technology risks and privacy concerns", he says. Krishna also points out that countries like the UK, Australia, France, the Phillippines, Germany, and Europe have rejected UID/Aadhaar-like projects while Asian countries like Pakistan, Bangladesh and Nepal are moving on similar lines as that of India. "Is it a coincidence that the similar schemes are unfolding in South Asia? Isn't there a design behind persuading and compelling developing countries to biometrically profile their citizens?" he asks.

Unique ID

Even if one dismisses the conspiracy theory, the fact remains that your unique number, once included in all official documents, leaves a trail that can be traced easily even when your biometric data remains protected. It has also a positive role to play.

Aadhaar authentication can be of unexpected help, too, as was evident when floods ravaged Chennai city recently. For dozens of hapless flood victims, whose entire belongings and identification documents got washed away, fingerprint or iris authentication was more than enough to avail the official relief. The biometric identification also helped them trace back their other identities.

In a bid to get the Aadhaar Bill passed at any cost, the government has deliberately framed it as a piece of legislation meant for the targeted delivery of financial and other subsidies, benefits and services, but in essence it is a law that provides statutory backing to an authority that issues a unique number as your national identity. In that sense, the original title of the Bill, the 'National Identification Authority of India Bill 2010', is very much relevant.

Unless the Supreme Court decides on the contrary, the enrolment and seeding of Aadhaar numbers for multiple purposes will only increase in the coming days. While it will definitely enhance the business opportunities of several stakeholders, one will have to wait till the next elections to understand its success, as that is the only time the real beneficiaries get to cast their feedback as votes.

If Rajasthan is an indication, the government needs to be more cautious in its approach.