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Cash transfer reaches just 10% of test population-Sidhartha
-The Times of India


NEW DELHI: Direct Benefit Transfer (DBT) was supposed to be a game-changer ahead of the 2014 general elections, with the government planning to plug leakages by transferring cash directly into the accounts of beneficiaries and hoping to cash in on their goodwill. But eight months down the line, it is discovering that the grand plan has run into bureaucratic walls and the beneficiaries are not ready to be part of the cash transfer architecture.

According to official data, there are at least four schemes where no cash transfers had taken place till early August, the latest period for which data is available. In another four, direct transfers ranged between Rs 2 lakh and Rs 8 lakh.

Overall, in a presentation made to Prime Minister Manmohan Singh last month, it emerged that a little over half of the population identified for 25 schemes in 121 districts, where pilots are being run, had bank accounts. While a quarter had both bank accounts and Aadhaar, there were less than 10% who had them linked. So, till July, effectively less than 10% of the population in the test cases had actually experienced the benefits of direct transfer.

In case of cooking gas, the petroleum ministry has said that in the 20 districts where a pilot project is underway, 16.6 lakh of the 72.3 lakh consumers - which is around 23% of the target group - are receiving subsidy via DBT.

The limited success in a majority of the schemes has prompted the government to consider reducing the size of the experiment. Of the 28 schemes identified, two (Dhanalakshmi and National Scheme for Incentive For the Girl Child for Secondary Education) are proposed to be dropped, while another nine may be handed over to the states, several of whom are unwilling to share the list of beneficiaries.

In many cases, ministries have said that the scheme was ill conceived. For instance, the scheme for the girl child does not involve direct cash transfer. Instead, a fixed deposit is offered to students which can be encashed when they turn 18. Dhanalakshmi has been included in the test run despite the women and child department deciding to wind up the scheme.

Several ministries have pointed out that in some of the schemes included under DBT funds are often routed through state and district government agencies and do not flow into accounts of beneficiaries. In case of some rural development schemes, the ministry has said that states' contribution is often more than the Centre's. States aren't on board either. For instance, Tamil Nadu has demanded that all funds should be routed through the states, while Congress-ruled Andhra Pradesh has said that it is better placed to handle cash transfers.

The government has also admitted that ministries have not changed the operating protocol to deal with the shift.

But the government is not giving up just yet despite a host of obstacles. A major stumbling block, officials admitted during the meeting, is opening bank accounts in "difficult pockets". Similarly, it now emerges that the post office banking network is not ready to take a part of the load. For instance, core banking in post offices is behind schedule and tenders for handheld devices, to dispense cash in unbanked areas, were cancelled. "It is not likely that the postal system will be ready for any form of DBT (except in Andhra Pradesh which has a different system in place) till March 2014," the minutes of the meeting chaired by the PM on August 5 said.

Progress on issuing Aadhaar and National Population Registration is not providing much comfort either. For instance, in 242 of the 650 districts, penetration varies between zero and 10% and the Unique Identification Authority of India has conceded that it will take up to 27 months to issue Aadhaar. Only 160 districts have Aadhaar coverage of over 50%. Similarly, the Registrar General of India has been asked to expedite biometric data collection in states such as Uttar Pradesh, Bihar, Chattisgarh, West Bengal, Odisha, Jammu & Kashmir and the North East.