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LATEST NEWS UPDATES | Nilekani panel's terms of reference extended

Nilekani panel's terms of reference extended

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published Published on Sep 21, 2011   modified Modified on Sep 21, 2011

-The Hindu

 

The government on Tuesday extended the terms of reference of the Nilekani task force on direct transfer of subsidies to include an Aadhaar-enabled unified payment infrastructure.

Set up by the Union Finance Ministry under the chairmanship of Unique Identification Authority of India (UIDAI) chief Nandan Nilekani in February, the task force was asked to recommend and implement a solution for direct transfer of subsidies on kerosene, LPG and fertiliser to the intended beneficiaries.

Announcing the panel's expanded brief in a statement here, the Finance Ministry said: “It has been decided to extend the Terms of Reference of the task force to include an Aadhaar-enabled unified payment infrastructure.”

Under UIDAI's Aadhaar scheme, citizens are being allotted a unique identification number aimed at better targeting of subsidies to intended beneficiaries so as to avoid leakage and wastage of funds.

As part of the extended terms of reference, the task force has now been asked to “recommend a detailed solution architecture for direct transfer of subsidy, wherein Ministries and State governments, through a payment bridge, can transfer funds into any Aadhaar-enabled bank account on the basis of the Aadhaar number.”

Alongside, the panel has been asked to recommend an architecture for e-banking through inter-operable business correspondents and examine the alignment of current standards for devices that will be deployed by them. It has also been asked to suggest one to align the recommendations of the Inter-Ministerial Group (IMG) on a ‘Framework for the Delivery of Basic Financial Services' using mobile phones with Aadhaar-enabled payments infrastructure.

Apart from these tasks, the panel has been told to recommend a solution that incorporates a robust customer support and grievance redress mechanism; recommend the feasibility of extending the solution architecture to include payment instruments apart from bank accounts and post office savings bank accounts to facilitate the fostering of e-commerce; oversee and evaluate the implementation of the solution proposed on a pilot basis through the implementing Ministries concerned, as and when approved by the Empowered Group of Ministers (EGoM)); and suggest a common framework to adopt it for all government welfare schemes involving disbursements to individual beneficiaries.

The solutions devised should ensure that the entire country can leverage the same payments platforms, the statement said while noting that while recommending an approach to harmonise various exercises related to opening bank accounts for financial inclusion and electronic benefit transfers, the panel should also identify and recommend amendments, if any, required to existing government payment and accounting procedures to enable direct subsidy transfers.

“The solutions devised by the task force may necessarily be incentive-compatible for all stakeholders in payments processing, respect beneficiary choice, drive competition, be fully interoperable and should be an implementable solution,” the statement said.

In view of the expanded brief, the government has also enlarged the task force by adding five new members. They will include a representative from the Reserve Bank of India, a representative from the Indian Banks Association (IBA), Director of the National Informatics Centre (NIC), the Controller-General of Accounts (CGA) in the Finance Ministry or one of his representatives and the Chief Executive Officer of the National Payments Corporation of India (NPCI).

“The task force will submit its final report on the extended Terms of Reference within three months of the extension of the Terms of Reference,” the statement said, noting the recommendations of the final report on Aadhaar-enabled payment infrastructure may also be incorporated in its final report on direct transfer of subsidies.

The task force submitted its interim report on July 5 and the suggestions therein were taken up by Ministries on a pilot basis under its supervision of the task force. The interim report suggested direct cash transfers through banks, ATMs or even mobile banking to beneficiaries of kerosene, LPG and fertiliser subsidies.

The Hindu, 21 September, 2011, http://www.thehindu.com/todays-paper/tp-national/article2471935.ece


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