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LATEST NEWS UPDATES | Push for cash transfers via Aadhar platform

Push for cash transfers via Aadhar platform

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published Published on Nov 10, 2012   modified Modified on Nov 10, 2012
-The Times of India

The government is moving rapidly to enable cash transfers through the Aadhar platform with 51 districts to be covered by January 1, 2013, and half the country four months later — a bid to rollout an initiative aimed at streamlining subsidies while also earning votes.

The plan is to put money directly into bank accounts of beneficiaries of government schemes like scholarships, cheap food under the Public Distribution System, subsidized cooking gas, rural employment guarantees and ultimately even fertilizer sold at a discount to farmers.

The decision to fast forward cash transfers comes soon after Aadhar card number 21 crore was recently handed out at Dudu in Rajasthan at a ceremony attended by Prime Minister Mamohan Singh, Congress president Sonia Gandhi and finance minister P Chidambaram.

With big ticket programmes like the food security Act and the bill on land acquisition and rehabilitation stuck in the legislative and Cabinet consultation process, cash transfers seem doable, giving the government an opportunity to merge reforms with political returns.

The PM-headed national committee on cash transfers will meet to consider roadmap and timelines on November 26.

Pilot projects have shown that transferring cash to accounts through a digitized base drawn up on the basis of the Aadhar enumeration can substantially reduce bogus beneficiaries and curb diversion of subsidized goods.

The government is also considering the viability of transferring money to bank accounts held in the names of women members of a family to see if this addresses fears of cash being misspent while controlled by males. Cash transfers are seen as vote enhancer by increasing a sense of entitlement.

A meeting convened by Pukok Chatterji, principal secretary to the PM, on Friday decided that ministries will send to the PMO and Planning Commission lists of schemes, roadmaps and timelines by November 20.

The Unique Identification Authority of India ( UIDAI) is to set up special cells to work out technical detail of cash transfers and will also roll out Aadhar in accordance to the roadmap that the government finally agrees on.

The big hitch in cash transfers is the need to improve financial inclusion as poor beneficiaries may not have bank accounts and be at a disadvantage in operating them as well. Access to banking is a big issue and the PMO has asked the department of financial services to examine likely solutions that can include period outreach to remote areas to train and monitor beneficiaries.

Cash transfers can, in the immediate context, be more doable in urban settings. The government is looking to draw lessons from pilot projects but will need to work with states to digitize beneficiary bases. The states often disseminate schemes on the ground.

Aadhar will hold possibilities for the states as well since most of them have programmes similar to the ones offered by the Centre like monetary assistance to new mothers and medical coverage to below poverty line population.

The Times of India, 10 November, 2012, http://timesofindia.indiatimes.com/india/Push-for-cash-transfers-via-Aadhar-platform/articleshow/17164160.cms


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