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LATEST NEWS UPDATES | Smart card: A solution for public distribution system problem by Anil Swarup </title>
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The government of India's Rashtriya Swasthya Bima Yojana (RSBY)a¦ is now internationally recognised for its innovative approach to harnessing information technology to reach the poor, says the World Bank in the context of the smart card-based cashless health insurance scheme...."/>
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The government of India's Rashtriya Swasthya Bima Yojana (RSBY)a¦ is now internationally recognised for its innovative approach to harnessing information technology to reach the poor, says the World Bank in the context of the smart card-based cashless health insurance scheme...." />
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<h1 class="cat-box-title">Smart card: A solution for public distribution system problem by Anil Swarup</h1>
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Published on</span><span class="text-date"> Sep 28, 2011</span>
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<br /><div align="justify">The government of India's Rashtriya Swasthya Bima Yojana (RSBY)a¦ is now internationally recognised for its innovative approach to harnessing information technology to reach the poor, says the World Bank in the context of the smart card-based cashless health insurance scheme. The RSBY has now been picked up by UNDP as one of the 19 schemes worldwide for its publication, Sharing Innovative Experience: Social Protection Floor Success Stories. <br /><br />About 20 million smart cards are already in the field, providing in-patient health cover to around 80 million poor persons in 24 states. With the smart card, the beneficiary can go to any empanelled hospital across the country and get cashless treatment. Much is being discussed at present to identify ways and means to improve the public distribution system (PDS). Can RSBY's smart card platform provide a solution to the PDS tangle? <br /><br />Of all the safety net operations that exist in India, the most far-reaching in terms of coverage as well as public expenditure on subsidy is the PDS. It provides rationed amounts of rice, wheat, sugar and other non-food products - kerosene and coal - at below-market price to consumers through a network of fair price shops. This is also arguably the biggest food security network in the world. There is now an effort to increase the ambit of food security. However, serious implementation challenges remain: accessibility of fair price shops; leakages and diversion of subsidised goods; targeting errors, ghost cards and unidentified households; supply chain management; and comparative cost of income transfer to the poor. <br /><br />A clever use of the information and communication technology can tackle many of these challenges. Using IT to capture information at the point of sale and, thereby, creating a permanent audit trail of all relevant transactions can take care of distribution channel-related issues. There is no solution without empowering the deprived segment, that is the below-poverty-line (BPL) families, and by providing them freedom of choice in the manner of consuming the intended subsidy. <br /><br />The key question is whether there is an existing electronic platform wherein the subsidised commodity can be disbursed to the beneficiary effectively and transparently. There are a number of 'pilot' projects underway though no one is sure which of these 'pilots' will ultimately fly. Moreover, in all the pilots, the incubation cost is high. However, if this can be linked with an existing platform, not only will the marginal cost of this exercise be low, it can be scaled pretty quickly. <br /><br />The target group for both RSBY and PDS is, by and large, identical. The RSBY is already reaching out to a large segment of PDS beneficiaries through the smart card. The technology has stabilised for in-patient healthcare at pre-designated locations - in the form of empanelled hospitals - throughout the country. For PDS, the entitlements are available only at one location, thereby limiting the choice and access for the beneficiary. This should change. The RSBY platform can enable this. <br /><br />There is no foolproof authentication of the beneficiary under PDS, but under RSBY, an elaborate Key Management System (KMS) ensures that the smart card cannot be issued to a wrong person. At the point of service as well, RSBY facilitates a foolproof identification through biometric system as the thumb impressions of the beneficiaries can be matched with that in the smart card. The RSBY also enables an electronic trail of the transactions. All this can be put to use in the context of PDS. <br /><br /><br /><br />The RSBY smart card and the IT applications therein can be used as a platform for rolling out the PDS with some additional software that can ride on the smart card. The technology has already been tested in trying conditions, similar to those obtaining under PDS. It is now a question of moving ahead with the same conviction as was done in the case of RSBY. Creation of entitlements in the chip, similar to the health insurance entitlement of 30,000, is not only desirable but possible. <br /><br />With the installation of necessary hardware and software - likely to cost 10,000-15,000 though this cost is likely to come down as the volume increases - in these empanelled shops (which could be any public or private outlet fulfilling the prescribed criteria), the data can be transferred to a central database through a normal telephone line without necessarily going through the Internet. <br /><br />The government would, from time to time, fix the amount to be paid by the beneficiary and also declare the price at which reimbursement would be made to the outlet in case it is to be made by the government in cash. The government can also provide this reimbursement in kind though it would not be advisable as it would then entail retaining some part of the government administered supply chain that is apparently one of the primary sources of leakages under the existing arrangement. <br /><br />It would be wrong to assume that the proposed arrangement would ensure resolution of all the issues that plague the present system. However, the proposed system does have the potential to resolve them as it would make the entire process much more transparent on account of regular flow of information. Moreover, what it will certainly do is to empower the beneficiary in terms of giving him a choice to select the shop for sourcing the goods. It would virtually rule out diversion of subsidised products by the supply chain managers (in case government opts for cash reimbursement to the retail outlet). The biometric identification of the beneficiary will ensure delivery to the right person. <br /><br />RSBY is just the beginning. The smart card has the potential to change the way we think and to transform the entire delivery system. <br /><br /><em>(The author is a civil servant. Views are personal) </em><br /></div>
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<br><a href="http://economictimes.indiatimes.com/news/economy/policy/smart-card-a-solution-for-public-distribution-system-problem/articleshow/10165060.cms" class="re" target="_blank">The Economic Times, 29 September, 2011, http://economictimes.indiatimes.com/news/economy/policy/smart-card-a-solution-for-public-distribution-system-problem/articleshow/10165060.cms</a><div class="clear"></div>
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<h1 class="cat-box-title">Smart card: A solution for public distribution system problem by Anil Swarup</h1>
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Published on</span><span class="text-date"> Sep 28, 2011</span>
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<br /><div align="justify">The government of India's Rashtriya Swasthya Bima Yojana (RSBY)a¦ is now internationally recognised for its innovative approach to harnessing information technology to reach the poor, says the World Bank in the context of the smart card-based cashless health insurance scheme. The RSBY has now been picked up by UNDP as one of the 19 schemes worldwide for its publication, Sharing Innovative Experience: Social Protection Floor Success Stories. <br /><br />About 20 million smart cards are already in the field, providing in-patient health cover to around 80 million poor persons in 24 states. With the smart card, the beneficiary can go to any empanelled hospital across the country and get cashless treatment. Much is being discussed at present to identify ways and means to improve the public distribution system (PDS). Can RSBY's smart card platform provide a solution to the PDS tangle? <br /><br />Of all the safety net operations that exist in India, the most far-reaching in terms of coverage as well as public expenditure on subsidy is the PDS. It provides rationed amounts of rice, wheat, sugar and other non-food products - kerosene and coal - at below-market price to consumers through a network of fair price shops. This is also arguably the biggest food security network in the world. There is now an effort to increase the ambit of food security. However, serious implementation challenges remain: accessibility of fair price shops; leakages and diversion of subsidised goods; targeting errors, ghost cards and unidentified households; supply chain management; and comparative cost of income transfer to the poor. <br /><br />A clever use of the information and communication technology can tackle many of these challenges. Using IT to capture information at the point of sale and, thereby, creating a permanent audit trail of all relevant transactions can take care of distribution channel-related issues. There is no solution without empowering the deprived segment, that is the below-poverty-line (BPL) families, and by providing them freedom of choice in the manner of consuming the intended subsidy. <br /><br />The key question is whether there is an existing electronic platform wherein the subsidised commodity can be disbursed to the beneficiary effectively and transparently. There are a number of 'pilot' projects underway though no one is sure which of these 'pilots' will ultimately fly. Moreover, in all the pilots, the incubation cost is high. However, if this can be linked with an existing platform, not only will the marginal cost of this exercise be low, it can be scaled pretty quickly. <br /><br />The target group for both RSBY and PDS is, by and large, identical. The RSBY is already reaching out to a large segment of PDS beneficiaries through the smart card. The technology has stabilised for in-patient healthcare at pre-designated locations - in the form of empanelled hospitals - throughout the country. For PDS, the entitlements are available only at one location, thereby limiting the choice and access for the beneficiary. This should change. The RSBY platform can enable this. <br /><br />There is no foolproof authentication of the beneficiary under PDS, but under RSBY, an elaborate Key Management System (KMS) ensures that the smart card cannot be issued to a wrong person. At the point of service as well, RSBY facilitates a foolproof identification through biometric system as the thumb impressions of the beneficiaries can be matched with that in the smart card. The RSBY also enables an electronic trail of the transactions. All this can be put to use in the context of PDS. <br /><br /><br /><br />The RSBY smart card and the IT applications therein can be used as a platform for rolling out the PDS with some additional software that can ride on the smart card. The technology has already been tested in trying conditions, similar to those obtaining under PDS. It is now a question of moving ahead with the same conviction as was done in the case of RSBY. Creation of entitlements in the chip, similar to the health insurance entitlement of 30,000, is not only desirable but possible. <br /><br />With the installation of necessary hardware and software - likely to cost 10,000-15,000 though this cost is likely to come down as the volume increases - in these empanelled shops (which could be any public or private outlet fulfilling the prescribed criteria), the data can be transferred to a central database through a normal telephone line without necessarily going through the Internet. <br /><br />The government would, from time to time, fix the amount to be paid by the beneficiary and also declare the price at which reimbursement would be made to the outlet in case it is to be made by the government in cash. The government can also provide this reimbursement in kind though it would not be advisable as it would then entail retaining some part of the government administered supply chain that is apparently one of the primary sources of leakages under the existing arrangement. <br /><br />It would be wrong to assume that the proposed arrangement would ensure resolution of all the issues that plague the present system. However, the proposed system does have the potential to resolve them as it would make the entire process much more transparent on account of regular flow of information. Moreover, what it will certainly do is to empower the beneficiary in terms of giving him a choice to select the shop for sourcing the goods. It would virtually rule out diversion of subsidised products by the supply chain managers (in case government opts for cash reimbursement to the retail outlet). The biometric identification of the beneficiary will ensure delivery to the right person. <br /><br />RSBY is just the beginning. The smart card has the potential to change the way we think and to transform the entire delivery system. <br /><br /><em>(The author is a civil servant. Views are personal) </em><br /></div>
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<br><a href="http://economictimes.indiatimes.com/news/economy/policy/smart-card-a-solution-for-public-distribution-system-problem/articleshow/10165060.cms" class="re" target="_blank">The Economic Times, 29 September, 2011, http://economictimes.indiatimes.com/news/economy/policy/smart-card-a-solution-for-public-distribution-system-problem/articleshow/10165060.cms</a><div class="clear"></div>
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The government of India's Rashtriya Swasthya Bima Yojana (RSBY)a¦ is now internationally recognised for its innovative approach to harnessing information technology to reach the poor, says the World Bank in the context of the smart card-based cashless health insurance scheme...."/>
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<h1 class="cat-box-title">Smart card: A solution for public distribution system problem by Anil Swarup</h1>
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<br /><div align="justify">The government of India's Rashtriya Swasthya Bima Yojana (RSBY)a¦ is now internationally recognised for its innovative approach to harnessing information technology to reach the poor, says the World Bank in the context of the smart card-based cashless health insurance scheme. The RSBY has now been picked up by UNDP as one of the 19 schemes worldwide for its publication, Sharing Innovative Experience: Social Protection Floor Success Stories. <br /><br />About 20 million smart cards are already in the field, providing in-patient health cover to around 80 million poor persons in 24 states. With the smart card, the beneficiary can go to any empanelled hospital across the country and get cashless treatment. Much is being discussed at present to identify ways and means to improve the public distribution system (PDS). Can RSBY's smart card platform provide a solution to the PDS tangle? <br /><br />Of all the safety net operations that exist in India, the most far-reaching in terms of coverage as well as public expenditure on subsidy is the PDS. It provides rationed amounts of rice, wheat, sugar and other non-food products - kerosene and coal - at below-market price to consumers through a network of fair price shops. This is also arguably the biggest food security network in the world. There is now an effort to increase the ambit of food security. However, serious implementation challenges remain: accessibility of fair price shops; leakages and diversion of subsidised goods; targeting errors, ghost cards and unidentified households; supply chain management; and comparative cost of income transfer to the poor. <br /><br />A clever use of the information and communication technology can tackle many of these challenges. Using IT to capture information at the point of sale and, thereby, creating a permanent audit trail of all relevant transactions can take care of distribution channel-related issues. There is no solution without empowering the deprived segment, that is the below-poverty-line (BPL) families, and by providing them freedom of choice in the manner of consuming the intended subsidy. <br /><br />The key question is whether there is an existing electronic platform wherein the subsidised commodity can be disbursed to the beneficiary effectively and transparently. There are a number of 'pilot' projects underway though no one is sure which of these 'pilots' will ultimately fly. Moreover, in all the pilots, the incubation cost is high. However, if this can be linked with an existing platform, not only will the marginal cost of this exercise be low, it can be scaled pretty quickly. <br /><br />The target group for both RSBY and PDS is, by and large, identical. The RSBY is already reaching out to a large segment of PDS beneficiaries through the smart card. The technology has stabilised for in-patient healthcare at pre-designated locations - in the form of empanelled hospitals - throughout the country. For PDS, the entitlements are available only at one location, thereby limiting the choice and access for the beneficiary. This should change. The RSBY platform can enable this. <br /><br />There is no foolproof authentication of the beneficiary under PDS, but under RSBY, an elaborate Key Management System (KMS) ensures that the smart card cannot be issued to a wrong person. At the point of service as well, RSBY facilitates a foolproof identification through biometric system as the thumb impressions of the beneficiaries can be matched with that in the smart card. The RSBY also enables an electronic trail of the transactions. All this can be put to use in the context of PDS. <br /><br /><br /><br />The RSBY smart card and the IT applications therein can be used as a platform for rolling out the PDS with some additional software that can ride on the smart card. The technology has already been tested in trying conditions, similar to those obtaining under PDS. It is now a question of moving ahead with the same conviction as was done in the case of RSBY. Creation of entitlements in the chip, similar to the health insurance entitlement of 30,000, is not only desirable but possible. <br /><br />With the installation of necessary hardware and software - likely to cost 10,000-15,000 though this cost is likely to come down as the volume increases - in these empanelled shops (which could be any public or private outlet fulfilling the prescribed criteria), the data can be transferred to a central database through a normal telephone line without necessarily going through the Internet. <br /><br />The government would, from time to time, fix the amount to be paid by the beneficiary and also declare the price at which reimbursement would be made to the outlet in case it is to be made by the government in cash. The government can also provide this reimbursement in kind though it would not be advisable as it would then entail retaining some part of the government administered supply chain that is apparently one of the primary sources of leakages under the existing arrangement. <br /><br />It would be wrong to assume that the proposed arrangement would ensure resolution of all the issues that plague the present system. However, the proposed system does have the potential to resolve them as it would make the entire process much more transparent on account of regular flow of information. Moreover, what it will certainly do is to empower the beneficiary in terms of giving him a choice to select the shop for sourcing the goods. It would virtually rule out diversion of subsidised products by the supply chain managers (in case government opts for cash reimbursement to the retail outlet). The biometric identification of the beneficiary will ensure delivery to the right person. <br /><br />RSBY is just the beginning. The smart card has the potential to change the way we think and to transform the entire delivery system. <br /><br /><em>(The author is a civil servant. Views are personal) </em><br /></div>
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<br><a href="http://economictimes.indiatimes.com/news/economy/policy/smart-card-a-solution-for-public-distribution-system-problem/articleshow/10165060.cms" class="re" target="_blank">The Economic Times, 29 September, 2011, http://economictimes.indiatimes.com/news/economy/policy/smart-card-a-solution-for-public-distribution-system-problem/articleshow/10165060.cms</a><div class="clear"></div>
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LATEST NEWS UPDATES | Smart card: A solution for public distribution system problem by Anil Swarup
Smart card: A solution for public distribution system problem by Anil Swarup
Published on Sep 28, 2011
Modified on Sep 28, 2011
The government of India's Rashtriya Swasthya Bima Yojana (RSBY)a¦ is now internationally recognised for its innovative approach to harnessing information technology to reach the poor, says the World Bank in the context of the smart card-based cashless health insurance scheme. The RSBY has now been picked up by UNDP as one of the 19 schemes worldwide for its publication, Sharing Innovative Experience: Social Protection Floor Success Stories.
About 20 million smart cards are already in the field, providing in-patient health cover to around 80 million poor persons in 24 states. With the smart card, the beneficiary can go to any empanelled hospital across the country and get cashless treatment. Much is being discussed at present to identify ways and means to improve the public distribution system (PDS). Can RSBY's smart card platform provide a solution to the PDS tangle?
Of all the safety net operations that exist in India, the most far-reaching in terms of coverage as well as public expenditure on subsidy is the PDS. It provides rationed amounts of rice, wheat, sugar and other non-food products - kerosene and coal - at below-market price to consumers through a network of fair price shops. This is also arguably the biggest food security network in the world. There is now an effort to increase the ambit of food security. However, serious implementation challenges remain: accessibility of fair price shops; leakages and diversion of subsidised goods; targeting errors, ghost cards and unidentified households; supply chain management; and comparative cost of income transfer to the poor.
A clever use of the information and communication technology can tackle many of these challenges. Using IT to capture information at the point of sale and, thereby, creating a permanent audit trail of all relevant transactions can take care of distribution channel-related issues. There is no solution without empowering the deprived segment, that is the below-poverty-line (BPL) families, and by providing them freedom of choice in the manner of consuming the intended subsidy.
The key question is whether there is an existing electronic platform wherein the subsidised commodity can be disbursed to the beneficiary effectively and transparently. There are a number of 'pilot' projects underway though no one is sure which of these 'pilots' will ultimately fly. Moreover, in all the pilots, the incubation cost is high. However, if this can be linked with an existing platform, not only will the marginal cost of this exercise be low, it can be scaled pretty quickly.
The target group for both RSBY and PDS is, by and large, identical. The RSBY is already reaching out to a large segment of PDS beneficiaries through the smart card. The technology has stabilised for in-patient healthcare at pre-designated locations - in the form of empanelled hospitals - throughout the country. For PDS, the entitlements are available only at one location, thereby limiting the choice and access for the beneficiary. This should change. The RSBY platform can enable this.
There is no foolproof authentication of the beneficiary under PDS, but under RSBY, an elaborate Key Management System (KMS) ensures that the smart card cannot be issued to a wrong person. At the point of service as well, RSBY facilitates a foolproof identification through biometric system as the thumb impressions of the beneficiaries can be matched with that in the smart card. The RSBY also enables an electronic trail of the transactions. All this can be put to use in the context of PDS.
The RSBY smart card and the IT applications therein can be used as a platform for rolling out the PDS with some additional software that can ride on the smart card. The technology has already been tested in trying conditions, similar to those obtaining under PDS. It is now a question of moving ahead with the same conviction as was done in the case of RSBY. Creation of entitlements in the chip, similar to the health insurance entitlement of 30,000, is not only desirable but possible.
With the installation of necessary hardware and software - likely to cost 10,000-15,000 though this cost is likely to come down as the volume increases - in these empanelled shops (which could be any public or private outlet fulfilling the prescribed criteria), the data can be transferred to a central database through a normal telephone line without necessarily going through the Internet.
The government would, from time to time, fix the amount to be paid by the beneficiary and also declare the price at which reimbursement would be made to the outlet in case it is to be made by the government in cash. The government can also provide this reimbursement in kind though it would not be advisable as it would then entail retaining some part of the government administered supply chain that is apparently one of the primary sources of leakages under the existing arrangement.
It would be wrong to assume that the proposed arrangement would ensure resolution of all the issues that plague the present system. However, the proposed system does have the potential to resolve them as it would make the entire process much more transparent on account of regular flow of information. Moreover, what it will certainly do is to empower the beneficiary in terms of giving him a choice to select the shop for sourcing the goods. It would virtually rule out diversion of subsidised products by the supply chain managers (in case government opts for cash reimbursement to the retail outlet). The biometric identification of the beneficiary will ensure delivery to the right person.
RSBY is just the beginning. The smart card has the potential to change the way we think and to transform the entire delivery system.
(The author is a civil servant. Views are personal)
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