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According to a Cabinet minister closely involved with the project, the successful implementation of Direct Benefits Transfer (DBT) for cooking gas subsidy has shown the technology behind DBT works and is scalable. "However, other schemes are just prodding along because of systemic problems."
The minister added the response so far has been so low because among the top five welfare schemes under the entitlement programme, only scholarships was taken up in the first phase, which stands in the fifth position. While the largest scheme, the Public Distribution System, has not been included at all, the second largest - cooking gas - has recently come on-board, while the third on the list, MGNREGS (job guarantee scheme) is still not ready. From pensions (fourth largest), only three schemes were added, last week. "In most of the current schemes under DBT, transactions are episodic. If cooking gas, MGNREGS and pension schemes were on board from the beginning, better value could have been derived from the project so far." (THE SPREAD OF DBT)
Business Standard spoke to over half a dozen officials working at the field level and most said while at the fundamental level, the scheme is surely a "game-changer", an unprecedented level of coordination is required to make it work. "There are some schemes which have migrated their systems on the DBT platform on their own initiative and are doing very well," said a government official working with the project. "At the end, it boils down to which state/district/department really has the intent to roll it out," added another.
Even as the second phase has been flagged off, which covers one-fifth of the country, there are recurring challenges such as penetration of Aadhaar, lack of cooperation from banks, issues in seeding the account number with Aadhaar and digitising of databases. (KEY ISSUES WITH DBT)
Jairam Ramesh, Union minister for rural development, said some districts are doing well and the big issue is with banks, which are not cooperating much. "There is confusion regarding the fee which the banking correspondents will be paid and the model of multiple banking correspondents with multiple banks has not happened yet."
The minister stressed that the aim should be to route all transactions through the Aadhaar-based platform to have a real impact. In some schemes, money is being directly transfered to the bank accounts as their seeding with Aadhaar is taking time. However, the linkage with Aadhaar is essential to eradicate ghosts and fakes from the system.
Ramesh said issues have also cropped up with states like Tamil Nadu raising alarm over the Centre trying to bypass them by directly transferring payments to people. However, that is not the intention.
Despite the fact that the government has pulled out all stops to roll out the scheme, "in some cases it is just bureaucratic lethargy," is acting as an impediment.
Browsing at the latest numbers in a particular state and looking somewhat disappointed at what propped up at the computer screen, one government official sighed and remarked: "In some districts, the administrators claim they are not able to locate the beneficiaries. These are the same people who know their territory like the back of their hand. Maybe the project has now started touching where it hurts the most - at the lowest level of corruption in the country."
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LPG: Cooking a success story Within six weeks of its rollout in about 20 districts, cooking gas subsidy transfers recorded 2.3 million transactions with Rs 90 crore sent directly into the Aadhaar-linked bank accounts of consumers, turning it into a DBT success story. The scheme’s “technological high ground” worked in its favour, say experts and officials. The database of LPG consumers had been fed into computers since 2000. Though the list was “primitive and corrupt,” the exercise to clean it up had started few years ago. However, most other schemes are still struggling with digitising databases. Moreover, its supply chain, to the last mile of delivery is automated. |
As a result, from zero per cent seeding of beneficiary bank accounts with their Aadhaar number in December last year, the ministry could scale up to 65 per cent as of now. Though it has been able to migrate only 35 per cent of its target base on DBT, it claims to have already saved roughly Rs 2,000 crore by blocking allegedly 6.3 million bogus connections.
However, officials say the support of banks in seeding Aadhaar and delivering the payments to the consumers in un-banked areas, consumer awareness and, finally, penetration of Aadhaar will pose challenges even in their case if they have to expand the scheme to the whole of India.
