As the government puts its ambitious direct benefits transfer (DBT) scheme on test in select districts from January 1, chief economic advisor Raghuram Rajan on Saturday said there should be a pressure on the agency concerned not to leave any area out of Aadhaar numbers.
“If the Aadhaar number is not forthcoming in a particular case, we should pressurise the Aadhaar agency,” Rajan said at a seminar organised on financial inclusion.
Aadhaar numbers are being rolled out by the Unique Identification Authority of India (UIDAI) and the National Population Registrar (NPR). UIDAI is expected to issue Aadhaar numbers to 600 million people, and NPR would issue for the rest. So far, the authority has issued it to over 220 million people.
Among other uses, Aadhaar numbers will be used to directly transfer cash to beneficiaries for various social welfare programmes, called DBT.
The scheme is being tested in 20 districts of the country since January 1, covering 200,000 beneficiaries. Currently, all DBTs are not going through Aadhaar numbers only. On January 1, about 2,000 beneficiaries were transferred an amount of Rs 35 lakh on the Aadhaar platform. However, the transfers were made in these districts even to the beneficiaries, who did not have Aadhaar-linked bank accounts.
The amount was transferred through National Payments Corp of India to eight banks for seven schemes, mostly education scholarship, which was later transferred to the accounts off beneficiaries in 23 banks.
Earlier, the government had planned to roll out the scheme in 51 districts from January 1, 2012. The number of districts was first reduced to 43 and later to 20, owing to lack of preparedness in many of these districts.
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The government will transfer cash benefits like scholarships, pensions, and rural job scheme wages directly to the bank or post office accounts of identified beneficiaries. On February 1, 11 more districts will be added to the scheme, followed by 12 more districts in March, taking the total number of districts to 43 in the first phase.
Rajan said: "It’s important that we retain our credit culture, and make fiscal transfers more direct. If we wait for everything to be in place, we would be waiting for ever."
He said financial inclusion is not just about credit. "It’s also about savings, and insurance. It’s about providing a wide variety of other financial services,” he added.
Rajan said financial inclusion should not be measured only by the number of new enterprises that comes up. "Small shops can benefit from new inventories that they can buy with more credit, but people who get credit are not always going to use it for such purposes.”
Rajan said one of the reasons China had more enterprises than India was the much higher education in the city and town level.