There is an expansive Madhubani painting, probably from the eponymous district in Bihar, behind Planning Commission Deputy Chairman Montek Singh Ahluwalia’s desk at New Delhi’s Yojana Bhawan. As he helps direct the government’s ambitious direct cash transfer scheme, riding on Nandan Nilekani-led UIDAI’s Aadhaar platform, it is rolling out the programme in remote districts such as Madhubani that will be Ahluwalia’s biggest challenge. It will involve dealing with differently tempered state governments, a creaking post office network and thousands of banking correspondents, among other issues.
In an interview to Santosh Tiwari and Devjyot Ghoshal, he says the initial experience of taking the scheme to 51 districts, starting January 1, will allow the government to identify the problems and, hopefully, find a way to dealing with these. Edited excerpts:
You have said this will be a gradual introduction across 51 districts, starting January 1.
What we’ve said is that we’ll roll it out on January 1. It’s possible for some schemes we are able to do it by then but if it gets delayed to January 30, we shouldn’t regard that as a failure; there are so many districts and so many schemes. Each scheme will roll-out separately because the work of digitising the database and seeding it will be scheme-specific. So, you might have a situation where one scheme gets the transfers effective on January 15, another on January 20. By the end of January, certainly, a substantial number of schemes in a substantial number of districts should actually have been implemented, in the sense that money should have moved.
So, from January 1, at least for some schemes, work on the payment platforms will begin and gradually the digitisation will happen.
That platform work is already on. My impression is that the moment the electronic cash transfer happens, any other mode (of payment) would cease. We cannot have two running together within the same district. We have to make sure the list of beneficiaries is sufficiently seeded. We have to keep a window where people who didn’t get into the list fully are able to claim their scholarship or whatever it is in a very short time.
Is there a time frame where all the 29 schemes across 51 districts will be rolled out?
That’s being done right now. We are probably going to have a video conference with all the district collectors, on December 13 or 14. That is when clear instructions will be given, and when we will hear from the collectors whether they can implement it or it will take a few weeks more.(TRANSFORMING THE TRANSFER)
Are you hopeful that within six months, say, in the majority of the 51 districts or in all, at least the initial clutch of schemes will be rolled out?
For these districts, absolutely. There is a lot of concern that the Aadhaar penetration in some of these districts is 80 per cent but in many others is 40 per cent or lower. The important point is not the overall Aadhaar penetration because that is a long-term objective. The important question is how soon we can get the beneficiary lists seeded with Aadhaar lists.
You can never be sure what electronic glitch or the other exists. It is my expectation that by the end of January, we should be able to say, ‘For this district, for these schemes, it has visibly worked’ and if you like, you can do a random check of the beneficiary list and ask them if they got any money.
It can take up to three months for an Aadhaar card to be delivered after the registration. Played out at scale, if it takes this long, it will mean that there will be a large number of people without Aadhaar and without access to schemes.
I accept that the speed will have to be totally different from the normal roll-out of Aadhaar. I think they can do that. You can’t have a system where you say it will Aadhaar-enabled, and Aadhaar-enabled adds a three-month delay. That is one of the things that will have to be sorted.
In a recent interview, you said ‘only a few more’ banking correspondents (BCs) were required for the initial roll-out. Are you concerned that as this programme reaches scale, this will be a crucial issue?
I accept that when you’re rolling out, you do need BCs for two purposes. One, to actually enroll and give the person a bank account number. Also, so he can have access to the fellow, to withdraw cash. In the districts we are talking about, if there is a deficiency of BCs, that will weaken the operation. But, remember, it won’t weaken it in the sense that today scholarships are being paid into their bank. If they are currently working by cheques, the same cheques will work. If they are currently drawing money by going to the bank, they can still do that. The only things the BC does is that if he happens to be living next to you in a village and you want Rs 200, you can go there, use your thumb imprint and get the money.
The main glitch is if they can’t find enough BCs at the time of seeding but I don’t think it’ll be very difficult.
If you look at MGNREGS (the rural job guarantee), 55 per cent of the accounts are held with post offices (POs). Beneficiaries of other schemes also hold accounts with POs. How will you deal with this?
If you have been traditionally getting your money credited to a PO account, you’ll have to open a bank account through this mechanism and it will be credited to your bank account. The key thing is that this should not be a problem.
Are you saying that for this platform to work, beneficiaries will have to mandatorily migrate away from PO accounts?
Not if the PO puts in place a combined banking solution comparable to what the bank have, which would enable an Aadhaar-gateway to send the money. But I don’t see why anyone should mind if someone is told a scholarship was being sent to a PO account and is now being sent to your bank account. The only disadvantage is that the PO is next door and the bank is not, to which our answer would be, there is a BC. Then, the person could say there isn’t a BC in our village. We have to address that issue. But making the PO competitive is not a bad idea.
Have you got any indication that the department of posts will sort out its system?
In principle, they say, of course, we will do that but it’s going to take them a long time. So, initially, at least, my guess is these beneficiaries would move to the banking system.
Andhra Pradesh and Maharashtra together have more than 40 per cent of India’s total Aadhaar enrolment and in the 10 most populous states, Aadhaar penetration is very weak for many. How critical is the participation of the state governments in expanding this programme?
The government, presumably, has an ongoing programme for rolling out (the enrolment process).
Nandan (Nilekani) has not said to me that the states are not willing to do it. So, I am assuming whatever the programme is, that will be continuing. At the moment, the focus is on these 51 districts. For the larger states, too, we have to do that. And, if this proof of concept works, everybody (state governments) will want it done this way.
If state governments say, ‘No, it can’t be done’, there is a problem because it can only be done through district collectors. When the collectors have the video conference with the finance minister — I would be there and Nandan — they make sure they have state government approval.
In states where the National Population Register (NPR) is responsible for enrolment, the penetration is still very low.
My view is that that was an original agreement, that let NPR do half the states and let Nandan (Nilekani-led UIDAI) do the other half. If NPR is not rolled out to the extent required, we can unleash the Nandan mode just for Aadhaar purpose in those states, too. A little bit duplicative but there’s no harm in that. So, it’ll be a combination of both.
