COVID-19 relief scheme: Poor find access to accounts hard, says study

On a day when the Centre said more than 39 crore people had received cash benefits under its COVID-19 relief scheme, a survey of rural households in six States cautioned that difficulty in accessing bank accounts meant that the impact of these benefits is more limited for the rural poor.

Forty days after Finance Minister Nirmala Sitharaman announced a COVID-19 relief package, including extra grain allocations and cash transfers for the poor, Finance Ministry data showed that ₹34,800 crore has been transferred so far.

Read | Fact check: Centre’s beneficiary count for COVID-19 relief is faulty

Beneficiaries include 20 crore poor women who received the first instalment of ₹500 in their Jan Dhan bank accounts, indicating more than 98% coverage of the target group. More than 5.5 crore have got the second instalment as well.

Almost 3 crore pensioners, 8.2 crore farmers, 2.2 crore construction workers and 45 lakh salaried workers also received benefits, the Ministry said. It is important to note that some of these groups overlap with each other, and some of the funds are prior existing benefits anyway.

A survey of 130 rural families in Uttar Pradesh, Chhattisgarh, Gujarat, Odisha, Jharkhand and Madhya Pradesh, conducted by students and volunteers under the guidance of development economists Reetika Khera and Jean Dreze at the end of April, showed that only a third of the households had been able to go to the bank last month, although bank branches were supposed to remain open during the lockdown.

Repeated visits

Of those who did go to the bank, 80% were able to successfully withdraw cash, although they also mentioned repeated visits, long queues and Aadhaar-related problems. One in five returned without any money; reasons included that the bank was shut or they were put off by the large crowds, or that their passbooks were blocked or their accounts showed zero balance.

Only five respondents were able to access money outside their banks through ATMs, banking correspondents or customer service centres, although the Centre had encouraged these methods of accessing bank accounts at a time of mandated social distancing, to avoid crowds at rural bank branches.

COVID-19 relief scheme: Poor find access to accounts hard, says study

Only 23% of surveyed households said they had received ₹500 in their Jan Dhan bank accounts or received an SMS notification about it. About a third of households did not get any money, but more than 40% said they simply did not know if the money had been received.

In practice, this means that many of the intended beneficiaries of the Centre’s cash transfers in these areas have not been able to access the relief at a time when it was desperately needed. “The problem with the government’s decision to give female Jan Dhan account holders ₹500 is that many poor women have non-JDY accounts. Further, those who have JDY accounts are also not able to access the cash, because they can’t go to a bank,” said Dr. Khera.

Better reach

The survey showed that the foodgrain portion of the relief scheme may have had better reach among intended beneficiaries, with 96% of surveyed households having received their ration for April. However, almost half were yet to receive the promised double ration.

The telephonic survey was carried out at the end of April using a random sample of 374 households originally used for the June 2019 Jachha Bachha survey of pregnant and nursing women in the rural areas of these States. The survey authors noted that by April 2020, a majority of these phone numbers were unreachable. “This is alarming, given that phone numbers are increasingly being linked to bank accounts, ration cards, etc., and used for purposes such as OTP and SMS alerts,” said the survey report.

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Printable version | Dec 4, 2021 12:31:05 PM |

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