Direct benefits transfer: Why direct transfer may not put money in people’s pockets

Pilot projects perform poorly in Jharkhand

If the experience in Jharkhand is anything to go by, the lives of lakhs of people living in 51 districts across the nation will be disrupted by the Aadhar-Enabled Cash Transfer (AECT) project slated to kick off in January. Beneficiaries risk not getting their payments because of several logistical, operational and technological problems that have not been solved in pilot projects in Jharkhand – a year after launch.

Jharkhand is one of the states where AECT pilots for payments of MGNREGA wages began in December 2011 in 12 blocks in four districts - Ranchi, Ramgarh, Hazaribagh, Saraikela-Kharsawan. Of these, in one block in Ramgarh district, the government has started AECT pilots in pensions (Old Age, Widows, Disability pensions), scholarships, Kisan Credit Cards, and Indira Awaas Yojana as well. But visits to two of the four “pilot” districts show that a vast majority of beneficiaries still do not have the requisite bank accounts mapped with 12-digit Aadhaar numbers. Even if they have Aadhaar-linked accounts, their “PINs,” in this instance the individual biometrics of their fingerprints, often do not work when they try to get paid via the new ATMs – their village Banking Correspondent who disburses the cash once the biometrics are matched with the UIDAI’s databases through a hand-held device/a micro-ATM.

According to the minutes of the first meeting of the executive committee on Direct Cash Transfers in the PMO on November 9, the tipping point for rolling out AECTs would be an Aadhaar penetration level of 80 percent of beneficiaries. Minister for Rural Development Jairam Ramesh in an article in The Hindu on December 11, 2012 also emphasized the prerequisite of 80 per cent of each district’s population having an Aadhaar number and Aadhaar-enabled bank account before payments are started.

In Ramgarh district adjoining Ranchi, which had been identified for full coverage by UIDAI, Aadhaar enrolment is at less than 40 per cent of the population of over 9 lakh. The number of Aadhaar-mapped accounts is 18,883, i.e., less than two per cent of the district population. When Jharkhand was chosen for pilots to pay MGNREGA wages through AECTs last December, in an interview to the Economic Times, Assistant Director General at UIDAI’s office in Ranchi P.K. Upadhayay had said they planned to pay 174,000 MGNREGA workers through this. A year later, officials in UIDAI’s office in Ranchi admit that this figure stands at 5,000 — less than 3 per cent of the initial target. The pilots have failed to scale up and give little indication of what to expect in the rollout announced for January.

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Printable version | Aug 4, 2020 3:11:36 AM |

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