Government of India change of strategy DBT (Direct Benefit Transfer)

Special emphasis to Ministry of Petroleum and Natural Gas

The following study aims at emphasis the Government of Indias strategic change in poverty elimination with the introduction of Direct Benefit Transfer. Direct Benefit Transfer I Introduction: Since independence, Governments in India have been strongly committed to addressing the issues of poverty and deprivation. Accordingly, Central and State Governments have devoted a major share of their budgets to put in place broad-ranging social safety nets and livelihood assistance programs. The fundamental objective of these programs has been to provide a basic minimum quality of life for the vast majority of people who require social assistance. They make it possible for the poor to access basic goods and services that would otherwise be unaffordable. Governments have been providing various kinds of welfare assistance and civic infrastructure at subsidized prices. The annual subsidy disbursement of the Government of India has increased dramatically in recent years. With large amounts being spent on subsidies, the Government is examining ways to ensure that this spending is carried out in ways that maximize positive outcomes, and lead to significant poverty reductions. Direct transfer of subsidies to address inefficiencies of present subsidy disbursement (whether as cash or otherwise) has dominated the debate in the public policy space for a considerable time.
References:
Direct Benefit Transfer of LPG (www.petroleum.nic.in/dbtl/index.htm) Handbook on direct benefit transfer for LPG consumer (DBTL)MOP&NG, GOI Department of Food & Public Distribution (http://dfpd.nic.in), GOI Interim report of the task force on Direct Transfer of Subsidies on Kerosene, LPG and Fertilizer Jun,2011 Government of India (2007). Public Distribution System and Other Sources of Household Consumption 2004-2005, Volume I, NSS 61st Round (July 2004June 2005). New Delhi, National Sample Survey Organisation. Government of India (2010). Envisioning a Role of Aadhaar in the Public Distribution System. New Delhi, Planning Commission. Government of India (2011). Interim Report of the Task Force on Direct Transfer of Subsidies on Kerosene, LPG and Fertilizer. New Delhi, Ministry of Finance. Government of India (2013). The Economic Survey 201213. New Delhi, Ministry of Finance. Annual Report Financial year 2011-12 of Ministry of Finance available on http://finmin.nic.in/reports/AnnualReport2011-12.pdf

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Technology advances are giving Governments an opportunity to tailor social spending and redesign schemes to improve targeting, empower beneficiaries, and reduce poverty at a household level. The issuance of the Aadhaar number, the Aadhaar authentication mechanism, widespread data connectivity especially through mobile phones, and universal coverage of the population with Aadhaar enabled bank accounts (AEBA) provides an administrative infrastructure that makes it possible to implement a direct benefit transfer program. In 201112 Indias subsidies and under-recoveries for fuel totaled INR 1.4 trillion (US$27.7 billion) which is not positive for any emerging economies like India. Total subsidy expenditure (including for fertilizer and food) was up by 27 per cent on the previous year, significantly contributing to the rise in fiscal deficit of 1.3 per cent of the GDP for 201112. As per the estimates the DBT scheme can result in a net saving of Rs. 33,000 crore ($6 billion) by way of plugging leakages. Subsidies are costly and contribute to the deterioration of Indias fiscal balance. Oil companies who bear part of the cost of underrecoveries have less capital to reinvest in exploration, production or infrastructure. The subsidies create market distortions (e.g., more manufacturers producing vehicles that run on diesel) and encourage fuel diversion (e.g., kerosene being used to adulterate diesel, commercial users of domestic LPG) resulting in corruption, black markets and fuel shortages. In addition, subsidies undermine energy efficiency measures and fuel standards, Exacerbating local pollution and global greenhouse gas emissions. The government has established the Unique Identification Authority of India (UIDAI) to develop the infrastructure for delivering direct transfers to support the poor. But challenges remain, such as identifying and targeting beneficiaries and increasing financial inclusion. Poverty elimination and inclusive growth are the top most priority for the welfare of every state. To meet these sociodevelopmental objectives, a number of Government sponsored programs and schemes have been introduced. However, there have been issues associated with the efficiency and effectiveness of the same. Rampant leakages and corruption have made many of the schemes and programs dysfunctional. Direct Benefit Transfer to the poor has been aimed to mitigate these malaises.
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II Need for Direct Benefit Transfer: Recent studies by the Planning Commission have shown that the Public Distribution System has become so inefficient that 58% of the subsidized grains do not reach the targeted group and almost a third of it is siphoned off the supply chain. According to the Finance Ministry the inefficiencies of the PDS ensure that the Government is forced to spend Rs.3.65 for transferring of Rs. 1 to the poor. The idea behind the Direct Benefit Transfer is to cut down wastage, duplication and leakages and also to enhance efficiency. The idea is to move to a completely electronic cash transfer system for the entire population. III Scope of DBT: The DBT program aims that entitlements and benefits are transferred directly to the beneficiaries. The beneficiaries could include widows, students and pension takers. This would be done through biometric-based Aadhaar-linked bank accounts. This would reduce several layers of intermediaries and delays in the system. IV Advantages of DBT system: (Social Implication) The use of Aadhaar or other biometric based systems would dissolve problems like duplicates or ghosts. Duplicates are when the name of the beneficiary is repeated and Ghosts is when the name of a nonexistent beneficiary is mentioned. It helps in the quick and direct cash transfer to the intended beneficiary. The cash transfer happens through a dense Business Correspondent system on the ground with micro ATMs. This ensures that the poor get the same level of service that the rich and the middle classes in the society receive. The financial inclusion offered by the DBT infrastructure can also be used by internal migrants to send their remittances. Approximately, Rs.75,000 crore worth of within-country remittances are made in India every year. However, seventy per cent of these remittances are channeled through informal (and often illegal) channels which impose high costs on them. The
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Aadhaar-based microATM network could ensure that remittances take place instantly and at much lower cost to migrants. V - Areas of concern (Practical Implication) 1. Biometric-based unique identity or Aadhaar is leading to huge problems for people working for the rural employment guarantee scheme and for others receiving welfare benefits. Not only have enrolments been done shoddily but the experience of the pilot projects shows that it is almost impossible to authenticate the work-hardened fingerprints of the poor. 2. There is also the overwhelming issue of deficient online connectivity. 3. Some states such as Tripura have opposed the central governments direct Benefit transfer scheme saying banking was not available in most villages. 4. Many fear that the direct Benefit transfer in PDS will affect the system and gives scope to corruption. Rights groups argue that the decision to stop food grains and introduce cash transfer in its place is a unilateral decision and unscientific. Instead of targeted rationing system, they want the government to universalise the PDS. 5. There are increased chances of money that is transferred into a female members account being misused by others in the family. 6. Many NGOs have pointed out the problem of the Governments decision of ending the public distribution system of food grain and give money directly to the people without proper identification of the poor in the country. About 40 per cent of the poor are still not officially recognised in India according to many welfare economists.

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VI SWOT Analysis of Direct Benefit Transfer Scheme

Strength Worlds largest cash transfer programme Cut down on Corruption Subsidies under various scheme account for nearly 3.5 % GDP Cost effective way

Weakness
Less penetration of banking system in rural parts Uneven Distribution of Aadhaar Cards Faulty Aadhaar Cards Bridging Aadhaar card with bank account

Opportunity Population coverage 1.27 Billions Expansion of Banking system in rural india No Middleman Huge saving of procedural saving

Threats Political Instability Change in policies Technology Misuses Wrong credit to bank A/c Frauds

VI PESTE Analysis of Direct Benefit Transfer Scheme 1. Political: The direct Benefit scheme is envisages as a game changer for government schemes implementation and execution. Better Segmentation, beneficiaries. Targeting and Positioning of the

An integrated view of the benefits consumed by a beneficiary through the various schemes that are active in the State. Bringing in efficiency, accountability and transparency in the administration. Governments endeavor in taking up fundamental reforms required in Public Distribution System (PDS)

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2. Economic: Creating awareness amongst the beneficiaries/ citizens/ communities about which schemes they are eligible for. Enable the expediting the verification and approval process for sanctioning a benefit and facilitate weeding out duplicate candidates for a benefit. Time to launch new schemes is lesser Reduction of intermediary machinery Avoid Delay & wastage of resources in processes Cheap & Effective method of transferring funds in long run 3. Social: Better targeting, bringing in efficiency, accountability transparency in the administration of social safety nets. Measuring the social impacts of the schemes Stops leakage and pilferage Financial Inclusion of marginalized section of society Less of corruption Deep rooting of Banking System Timely and direct benefit to the poorer Deep penetration and vast coverage of government schemes 4. Technological: Using the latest technology for making DBT possible Integration of disbursement various modules for timely and efficient and

5. Environmental: Less of the paper work Extensive footprints use of technology has reduced overall carbon

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VII DBTL for Domestic LPG Ministry of Petroleum & Natural Gas The countrys current consumption of LPG is approximately 14,000 Thousand Metric Tons (TMT), of which indigenous production constitutes approximately 68% while the balance is met by imports. The broad consumption pattern of LPG across various applications is as follows:

Phase wise approach was adopted for rolling out direct benefit for consumers of domestic LPG is as under: Phase I: Cap consumption of subsidized cylinders to all consumers. Phase II: Direct transfer of subsidy to consumers in their Aadhaar linked bank account. Phase III: Direct transfer of subsidy only to a targeted segment of consumers Review of Phase I: The Phase I recommendation was implemented from 14.09.2012 onwards with a cap of 6 subsidized cylinders to each household which was later revised to 9 subsidized cylinders per household on 17.01.2013.

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25 CS and CSS Schemes (Out of which 17 are Scholarship Schemes) 8 Departments 43 Districts 16 States/ UTs 16,65,771 beneficiaries 77.5 % Bank Coverage 32.2 % Aadhaar and Bank Account Coverage 4.1 % Seeding

Implementation of Phase II: Government launched Direct Benefit Transfer for LPG (DBTL) scheme for consumers across the country 78 Districts (44 of Phase I States and 34 of Phase II States) 121 districts (roughly one fifth of the Country) would be covered Additional Schemes - 3 Pensions schemes under Ministry of Rural Development Present Status of Transfers under DBT
Mode of Transaction Data provided by No. of Schemes under DBT
13 21

Transactions in Volume

Transactions in Rs. crores

APB

NPCI/UIDAI Concerned Ministries/ CGA

75,342 NA#

22.90 57.74

OTHER non APB (including CPSMS) Total

80.64

Exhibit 1

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Status of APB Transfers - Q4

APB Volumes
Total - 1,88,535
2,00,000 1,80,000 1,60,000 1,40,000 1,20,000 1,00,000 80,000 60,000 40,000 20,000 0 Volume - 26 schemes across 43 Districts Volume - All Schemes across All Districts 12,515 7,050 43,918 13,059 1,31,558

Total - 75,342
55,777

March February January

Exhibit 2

APB Value (In Rs. Cr.)

Total - 43.43 cr
45.00 40.00 35.00 30.00 25.00 20.00 15.00 10.00 5.00 0.00 Value - 26 schemes across 43 Districts Value - All Schemes across All Districts 24.17

Total - 22.90 cr
15.90 15.78 4.46 2.54 3.48

March February January

Exhibit 3

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Exhibit 4 By 01.01.2014 it is envisaged by government of India to cover nearly half of the country under Direct Benefit Transfer

Phase III (Future Phase), the government of India on January 01, 2013rolled out the DBT covering seven welfare schemes in 20 districts in 16 states, and recently it was proposed to roll out DBTL for LPG for more than 200 districts covering almost half of the country by 01.01.2014. The LPG subsidy shall be given to specific categories and for the remainder of customers, it will be discontinued. Subsidy amount will be transferred to targeted customers directly as envisaged in Phase II. Phase III can be implemented only after successfully completing Phase II. It is expected that in the final phase, with only targeted customers receiving subsidized LPG, there will be a considerable reduction in the amount of subsidy outgo for the Government.
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Benefits envisaged to various stakeholders TO LPG CONSUMERS: LPG Consumers will be empowered as they will be getting their cylinders at the fixed price and receive the subsidy in cash directly in their bank account without any manual intervention. With supply chain having no incentives in diverting the cylinders, consumers will receive prompt supplies. There would be an improved availability of new LPG connections in the market. As the cylinder supplied is at the market price, competition is expected to come in, there by more choices of buying points will emerge which will bring in better consumer service.

TO OIL MARKETING COMPANIES (OMC): OMC may experience reduction in administrative efforts due to targeted delivery of subsidy leading to: Lesser policing of supply chain activities. Reduction in number of grievances related to unauthorized usage, diversion and delayed deliveries. Public auditing of Subsidy administration through Transparency Portal. Shift of focus from distributor administration to consumer management leading to emergence of ways to serve consumers better with focused initiatives. Improved quality of consumer database on the basis of Aadhaar which can be leveraged for better analysis of consumer needs and thus improved services. Improvement of consumer services may result in better consumer satisfaction. Aadhaar based de-duplication will help in getting rid of multiple connections / fake & ghost LPG consumers. Elimination of chances of artificial product shortage.

TO GOVERNMENT OF INDIA: Launch of DBTL will reduce subsidy burden due to following factors:
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Elimination of supply chain leakages and thus unauthorized usage.

Bringing in a segment of consumers opting out of subsidy, and Reduction in diversion by consumers by way of Aadhaar based De-duplication of multiple connections. Targeted subsidy delivery and there by satisfaction of LPG consumers as the supply chain does not have any incentive in diverting the product. Elimination of diversion and losses due to supply chain leakages may lead to reduction in the grievances / queries which may provide Government with bandwidth to improve policies and guidelines. Opportunities to open up domestic LPG sector for policy initiatives in improving competitiveness and there by better consumer service.

Eligible Consumers under DBTL Scheme Consumers in Domestic household Category who are currently getting domestic 14.2 Kg and 5 Kg cylinders are eligible to receive subsidy in their bank account to the extent of the quota of 9 cylinders per financial year fixed by Government of India. Those consumers who have linked Aadhaar with LPG consumer data base and Bank account (CTC) will be eligible to get the subsidy in their bank account from the date of launch. Non CTC (NCTC) Consumers will become eligible from the date they complete the process of linking their Aadhaar with LPG consumer number and bank account (i.e. become CTC). For Reticulated and Non Domestic Exempted Category consumers detailed guidelines will be issued in due course. However till such guidelines are issued they will receive the cylinders upto the quota at subsidized rates.

In-eligible Consumers under DBTL Scheme Ineligible consumers include (any one or more of the following) Consumers not having Bank account. Consumers not having Aadhaar number.

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Consumers who have not linked Aadhaar number with Bank Account (i.e. NCTC). Consumers who have not linked Aadhaar number with LPG Consumer Number (i.e. NCTC).

PROCESS OF CASH TRANSFER A provision to link Aadhaar number in the LPG consumer database is available in the OMC software through authorized process. The distributor is authorized to update the Aadhaar number and verify the same. Any modification / corrections thereafter, if any, can be done by Sales Officers only. Aadhaar number change is applicable as and when a name change takes place for regularization of a consumer. Aadhaar number updation will have to be done after Aadhaar deduplication. In case a consumer is having more than one connection even in two households at different address, he will receive subsidy only in one household. In order to know whether a consumer has become CTC the OMCs get confirmation on Aadhaar linking in Banks through an automated system of checking Aadhaar availability through National Payment Corporation of India (NPCI) provided Aadhaar mapper on a regular basis. At the end of each day after delivery confirmation, system centrally generates a file based on refill orders received for the first time after launch of DBTL scheme in the district and sends to Sponsor Bank (presently SBI) for transfer of advance amount without any manual intervention. Similarly, at the end of each day, system centrally generates a file based on refill orders delivered and systemically sends to Sponsor Bank (presently SBI) for transfer of subsidy amount without any manual intervention. NPCI managed Aadhaar Payment Bridge (APB) transfers the cash normally on the next working day to the bank account of the consumers.

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VI Direct Benefit Transfer System How other countries are doing? Exhibit 5 below compares the other countries which are currently engaged in direct benefit transfer

Exhibit 5 VII Direct Benefit Transfer System for LPG Customer Transforming governance through innovative technology The solution architecture for direct transfer of subsidies consists of a Core Subsidy Management System (CSMS). The concept is similar to the Core Banking Systems (CBS) implemented by almost all large banks today. While the CSMS automates all business processes related to direct subsidy transfer, the specific policies and business rules will continue to be framed by the policy makers in the Ministry of Petroleum & Natural Gas. The CSMS maintain the subsidy accounts of all beneficiaries, and all policies related to subsidy management. The CSMS is capable to support all forms of direct

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transfers of subsidies such as non-cash transfers, conditional cash transfers, direct cash transfers, etc. In addition to maintaining the subsidy accounts, it also integrate with a number of other external systems of other Government Departments, partners, and service providers to effectively monitor the scheme, and ensure the desired quality of service.

Exhibit 6 The CSMS (Exhibit 6) will contain the following modules, some of which may need to integrate with external systems. The basic modules of CSMS include: 1. Business Rules Engine 2. Beneficiary integration) and family identification module (Aadhaar

3. Product movement and stock tracking module (ERP systems integration) 4. Direct subsidy transfer module (Integration with nodal bank and payments gateway) 5. Transparency module (Data.gov.in integration)
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6. Contact Centre module 7. Training, education, and outreach module 8. Logistics module 9. MIS Module 10. Module to integrate with other subsidy management systems

Methodology of Scheme:

Exhibit 7 (a)

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Exhibit 7 (b)

A CSMS for LPG is implemented as described in Exhibit 7(a). The basic solution architecture for subsidy administration and direct cash transfer is worked out based on single pricing and proper authentication models for customers who receive subsidy either as product or as cash. The model also consider direct customer and stakeholder involvement through relationship building elements including customer empowerment via customer education, transparency web-portal, grievance redressal etc. With the following facets as the backbone, domestic LPG delivery system can be revamped: 1. Every customer (to receive subsidized LPG) will have an Aadhaar a) Aadhaar numbers of beneficiaries will be verified before seeding the database to eliminate ghost connections /registrations b) In order to have a wider base to eliminate duplicates, the databases of all OMCs will be pooled together. The combined database will be used for de-duplication 2. While delivering LPG, the Aadhaar number of the customer or his/her family members will be verified in order to disable unauthorized persons from receiving subsidized cylinders
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3. Single price and direct subsidies will further remove the incentive for unauthorized deliveries In the process shown below (Exhibit 8): 1. LPG cylinders are booked by customers 2. The order details are entered in the booking system (software) of the distributor 3. The delivery list for a delivery boy is transferred to handheld device 4. At the time of delivery, the device captures the authentication data from the customer 5. The device sends the authentication data to the authentication service provider to facilitate the transaction 6. The authentication service provider responds to the request received, completing the verification and enabling (or preventing) the delivery 7. The delivered data is transferred back to the distributor software

Exhibit 8
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The cash will be directly transferred to the Aadhaar linked bank account of the customers. At the onset, each customer entitled for subsidized LPG will be given one unit of subsidy in cash directly in his/her bank account. Subsequently, when the LPG cylinder is sourced and received through the authentication route, additional units of subsidy will be credited to the bank account.

VIII Inferences and Recommendations The government has been incurring a very high subsidy bill on petroleum products. Although intended for certain specific objectives, the prevailing subsidy schemes and their delivery mechanisms have not been able to meet the intended objectives and beneficiaries. Based on the figures for last year alone, the cost of subsidizing these fuels is more than INR 1,38,000 (US$26.95 billion). In addition to this, losses are incurred on leakages, foregone excise and tax revenue and excessive fuel consumption. Each year that this problem is not addressed, the losses remain high. In this short term period, there is a requirement of more widely distributed pilot studies, carrying out cost-benefit analyses and capping the consumption of subsidized LPG cylinders. And in long term period it is recommended to have improvements in the mechanism of cash transfer schemes, including indexing payments to price-level changes, increasing financial inclusion, decontrol of LPG prices, an improvement in the supply chain of LPG and designing better BPL surveys to reduce errors of identification of beneficiaries. The state governments will have to play an active role in administering pilot projects for distributing subsidies through cash transfers. In order to encourage states to expedite the process, financial assistance from the centre and other incentives should be provided for state governments.

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Abbreviations and Definitions

APB ARS BPCL BPL CTC
AADHAAR PAYMENT BRIDGE AADHAAR REGISTRATION SHEET BHARAT PERTOLEUM CORPORATION LIMITED BELOW POVERTY LINE CASH TRANSFER COMPLIANT (AN LPG CONSUMER WHO HAS LINKED HIS/HER AADHAAR NUMBER TO BOTH LPG CONSUMER NUMBER AND TO THE BANK ACCOUNT IS CALLED CASH TRANSFER COMPLIANT (CTC) CONSUMER) DIRECT BENEFIT TRANSFER FOR LPG CONSUMER DISTRICT COLLECTOR DEPARTMENT OF FINANCIAL SERVICES DEPUTY GENERAL MANAGER DEPUTY SECRETARY EXECUTIVE DIRECTOR ENROLLMENT IDENTIFICATION ENTERPRISE RESOURCE PLANNING GENERAL MANAGER GOVERNMENT OF INDIA HINDUSTAN PETROLEUM COMPANY LIMITED INTENSIVE EDUCATION CAMPAIGN INDIAN OIL CORPORATION LIMITED INFORMATION SERVICES INTERACIVE VOICE RESPONSE SYSTEM JOINT SECRETARY LEAD DISTRICT MANAGERS FOR BANKS LIQUIFIED PETROLEUM GAS MANAGEMENT INFORMATION SYSTEM NON CASH TRANSFER COMPLIANT (AN LPG CONSUMER WHO HAS NOT LINKED HIS/HER AADHAAR NUMBER TO EITHER LPG CONSUMER OR BANK ACCOUNT OR BOTH LPG CONSUMER NUMBER AND BANK ACCOUNT IS CALLED NON CASH TRANSFER COMPLIANT (NCTC) CONSUMER A NATIONAL INFORMATION UTILITY (NIU) IS A COMPANY WITH PUBLIC AND PRIVATE OWNERSHIP SET UP FOR THE PURPOSE OF DEVELOPING, MAINTAINING, AND EXECUTION OF COMPLEX IT PROJECTS IN GOVERNMENT. THE NIU FRAMEWORK WAS DESCRIBED IN REPORT OF THETECHNOLOGY ADVISORYGROUPFOR UNIQUE PROJECTS (TAGUP) NATIONAL PAYMENT CORPORATION OF INDIA OIL MARKETING COMPANY PRIME MINISTER OFFICE PROOF OF ADDRESS PROOF OF IDENTITY PETROLEUM PLANNING AND ANALYSIS CELL REMOTE AADHAAR LINKING FRAMEWORK

DBTL DC DFS DGM DS ED EID ERP GM GOI HPCL IEC IOCL IS IVRS JS LDM LPG MIS NCTC

NIU

NPCI OMC PMO POA POI PPAC RASF

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Teaching notes Subject area The case focuses on Government of India change of strategy DCT (Direct Cash Transfer) Special emphasis to Ministry of Petroleum and Natural Gas. This is undertaken by employing the usage of SWOT analysis, PESTE analysis.

Question1. What is Direct Benefit Transfer Scheme?

Direct cash transfer is the direct transfer of government subsidies and other benefits to the entitled people usually provided by the government. In India, the UPA government has introduced the scheme to reach out to poor people directly in order to plug leakages and cut delays in transfer of subsidies to the poor. The areas that would be covered by the program include scholarships, pensions and unemployment allowances and later MNREGA and Public Distribution Schemes. It is assumed that it will help to bypass corrupt middlemen, would help in cutting down wastage and duplication. It is fundamentally being established to ease the burden of subsidies and letting the genuine beneficiaries avail the advantage.
Question2. What are the benefits to Government?

Launch of DBTL will reduce subsidy burden due to following factors: Elimination of supply chain leakages and thus unauthorized usage. Bringing in a segment of consumers opting out of subsidy, and Reduction in diversion by consumers by way of Aadhaar based De-duplication of multiple connections. Targeted subsidy delivery and there by satisfaction of LPG consumers as the supply chain does not have any incentive in diverting the product. Elimination of diversion and losses due to supply chain leakages may lead to reduction in the grievances / queries which may provide Government with bandwidth to improve policies and guidelines. Opportunities to open up domestic LPG sector for policy initiatives in improving competitiveness and there by better consumer service.
Question3. What are the social Implication of Direct Benefit Transfer?

The use of Aadhaar or other biometric based systems would dissolve problems like duplicates or ghosts. It helps in the quick and direct cash transfer to the intended beneficiary. The cash transfer happens through a dense Business Correspondent system on the ground with micro ATMs. This ensures that the poor get the same level of service that the rich and the middle classes in the society receive. The financial inclusion offered by the DBT infrastructure can also be used by internal migrants to send their remittances. The Aadhaar-based microATM network could ensure that remittances take place instantly and at much lower cost to migrants.
Question4. What are the areas of caution?

Biometric-based unique identity or Aadhaar is leading to huge problems for people working for the rural employment guarantee scheme and for others receiving welfare benefits. Not only have enrolments been done shoddily but the
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experience of the pilot projects shows that it is almost impossible to authenticate the work-hardened fingerprints of the poor. There is also the overwhelming issue of deficient online connectivity. Some states such as Tripura have opposed the central governments direct cash transfer scheme saying banking was not available in most villages. Many fear that the direct cash transfer in PDS will affect the system and gives scope to corruption. Rights groups argue that the decision to stop food grains and introduce cash transfer in its place is a unilateral decision and unscientific. Instead of targeted rationing system, they want the government to universalise the PDS. There are increased chances of money that is transferred into a female members account being misused by others in the family. Many NGOs have pointed out the problem of the Governments decision of ending the public distribution system of food grain and give money directly to the people without proper identification of the poor in the country.

Case overview Direct Benefit Transfer A game changer To meet the socio-developmental objectives of poverty elimination and inclusive growth, a number of Government sponsored programs and schemes have been introduced. However, efficiency and effectiveness have not been achieved by any of the programs and schemes optimally. Rampant leakages and corruption have made many schemes dysfunctional. Direct Benefit transfer scheme has been aimed to mitigate these malaises. Direct Benefit transfer scheme aims to reduce leakages, cut down corruption, eliminate middlemen, target beneficiaries better and speed up transfer of benefits to eligible individuals. This paper examined the various aspects of direct cash transfers, the need to direct cash transfers, the benefits to all stakeholders like Government, Marginalized class. It also covers the extensive use of technology to achieve the goal.

About the Authors

Nagender Singh Yadav (S-46) working as Deputy Director (IT) in Ministry of Petroleum and Natural Gas, PPAC, Govt. of India

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