The Direct Cash Transfer

Scheme “Aapka paisa aapke haath"

Y.SYAMALA JENNIFER

MBA 1- E

1420462

Contents

1. Introduction

2. About the scheme

3. International Practices

4. Programs part of DBT

5. Primary aims

6. How does it work?

7. Aadhaar and its application.

8. LPG

9. National Child Labour

10. NREGA

11. Financial details

12. SWOT analysis

13. Recent Updates

14. Success Story

15. Challenges

16. Learning and Conclusion

The Direct Cash Transfer Scheme “Aapka paisa aapke haath"

INTRODUCTION

Direct Benefit cashTransfer or DBT is an anti-poverty program

launched by Government of India on 1 January 2013. This program

aims to transfer subsidies directly to the people living below poverty

Line.

"Aapka paisa aapke haath" concept has brought happiness to

the poor who have received the benefits directly into their

bank accoounts.

The Prime Minister has set up three-tier architecture for

monitoring the scheme. This includes a national ministerial

committee, a national executive committee and

implementation committees.

The scheme has now been rechristened as Direct Benefits

Transfer (DBT) and curtailed beneficiary districts to 20.

At least two lakh beneficiaries are expected to benefit from

DBT scheme immediately. Food, fertilisers, and fuel have

been kept out of its purview for the present.

“Direct Cash Transfer” scheme which would be rolled out in

phases, initially covering 43 districts (out of 51 announced

earlier) from 1 January 2013 and then entire country (640

districts) by end 2013.

The Direct Cash Transfer Scheme “Aapka paisa aapkehaath"

About the Scheme

• Direct cash transfer scheme aims to reduce

leakages, cut down corruption, eliminate

middlemen, target beneficiaries better and speed

up transfer of benefits to eligible individuals.

• To meet the socio-developmental objectives of

poverty elimination and to 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.

INTERNATIONAL PRACTICES

• Cash Transfer schemes originated in middle-income Latin American countries.

• In Asia, Bangladesh had a Female Stipend Programme as early as 1982 followed by

a Food for Education Programme in 1993. Food grants were later converted to cash

grants in 2002.

• Several countries including Jamaica, Philippines, Turkey, Chile, Mexico, Indonesia,

South Africa, Morocco and United States have adopted this system in the form of

Conditional Cash Transfer (CCT) programs.

• The largest and the most successful conditional cash transfer program is the Bolsa

Família that provided 100 percent of Brazil's poor in 2007.

The Direct Cash Transfer Scheme

“Aapka paisa aapke haath"

National Child Labour Project

Student Scholarship

LPG subsidy

Pension plans

NREGA

PROGRAMS PART OF DBT

To bring transparency and terminate pilferage

In DBT, benefit or subsidy will be directly transferred to the citizens living below poverty line.

No subsidy will be given to those people who don't require it.

The DBT scheme aims at cutting a subsidy bill of ₹1,64,000 crores apart from other benefits like better delivery, accurate targeting, broader choice, reducing delays and corruption.

LPG and kerosene subsidies, pension payments, scholarships and employment guarantee scheme payments as well as benefits under other government welfare programmes will be made directly to beneficiaries.

PRIMARY AIMS

HOW DOES IT WORK?

The money is directly transferred into bank

accounts of beneficiaries having Aadhar cards.

LPG and kerosene subsidies, pension

payments, scholarships and employment

guarantee scheme payments as well as benefits

under other government welfare programmes

will be made directly to beneficiaries.

Under the DBT each and every beneficiary has

to establish his identity and eligibility many

times by producing multiple documents for

verification. The verification of such

documents is done by multiple authorities.

What is Aadhaar?

Aadhaar card, consisting a12 digit number

issued for every individual, including infants.

Each individual of a family will have separate

Aadhaar UID number. While enrollment it

verifies all the documents pertaining to an

individual and collects biometric information -

photograph, ten fingerprints and iris through

scanning. The Unique

Identification Authority of India

(UIDAI) will issue for all residents

in India (on a voluntary basis).

Government can transfer the benefit amount directly to the bank account of the beneficiaries to which their Aadhaar card is linked. In this way we can avoid

middlemen eating away the government fund.

For the rural people if the bank branches are not there in their village we can provide them the micro ATM facility where he need to verify his identity by making a thumb impression on the microATM.

Then the person carrying the micro ATM will pay the benefit amount and the bank will deduct this amount from the beneficiary’s account.

UID and its applicationsGovernment benefits

Voting Criminal acts Corruption Perfect authentication LPG Distribution Mobile connections E-commerce

Direct Benefit Transfer for LPG consumer (DBTL) is the scheme aimed to improve

the subsidy administration of LPG across the country.

As per this scheme an LPG consumer will get his/her cylinder at full market price

and the differential between subsidized price and full market price i.e. the subsidy

will be transferred to his/her bank account up to a capped limit(9 cylinders in a

year) .

DBTL by Ministry of Petroleum and Natural Gas is the scheme aimed to improve

the subsidy administration of LPG across the country.

LIQUIFIED PETROLEIUM GAS

Users can access list of aadhaar enabled banks, DBTL helpline, DBTL forms,

etc. Details related to checking aadhaar enrollment status, aadhaar enrollment

centres, generating e-aadhaar, linking aadhaar to LPG consumer number, etc. are

also available.

LPG for Domestic Cooking is heavily subsidized. So people use fake

connections and misuse the benefits. If Aadhaar card is integrated with the

customer database of LPG they can eliminate illegal diversion of cylinders.

From April 1,2014 residents can avail subsidy on 12 cylinders but will have to

pay the non-subsidised rate for the 13th and thereon.

We are soon going to go in for direct benefits transfer for this amount,”said A.C. Pandey, Joint Secretary, Labour Ministry.

Overall, there are 7,311 such schools under the NCLP scheme and about8.52 lakh children have been mainstreamed into formal education.

There had been a 45 per cent decline in child labour in India from 90.45lakh in 2004-05 to 49 lakh in 2009-19, mainly due to MGNREGA, therural job scheme, and Right to Education. Assured of 100 days work underthe job scheme, parents are now sending children to school, which ismaking all the difference

NATIONAL CHILD LABOUR

STUDENT SCHOLARSHIP SCHEME

In fiscal year 2012-2013, government of Andhra Pradesh channelled $1.2

billion of NREGA and social security pension

Security pensions (SSP) payments through this EBT channel. This year the

amount is expected to increase to $1.5 billion.

Various departments at the state level are involved in implementing several

cash transfer schemes.

Government has built a unique skill set in the smart card and pensions unit at

the state level, as well as at the national level.

Payments expert for every district to coordinate this activity.

NREGA-NATIONAL RURAL

EMLOYMENT GUARANTEE ACT

According to government reported data, in 2012-13, 67% of NREGA payments

were delivered Summary of Results on December 2013 electronically, and the

remaining were done through a manual process.

In the electronic system, the percentage of payments delivered within the

stipulated two weeks was 25%, 60% within thirty days and the remaining 15%

were delivered after thirty day’s. There is a disbursement window each month of

ten days for making payments.

Pensions are paid during the first six days of the month, while NREGA

payments vary according to work completed.

During the payment window, the agent does over a hundred transactions per day.

FINANCIAL DETAILS

The Government had allocated Rs250crore for various welfare

programmes under the DBT scheme launched about seven months

ago covering distribution of LPG subsidy, pensions, scholarships.

So far, over 40crore Aadhaar enrolments have been done, and the

Plan panel was hopeful of achieving the target of 60crore by 2014.

Till June 30, 2013, a total of about Rs35.53crore was disbursed

under various scheme, and in July 2013 alone, about Rs14.76crore

was disbursed.

The government will disburse Rs.4 lakh crore every year, with each

BPL (below poverty line) family getting between Rs.3,000 and

Rs.4,000 a month in a designated bank account. Each family will

get its cash transfer on the basis of its Aadhar.

About Rs32 lakh has been disbursed under the Direct Benefit Transfer (DBT)

scheme through the Aadhaar Payment Bridge, the Planning Commission said.

It is ascertained that the Public Distribution System (PDS) is so ineffective that

58% of the subsidized grains do not reach the targeted group and almost a third

of it is trajected off the supply chain.

According to the Finance Ministry, the inefficiencies of the PDS cause the

government to spend ₹3.65 for transferring ₹1 to the poor.

To generate budget savings and reduce corruption, the Government of India

launched the Direct Benefit Transfer (DBT) scheme on January 1st, 2013.

The DBT scheme aims at cutting a subsidy bill of ₹1,64,000crores apart from

other benefits like better delivery.

RECENT UPDATES

The government is likely to announce a boost to DBT scheme in theforthcoming budget and delink it from Aadhaar cards.

The move is part of the revamp of the financial inclusion .

The campaign will focus more sharply on empowering businesscorrespondents to push financial products in the rural market.

The intention is that the beneficiary should continue to directly receive thebenefit, which is possible without Aadhaar.

The new government is expected to take refuge in the Supreme Court order,which directs that Aadhaar should not be mandatory for availinggovernment schemes.

SUCCESS STORYPerhaps the most powerful example of the potential of Aadhaar and DBT comes from

Adilabad and East Godavari districts of Andhra Pradesh, where more than 95% of the

population is enrolled in Aadhaar

DBT has resulted in reduced leakages of about Rs.45 crores in Adilabad

East Godavari of about Rs.120 crores in less than a year.

In both these districts, Aadhaar also enabled identification of duplicate and

fake Liquified .Petroleum Gas (LPG) connections, which were terminated,

over 25,000 new rightful connections for women enabled.

it also revealed bogus pensions amounting to Rs.10-15 crore

50,000 bogus job cards under the MNREGA scheme.

Will everyone receive their Aadhaar number in time?: In three years, the government has issued about 400 million Aadhaars, which leaves 800 million numbers.

Issued a bank account in time: According to the deputy governor of RBI, only 40% of Indians have bank accounts.

Talking about villages in particular, about 188,000 villages had banking connectivity in June 2012 whereas India has 700,000 villages.

Will banking channel be ready in time: Currently, the banking correspondents cover only 70,000 villages which require a further 10-fold expansion.

At present, BC companies are very few and even if the target is achieved it will take time to find people and train them.

WHAT ARE THE CHALLENGES?

DBT in ultimate analysis aims at povertyelimination, inclusive growth and deliveringbetter welfare measures.

problems with banks, post offices and onlineconnectivity should be resolved.

No doubt rampant corruption, inefficienciesand leakages have made many welfareschemes dysfunctional

Direct Benefit cash Transfer to the pooraims to mitigate these many malaises.

Considering these benefits, India would be inright direction to implement cash.

LEARNINGS

The new system is expected to reduce this cost and subsidy bill

through better targeting.

If the entire system is managed through efficient targeting,

disbursement and regular monitoring of the disbursed funds this can

result into transforming the rural India.

The real success of the policy lies in the accuracy and efficiency in

identification of worthy beneficiaries, i.e. BPL Households.

CONCLUSION

Website Referred:

http://uidai.gov.in/

http://www.npci.org.in/documents/AEPSFAQBank.pdf

http://en.wikipedia.org/wiki/Unique_Identification_Authority_of_India

www.google.com

www.wikipedia.com

www.economicstimes.com

www.thehindu.com

www.youtube.com

REFERENCES

THANK

YOU