Karela Fry

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Aadhar ready to take off

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India Today presents a PTI report on what the government is calling a game-changer:

Benefits under 29 welfare schemes being operated by different ministries would be transferred through Aadhaar-enabled bank accounts in 51 districts spread over 16 states from January 1 next year, Finance Minister P. Chidambaram said in New Delhi on Tuesday.

The scheme of cash transfer into bank accounts, the minister said, would enable the government to extend benefits to the needy at the click of a button without any fear of misuse or duplication.

“… roughly about 29 schemes are ready to start from the January 1. It is possible that one or two schemes may start a few days or a couple of weeks late. But ultimately we want to load all these schemes on the system. Out of the 42, we think about 29, give or take one or two, will be ready,” Chidambaram said while addressing a press conference at Congress office.

At present, government operates about 42 schemes, of which 29 would be covered by the cash transfer scheme that is to be launched from January 1, 2013 in 51 districts. The second roll-out to cover more districts would be launched in April 2013, he said.

The schemes which would come under the purview of the cash transfer scheme would include those of Ministry of Social Justice and Empowerment, Human Resources Development (HRD) Minority Welfare, Women and Child Development, Health and Family and Labour and Employment.

With the introduction of the direct cash transfer scheme, Chidambaram said, “falsification and duplication will be practically eliminated and I believe that (it) would result in considerable savings to the exchequer.”

IBN Live adds:

But there are going to be several bottlenecks in the scheme. There are many logistical and procedural difficulties in the implementation of the scheme whie the benefits will only to go to Aadhaar card holders. Aadhaar coverage is patchy in rural areas and it must be linked to a bank account for the scheme to work. Moreover, the users might not be prudent with cash management.

In lieu of subsidised food, fertilizer and fuel, BPL families would get 30,000-40,000 a year in their bank accounts. In all, almost Rs 4,00,000 crore will be disbursed. APL families too would get money for subsidised cooking gas. A pilot project for kerosene is already on in Alwar in Rajasthan. The scheme will cover the entire country by December 2013.

ET reports:

The government’s ambitious plan for direct cash transfer of subsidies is facing implementation hurdles even as Prime Minister Manmohan Singh on Monday set a January 1 deadline to roll out the scheme in 51 districts.

While the PM’s announcement was a formality, the petroleum ministry has pointed out that once the Cabinet approves the new mechanism on oil and LPG subsidies, it will take 11 months for a rollout.

This means that even if the scheme is approved now, it can be rolled out only around next October. Officials said the Cabinet note is yet to be circulated and on an average it takes around two months for the consultation process to be completed. Which means that the rollout could be as late as next December, which may be too close for comfort of the government that is hoping to use cash transfer as a key poll plank in the 2014 elections.

In fact, oil subsidies are the first among the major doles that would switch to cash transfer mode, which is seen to be more resistant to leakages and at the same time empower the beneficiaries with the option to choose between having less wheat and more vegetables or dal.

Will IT be able to change the way the government reaches the people?

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