New Delhi: Welfare payments under pensions, scholarships and the national job guarantee scheme will, in a few months, be made directly into bank accounts of beneficiaries in some districts, as part of the first phase of a roll-out of Aadhaar-enabled payments.
Finance minister Pranab Mukherjee, in his annual budget speech in March, had said the government would facilitate Aadhaar-enabled payments for the various welfare schemes in at least 50 districts in six months.
The Unique Identification Authority of India (UIDAI) is conducting pilot studies on transferring subsidies related to cooking gas and kerosene directly to the bank accounts of beneficiaries.
But, for the first phase, it decided to begin with schemes that already involve some element of cash, such as pensions and scholarships, government officials said.
The authority has identified three areas with large cash payments for Aadhaar-enabled transfers, said an official involved in the discussions. “One is NREGA (now, the Mahatma Gandhi National Rural Employment Guarantee Act), and the other is national social assistance programme, which consists of old age, widow and disability pensions. The third area is scholarships, which consists of Sarva Shiksha Abhiyan scholarships, minority and scheduled caste and scheduled tribe scholarships,” the official said, adding that UIDAI has suggested to the finance ministry 50 districts for the services to be rolled out by the end of September.
Mint’s Surabhi Agarwal says that as part of the first lot of Aadhaar-enabled payments, money for pensions, scholarships, and MGNREGA will be made directly into the bank accounts of beneficiaries in certain districts.
Subsidy?payments?and benefits under different schemes amount to Rs 3 trillion every year, which is roughly 3.5% of India’s gross domestic product (GDP), according to government estimates.
Another government official involved with the talks said though the government has accepted the recommendations of the task force on direct transfer of subsidies, the centre’s mandate is needed to roll them out.
“UIDAI is in discussions with all the states and departments, but the final direction has to come from the department of expenditure under the ministry of finance,” said the official, who did not want to be identified.
The official said certain issues with some subsidy payments have to be resolved before money can be transferred into bank accounts of the beneficiaries.
“In the case of LPG (liquefied petroleum gas), the government is trying to take a decision on fixing the cap of cylinders per household before the cash transfer can be worked out, and PDS (public distribution system) subsidy issue has to be dealt with care as it could be politically sensitive,” the second official said.
The first 50 districts to roll out welfare payments through Aadhaar-linked accounts will most likely be in states where Aadhaar numbers have been issued to a large population, such as Andhra Pradesh, Maharashtra, Karnataka and Delhi.
Mukherjee, in his budget speech last year, announced the creation of a task force to propose a system for direct transfers of subsidies for kerosene, LPG and fertilizer, and later extended the terms of reference to include the development of an Aadhaar-enabled unified payment architecture.
The task force proposed an electronic payment gateway through which the finance ministry will release the funds to various ministries. These will then be transferred to the Aadhaar-enabled bank accounts of beneficiaries through a central payment platform.
The government departments will need to submit details of the beneficiary such as the Aadhaar number and the amount to be paid to the bank, which will process the payment. The beneficiaries can withdraw the money either from the bank branches or through business correspondents equipped with micro-automated teller machines (ATMs).