Hasty Cash Transfer: Appealing or appalling?

Finally the Govt. has failed to meet the deadline of Direct Cash Transfer( DCT) of subsidy in the wake of haphazard and unfinished preparation. They have now postponed it by four days.

The key purpose of DCT is to provide entitlements in cash to the poor via biometric identification under Aadhar. Any rational Govt. would have first assembled the data of beneficiaries before introducing schemes, intrinsically aiming at poor-benefit. But it is staggering that India still doesn't possess any authentic data of poverty when the entire system of social-welfare schemes rests on poverty-estimation. What is more surprising is that Govt. effort of identifying needy via Socio Economic Caste Census (SECC), which was supposed to be completed by 2006 is yet on play and Govt. is moving forward to live with the faulty list of beneficiaries. Hence many deserving needy will remain out of the ambit since beginning.

Govt. put its all energy into making people Aadhar enabled which doesn’t even estimate income data. Govt. would have done better to either associate it with specifying income data or simply expedited the process of SECC before distributing Aadhar in remote villages.

The selection of states and welfare programs also shows the poor insight of Govt. States like UP, Bihar, Orissa, and West Bengal, considered to be densely destitute, are not part of this first trial of DCT. Apart from this, Govt. has chosen mainly scholarship and pension schemes which are less or not at all tainted with leakage. Pilot projects are meant to be testified in challenging situations, if not entirely then at least on smaller scale. It is pertinent to mention that one of the testing trials in Kotkasim (Rajashthan) has comprehensively failed to deliver the desired results of DCT of Kerosene subsidy.  

Only 40% of India's 1.2 billion people have bank accounts, and only 36,000 of India's 600,000 villages even have a bank branch. There were plans to open 73,000 new "ultra small" bank branches of about 100 to 200 square feet apiece and hire one million banking employees in rural areas (according to minutes from a government committee overseeing cash transfers) but when the target seemed unattainable before deadline, there came a wild card entry i.e. Business Correspondents known as BC model. This model seems tricky. Representatives from companies, financial institutions, panchayat and even kirana shoppers etc can become a BC in far-off villages. These BCs will be deployed in villages with a micro-ATM. Villagers wanting to withdraw their entitlement will approach a BC, get his/her fingerprints verified on machine and will be paid by BC. Micro-ATM devices will be operated through wireless connectivity which is by and large intermittent and creaky. In case of any technological failure, beneficiaries might be deprived of their benefits. 

This Friday Union Agriculture Minister and Nationalist Congress Party ( NCP) Supremo Sharad Pawar cautioned the Govt. against hasty implementation of cash transfer schemes. Many Chief Ministers had also opposed the move in the recently held National Development Council (NDC) meeting. The implementation of DCT, without the consent of state governments, is certainly a tough call in the federal setup of the country. No single target pertaining to DCT has been achieved so far. The problem is that there was no visionary agenda for the same and many institutions were roped in without coordination. Govt. must understand that too many systems lead to no systematic system at all. Mr. Chidambaram, DCT is definitely a game changer (directing towards failure) and a pure magic (a black one).