Lack of uniformity in format to secure beneficiary info may put the programme at serious risk.
The direct cash transfer scheme may have got off to a start with much fanfare. But lack of standardisation on the part of state governments in storing beneficiary data is making life difficult for banks to collate the same. And there lies the biggest challenge, believes A P Hota , managing director and CEO of National Payments Corporation of India (NPCI), tasked with disbursing subsidies from the government department’s bank to the beneficiary’s bank account.
“This year, it is the state government which needs a lot of hand-holding to conform to a particular standard for giving the data to the bank. That is the biggest problem in the direct cash transfer,” said Hota.
The ambitious scheme providing direct cash transfer of subsidies from central and state governments – the main plank of UPA for 2014 general elections – aims to plug leakages in the public distribution model and reduce costs. But infrastructure bottlenecks and operational glitches like these are threatening to slow the execution.
The real hitch is different formats in which banks currently receive beneficiary data from governments. The data are then keyed in one by one to credit their accounts. This entire process is time-consuming and is open to errors.
NPCI’s role in the whole process is that of a payment gateway as it routes benefits based on Aadhar numbers to Aadhar-enabled bank accounts.
Hota was spot-on when he said there’s so much to do on data security, its auditing and reconciliation. NPCI is in the process of implementing a standardised format, but it’s still some time away. “Stabilisation of the direct cash transfer scheme will take, in my opinion, a minimum of two years. If we can do it in two years, we should really take credit for that. The job is huge,” he added.
Phase one of the subsidy transfer programme took off on January 1 with a rollout in 20 districts across India for a limited number of schemes. The agency till date has processed transfers worth about Rs34 crore.
This figure has come in below expectations mainly because of the tardy pace in linking beneficiary bank accounts with unique Aadhar numbers. The government hopes to push through a nation-wide rollout covering 42 welfare schemes by 2014.