Direct cash transfers: ‘The previous system was so much more convenient’

Ruhi Tewari : Rajasthan/Delhi, Fri Oct 04 2013,
UPA governmentGori Sahaab (left) uses mustard oil now. (Right) Queue for Aadhar card outside DM office in Northeast Delhi.

Three states where the UPA govt has rolled out direct cash transfers go to polls later this year. On the ground, the scheme has not quite turned out the game-changer the government reckoned it would.Rajasthan: The scheme that blocked kerosene

A frail Gori Sahaab, 90, instructs his son to pour mustard oil into a tiny diya in his one-room house. He once used a kerosene lamp but has stopped buying that fuel. His son says he is a “victim” of the direct cash/benefits transfer scheme. Direct Benefit Transfer: Lack of clarity on funds flow

Gori is one of many villagers in Kotkasim in Rajasthan’s Alwar district who have not received their due under the cash subsidy scheme for kerosense. Cash transfer: Some cash in, some uncertainty

The pilot for cash transfer was launched in Kotkasim in December 2011. The Centre went on to launch the DBT scheme in 43 districts across the country this January 1, and expanded the rollout to 121 districts by July 1.

Direct cash transfer scheme, Aadhar-enabled, launched

In Rajasthan, the scheme was launched in three districts in the first phase — Alwar, Ajmer and Udaipur. DBT is mostly being used for scholarships and maternity benefits but the government recently launched cash transfers for kerosene in some pilot blocks in the latter two districts, despite having been unable to remove glitches in Alwar.

Direct cash transfer to curb wastages, leakages: Prime Minister

The government feels the “visibility” of DBT is maximum where cash subsidy is involved, as the minutes of a recent high-level meeting at the national level on DBT mention. However, far from being an electoral game-changer as promoted by the Congress with its slogan “Aapka Paisa Aapke Haath”, the scheme has made people more angry with the Centre than ever for disrupting the existing system.

Punjab fails to kickstart direct cash transfer

In Kotkasim, villagers have replaced kerosene with other fuel substitutes. While earlier consumers could buy up to 3 litres per ration card from fair-price shops at subsidy, under Direct Cash Transfer, they have to buy at the prevailing market rate and the difference between the market and subsidised rates is supposed to be transferred to their accounts in advance, starting with a three-month advance. Villagers say they get their subsidy months after purchasing kerosene, and most have been unable to organise enough money to buy the fuel at the full market price. Many others don’t even have bank accounts.

To withdraw the subsidy, the account holder has to be physically present, making it nearly impossible for the disabled living kilometres from banks.

“I can barely walk around in the village, how do I go all the way to the bank, spending Rs 100? The previous system was so much more convenient,” says Santara Devi, 75.

The last entries for cash subsidy on the passbooks of Gori Sahaab, Santara Devi, Ram Chand and several others in Gunsar village are on 26.04.2012, when each received Rs 263. Since then, either the money has not come in or they have not been able to go to the bank.

The business correspondent model to facilitate last-mile delivery is yet to see the light of day. This, in a block where the scheme has now had a 22-month run.

“Not one person in this village has got money in advance,” says Sooraj Bhan, owner of a fair-price shop and zilla head, PDS, in Alwar. “They first buy kerosene, then I make an entry, which I forward to the district supply officer, after which money is supposed to be transferred. Kerosene sales have dropped drastically. The Congress will not gain even one per cent votes with this scheme.”

DSO R C Meena insists the scheme is being implemented “well”. He says there were some problems with bank accounts that caused delays, but these have now been “sorted out”.

Under Aadhar, while enrolment rates are high, the numbers are yet to be seeded with bank accounts, a prerequisite for cash transfer. The scheme in Kotkasim is not being implemented on the basis of Aadhar.

‘Scheme? What scheme?’

In Ajmer, the slogan “Aapka Paisa Aapke Haath” has no resonance. “I have not heard of this scheme. We all have Aadhar numbers because we were told we won’t get anything if we don’t. But how that makes any difference, we don’t understand,” says Ram Jeevan of Tilonia village, also the ‘ward head’.

Shama Devi of Harmara village is equally puzzled. “I get pension in cash. That is convenient. But the government hasn’t told us anything,” she says, as she displays her new Aadhar card.

“See, we know of the scheme because we work in the social sector,” says Naurat Mal, who works with Mazdoor Kisan Shakti Sangathan. “An ordinary villager has no clue. Not a single government official or politician has come to explain the scheme or how it would make a difference. Even if we try to explain, people don’t get the difference. They still get pension in hand or by cheque. Scholarships may be coming directly into accounts but people hardly care about it. Here, Aadhar is all people have heard about, but only as a mandatory identity proof. Unlike MGNREGA, which was on the lips of every villager, DBT is something not everyone knows about.”

In Arahi, where cash subsidy for kerosene has just been launched, there is absolute confusion. Some say they don’t even have bank accounts, some say they are still buying at subsidised rates while others say they had to buy at full market rates but have not received any cash.

“We make it a point to transfer the subsidy in advance of the consumer week when they can go buy kerosene. A three-month advance is transferred initially,” says DSO Sunita Daga. She admits, however, that the scheme has so far been difficult to implement. “We did try to bring MGNREGA under it but it was a problem since most people have post office accounts which are not in the core banking system,” she says.

Another problem has been the delay in receiving Aadhar numbers. “I completed all the formalities nine months ago but am still waiting for my Aadhar card,” says Ram Biwas of Arahi Panchayat Samiti.

“Nobody seems interested. It was dropped like a hot potato once the government realised how complex it was and what a mess had been created. No political pressure is put on the administration to implement it and no political leader really shows interest. Our MP has not ever asked about implementation. It will have a zero impact in the coming elections,” says an Ajmer district official who wishes not to be identified.

The opposition, meanwhile, has found an issue to attack the Congress government on. “The central government is not putting in enough funds and the state government has no interest in implementing it. Every day I have people from my constituency come to me with complaints. I even raised it in the Vidhan Sabha. This has turned out to be a problem rather than solved anything,” says Ramhet Yadav of the BJP, MLA of Kishangarhbas in Alwar. Kotkasim falls under his constituency.

Villagers, irrespective of affiliation, are talking about the Ashok Gehlot government’s latest sops — universalised and restructured pension, free medicines and check-ups in government hospitals, and Rs 2,100 for each household that completes 100 days under MGNREGA. They are also talking about Narendra Modi and his recent rallies. Few have anything to say about DBT. And those who do have nothing positive to say.

“Aapka Paisa Aapke Haath. What sort of a scheme is this?” says Bela Devi of Tilonia village. “Who has launched it? What does it mean? Where was the money going until now? My ration card needs to be updated. Even something as basic as that is not happening smoothly. Where is the space for some new scheme?”


Delhi: Long queue for cards, long delay for benefits


In a narrow lane of Kanjhavala in Northwest Delhi, Maina Devi, 75, waits to get her Aadhar card made. Having lost her legs, she has not been able to go to the enrolment camp. Without the card, she would not get Rs 600 a month under the Delhi government’s Annashree scheme. She is entitled to the cash subsidy for food by virtue of being the eldest woman in the household. The Annashree Yojana, which entails transferring the cash directly into Aadhaar-linked bank accounts, is for needy families that don’t get subsidised food under either the BPL scheme or Antyodaya Anna Yojana.

It is a new scheme, but several existing schemes such as scholarships, widow pensions, Janani Suraksha Yojana, too, have been included under DBT, launched in Northwest and Northeast districts in the first phase in January this year.

With polls due at the end of this year, the Sheila Dikshit-led government will be looking at making the maximum impact with the cash subsidy for food. However, eight months after the launch, the noise has been about delays.

“I got the subsidy just once in the past nine months, though I have visited the bank several times,” says Reshma of Saavda in Northwest district. She is among 11 women who have thronged the Mission Convergence office to complain. The scheme was supposed to be implemented retrospectively from April 1, 2012, with arrears to be credited into accounts. “Several women come to us every day complaining about not having received the cash. It comes with a lag of four to six months on an average,” says Meenakshi, who works with a gender resource centre for the Mission Convergence programme.

DBT is something people are yet to understand fully. Not everybody has got a bank account or an Aadhar number and seeding remains a concern. “I still get my pension by cheque. The bank told me my account is not linked to Aadhar,” says Munni Bibi of Ghevra village.

In Nathu colony in Northeast, Murti Bai says her son and daughter-in-law, both disabled, got their last pensions directly in their accounts. “It was convenient… But it happened only because of the people working with the gender resource centre,” she says. Most women credit the “social workers” in their area. No one from the government ever came to them to explain, they say.

Outside the Northeast district magistrate’s office, people queued up to enrol in Aadhar say they have been waiting for hours. “We have been waiting since 8 am. We have to get the cards, else we won’t get benefits,” says Sangeeta Yadav, while her nine-month-old baby wails in the heat. Several have not received their children’s scholarships for lack of a card.

“The DBT scheme is still in the preliminary stages… We are still doing Aadhar enrolment. We get around 200-300 people every day for Aadhar generation,” says Anoop Thakur, SDM (Kanjhawala), Northwest.

Another scheme that appears to be suffering after being included under DBT is the Janani Suraksha Yojana, under which BPL women get Rs 600 for a childbirth registered with a government hospital. “Earlier women were given cash or cheques but now it goes straight to their accounts. But only those with Aadhar numbers and bank accounts are given it, so invariably some get left out,” says a government official dealing with the scheme in Northeast.

“The biggest problem in Delhi has been that banks don’t cooperate and are reluctant to open no-frill accounts… The business correspondent model also exists more in the books and less on the ground,” says Sanjay Kumar, director of Sewa Bharat, an NGO that has been working in the area of direct cash transfers.

Madhya Pradesh: Direct transfer of benefits, if any, to BJP state govt

The UPA government will struggle to take credit for the DBT scheme in BJP-ruled Madhya Pradesh, where schemes that seek to provide similar benefits are already in place. Simultaneously, should things go wrong, the UPA would be spared the flak because DBT is indistinguishable on the ground from the state’s measures — electronic transfer of funds or enhancing the scope of financial inclusion, both of which necessitate opening of bank accounts.

The Madhya Pradesh Model of Financial Inclusion and Direct Benefit Transfer weaves in benefits of several state and central schemes. It has named the project Samagra Samajik Suraksha Mission.

The government has been depositing money in the accounts of farmers after purchasing wheat, starting before DBT was introduced, besides making electronic transfers of MNREGA payments. In the last few months, 1,700 ultra small banks (also called community service centres) have been opened and 1,300 more are being added.

Unlike DBT, which is being implemented in Hoshangabad, Harda and Khandwa districts, the state’s initiatives are relatively hassle-free because they are not linked to the Aadhar card yet. Using biometric authentication, the beneficiary is provided benefits at the nearest USB. The RBI norm of one USB for a population of 2,000 did not suit a large state like MP, so the government changed the criterion to one USB every 5 km.

The USB works to the bank’s advantage also because it does not have to spend on infrastructure. While distributing benefits of government schemes, it can also convert the no-frills accounts to regular savings accounts.

Against this background, the idea of opening accounts for benefits such as LPG or kerosene under DBT has not really enthused potential beneficiaries, who fail to understand how they stand to benefit. They don’t know — or care — which government is behind the idea.

“Daily wage earners like me will have to pool money to buy kerosene at the market rate and then wait for the subsidy to reach the bank. I don’t see any benefit in it. What does my family eat till then?” says Janardan Shravankar, who tarvels daily from Hoshangabad to work at a highway dhaba.

Shakti Singh Chouhan, sarpanch of Jasalpur, has an LPG cylinder in mind. “Hamara paisa hamko vapas de rahe ho,” he says questioning the DBT. He claims, “There’s a rumour that the government will deduct tax before depositing the subsidy amount.”

When a sarpanch is influenced by rumours, not many in rural areas show enthusiasm. “I don’t know whose scheme this is but it’s not good for us,” says Ravindra Kushwaha, of Jasalpur, recounting his troubles with opening an account and getting an Adhar card.

Jasalpur, about 10 km from Hoshangabad on Pipariya Road, is one of the villages that have an USB, started by Central Bank of India. For a population of 3,115, it has a relatively high number of 1,600 accounts with only Central Bank.

Dharmendra Chouhan, who supervises the functioning of more than a dozen business correspondents (engaged by the bank at Rs 3,500 monthly), admits not one beneficiary of Janani Suraksha Yojana (a scheme to promote institutional delivery) has actually got direct benefits in the last eight months. More than 40 women have been given cheques when the money should have been deposited in their accounts directly. But the presence of a USB means the beneficiary did not have to travel to the main branch to deposit the cheque or to get the money.

In fact, beneficiaries had expressed similar doubts when the state government introduced its own DBT. For example, farmers used to be given cash on selling wheat, then they were given cheques, and now the money is deposited directly in their bank accounts. Whenever a change was taking place, they used to think the previous arrangement was better in some way or the other before being convinced.

Of a total population of 12.48 lakh, Hoshangabad claims to have enrolled nearly 11.30 lakh for Aadhar cards and distributed the number to more than seven lakh. The district has fared better in Aadhar enrolment because it was one of the pilot districts chosen in 2010 to link PDS to Aadhar by issuing food coupons to beneficiaries.

Hoshangabad district has had special camps for targeted beneficiaries (women and schoolchildren) for the centre’s DBT, under which eight kinds of school scholarships and Janani Surakshya Yojana have been covered so far.

For all the publicity around “Aapka Paisa Aapke Haath”, DBT has no resonance and looks unlikely to become a poll issue. “Only issues such as electricity, roads and water matter in the election, not schemes like these. People know least about which government runs them,” says B C Pandey, a government employee.

Congress leaders take credit for the scheme by talking about DBT in their political rallies but otherwise politicians or parties have showed little interest to either popularise or criticise them. Outside of audiovisual publicity, it is only government employees or banks that talk about the scheme.

Additional secretary (rural development) Brijesh Kumar says coverage of Aadhar is not very high, especially in rural areas. He says the state government schemes are working well because all bank accounts are biometrics-enabled.

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