Jharkhand is all set to lead the Prime Minister’s architecture for electronic cash transfers or direct cash transfer leveraging Aadhaar (Unique Identity Number).

The Prime Minister announced the setting up of the new mechanism on Saturday.

Why Jharkhand? This was the first State to adopt Micropayments, using the Aadhaar linked bank accounts in 2011. This was used in paying NREGA wages, scholarships, and old age pensions in some of the districts. Data show that 2,956 transactions took place in five banks and the amount involved was Rs 10.5 lakh.

In Tripura, payment under Indira Gandhi National Old Age Pension (IGNOAP) is being done in Mandwi block of West Tripura district. The number of Beneficiaries with Aadhaar is 2,559 out of total of 3,252. This mechanism is also under progress in other two Panchayats of the State – Borakha and Patni. There, out of 240 beneficiaries, 191 were paid through the Aadhaar enabled system.

Although it is not clear when Aadhaar will be used for subsidy payment on domestic cooking gas or LPG, a pilot project on Aadhaar based delivery of LPG cylinders (domestic) by three oil marketing companies (one distributor each) is being conducted in Mysore. Approximately 20,000-plus residents participated in the exercise. A similar exercise for kerosene is being done in Alwar district of Rajasthan.

These numbers may look small especially when the amount on subsidy and various welfare schemes is around Rs 3.25 lakh crore.

But Government officials say these numbers will rise when Aadhaar enabled delivery of subsidies, benefits related to various schemes are rolled out in 51 districts. The rollout is in various stages of implementation currently.

Now, the question is why an Aadhaar enabled system? The answer lies in the statement issued by the Prime Minister, where it has been said that such a move aims to improve targeting, reduce corruption, eliminate waste, control expenditure and facilitate reforms. It has been often pointed out in the past that only a part of the subsidy and welfare scheme reaches the intended beneficiaries.

Another question is that whether the Prime Minister’s enthusiasm is reflected in Aadhaar enrolment. The UID authority claims yes. Till now more than 20 crore Aadhaar numbers have been generated and the total number of enrolments has crossed 22 crore. The target for Aadhaar is 60 crore, and the remaining half of the population is to be covered by National Population Registry.

So hopes are really high and the Government is expecting significant change in extending benefits to the targeted population.

Although the State-wise break-up of Aadhaar generated cannot be disclosed as per policy, UID officials have admitted that non UPA, especially BJP ruled States, have done well in implementing projects based on UID. This was also evident in the statement from the Prime Minister’s Office.

The statement said the results of pilots are encouraging. Electronic Benefit Transfer (EBT) has already begun in many cases. The Government and RBI have issued Guidelines to Banks for implementation of EBT.

Pilots are under implementation, including in AP, Chhattisgarh, Punjab, Rajasthan, Tamil Nadu, West Bengal, Karnataka, Puducherry and Sikkim.

Here, it may be noted that apart from Andhra Pradesh and Rajasthan, rest all are non UPA or BJP ruled States.

> Shishir.Sinha@thehindu.co.in

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