The poor progress of Aadhaar enrolment was cited as one of the reasons why the direct cash benefit transfer scheme would fail. When the launch of the scheme was being planned last September, just around 215 million Indians were enrolled under it, and just a handful of districts had the 80%-plus Aadhaar penetration that was seen as the minimum required—today, that number is up to 315 million but still woefully short of the eventual target. The fact that there was no one database—and machine-readable at that—with details of the poor who are to get PDS rations, for instance, was cited as another reason for why the scheme would fail. After all, the argument went, even if everyone had Aadhaar numbers, how were we to figure out who was poor and who wasn’t.
In the event, the government did the best thing possible and adopted a modular approach. It began by choosing 43 districts for the first phase of the direct cash transfer, beginning January 1, that had the highest Aadhaar penetration. It also chose to first use Aadhaar-based cash transfers in sectors where reasonable database existed and where cash transfers were in any case happening, though not to the bank accounts of intended beneficiaries. So, scholarships and various health schemes were targeted for the cash transfers to begin with. Later, LPG subsidies were to be included—the lists of those getting subsidised LPG cylinders, for instance, are with just three public sector oil marketing companies. Over 2 lakh beneficiaries started receiving benefits of 26 identified schemes through DBT from January 1 in 20 districts, and 23 other districts were brought to the fold over the next two months.
The problem is, as our lead story points out, there is poor coordination between concerned departments. While the Aadhaar number and biometric identification provides a platform to identify beneficiaries, the actual payments to the targeted beneficiary depends on two things. The relevant government departments have to provide the list of beneficiaries and some coordinating agency needs to ensure these beneficiaries have bank accounts—the Aadhaar-payments gateway then ensures the necessary matching. If this doesn’t happen, and it is clear it didn’t, the whole system collapses. This needs to be fixed before going into the next phase with 78 more districts to be added. The losses to the country are too large to accept failure since the leakages in the R3.5 lakh crore or thereabout of annual entitlement and subsidy payments are very high. In just the PDS, for instance, comparing National Sample Survey data with that presented by the PDS system shows that around half the intended beneficiaries don’t get their subsidised grain.