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HindustanTimes Fri,18 Apr 2014

Govt cash transfer system is old wine in new bottle

Chetan Chauhan, Hindustan Times  New Delhi, November 29, 2012
First Published: 21:04 IST(29/11/2012) | Last Updated: 02:18 IST(30/11/2012)

The direct cash transfer in 42 schemes to start from next year is old wine in new bottle with beneficiaries under these schemes already receiving money directly into their bank accounts.

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Finance minister P Chidambaram and rural development minister Jairam Ramesh on Tuesday announced that money under these 42 schemes of the central government would be transferred directly into bank accounts of beneficiaries in 51 districts from next January.

The list of the schemes shows that it includes 22 scholarship programmes of the nine Central government ministries. It has also national social assistance programme having five schemes and Dhan Laxmi scheme of WCD ministry and Janani Suraksha Yojana of health ministry. Under these schemes the money is being transferred directly into bank accounts of beneficiaries.

"The big difference would be that the beneficiaries would get money faster," a senior Planning Commission official said. But, for that, they will have to get an Aadhaar number, for which they would get time till March 2013.

In the present system, the money is first transferred to the institution responsible for disbursing the money and then it gets electronically transferred into bank accounts of the beneficiaries. For example, the University Grants Commission transfers the scholarship money into the bank account of the university, where the student is enrolled. The university then transfers the money into account of the intended students.

Government officials said in the new Unique Identification or Aadhaar enabled direct cash transfer system the money would be directly transferred into bank accounts of the beneficiaries. "Aadhaar number would act as bank account number," a government official said.

The benefit of direct transfer in the existing cash schemes is more for the government than the beneficiaries as the government would able to monitor utilization of funds under different schemes from one point. Officials admitted that cash transfer under existing schemes may not end harassment of beneficiaries to withdraw the funds as experienced in many states. 

As majority of the schemes to come under government's direct cash transfer scheme are regarding scholarships, the government is planning to create a national scholarship portal to provide single window information on scholarships for different categories of students such as minorities, scheduled caste and tribes and economically backward.

State governments of Madhya Pradesh and Tamil Nadu have scholarship portals helping students to track their applications and also money and now the Central government wants to have similar portals under the national e-governance programme.

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