The government is planning to shift completely to a smart card-based electronic benefit transfer (EBT) system to pay wages to beneficiaries of the National Rural Employment Guarantee Scheme (NREGS).
It is examining the results of pilot projects that various banks are implementing in Karnataka, Andhra Pradesh, Uttarakhand and Orissa.
At present, it takes a month for NREGS payments to reach the actual beneficiary. Once the EBT is fully implemented,
payments will reach in a day.
Banks will set up ‘banking outposts’ in all gram panchayats (village councils), which will be connected through a technology platform.
A senior government official, requesting anonymity, said Finance Minister Pranab Mukherjee could indicate a roadmap for moving to the smart card-based system in his budget speech on February 26.
Under NREGS, which was launched in 2005, the government is statutorily required to provide 100 days of employment to a member of each rural household living below the poverty line. About 44.1 million households benefit annually from the scheme spread across 626 districts in the country.
“Banks have been advised to work in co-ordination with the respective government departments to ensure all benefits are delivered to individuals only through bank accounts within a specific timeframe,” said a public sector bank chairman, who requested anonymity.
The State Bank of India has inked an agreement with the Orissa state government, while Syndicate Bank is implementing a similar project in select districts of Karnataka.