The government will launch direct cash transfer in 51 districts from 1 January and cover the entire country by April 2014, just ahead of the next Lok Sabha elections.
The Prime Minister’s Office on Friday cleared the roadmap to implement the UPA-2’s ambitious project that could see the government crediting nearly Rs. 2,000 billion --- around 40 % of Centre’s plan budget -- straight into bank accounts of millions of beneficiaries of government schemes across the country.
Cash transfer will include a wide ambit of welfare measures from food and fuel subsidy to financial entitlement such as scholarships and pensions. The transfer will take place through Unique Identification or Aadhaar based biometric authentication system to ensure that the right person gets the money into his or her bank account.
Prime Minister Manmohan Singh and Congress President Sonia Gandhi on October 20 initiated pilot projects to test the Aadhaar authenticated electronic cash transfer mode for different government schemes.
“All government departments engaged in transferring benefits to individual beneficiaries will quickly move to an electronic direct cash transfer system based on Aadhaar payment bridge,” a PMO statement issued after a meeting chaired by Principal Secretary to PM Pulok Chaterrjee with officials of different ministries said.
To meet the ambitious deadline, majority of Indian residents will need to have a bank account and Aadhaar number of end of 2013. As of now, half of 1.2 billion Indians have a bank account and Aadhaar number has been issued just 21 crore residents.
Chatterjee issued directions to the Department of Financial Services and to achieve universal financial inclusion and Nandan Nilekani led Unique Identification Authority of India to roll out Aadhaar speedily in line with the road map decided.
“It is a challenge we will achieve,” a senior UIDAI official said confidentially and adding that the authority was generating over a million Aadhaar numbers every day.
For a smooth roll-out of the world’s biggest transparency linked governance initiative, the government has also decided that electronic money transfer will take place in areas having 80 % or more coverage of Aadhaar numbers. There are about 100 such districts in India including all in Delhi and Tripura.