Good Governance Application 2 : Direct Benefit Transfer

 

Plugged In / Leak Off/ Sealed

Only 15 paise reaches the needy’: SC quotes one of the major politician remarks in its Aadhaar verdict in 2016. This quote came In 1985, on a visit to drought-affected Kalahandi district in Odisha as “ every rupee spent by the government, only 15 paise reached the intended beneficiary”. That was the scenario in those days. Has it changed now, my answer will be, yes, to a larger extent.

Governments across the world run large cash/kind transfer programmes as an incentive to access essential commodities to its beneficiaries as a part of the government manifesto.  Even though the intention is good, due to the process, pilferage was high. Let’s take an example of scholarship, the flow of release is depicted below.

  The issue with this flow is too many intermediaries, delay, lack of a mechanism to know whether the intended beneficiary received it or not. Due to the nonexistence of bank account to beneficiary cash disbursal happens at the last mile. Due to a loose thread for accountability, it was difficult to make out genuine/ ghost beneficiary. As a result, the intended beneficiary keeps on waiting, while government assumes, the benefit has been delivered. The fact remains, the expenditure has been done. Now the challenge is how do we connect to the last beneficiary, without intermediaries. By collecting the bank account of the beneficiary and seeding it in the beneficiary database. Hence Direct Benefit Transfer was initiated, the program was aimed to transfer subsidies directly to the beneficiary through their bank accounts. It is hoped that crediting subsidies into bank accounts will reduce leakages, delays, etc.
Due to the lack of unified databases, the question raised. Is a bank account unique? Is the seeded bank account is of the same beneficiary? How to ensure the same bank account is not seeded in another district? How to ensure an independent communication channel to the beneficiary to inform his benefits transfer?

The solution came in the form of JAM. Jandhan, Aadhaar and Mobile. Aadhaar is unique to a person. Aadhaar had the mobile number of the applicant. The bank account was opened/seeded with Aadhaar. This means through Aadhaar we can reach the bank and send a message to the beneficiary. 

And hence Aadhaar based DBT was initiated. The DBT system uses the Aadhaar number of the beneficiary as a financial address instead of the bank account number. The beneficiary list is prepared by the concerned department and is authenticated with Aadhaar to ensure no ghost entries are there. DBT application does de-duplication using Aadhaar number to eliminate double entries. Application process the payments in the bank accounts of the beneficiary using the Aadhaar Payment Bridge of NPCI, which achieve accurate targeting of beneficiaries. And SMS is triggered at all levels to ensure the beneficiary is aware, where he stands. 

 In Karnataka from the past three years, ₹13,200 crores has been transferred to the bank accounts of various beneficiaries of government schemes via the Direct Benefit Transfer (DBT). The benefits of 117 schemes across 20 departments were disbursed through the DBT platform.

DBT has ensured elimination of waste, curbed leakage thereby controlling expenditure and greater accountability and transparency

 

Disclaimer: Purely personal opinion.