Electronic cash transfers may stop other modes of payment: Montek Singh Ahluwalia

Last Updated: Mon, Dec 10, 2012 03:56 hrs

pThere is an expansive Madhubani painting probably from the eponymous district in Bihar behind Planning Commission Deputy Chairman strongMontek Singh Ahluwaliastrong&rsquos desk at New Delhi&rsquos Yojana Bhawan As he helps direct the government&rsquos ambitious direct cash transfer scheme riding on Nandan Nilekani-led UIDAI&rsquos Aadhaar platform it is rolling out the programme in remote districts such as Madhubani that will be Ahluwalia&rsquos biggest challenge It will involve dealing with differently tempered state governments a creaking post office network and thousands of banking correspondents among other issuesppIn an interview to emSantosh Tiwariem and emDevjyot Ghoshalem he says the initial experience of taking the scheme to 51 districts starting January 1 will allow the government to identify the problems and hopefully find a way to dealing with these Edited excerptsppstrongYou have said this will be a gradual introduction across 51 districts starting January 1strongbr What we&rsquove said is that we&rsquoll roll it out on January 1 It&rsquos possible for some schemes we are able to do it by then but if it gets delayed to January 30 we shouldn&rsquot regard that as a failure there are so many districts and so many schemes Each scheme will roll-out separately because the work of digitising the database and seeding it will be scheme-specific So you might have a situation where one scheme gets the transfers effective on January 15 another on January 20 By the end of January certainly a substantial number of schemes in a substantial number of districts should actually have been implemented in the sense that money should have movedppstrongSo from January 1 at least for some schemes work on the payment platforms will begin and gradually the digitisation will happenstrongbr That platform work is already on My impression is that the moment the electronic cash transfer happens any other mode of payment would cease We cannot have two running together within the same district We have to make sure the list of beneficiaries is sufficiently seeded We have to keep a window where people who didn&rsquot get into the list fully are able to claim their scholarship or whatever it is in a very short timeppstrongIs there a time frame where all the 29 schemes across 51 districts will be rolled outstrongbr That&rsquos being done right now We are probably going to have a video conference with all the district collectors on December 13 or 14 That is when clear instructions will be given and when we will hear from the collectors whether they can implement it or it will take a few weeks morea target_blank hrefhttpwwwbusiness-standardcomcontentgeneral_pdf121012_02pdfTRANSFORMING THE TRANSFERappstrongAre you hopeful that within six months say in the majority of the 51 districts or in all at least the initial clutch of schemes will be rolled outstrongbr For these districts absolutely There is a lot of concern that the Aadhaar penetration in some of these districts is 80 per cent but in many others is 40 per cent or lower The important point is not the overall Aadhaar penetration because that is a long-term objective The important question is how soon we can get the beneficiary lists seeded with Aadhaar listsppYou can never be sure what electronic glitch or the other exists It is my expectation that by the end of January we should be able to say &lsquoFor this district for these schemes it has visibly worked&rsquo and if you like you can do a random check of the beneficiary list and ask them if they got any moneyppstrongIt can take up to three months for an Aadhaar card to be delivered after the registration Played out at scale if it takes this long it will mean that there will be a large number of people without Aadhaar and without access to schemesstrongbr I accept that the speed will have to be totally different from the normal roll-out of Aadhaar I think they can do that You can&rsquot have a system where you say it will Aadhaar-enabled and Aadhaar-enabled adds a three-month delay That is one of the things that will have to be sortedppstrongIn a recent interview you said &lsquoonly a few more&rsquo banking correspondents BCs were required for the initial roll-out Are you concerned that as this programme reaches scale this will be a crucial issuestrongbr I accept that when you&rsquore rolling out you do need BCs for two purposes One to actually enroll and give the person a bank account number Also so he can have access to the fellow to withdraw cash In the districts we are talking about if there is a deficiency of BCs that will weaken the operation But remember it won&rsquot weaken it in the sense that today scholarships are being paid into their bank If they are currently working by cheques the same cheques will work If they are currently drawing money by going to the bank they can still do that The only things the BC does is that if he happens to be living next to you in a village and you want Rs 200 you can go there use your thumb imprint and get the moneyppThe main glitch is if they can&rsquot find enough BCs at the time of seeding but I don&rsquot think it&rsquoll be very difficultppstrongIf you look at MGNREGS the rural job guarantee 55 per cent of the accounts are held with post offices POs Beneficiaries of other schemes also hold accounts with POs How will you deal with thisstrongbr If you have been traditionally getting your money credited to a PO account you&rsquoll have to open a bank account through this mechanism and it will be credited to your bank account The key thing is that this should not be a problemppstrongAre you saying that for this platform to work beneficiaries will have to mandatorily migrate away from PO accountsstrongbr Not if the PO puts in place a combined banking solution comparable to what the bank have which would enable an Aadhaar-gateway to send the money But I don&rsquot see why anyone should mind if someone is told a scholarship was being sent to a PO account and is now being sent to your bank account The only disadvantage is that the PO is next door and the bank is not to which our answer would be there is a BC Then the person could say there isn&rsquot a BC in our village We have to address that issue But making the PO competitive is not a bad ideappstrongHave you got any indication that the department of posts will sort out its systemstrongbr In principle they say of course we will do that but it&rsquos going to take them a long time So initially at least my guess is these beneficiaries would move to the banking systemppstrongAndhra Pradesh and Maharashtra together have more than 40 per cent of India&rsquos total Aadhaar enrolment and in the 10 most populous states Aadhaar penetration is very weak for many How critical is the participation of the state governments in expanding this programmestrongbr The government presumably has an ongoing programme for rolling out the enrolment processppNandan Nilekani has not said to me that the states are not willing to do it So I am assuming whatever the programme is that will be continuing At the moment the focus is on these 51 districts For the larger states too we have to do that And if this proof of concept works everybody state governments will want it done this wayppIf state governments say &lsquoNo it can&rsquot be done&rsquo there is a problem because it can only be done through district collectors When the collectors have the video conference with the finance minister &mdash I would be there and Nandan &mdash they make sure they have state government approvalppstrongIn states where the National Population Register NPR is responsible for enrolment the penetration is still very lowstrongbr My view is that that was an original agreement that let NPR do half the states and let Nandan Nilekani-led UIDAI do the other half If NPR is not rolled out to the extent required we can unleash the Nandan mode just for Aadhaar purpose in those states too A little bit duplicative but there&rsquos no harm in that So it&rsquoll be a combination of bothp

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