You may call the Toll
Free No. 18001801947 for inquiry, which is provided in the Aadhaar
advertisement as published in the Time of India (New Delhi edition, page no. 2)
dated 16 December, 2012 and find that it is not in service. This advertisement was
published a day after the Delhi Government’s Cash-for-Food flagship programme
titled Dilli Annshree Yojana was launched by the UPA chairperson Sonia Gandhi
and CM of Delhi Smt. Sheila Dikshit. Under the Annshree Yojana, a monthly cash subsidy
of Rs. 600/- will be provided to Delhi’s most vulnerable.
----
In India, cash
transfers initiative has been hailed as a panacea for large number of
problems faced by the citizens, particularly the poor, in accessing essential
public services and goods. Transferring of direct cash subsidies into the bank
accounts of citizens for services and goods like: LPG, food grains and
kerosene under the public distribution system (PDS), fertilizers, scholarships etc.
has been mooted by the government in order to avoid duplication of cards and reduce
leakages in the system. Proponents of cash transfer believe that it
will streamline expenses incurred by the exchequer and will, therefore, help in
curtailing fiscal deficit. Please refer to the media report titled: Direct CashTransfer Can Control Inflation: Chakrabarty, which was published in the
Outlook dated 14 December, 2012.
In a report titled: 'Aadhaar Number to be Made Mandatory for 10 Schemes' published in the Outlook dated: 20 October, 2012,
it has been mentioned that Aadhaar would be made compulsory for applying for old
age pension schemes of old age, widow, differently abled, MGNREGA job card,
ration card, driving license, water and electricity connections, property
registration, Indira Awas Yojna, scholarships etc. in Rajasthan. In another
media report published in The Hindustan Times dated: 28 November, 2012
entitled: Keep your UID cards ready to get married, buy house by Neelam
Pandey, it has been stated that the Delhi Government wants to make UID card compulsory for work related to property and marriage registration.
For accessing direct
cash transfer, enrolling for Aadhaar card has been made mandatory unlike in the
earlier days of the so-called un-Constitutional UID project (The National Identification Authority of India Bill, 2010, Forty Second report by Standing Committee on Finance (2011-12), publication date: December, 2011, Fifteenth Lok
Sabha, Ministry of Planning),
during which making an Aadhaar card was optional (please check my blog entry: Envisioning India—The Potential of Aadhaar)
and it was meant for those who faced problems in proving their identity (such
as poor migrants in search of livelihoods) so as to access public services. But
now Aadhaar card would help one to open a bank account so that direct cash
transfer of subsidy could be made into that account.
In the following points,
I would briefly discuss one by one the problems associated with cash transfers:
Problem 1: Providing one’s bank
details including bank account number and IFSC code number in the Aadhaar application
form is optional. (Please download the present Aadhaar enrollment form).
If cash transfer becomes the order of the day for accessing any universal public
service/ goods, then the Aadhaar application form should explicitly mention that
giving one’s bank account details is mandatory. Otherwise, this might generate
another round of standing in the queues, filling up of forms and then submitting
them.
Those using the Internet have encountered the problem of spam mails that are sent from Nigeria or
some other place, where one is requested to provide one’s bank account details to
the sender of such mails. There is no terms and conditions part provided in the
Aadhaar application form that the information provided by the applicants for
enrollment shall not be divulged by the government to any private party or
corporation and such information shall be considered as confidential.
Problem 2: In the past a lot
has been written against cost push inflation caused by rising NREGS wages. It
has also been said that rising NREGS wages is making it harder for the farmers to
hire agricultural labourers since the latter have started demanding for higher agricultural
wages. (Please check my blog entry: Proposed changes in the NREGA: Why do I oppose them?).
The same question can now be asked to the proponents of cash transfers whether this
adventurous scheme might inject liquidity that could generate demand pull
inflation via multiplier effect. For a detailed exposition on this subject,
please consult the article titled: Cashing in on schemes for poor by
Narendar Pani published in The Hindu dated 29 November, 2012.
Problem 3: A much discussed
criticism leveled against NREGA is that wages do not reach the manual workers
in time. The study entitled MGNREGA Sameeksha: An Anthology of Research Studies
on the Mahatma Gandhi National Rural Employment Guarantee (2005) Act 2006–2012,
published by the Ministry of Rural Development, GoI, http://www.im4change.org/docs/63503975mgnrega_sameeksha.pdf
has documented that due to delay in wage payments, people employed in NREGS
works in Mandla, Madhya Pradesh and Narmada, Gujarat shifted back to
lower-paying works. The NSSO survey on MGNREGA findings in FY 2009–10 indicate
that in Andhra Pradesh, about 68 per cent of households who worked in MGNREGA
received payments within 15 days; in Rajasthan, 10 per cent of the households
received payment within 15 days and in Madhya Pradesh 23 per cent of the
households received payments within 15 days. The CAG audit (Performance Audit
Report No. 11, 2008) conducted in 2006 found that there were delays in payment
in 213 Gram Panchayats in 16 states including, Andhra Pradesh, Chhattisgarh,
Jharkhand, Karnataka, Uttar Pradesh and West Bengal.
There are a number of
examples available from grassroots to illustrate that middlemen get a
portion of the money when much delayed payments are deposited in the bank
accounts of NREGS workers. Such poor people constantly faced threat and
harassment from babus and contractors. Bank accounts opened in their
names have hardly ended their exploitation. People walk more than 6 kms to
reach banks to withdraw money. The MGNREGA Sameeksha report has spelled
out some of the problems in the existing banking system: a. Poor
coverage/network of banks/post offices; b. Non-streamlined record-keeping at
banks/post offices; c. Low level of literacy or illiteracy among NREGS workers; and d. Low Cash
and Line Limit.
What is the guaranty
that cash transfer would be deposited timely in the bank accounts and not be
siphoned off? The Kotkasim experiment in Rajasthan's Alwar district illustrates that moving towards a cash transfer system for kerosene has failed
since subsidy payments were erratic and cumbersome. For more, please check the
article titled Neither effective nor equitable by Bharat Bhatti and
Madhulika Khanna, published in The Hindu (dated: 4 December, 2012.
Problem 4: For a rural society,
which is caste-based, relying on micro-ATMs held by business correspondents is asking
too much for last mile connectivity. The economic viability of the ‘business correspondent
model’ is too under doubt. Please check the article entitled: The "Aadhaar" of Direct Cash Transfer is more of assumptions, less of ground-level realities by MS Sriram, which was published in The Economic
Times dated 14 December, 2012.
There are places where the accounts that have been created under the business
correspondent model have remained dormant, with no transactions happening. Please
check the blog entry titled Analyzing the Business Correspondent Model (PartII) Why isn’t it working?–Dormancy of No-Frills Accounts by Nikhil Dugal
dated 29 October, 2012.
A factsheet prepared
by Deepti KC (Institute for Financial Management and Research)
mentions about a study by Centre for Micro Finance titled: Business
Correspondent Model-An analysis of the financial viability of the Customer
Service Providers and Client Satisfaction that has found that agents are
struggling to make their business profitable and financially sustainable as the
current commission structure is not adequate to cover agents’ costs. In
addition, agents are facing issues with cash management and liquidity due to
unwillingness to share risks by both BCs and banks.
Genuine NREGS workers
have faced fingerprint recognition problems in the Ratu Block in Ranchi
District, Jharkhand. Please check the article entitled: Experiments with Aadhaar by Bharat Bhatti, Jean Dreze and Reetika Khera published in The
Hindu dated 27 June, 2012.
It must be added that
cash transfer initiative will not solve the problem associated with shortage of
qualified staff in various departments who are people/consumer friendly. As has
been pointed out by various activists, the government is trying to hide its own
failure by introducing cash transfer so that people start relying on the market
for goods and services.
Problem 5: It may sound silly
but I would like to show here how the Aadhaar enrollment form confuses a
citizen. If one goes through the enrollment form (please download the present Aadhaar
enrollment form from here),
one will find that driving license is considered as a valid document both as a
proof of identity (PoI) and as a proof of address (PoA). However, if one flips
over a driving license (check the image provided), which is presently issued in
Delhi, one can read: "Driving License particulars not to be used as
Residence Proof".
Problem 6: Transferring
a meager sum of cash into the bank account of intended beneficiaries
without taking into account size of the household and rate of inflation might
push one further into poverty. Some of the State governments already provide 35
kg of foodgrains to every BPL household on a monthly basis at subsidized rates.
There has been a reversal of the performance of PDS in many states including Chhattisgarh. Therefore, Central government’s effort to introduce cash transfer
by replacing the PDS may face stiff opposition from the state governments. The Socio
Economic Caste Census (SECC), which got started to enumerate BPL households in
various states is not yet over and has faced various challenges. Without
waiting for the results of SECC, how can the government start with an
adventurous cash transfer scheme? Why is the hurry for UPA 2 to rush for a scheme
that may have been successful in Brazil but could fail in India?
No comments:
Post a Comment