Direct cash transfer pilots ride to success on Aadhaar

Written by Kiritika Suneja | New Delhi | Updated: Dec 20 2012, 06:25am hrs
Direct cash transfer pilots riding the Aadhaar platform have borne fruit in several parts of the country, even as protests by villagers from Rajasthans Kotkasim and objections by the ministries of food, fertiliser and petroleum cast occasional shadows over the UPA governments ambitious welfare programme.

Consider this: Beneficiaries of the public distribution system in Kakinada in Andhra Pradesh buy their ration supplies using the Aadhaar Online Authentication System. Same is the case in Aurangabad in Maharashtra, where scholarships and pension payments are made under the Aadhaar-Enabled Payment System. Beneficiaries get their dues after authenticating their identity through a micro-ATM device.

Jharkhand partnered the Unique Identification Authority of India (UIDAI) to undertake financial inclusion and welfare payments in a pilot project in 12 blocks of Ranchi, Hazaribagh and Saraikela-Kharsawan. So far, more than 2,223 transactions adding up to R1.8 lakh have been conducted through the Aadhaar Payment Bridge System (APBS).

Besides convenience for the customer, there are advantages for the banks and the government. Earlier, many beneficiaries did not get their money, but now due to Aadhaar, service delivery is more timely, said an UIDAI official.

Another success story is Jharkhands Ramgarh district, where the government directly transfers money to Aadhaar-linked bank accounts under MNREGS. Beneficiaries withdraw money from a micro-ATM operated by a business correspondent.

The rollout of direct cash transfers of welfare schemes is possible and will rapidly scale up because of Aadhaar seeding, said a Planning Commission official. Last week, the panel met representatives from 11 states and six union territories to discuss the preparedness for a rapid roll-out of Aadhaar-based cash transfer.

Aadhaar seeding is a process by which Unique Identification (UIDs) numbers of residents are included in the database of service providers for authentication during service delivery. The rural development ministry has already integrated the 12-digit Aadhaar number in digitised NREGA cards.

In fact, the authority has developed an in-house seeding tool called Ginger for the seeding process which involves data extraction, consolidation, normalisation and matching.

In Tripura, gram panchayats have completed seeding Aadhaar number into the RoR (Register of Ordinary Residents) database so that welfare programmes targeting rural population get priority.

In Maharashtras Wardha district, Aadhaar enrolment has reached more than 80% and the state is in the process of issuing guidelines on incentives to ASHA and Anganwadi workers for helping women members of the household in opening bank accounts by giving Rs 10 per bank account opened.