Cash Transfer Scheme “Aapka paisa aapke haath"

Team : 1. Ashok Hegde 2. Arun Khedwal members 3. Rutuja Dighe 4. Sanjeev ShrivastvaGroup : I Batch : XMBA-25 Professor : Anand ShringarpureInstitute : ITM, Vashi

Agenda• Executive Summary• What is Cash Transfer Scheme ?• Why Cash Transfer Scheme?• How is it being implemented?• What is Aadhaar Card?• What are the challenges ?• SWOT Analysis• Report Card• Suggestion’s• Conclusion• Video

Executive SummaryMoney Transfer

How

When

Why

Challenges

 BPL(below poverty line) families would get ₹ 30,000 to ₹ 40,000      per year. APL (above poverty line) will get the Cooking gas subsidy. In all ₹ 4,00,000 Crore will be distributed in a year

 Families with Aadhar card will get money directly in their bank a/c’s New bank a/c’s will be opened; Expansion of banks in rural area. 

 In 51 districts the scheme was launched  from January 2013 with a      target to cover the entire nation by April 2014. 

 To check the leakages from the system & eliminate middle man from       the system.  Ahead of 2014 elections, it is seen as big political thrust

  Only 400 million Aadhaars issued till date, which leaves 800 million numbers to be issued before April 2014 which seems to be a tall task.  About 188,000 villages had banking connectivity in June 2012         whereas India has 700,000 villages

What is direct cash transfer in India?

• It is the scheme to reach out to poor people directly in order to plug leakages and cut delays in transfer of subsidies to the poor.

• The areas that would be covered by the program include scholarships, pensions and unemployment allowances and later MNREGA (Mahatma Gandhi National Rural Employment Guarantee Act ) and Public Distribution Schemes.

• Electronic cash transfer system would improve targeting, reduce corruption, control expenditure, eliminate waste and facilitate reforms.

• The programme is inspired by such successful schemes existing in countries like Brazil and Mexico and cities like New York and Washington

Why direct cash transfer? Government spends ₹3.65 for transferring ₹1 to the poor Public Distribution System (PDS) is so ineffective that 58% of the 

subsidized grains do not reach the targeted group  Leakages and corruption have made many schemes dysfunctional.  Efficiency and effectiveness have not been achieved by any of the 

government programs and schemes optimally To generate budget savings and reduce corruption Direct cash transfer scheme aims to reduce leakages, cut down 

corruption, eliminate middlemen, target beneficiaries better and speed up transfer of benefits to eligible individuals

Ahead of 2014 elections, it is seen as big political thrust

How is it being implemented?Government Welfare Fund

Micro ATM Authentication

Beneficiary Receive the Money

Transfer money to Beneficiary's A/C’s

Withdrawal through ATMs,debit cards and through the business correspondent

Unique Identification Authority of India (UIDAI) Aadhaar card, consisting a 12 digit number is issued

for every individual, including infants. Each individual of a family will have separate Aadhaar UID number.

As on 20th August 2013 total 40,55,78,856 Aadhaar cards issued

Aadhaar is potentially useful for reducing leakages in a large number of government programmes

Benefits of Aadhaar Aadhaar will become the single source of identity

verification Supporting identity documents for obtaining a bank 

account, passport, driving license and so on.

Aadhaar card consists of all the information including address, photo, PAN card number, license details, Voter ID, ration card we can remove all the cards 

Government can transfer the benefit amount directly to the bank account of the beneficiaries to which their Aadhaar card is linked

Criminal acts : If we get the fingerprints of the criminal, we can try to match them with the database and easily catch the culprit.

Identity Verification

One card for all

GovernmentBenefits

Aadhaar’s Errors

What are the challenges ?

About 188,000 villages had banking connectivity in June 2013 whereas India has 700,000 villages

The private-owned banks have been reluctant towards providing services in the rural areas

The government owned banks are in rural areas but the branches available are already working over capacity

Only 400 million Aadhaars issued till date, which leaves 800 million numbers to be issued before April 2014 which seems to be a tall task.

Errors in Aadhaar cards Bridging the Aadhaar card with bank a/c’s

If the male member receives cash from the government on behalf of the family; it is most likely that due to illiteracy and scarcity of civic sense, he will spend the cash on liquor, gambling and other things which will in turn harm the family.

The ground realities like several gaps in infrastructure, shortage of energy, IT infrastructure, technicians and the involvement of private banks has forced the government to reduce its initial target from 51 districts 

Other Challenges

Aadhaar Cards

Banking System in rural area

SWOT Analysis                                                                    Strength World's largest cash transfer 

programme Cut down on corruption Subsidies under various 

schemes account for nearly 3.5 percent GDP.

Cost effective way

                                                             

               Weaknesses Banking system has less 

penetration in rural parts Aadhaar card given to only 400 

million out of 1,200 Million Faulty Aadhaar cards Bridging Aadhaar card with bank 

A/C’s

                             

                                                 Opportunities Population 1.27 Billion Expansion of Banking System in 

rural area Corruption free scheme Save huge amount of money

                                   Threats New government new plans New government may drop the 

project on any reason Technology misuses Money transfer to incorrect 

A/C’s Frauds

Report Card

Suggestion’s

 We believe that the infrastructure must be built  before starting a scheme and not vice-versa 

Identification of beneficiaries:- Selection criteria should be kept broad-based and inclusive. Lessons can be learnt from the successful implementation of Brazil’s Bolsa Família Program

 The amount of subsidy should be calculated based on the number of individuals per household rather than assuming an average household size

 It would be better if it is thoroughly meant for women, as they are responsible for the household needs such as food, health, education, kerosene, LPG etc.

Conclusion The new system is expected to reduce this

cost and subsidy bill through better targeting If the entire system is managed through 

efficient targeting, disbursement and regular monitoring of the disbursed funds this can result into transforming the rural India.

 The real success of the policy lies in the accuracy and efficiency in identification of worthy beneficiaries, i.e. BPL Households.

                

Thanks