News on Direct Cash Transfers

Bharat Choudhary Reply 12:37 PM
Aadhaar based Direct Cash Transfers - Roll-out to begin from 1 January 2013 in 51 districts, Half the country to be covered by 1 April 2013

A meeting of the Executive Committee on Direct Cash Transfers was held today by the Principal Secretary to the Prime Minister along with the Cabinet Secretary. The  meeting was attended by the Secretaries and representatives of the Departments of  Financial Services, UIDAI (Aadhaar), IT, Planning Commission,  Expenditure, Posts, Rural Development, Social Justice & Empowerment, Tribal Affairs, Minority Affairs, Higher Education, School Education, Health & Family Welfare, Women & Child Development, Labour & Employment, Petroleum & Natural Gas, Fertilizers, and Food & Public Distribution.

            The Prime Minister had recently constituted a National Committee on Direct Cash Transfers under his chairmanship and an Executive Committee on Direct Cash Transfers to give a thrust to roll out a cash transfer programme across the country, leveraging the Aadhaar platform.

            The purpose of the meeting today was to move forward and operationalise Direct Cash Transfers for which many steps need to be taken. The necessary steps include (i) identification of areas where Direct Cash Transfers can be introduced, (ii) establishing mechanisms for preparing rollout plans for these areas, (iii) ensuring rapid rollout of Aadhaar to achieve better coverage (at least 80%), (iv) ensuring universal access to banking and financial inclusion and (v) setting up mechanisms to enable cash transfers to actually take place. To facilitate all this, there is a need to constitute other committees including a Technology Committee, a Financial Inclusion Committee and Implementation Committees within each Ministry so as to ensure coordination and quick implementation.

            The agenda for the meeting was to:

01. Explain to all committee members the rationale and purpose of Direct Cash Transfers and the institutional architecture that has been put in place for the rollout.
02.   Finalise the constitution and composition of the Implementation Committees.
03.  Identify areas for introducing Direct Cash Transfers and make arrangements for finalising roadmaps for rollout in each area, keeping in view the roadmap already prepared for Direct Cash Transfers of LPG Subsidy.


Based on the extensive discussions that took place and the issues raised by the participants, the following decisions were taken in the meeting:

04.  All departments engaged in transferring benefits to individual beneficiaries will quickly move to an electronic Direct Cash Transfer system, based on an Aadhaar Payment Bridge/ Platform.
05.   They will identify the schemes to move to this system and also prepare a roadmap with timelines so that the rollout is smooth and fast. The roadmap for each scheme will broadly have the following timelines: 
·        A. 51 districts -  from 1 January 2013 

·        B. 18 states     -  from 1 April 2013 
·        C. 16 states     -  from 1 April 2014 or earlier.  
06. The list of schemes, roadmaps, and timelines will be sent to the Planning Commission and PMO by 20 November 2012
07. UIDAI will set up a dedicated cell of technical experts in UIDAI to facilitate Aaadhaar enabled Direct Cash Transfers and help individual Ministries.
08. Department of Financial Services will go for universal Financial Inclusion through individual Bank Accounts for all in line with the roadmap.
09. UIDAI will rollout Aadhaar speedily in line with the roadmap.
10. Departments will work towards digitising their databases quickly, particularly at the state level with the help of state governments, DeITy and NIC to ensure convergence.

(Source - PIB Featurs)

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