Direct Benefits Transfer(DBT) Rollout

for 26 schemes in 43 districts

In India

Smt.Surekha Shahu

A. Name of the program: Direct Benefit Transfer

B. Year program started: 2012-13 ( from 1.1.2013)

C. Number of beneficiary households : 1.66 millions for

43 districts

D. Yearly budget: arranged by participating Ministries

E. Objectives:

Ensuring better and more timely delivery of

benefits to the people.

Reducing corruption and administrative costs.

Program Summary

F. Beneficiary target group: Intended beneficiary

could be a student, a pensioner, a widow, an

elderly person, a disabled person, a poor

family.

G. Institution responsible for implementing the

program: PMO, Planning commission, 8

Central Ministries and State Governments,

districts, UIDAI.

H. Launched: On January 1, 2013 in 20 districts

of 16 States in India

Program Summary Continues…

Monetary Benefit For A Specific Purpose

Or Use – Scholarships

Direct income support – Pension,

unemployment allowance and wages.

Direct Subsidy

Why Direct Benefits Transfer

Short Term Advantages

Accurate Targeting.

De-duplication.

Reduction of Fraud and corruption.

Process Re-engineering of Schemes for

simpler flow of information and funds.

Greater Accountability.

Eliminates wastes in subsidy.

Why Direct Benefits Transfer …..

Long Term Advantages

Consolidate Cash Transfers to Households which are getting

benefits from multiple sources and multiple forms

Improves efficiency of Social safety net, consolidated income

support programme for the poor and eliminate multiple sources

of subsidy.

Positive Institutional Externalities Adoption of cutting edge

technical system.

Frees administrative system from exercise of control to focus on

development Maximise benefits from expenditure of welfare

schemes which leads to overall human development.

Why Direct Benefits Transfer….

ARCHITECHTURE

National Committee

Executive Committee

IC IC IC IC TC FIC

26 Schemes were selected

15 Central Sector (CS),

11 Centrally Sponsored Schemes (CSS)

Schemes were selected on the basis of

Beneficiaries with Bank Accounts

Flow of Funds is relatively simpler.

43 districts were identified

Based on higher Aadhaar Enrolment figures

Presence of Banks

Criteria for Selection

Sl. No Ministry/ Department No. of

Schemes CS/ CSS Name of the Scheme

1 M/o Social Justice & Empowerment

7 1 CSS Post Matric Scholarship for SC Students.

2 CSS Pre-Matric Scholarship for SC Students.

3 CSS Pre-Matric Scholarship for Children of those engaged in unclean occupations.

4 CS Upgradation of merit of SC Students.

5 CS National Overseas Scholarship Schemes for SC Students.

6 CSS Post Matric Scholarship for OBCs.

7 CS Top Class Education Scheme.

2 M/o Human Resources Development, D/o Higher Education

3 1 CS Scholarship to Universities/College Students.

2 CS Fellowship Schemes of UGC.

3 CS Fellowship Schemes of AICTE.

3 M/o Human Resources Development, D/o School Education & Literacy*

2

1 CS National Means cum Merit Scholarship.

2 CS National Scheme for Incentive for the girl child for secondary education.

4 M/o Tribal Affairs 3 1 CSS Post Matric Scholarship Scheme for ST

2 CS Top Class Education System.

3 CS Rajiv Gandhi National Fellowship.

Schemes Selected for DBT

5 M/o Minority Affairs 3 1 CSS Matric Scholarship Scheme.

2 CS Maulana Azad National Fellowship.

3 CSS Merit cum Means Scholarship Scheme.

6 M/o Women and Child Development

2 1 CSS Indira Gandhi Matritva Sahyog Yojana (IGMSY).

2 CS Dhanalakshmi Scheme.

7 M/o Health & Family Welfare

1 1 CSS Janani Suraksha Yojana.

8 M/o Labour and Employment

5 1 CS Scholarship to the Children of beedi workers.

2 CS Housing subsidy to beedi workers.

3 CSS Stipend to children in the special schools under the Child Labour Project.

4 CS Stipend to trainees under the Scheme of Welfare of SC/ST job seekers through Coaching, Guidance and Vocational Training.

5 CSS Payment of stipend to trainees under the Scheme of Skill Development in 34 Districts affected by Left Wing Extremism (LWE).

Total 26

To Commence soon.

In district of Mysore (pilot has been

successfully run).

It concerns only 3 oil companies.

Will cover about 5 lakh beneficiary

District Mysore >80% Aadhaar

Enrolment.

40-50% seeding of database completed.

Bank-linkage still a Challenge.

Direct Benefits Transfer roll out for LPG

Direct Benefits Transfer roll out for

Mahatma Gandhi National Rural

Employment Guarantee Scheme

(MGNREGS)

On the basis of successfully piloted in five

States viz. Gujarat, Karnataka, Orissa,

Tripura and Rajasthan

DBT will be implemented in 46 Rural

Districts out of 51 Districts identified from

1.6.2013 (Proposed)

This will be further scaled up to include the

whole country

This will reduce delays in payment and

result in better management of the scheme

Financial / Work Flow of DCT

No

CPSMS

Yes

No

No

No

Yes

CPSMS

Beneficiary list

Is digitized?

Digitized data in standard format

M/o E&IT

(1 week)

Resident has Aadhar no.?

Enrolment stations (20

days)

Beneficiary has bank a/c

Open Bank A/c

Seed Aadhar in Bank CBS

Payment Disbursement

Authority Create APB File Sponsor Bank

Aadhar

Payment Bridge

Credit

Beneficiary

Bank A/c

Withdrawal

using Aadhar

Authentication

Seed Aadhar

No/ EID No. in

Gov database (SRDH)

1 month

Release of

funds by Central

Ministries

State Govts/

Autonomous -

Bodies.

Sub -

State level

Beneficiaries

Govt. Department prepares an electronic file containing Aadhaar no and amount

Govt. Department sends the file to the bank where scheme account is maintained

Bank sends to Aadhaar Payments Bridge (APB) (owned and operated by NPCI) – for inter-bank entries only

APB routes money to the concerned banks. Banks credit the money in beneficiaries’ accounts

Department can send SMS informing the beneficiary about the money being sent. Banks can also send when the money arrives in the accounts

NPCI’s role in Aadhaar Payments Bridge

(APB):

NPCI owns and maintains the APB which

brings about seamless transfer of EBT from

Government Departments to Aadhar

enabled Bank Account (AEBA) of the

individual beneficiary.

Maintains Central Mapper-helps in

identifying the banks and routing the money

accordingly.

Role of NPCI

NPCI’s role in Aadhaar Enabled Payment System:

acts as the Authentification Service Agency (ASA) by

directly connecting to UIDAI for the same so as to

enable extension of Aadhaar Enabled Payment

Services.

ensures enriched MIS to the participants.

ensures secure Clearing and Settlement of inter-

bank transactions.

Challenge

Who pays for the transaction cost?

Contd…..

Aadhaar-enabled Payment Systems

(AEPS)

Beneficiary approaches a BC of any Bank with her Aadhaar number

BC feeds the Aadhaar number, fingerprints and amount in the micro-ATM

Aadhaar server authenticates the ID of the resident.

After successful Aadhaar authentication, beneficiary can carry out the transaction

26 PSU Banks

12 RRBs

Few Private Banks and Cooperative Banks which are on CBS.

Banks on Board

Context in which the Concept emerged:

Major share of bank branches are located in urban and semi-urban areas.

Rural banking coverage is not only inadequate, it has been dwindling in the recent years.

In this context, came out with the Banking Correspondent (BC) Guidelines in 2006.

BCs are expected to bridge the gap between banking infrastructure and customers and bring about financial inclusion.

Engagement with Business Correspondents

Advantages of BCs:

Reach-Presence right in the village

Process-Paperless

Technology enabled infrastructure-With the

help of Micro-ATMS, BCs can provide real

time authentication of beneficiary details

speeding up the process of withdrawal.

Contd……..

Who can be BCs: Anybody with a Micro ATM can

become a BC. Any Individual, Asha, anganwadi worker,

teacher, kirana store, SHG, PDS shop, fertilizer shops,

CSC, Petrol Pump, Post Office etc can become a BC.

This opens a window of immense employment

opportunities for the unemployed and additional income

for the gainfully employed.

Leveraging BC Capabilities: With adequate training by

UIDAI, the field capabilities - enrollment, seeding etc. and

technology capabilities-seeding, AEPS, Monitoring etc. of

BCs can be leveraged

Major Challenge: Who pays for the Micro ATMs/ BCs

Contd……..

OM#1- Digitization of Database

OM#2- Seeding of Digitized Database and Bank

Accounts

OM#3- Payment Advice

OM#4- Guidelines for LPG (Proposed)

OM#5- Monitoring and Accounting through CPSMS

OM#6- Application for facilitating implementation of

DBT

OM#7- Inclusion Bank Account Number in the

Payment Advice extended till 30.9.2013

Guidelines for DBT

Since Enrolment for Aadhaar, Generation of UID,

Seeding of Aadhaar with Bank Accounts will take

time.

In the interim, no transfer would be withheld for

want of Aadhaar.

Process of electronic transfer along with transfer

through APB to continue till 31.3.13.

Ministries to decide switchover dates for each

scheme after which transfers only through APB.

Contd….

Lack of trained and skillful employees.

Delay due to issuance in Aadhar

Cards.

Resistance to adopt new processes

and technology.

Lack of flow of information.

Issues on Governance

Aadhaar enabled DBT would:

Eliminate the possibility of identity

fraud,

Better delivery of public services,

More transparent

Rationalize administrative expenses,

More effective governance.

Issues on Governance

Reduction in number of layers of

approval.

Reduction in delays of providing the

benefits.

Ensuring the removal of middleman.

Ensuring that the benefit is reaching to

the target group.

Conclusions- Innovations on

Governance

Studies have revealed that there are instances

where benefits under government schemes are

not reaching to the intended beneficiaries in time

and in full amount.

The Aadhaar enabled Direct Benefit Transfer

mechanism is a most effective tool to ensure

transparency, accountability and percolation of

benefits to the intended beneficiaries.

Conclusions- Innovations on

Governance

Review of Rollout of DBT

Data on DBT as on 31st March 2013

1.Beneficiaries: The total number of beneficiaries under

these schemes in 43 districts is 16,65,771.

2.Opening of Bank Accounts: The total number of

Beneficiaries with bank accounts is 12,92,191 now. The

coverage with bank accounts has risen to 77.5%.

3.Beneficiaries with both Bank account and Aadhaar

numbers: This number id 5,36,934 which is 32.2% of the total

number of beneficiary base

4.Bank accounts seeded with Aadhaar numbers: This

figure, as reported is just 69,934 which is only 4.1%

5.Data on this is quite incomplete with departments relying

largely on secondary information to estimate the extent of

seeding

Roll out of Phase-II – DBT from

1.7.2013 in 78 Districts All the Identified 26 Schemes have been

selected

15 Central Sector (CS),

11 Centrally Sponsored Schemes (CSS)

Schemes were selected on the basis of

Beneficiaries with Bank Accounts

Flow of Funds is relatively simpler.

78 additional districts have been identified in 26 States/UTs

Based on higher Aadhaar Enrolment figures

Presence of Banks

Thank you

APB – Technical architecture Funds Disbursement / Credit Architecture