Govt may Delink Direct Benefit Transfer Scheme from Aadhaar Expected to take refuge in SC order, which says Aadhaar not mandatory for availing subsidies The government is likely to announce a boost to the direct benefit transfer (DBT) scheme in the forthcoming budget with a few minor changes and delink it from Aadhaar cards, spelling what could be the final nail in the coffin for the previous regime’s ambitious Unique Identification project that sought to cover all residents in the country. The move is part of the revamp of the financial inclusion campaign that will focus more sharply on empowering business correspondents to push financial products in the rural market. “The intention is that the beneficiary should continue to directly receive the benefit, which is possible without Aadhaar,” said a finance ministry official, indicating that seeding of bank accounts with Aadhaar numbers would not be a prerequisite for the direct benefit transfer scheme. The scheme aims to transfer subsidies directly to people living below the poverty line. The new government is expected to take refuge in the Supreme Court order, which directs that Aadhaar should not be mandatory for availing government schemes or subsidies. Under the previous Congressled UPA government, banks were asked to seed bank accounts with Aadhaar numbers and funds were transferred using National Automated Clearing House-Aadhaar Payment Bridge System. “The focus is on expanding the reach of banking coverage by opening more bank accounts and supporting it through new technological structures such as mobile banking,“ the official said, adding that all measures would be taken to strengthen the banking infrastructure to enable beneficiaries to withdraw money . The government also plans to push mobile banking through its common USSD platform, which offers basic banking facilities such as money transfer and bill payments on simple GSM-based mobile phone. “This will be one of the cornerstones of the financial inclusion agenda,” said the official, who did not wish to be identified. Business correspondents (BCs) may also be empowered to sell more products in order to push other financial products. “We have to expand the scope of BCs so that they can offer multiple financial services at lower cost,” the official said, adding that the services of BCs should be used in financial literacy and credit counselling. Besides, the government will push regional rural banks to open at least a fourth of their branches in unbanked areas. Bankers say government should also look at the viability factor before imposing stiff financial inclusion targets on banks. “Public sector banks have a responsibility but it has to be financially viable so that banks pursue the government’s agenda in true earnest,” said MP Shorawala, an independent director with Central Bank.
Posted on: Tue, 01 Jul 2014 11:14:48 +0000
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