2,000 beneficiaries get cash transfers via Aadhaar on Day 1

The programme aims at covering two lakh beneficiaries

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After initial hiccups, the government’s ambitious direct benefits transfer programme through a unique identification number kicked off smoothly today, though the number of transactions carried out by the banks on the first day remained low. About 2,000 beneficiaries were transferred an amount of Rs 35 lakh on the Aadhaar platform, but the figure is expected to go up tomorrow. The programme is aimed at covering two lakh beneficiaries.

"The implementation was glitch-free. The system has worked," said a government official, adding the number of transactions was expected to go up in the coming days as today being the first day many government departments could not transfer the money before the closing hours (3 PM) for bank transactions. "Some departments have sent advice [to transfer the money] after 3 PM. So that will come tomorrow."

The amount was transferred through National Payments Corporation of India to eight banks for seven schemes, mostly education scholarships, in 20 districts, which was later transferred to the accounts off beneficiaries in 23 banks. Earlier, the government had planned to roll out the scheme in 51 districts from January 1, 2012. The number of districts was first reduced to 43 and later to 20 owing to lack of preparedness in many of these districts.

The transfers were made in these districts even to the beneficiaries who did not have Aadhaar-linked bank accounts. The official clarified these 2,000 transactions carried out by the banks on the first day of the programme were only towards Aadhaar-enabled accounts and that the total amount transferred by the Central government ministries to various beneficiaries was much higher.

"We have been told 85-90% of the beneficiaries have a bank account but not all of them have an Aadhaar number. As more accounts are ceded with Aadhaar the number of transactions would go up," the official added.

The government will transfer cash benefits like scholarships, pensions, and MNREGA wages directly to the bank or post office accounts of identified beneficiaries. On February 1, 11 more districts will be added to the scheme followed by 12 more districts in March, taking the total number of districts to 43 in the first phase.

Districts, which are covered under direct benefits transfer from today, are in Karnataka, Puducherry, Chandigarh, Punjab, Delhi, Madhya Pradesh, Rajasthan, Andhra Pradesh, and Daman & Diu.

Through this direct cash transfer scheme the government is expecting to check leakages in various subsidies and benefits given to the beneficiaries. However, food, fertiliser and petroleum subsidies, which mainly cause the pain to government finances, are not kept under the scheme at the moment.