PM approves architecture for Aadhaar-based subsidy transfer

The new system will cut down wastage, duplication and enhance efficiency in the disbursement of subsidies and other benefits

Prime Minister Manmohan Singh on Friday cleared the architecture of the Aadhaar-based system to launch nationwide cash transfer system for subsidies and entitlements directly into the bank accounts of the beneficiaries. Wages for the National Rural Employment Guarantee Scheme, scholarships, pensions and health benefits will come under this.

The new system, which the government plans to implement in a time-bound manner, will cut down wastage, duplication and enhance efficiency in the disbursement of subsidies and other benefits which will be paid through electronic cash transfer.

The architecture is a coordination mechanism comprising a national ministerial panel under the prime minister with members from other ministries and departments like finance, IT, social justice, HRD, minorities, labour, health, food, petroleum, fertilisers, Plan panel and the Unique Identification Authority of India.

This high-level ministerial committee will ensure decision-making at the highest level and bring in the necessary urgency to the programme.

There is also a national executive committee with the secretaries of the ministries as members who will meet frequently to coordinate action, ensure adherence to timelines and sort out hitches in the programme as it is rolled out.

Then there are other sub-committees to smoothen out the process.

The implementation panel will finalise all details related to the design and operation of the transfer system.

The technology panel will focus on technology, architecture and IT and the financial inclusion panel will ensure universal access to banking.

Further, the electronic benefit transfer committee will work out the details such as data bases, transfer rules and controls audits for each ministry engaged in benefit transfers.

The national executive committee will monitor these committees.

With the rapid rollout of Aadhaar, now covering 200 million people and mandated to enroll a total of 600 million, and with the National Population Register covering the rest of the population, the government thinks it can move to an e-cash transfer system without much trouble.

Aadhaar-based pilots are already under implementation in Andhra Pradesh, Chhattisgarh, Punjab, Rajasthan, Tamil Nadu, West Bengal, Karnataka, Puducherry and Sikkim.