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Direct Benefits Transfer has run into difficulties: PM

Last Updated: Saturday, April 6, 2013 - 09:33

New Delhi: The Direct Benefits Transfer (DBT) subsidy scheme is being extended to 78 more districts in July even as Prime Minister Manmohan Singh Friday acknowledged that it has "run into difficulties" and that efforts must be made to ensure the programme does not fail.

The flagship programme, rolled out in 43 districts in Phase I in January, will be expanded to include LPG subsidy in a phased manner to cover 20 districts by May 15 and more districts will be brought in its ambit along with the expansion of Aadhaar enrolment.

The total number of LPG consumers in the country is 14 crores and as the scheme rolls out, the subsidy amount will be transferred to consumers directly into their bank accounts.

With the subsidy going directly, there will be only one price at which cylinders will be sold at a dealer's shop. This will eliminate all ghost connections and diversion of cylinders, an official statement said.

The scheme will be expanded to include post offices from October, 1 2013.

Reviewing the progress of the scheme, Singh said, "We have come some distance since Direct Benefits Transfer programme was rolled out in January. In this period, we have resolved a number of operational issues. I am encouraged by this progress and hopeful about the future.

"But we have also run into difficulties that we had not anticipated when we began the programme. We must therefore renew our efforts for successful implementation of the programme."

He said its implementation has "revealed the unsatisfactory nature of tracking and monitoring systems we have in various departments."

Underlining that "we cannot afford to fail", he said, "We need to show that we can deliver results and benefits."

In the meeting of the National Committee on DBT attended by ministers concerned including Finance Minister P Chidambaram besides Deputy Chairman of Planning Commission Montek Singh Ahluwalia, the Prime Minister said that the initiative has the potential of transforming the way in which government benefits are delivered to the people.

He asked all ministries and departments to apply themselves with dedication to this major initiative and the challenging task in rolling out the DBT program.

At the meeting, it was decided that the scheme, in phase II beginning July 1, will be extended to cover one-fifth of the country as 78 more districts will be brought in its ambit in states like Odisha, West Bengal, Uttar Pradesh, Uttarakhand, Bihar and Chhattisgarh.

Three pension schemes of Rural Development Ministry would also be included in the programme.

"Conceptually, Direct Benefits Transfers involves a few simple steps- digitising data, enrolling in Aadhaar, opening bank accounts and seeding these accounts. However, Direct Benefits Transfers also require process re-engineering.

"We need to change the way we transact business, the way we release funds, the way we track funds and the information we have on beneficiaries. I hope due attention will be paid to these aspects as we move forward in implementing the programme," he told the meeting.

Singh asked all the departments to apply themselves with commitment to this major initiative.

"The Planning Commission and the Finance Ministry have a special responsibility of working together for the achievement of the objectives that we have set for ourselves," he emphasised.

"If we need to ensure that the money we spend delivers outcomes, it is necessary that we have a robust monitoring system in place. That is one of the things that Direct Benefits Transfers will achieve, in addition to making the process of getting benefits simpler for the beneficiaries and eliminating corruption and wastage," he said.

"This is a program in which the implementation capacity of our government will be tested. We cannot afford to fail," the Prime Minister told the meeting, adding that 120 districts will be covered soon and even more in a few more months.

"The journey has just begun and we have a long distance to go. This is not the time to rest," Singh said.

"We need to show that we can deliver results and benefits. I wish you all success in your endeavours to implement this ambitious programme," he told ministers and top officials.

At the meeting, it was decided that departments will start the process of digitisation in all districts, irrespective of the rollout of DBT as this is a critical activity which need not wait and can be done in parallel.

A full-fledged DBT Mission Directorate consisting of a Mission Director assisted by other officers is being created to have an institutionalised administrative arrangement to enable smooth rollout, early identification of bottlenecks, resolution of bottlenecks and handholding of ministries/ departments wherever necessary.

In the second phase beginning July, the DBT is being expanded to states where biometrics are being collected under the National Population Register (NPR) -- Odisha, West Bengal, Uttar Pradesh, Uttarakhand, Bihar and Chhattisgarh.

The collection biometrics in selected districts here will be accelerated to have a coverage of 70-80 percent by June and DBT will be rolled out from July one.
The programme at present covers 26 schemes and the three more pensions schemes -- old age, disability and widows -- will now be covered from July 1.

DBT will be expanded to include post offices and schemes run through post office accounts from October, by when the post offices will have the core banking system in 51 districts.
The prime minister said that "on the financial inclusion side, the banking system needs to integrate the post office system which is widespread. It also needs to ensure that the front end infrastructure is in place, so that people have no trouble opening bank accounts and have easy access to their cash.

"There should be a system in place where people can get a simple bank account on demand if they have an Aadhaar card. Such a spread of financial inclusion will have many other benefits, far beyond cash transfers alone. For bankers, this is an investment in their bank's own future growth.

Singh said that it must also be ensured that the coverage of Aadhaar is adequate and no one is left out. Aadhaar should be available on demand, he added.
In his closing remarks, the Prime Minister said, "This programme will transform the way in which government benefits are delivered to our people."

He said ever since the programme was rolled out, "We have learnt a lot about the challenges in implementing a programme of this sort.

"It has not been as easy as departments envisaged. We have run into many operational issues which were resolved along the way. I am heartened by the progress and am hopeful about the future. But the journey has just begun and we have a long distance to go. This is not the time to rest."

He said that DBT is "not conceptually difficult" as it consists of just a few simple steps.

"In the field, it is all about digitising data, enrolling in Aadhaar, opening bank accounts and seeding these accounts," Singh said.

"More importantly", he said DBT requires process re-engineering at the government level.

He concluded by saying that as DBT expands, it will become more visible with a larger footprint, both in terms of area and in terms of number of people covered.


First Published: Friday, April 5, 2013 - 21:43
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