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Posted on Nov 27, 09:28AM | IBNS
Indian Prime Minister Manmohan Singh's closing remarks at the first meeting of the National Committee on Direct Transfers on Monday:
"We have just concluded a very useful round of discussions about a very important initiative that the government has taken.
The government today spends huge funds on schemes and programmes for the benefit of the common man and the under-privileged sections of society. These schemes have the potential to bring about improvements in the lives of a large number of our people provided they are targeted correctly and implemented effectively.
The funds that are provisioned for direct benefits like pensions, scholarships and health-care benefits must reach the intended beneficiaries without delays and leakages. Apart from these direct benefits, the government also provides an amount of over 3 lakh crore Rupees in subsidies which too must reach the right people.
Direct Cash Transfers, which are now becoming possible through the innovative use of technology and the spread of modern banking across the country, open the doors for eliminating waste, cutting down leakages and targeting beneficiaries better.
We have a chance to ensure that every Rupee spent by the government is spent truly well and goes to those who truly deserve it.
I am happy at the widespread support that I have heard across the table for Direct Cash Transfers. I have also listened carefully about the challenges that lie in our way in moving to a system of Direct Cash Transfers. In the coming days we will need to make every possible effort to address these challenges.
The twin pillars for the success of the system of Direct Cash Transfers that we have envisioned are the Aaadhaar Platform and Financial Inclusion. If either of these pillars is weak, it would endanger the success of the initiative.
I would expect the Finance Ministry and the Unique Identification Authority to work in close coordination to achieve a collective goal.
To move closer towards the goal of financial inclusion, the banking system perhaps needs to integrate the post office network, especially in the rural parts of the country.
It also needs to ensure that the front end infrastructure is in place all over the country, both through the existing modes of banking and through newer innovative ones, so that people have no trouble in opening bank accounts and withdrawing and depositing cash.
Ideally, the common man should be able to open a simple bank account on demand if they have an Aadhaar number. This would have many other benefits too, beyond cash transfers. For banks, the increase in the number of account holders would be an investment in their own growth.
The Unique Identification Authority must ensure that the coverage of Aadhaar is adequate as per the rollout plan and no one is left out. An Aadhaar number should be available on demand if beneficiaries are getting left out.
I would urge the individual ministries to work in right earnest for implementation of the Direct Cash Transfers initiative. They will need to digitize their databases, most of which are with the States, and seed them with Aadhaar numbers.
You will be provided help by both the Unique Identification Authority and the IT Ministry. But, you will in turn need to assist the States.
This is a program in which the implementation capacity of our government will be tested. We must ensure at all times that there is no duplication of effort, and technology is used to the fullest for efficiency gains.
The timelines we have set for ourselves are ambitious. Fifty one districts are to rollout from January next year and 18 States from April. And the rest of the country later in 2013. I have no doubt we can succeed in achieving these goals provided we work sincerely and collectively.
I wish you all success in your efforts to put in place a system of Direct Cash Transfers."