Direct Cash Transfer scheme is the initiative taken up by
Congress to gain an advantage in the upcoming general elections- 2014. This
scheme replaces all the schemes and is linked to the Aadhar card of
individuals. Instead of receiving benefits from government in the form of
various subsidies, an eligible individual (identified by number on the Aadhar
card), would have cash remitted to his account regularly. To make things
simpler, instead of fuel, fertilizer and food subsidies given to BPL families,
the scheme will involve direct cash transfer to their bank account, that is Rs
32,000 per year. This scheme is expected to prove as a game changer for the
UPA-II government to come back to power.
This idea has its own merits. With the aim of achieving
electronic cash transfer for the entire population, this scheme would reduce
corruption in distribution of government’s benefits. It would also
significantly reduce the wastage due to poor storage and distribution
facilities in India and enhance the efficiency.
However, this scheme also has its own drawbacks. Success of
this scheme highly depends on the successful rollout of Aadhar card. There are
still many people who haven’t been brought under the umbrella of the Aadhar
card. Government would also have have to deal with other issues when this
scheme is rolled out completely. Many people who have been working for earlier
schemes of government (which would cease to exist with this scheme) would lose
their employment (eg. People working in Ration shops).
Reach of banks is limited in rural India – both branches and
ATMs are low in number. Hence, withdrawal of money would be another serious
issue in rural India. Business Correspondent model suggested by Indian
Government to overcome this problem also has its own limitations.
Hence, it is better to address the issues first before the
full-fledged rollout of the scheme; this would be beneficial to both- people
and government.
