“Aadhaar” of Direct Cash Transfer is more of assumptions, less of ground-level realities #UID #MUSTREAD


14 DEC, 2012,

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The government announced that from January 2013, 51 districts of the country would be subjected to Aadhaar- based direct cash transfers (DCT). We need some basic answers before we get to term the initiative as a game-changer.
Quick-fix solutions?: The latest fix is through the new improved micro ATM architecture where BCs sort out the last mile. Technology provides a fix on authentication and transaction recording. This assumes that the physical connectivity between the branch and the customer through the intervention of a human being fixes the issue.But the cash has to be delivered physically. With 1,50,000 post offices, and postmen visiting all the habitations regularly, with an instrument of money order, we have not been able to sort out the problem of transferring the cash from the coffers to the beneficiaries.

The finance ministry has not convincingly established the business case for a BC. Do we have an idea how a BC would do it better? The answer would be in commissions and incentives. Agreed.

But where is the business case to the banking institutions if these costs are loaded? Does it work at scale?

Too much is loaded on to a single intervention, involving commercial institutions, without a strong business case.

The approach of the government is worrisome. It may be a part of the measures in the run up to the 2014 election is the simplicity with which the solutions are offered. That the entire country can take a single solution; that the solution can be offered through the banking system; that the only impending problem was establishing identity; and that Aadhaar will sort out issues much more than identity and fix leakages and petty corruption.

The commercial sector would have looked at this through the lens of segmentation, test marketing and local strategies. The government believes in standardisation and scale.

Even if Aadhaar number is subjected to multiple pilots in several locations, it is difficult to imagine how these pilots have informed this aggressive rollout of cash. This space is getting to be interesting and we need to watch for more action.

3 comments on ““Aadhaar” of Direct Cash Transfer is more of assumptions, less of ground-level realities #UID #MUSTREAD

  1. Pingback: #Kerala to track school kids with #Aadhaar card , seriously #WTFnews #UID « kracktivist

  2. Pingback: Unique ID is dangerous for you; it should be scrapped #Aadhaar « kracktivist

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