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Why in news?

The Union agriculture ministry had alerted Assam about irregularities in the cash transfer programme for farmers.

Existing Issue with Cash transfer

  • It appears, prima facie, that ineligible people signed up for the scheme, which provides ~6,000 a year to farmers with valid documentation.
  • With the coronavirus disease pushing more people into poverty and affecting the earning capacity of millions, it is vital that welfare schemes reach the targeted beneficiary in the shortest possible time.
  • For many, these schemes are their only source of income now.

The Big Picture view of Issues with Cash Transfer

  • A major issue with India’s welfare architecture has traditionally been targeting.
  • For schemes which are not universal, reaching the intended beneficiary is a challenge.
  • While direct benefits transfer and the Jan Dhan accounts-Aadhaar-mobile phone (JAM) trinity have helped in reducing leakages and eliminating intermediaries, the pandemic will pose new challenges in identifying beneficiaries.
  • Many have moved from urban settings to rural areas. As people travel across states due to job losses, the states have to coordinate much more effectively using their own databases and inputs from the Centre.
  • As the reliance of citizens on welfare increases, it is incumbent on governments to plug the loopholes in welfare delivery.

Analysis: What is JAM trinity?

  • JAM (short for Jan Dhan-Aadhaar-Mobile) trinity refers to the government of India initiative to link Jan Dhan accounts, mobile numbers and Aadhar cards of Indians to plug the leakages of government subsidies.
  • Pradhan Mantri Jan-Dhan Yojana is India’s National Mission for Financial Inclusion to ensure access to financial services, namely banking savings and deposit accounts, remittance, credit, insurance and pension in an affordable manner.
  • The Unique Identification Authority of India (UIDAI), a central government agency of India, issues a 12-digit unique identity number called Aadhaar to each resident. This is considered the world’s largest national identification number project.
  • The government intends to use these three modes of identification to implement one of the biggest reforms in independent India – direct subsidy transfers to the poor.
  • Subsidy schemes that take an indirect route like the PDS, the MGNREGA, etc., are more costly to the exchequer, and are also prone to a lot of corruption, as there are a lot of intermediaries before the actual benefit reach the poor.
  • With Aadhaar helping in direct biometric identification of disadvantaged citizens and Jan Dhan bank accounts and mobile phones allowing direct transfers of funds into their accounts, it may be possible to cut out all the intermediaries.

-Source: Hindustan Times

December 2023