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Architecture for direct cash transfers: A step in the right direction


Architecture for direct cash transfers: A right step
In a major push to transfer individual benefits from the Government directly into the bank accounts of beneficiaries, the Prime Minister has set up an architecture for cash transfers, which will help reduce wastages, cut leakages and even help prevent siphoning off of money meant for the poor and needy.

This is to be done in a fast-track, accelerated mode to be achieved in a time bound manner. The idea is to move to a completely electronic Cash Transfer System for the entire population.


In order to accelerate the process, which currently is being tried in pilots on a small scale and whose results are very encouraging, the Prime Minister has set up the architecture for moving to electronic Cash Transfers leveraging Aadhaar.

1.Architecture for Cash Transfers
In order to speed up activity and ensure that the shift to electronic Cash Transfers can be rolled out rapidly, the Prime Minister has set up the Architecture for Cash Transfers which will be the coordination mechanism. This architecture will consist of:

i.National Ministerial Committee - under the Prime Minister with membership of all concerned ministers (Finance, IT, Social Justice, HRD, Minorities, Labour, Health, Food, P&NG, Fertilizers, Planning Commission, UIDAI,). This committee at the highest level would ensure coordination and decision-making at the highest level and impart the necessary urgency to the program.

ii. National Executive Committee - with the Secretaries of all concerned Ministries as members. This committee would meet frequently to coordinate action, ensure adherence to time lines and sort out hitches in the program as it is rolled out.

iii.Implementation Mission and Committees - to work on and finalise all operational and implementation details relating to the design and operation of the transfer system. There is a lot work needed to have a smooth roll-out and has to be done in a Mission mode with multiple agencies acting in a coordinated manner. The Mission will have the following sub-committees:


a.Cash Transfer Mission - Technology Committee -to focus on the technology, architecture and IT issues.

b. Cash Transfer Mission - Financial Inclusion Committee - to focus on ensuring Universal Access to Banking and achieving complete Financial Inclusion.

c. Cash Transfer Mission - Electronic Benefit Transfer (EBT) Committees - to work out the details relating to EBT such as data bases, transfer rules, controls, audits, etc. There would be one for each Ministry which is engaging in benefit transfers.

The milestones and timeliness for each of these Committees will be clearly laid down. The National Executive Committee will monitor progress and ensure timely roll-out. This scheme will have a momentous impact on the government's various social programmes and help million of beneficiaries.

Read more about: cash transfer
Story first published: Saturday, September 29, 2012, 9:52 [IST]
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