Cash Transfer Scheme
“Aapka paisa aapke haath"
Team : 1. Ashok Hegde 2. Arun Khedwal
members 3. Rutuja Dighe 4. Sanjeev Shrivastva
Group : I
Batch : XMBA-25
Professor : Anand Shringarpure
Institute : ITM, Vashi
• Executive Summary
• What is Cash Transfer Scheme ?
• Why Cash Transfer Scheme?
• How is it being implemented?
• What is Aadhaar Card?
• What are the challenges ?
• SWOT Analysis
• Report Card
BPL(below poverty line) families would get ₹30,000 to ₹40,000
per year. APL (above poverty line) will get the Cooking gas subsidy.
In all ₹4,00,000 Crore will be distributed in a year
Families with Aadhar card will get money directly in their bank a/c’s
New bank a/c’s will be opened; Expansion of banks in rural area.
In 51 districts the scheme was launched from January 2013 with a
target to cover the entire nation by April 2014.
To check the leakages from the system & eliminate middle man from
Ahead of 2014 elections, it is seen as big political thrust
Only 400 million Aadhaars issued till date, which leaves 800 million
numbers to be issued before April 2014 which seems to be a tall task.
About 188,000 villages had banking connectivity in June 2012
whereas India has 700,000 villages
What is direct cash transfer in India?
• It is the scheme to reach out to poor people directly in order to
plug leakages and cut delays in transfer of subsidies to the poor.
• The areas that would be covered by the program include
scholarships, pensions and unemployment allowances and later
MNREGA (Mahatma Gandhi National Rural Employment Guarantee
Act ) and Public Distribution Schemes.
• Electronic cash transfer system would improve targeting, reduce
corruption, control expenditure, eliminate waste and facilitate
• The programme is inspired by such successful schemes existing in
countries like Brazil and Mexico and cities like New York and
Why direct cash transfer?
Government spends ₹3.65for transferring ₹1to the poor
Public Distribution System (PDS) is so ineffective that 58% of the
subsidized grains do not reach the targeted group
Leakages and corruption have made many schemes
Efficiency and effectiveness have not been achieved by any of
the government programs and schemes optimally
To generate budget savings and reduce corruption
Direct cash transfer scheme aims to reduce leakages, cut down
corruption, eliminate middlemen, target beneficiaries better and
speed up transfer of benefits to eligible individuals
Ahead of 2014 elections, it is seen as big political thrust
How is it being implemented?
Government Welfare Fund
Micro ATM Authentication
Beneficiary Receive the Money
Transfer money to
Withdrawal through ATMs,debit
cards and through the business
Unique Identification Authority of India (UIDAI)
Aadhaar card, consisting a 12 digit number is issued
for every individual, including infants. Each individual
of a family will have separate Aadhaar UID number.
As on 20th August 2013 total 40,55,78,856 Aadhaar
Aadhaar is potentially useful for reducing leakages in a
large number of government programmes
Benefits of Aadhaar
Aadhaar will become the single source of identity
Supporting identity documents for obtaining a bank
account, passport, driving license and so on.
Aadhaar card consists of all the information including
address, photo, PAN card number, license details,
Voter ID, ration card we can remove all the cards
Government can transfer the benefit amount directly
to the bank account of the beneficiaries to which their
Aadhaar card is linked
Criminal acts : If we get the fingerprints of the
criminal, we can try to match them with the database
and easily catch the culprit.
What are the challenges ?
About 188,000 villages had banking connectivity in June
2013 whereas India has 700,000 villages
The private-owned banks have been reluctant towards
providing services in the rural areas
The government owned banks are in rural areas but the
branches available are already working over capacity
Only 400 million Aadhaars issued till date, which leaves 800
million numbers to be issued before April 2014 which seems
to be a tall task.
Errors in Aadhaar cards
Bridging the Aadhaar card with bank a/c’s
If the male member receives cash from the government on
behalf of the family; it is most likely that due to illiteracy and
scarcity of civic sense, he will spend the cash on liquor,
gambling and other things which will in turn harm the family.
The ground realities like several gaps in infrastructure,
shortage of energy, IT infrastructure, technicians and the
involvement of private banks has forced the government to
reduce its initial target from 51 districts
in rural area
World's largest cash transfer
Cut down on corruption
Subsidies under various
schemes account for nearly 3.5
Cost effective way
Banking system has less
penetration in rural parts
Aadhaar card given to only 400
million out of 1,200 Million
Faulty Aadhaar cards
Bridging Aadhaar card with bank
Population 1.27 Billion
Expansion of Banking System in
Corruption free scheme
Save huge amount of money
New government new plans
New government may drop the
project on any reason
Money transfer to incorrect
We believe that the infrastructure must be built
before starting a scheme and not vice-versa
Identification of beneficiaries:- Selection criteria
should be kept broad-based and inclusive.
Lessons can be learnt from the successful
implementation of Brazil’s Bolsa Família Program
The amount of subsidy should be calculated
based on the number of individuals per
household rather than assuming an average
It would be better if it is thoroughly meant for
women, as they are responsible for the
household needs such as food, health, education,
kerosene, LPG etc.
The new system is expected to reduce this
cost and subsidy bill through better targeting
If the entire system is managed through
efficient targeting, disbursement and regular
monitoring of the disbursed funds this can
result into transforming the rural India.
The real success of the policy lies in the
accuracy and efficiency in identification of
worthy beneficiaries, i.e. BPL Households.