Pensions Core Course 2013: Implementation Review of Social Pension Schemes in India
Implementation Review of SocialPension Schemes in IndiaChangqing SunSouth Asia Social ProtectionThe World Bank
About the Review• Jointly with Ministry of Rural Development, GoI– Feed into government’s own program review• Objective– Review progress in implementation, highlight what has workedacross States, identify challenges, and recommend improvements• Two phases:– Phase 1: Rapid State Assessment• focusing on administration of social pensions and processes inplanning/budgeting, application/sanctioning, fund flows and paymentmechanisms, audit/assurance mechanism, grievance redressal,monitoring– Phase 2: Field Assessment on performance on the ground,through household surveys:• Information on both outcomes and processes, particularly beneficiaryperceptions of application process and payment systems
Background• National Social Assistance Programme (http://nsap.nic.in/)– National Old Age Pension (1995)– Widow Pension (2009)– Disability Pension (2009)– National Family Benefit Scheme (1995)– Annapurna (2000)• Objective – alleviate chronic poverty through regularcash transfers to the elderly, widows and disabledpersons (most vulnerable among the poor)• Ongoing debates– Universal vs. targeted– Level of benefit (Rs 300 vs. Rs 2000 or ½ minimum wage)– Fiscal space vs. priority (is spending 3.4% of GDP on socialpension too high?)– Implementation model: CSS vs. ACA
Eligibility Criteria “Plus”EligibilityCriteriaGOI Guideline Andhra Pradesh Bihar Delhi Uttar PradeshOld AgePensions1) Age: >=60years2) BPL3) Resident of district4) Not covered underother schemes2b) Family Income <Rs. 60000 per annum3) Resident of Delhi for >5years3) Resident of state4) Not covered underother schemesWidowPension1) Age: >=40&<=59 years2) Widow3) BPL1b) Age >=18 years4) Resident of district5) Not covered underother schemes1b) Age >=18years3b) BPL OR non –BPL & Income<Rs. 60000 perannum1b) Age:18-60 years3b) Family Income <Rs. 60000 per annum4) Resident of Delhi for >5years1b) Age: 18-64 years3b) BPL or Annual Income<Rs. 25,546 in urban areas.If non BPL, then AnnualIncome< INR 19,884 inrural areasDisabilityPension1) Age : >=18&<=59 years2) Severe ormultiple disability(80% disability)3) BPL1b)Age: No limit2b) 40% disability4) Resident of district5)Not covered underother schemes1b)Age: No limit2b) 40% disability1b) Age: 0 -60 years2b) 40% disability3b)Family Income<Rs.75000 per annum1b) Age: No limit2b) 40% disability3b) BPL OR Income <Rs.1000 per month
Coverage and Expenditure by GoI and States• Three social pension schemes covered 26 million beneficiariesfor FY2012-13, costing GoI US$ 1.5 billion (0.55% budget). BUTstates expand coverage (some also benefit level) significantly020406080100120140160All India UP Bihar AP DelhiNSAP-financed pensioners as % of GoI targetsOld Age Pensions Widow Pensions Disability Pensions020406080100Uttar Pradesh Bihar AndhraPradeshDelhi% pensioners financed by GoIOld Age Pensions Widow Pensions Disability Pensions
Tale of two statesAP• Pioneered with biometric basedsmart card technology for beneficiaryidentity and pension payment• Centralized administration throughfunctioning MIS• Viable “banking correspondent”model for SP & NREGABihar• Used Post Office exclusively• Complete paper based processing ofadministrative tasks, with no MIS tosupport implementation• Beneficiary list was digitized forreporting purpose
Roles and Responsibilities in APGP/Ward Mandal / Municipality District StateKey Player GP Secretary or Ward Councilor;CSPMandal Parishad DevelopmentOfficer (MPDO) or MunicipalityCommissioner; PDA (TSP) MandalCoordinatorDC; PD of DRDA; PDA (TSP) Commissioner RD; CEO SERPApplication &Identification(1) GP Secretary or WardCouncilor identifies eligibleindividuals and collectsapplicationVerification (2) After reviewing applications,MPDO or MunicipalityCommissioner enters eligibleapplicant data into SSPS offlineapplication and upload into SSPS(3) SERP conducts Six-Steps-Validation;(4) SERP adds validatedapplicants to pensioner listor gives reason for rejectionSanction (5) MPDO provides Sanction Orderto pensioner(6) TSP enrolls pensionerFund Flow andCashDisbursement(13) CSP disburses cash topensioners;(14) CSP returns undisbursedcash to PDA MC;(11) MPDO downloads & prints outAR and handovers to MC;(12) MC takes cash and AR &handovers to CSP(8) DC approvesAcquaintance Roll and PDsent FTR;(10) PDA receivesAcquaintance Roll and fundreleased, and creditspensioner accounts(7) SERP freezesAcquaintance Roll for thatmonth;(9) CEO SERP releases fundto PDAMonitoring &Social Audit(15) CSP returns signed/thumbprinted AC to both PDA andMPDO, with reason for non-disbursement;(17) GP Secretary or WardCouncilor verifies non-disbursement cases(16) PDA consolidates cashdisbursement and pension non-disbursement reason and feedsdata into SSPS;(18) MPDO modifies/confirmspensioner status for non-disbursement casesPD monitorsimplementationCEO SERP monitorsimplementationEvaluation CEO SERP is responsible
Application & Sanction of New Pensions in APApplicant- Submitsform with whiteration card, and/orother documentsPanchayatSecretary/BillCollector- CollectsformMandal ParishadDevelopment Officer(MPDO) / MunicipalCommissioner (MC)MPDO/ MC entersdata offline&uploads to centralserverSix step validationwith ration carddatabaseSanction/ RejectMPDO /MCsynchronize withcentral server getslistProvides Sanctionorder to beneficiaryINDIRAMMA/Rachabanda-Collects Form, whiteration cardPDA/ TSP downloadslist of new sanctionsfor enrollmentVillage/ Wardmeetings withSarpanch/ WardCouncilor
Proactive identification’s effect051015202530354045502004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12Number of Beneficiaries: Target (in lakhs)Old age Pensions Widow Pensions Disabled Pensions
Verification of beneficiaries• MPDO cross-checks documents for age- proofand the details on ration card against applicationform.• Six Step Validation at state level– Stage 1: The data of applicants compared with thesanitized ration card database and invalid rationcards are filtered out.– Stage 2: All duplicate applicants filtered withration cards numbers– Stage 3: Verification of the applicant name againstration card with software for phoneticcomparison.– Stage 4: Check for one pensioner per family (Nolonger done)– Stage 5: Applicant`s name is matched with livepensioners and those with the same name andfathers name within a GP.– Stage 6: Applicant`s name compared with namesdeleted during Integrated Common Field Survey(ICFS).57139 261517258127010214303008349391invalid ration card #duplicate ration card #name not matchedone OAP per familyduplicate with existing live pensionerdeleted in ICFSeligible applicants
State generatesacquittance monthlyonlineMandal Coordinatortakes list & cash toCSPCSP disburses&marks absenteepensioners as TM,PM or deadUn disbursed cash &signed acquittancereturned to MandalCoordinatorPDA sharesdisbursementdetails with socialpensions serverMPDO prints 2copies ofacquittance listState Nodal Account(SNA) transfersfunds to PDAPDA creditsbeneficiary accounts& gives cash toTSP/MCMPDO validates TM,PM or death casesonline after fieldverificationMandal Coordinatorhands over signedphysical acquittanceto MPDO/MCPayments to beneficiariesPDA remitsundisbursed amountto SNACSP uploadsdisbursement datato PDA server dailyMPDO keepsphysical copy ofsigned acquittancefor audit purpose
Actors involved in payment in AP• PDAs – Paid 2% by SERP– mostly banks (e.g. Warangal has 8 banks), Post Office has 2.5 districts• MIS vendor (develop, upgrade and operate)• TSP – Paid 1.75% by PDA– IT (hardware, software, connectivity, data) and operation services(enrollment, cash delivery, HR capacity)– District Coordinator - Monitors enrollments and disbursements.– Mandal Coordinator - coordinates enrollment process, collect paymentdocumentation, manage cash movement from banks to CSP.• CSP – Payment agent– Must be SHG member of GP– Paid by Rs 300 + 2.5 * # of pensioners paid• Village Organization (V0)– Safe keeps physical cash for the CSP prior to disbursement
2 filledApplications, 2Photos, BPL List,Voter List,(Death/ DisabilityCertificate)Application +Attachments +RTPSApplicationNumberApplicant RTPS CounterApplication +AttachmentsApplicationNumber +Block RegisterIDBlock OfficeRTPSDatabaseApplication +AttachmentsApplicationNumber + BlockRegister ID +SDO SanctionNumber +Sanction OrderSDO OfficeBlockRegister bypanchayatSDORegister byBlockApps +Supportingstoredblock wiseRTPS ApplicationNumber + SDOSanction Number +Sanction OrderBlock OfficeNumber of SanctionedADSSOTotal number ofsanctionedpensioners by block(no details)Number of beneficiariesin StateDoSWSocial Pensions Document/Information Flow in Bihar
Issues in administration processes in BiharStage On Paper In Practice GapApplicantApplicationFilling &Submission toBDO• Submit application inperson to RTPS counterat block office• Supporting documentschecked at the time ofsubmission and receiptprovided• Application submitted tomukhiya/wardmember/vikasmitra/panchayat sachivwho submits on behalf ofthe beneficiary• Supporting documents (DeathCertificate, BPL list ) not easy• Need support to fill form at theRTPS counter• No support for those unable togo to the block office in person• May need to pay forsubmissionPanchayatSachivVerification• Panchayat Sachiv toconduct physicalverification beforesanction and forupdation of pensionbeneficiary list• Verification carried outbefore submission ofapplication form• No procedure in place forsystematic updation ofpension beneficiary list• Unclear parameters ofverification• Errors of age in age proof used• Death certificate not easilyavailable (10+ years)BDOVerification,Recommendation, Monitoring(PhysicalVerification)• BDO to receiveapplication at RTPScounter, verifydocuments and ensurethat Panchayat Sachivconducts physicalverification• Block office receivesdocuments at the RTPScounter, sorts by GP andrecommends to SDO• RTPS: Acknowledgementreceipt in English• RTPS system only front end, nosystem of tracking other thanwhether disposed or not.• No physical verificationundertaken
Issues in Bihar (2)Stage On Paper In Practice GapSDOSanctioning ¬ifying ADSSof new sanction• Sanction pension based onverification already done• Intimates ADSS, POsuperintendent & BDO ofSanctioning• Verification of thedocuments multipletimes (by 2 assistants),• Intimates BDO & ADSS ofsanctioning• Verification onlyinvolves checking if allsupporting documentsattachedBDOIntimation toapplicant• Sanction orders mailed tobeneficiary/available for pickup at RTPS counter.• Update RTPS application onstatus of application• Sanctions sent throughthe Mukhiya/PanchayatSachiv (PS)• No sanction ordersmailed• Sends sanction order toBranch level PO foraccount creation• Creates opportunityfor rent seeking byletting Mukhiya/PScollecting sanctionsADSSCompilation ofrecords &Monitoring• Compilation of number ofsanctioned pensioners andreporting to DoSW monthly• Monitoring of Pensions• Compilation of numberof sanctioned pensioners• ADSS not always ableto exact accountabilitydirectly from BDOs andSDOs. Requireintervention of theDM.
Bank/Post Office networksCoverage of Banks and Post Office in the rural areasS.No State No ofG.PsNo ofBankBrachesOf whichRuralPostOffices(SO&BO)Total BankBranches/GPs (%)Rural BankBranches/GPs (%)BO & SO/GPs (%)1 2 3 4 1/2 1/3 1/41 Bihar 8474 5247 2809 8982 62% 33% 106%2 UttarPradesh51973 13507 6095 17536 26% 12% 34%3 AndhraPradesh21695 9020 3090 16130 42% 14% 74%4 Haryana 6081 3659 1392 2642 60% 23% 43%Source: Banks include RRBs & Coop Bank; data is as of March 31, 2012 from RBI website; Post office data from website ofIndia Posts.
The proposed cash disbursement modelAll pension payments will be made in cash through quarterly panchayat level campssupervised by the BDO.1. Funds will be transferred by DoSW from the State Treasury to the district.2. DM will transfer money from district accounts to BDO3. BDO withdraws money based on sanctioned accounts4. Supervisors will make payments in camps with support from Panchayat SewakArrangements for cash payments currently underway in Bihar:1. Printing of colour-coded passbook for each type of pension2. Creating a consolidated database of all pension beneficiaries based on records in theoffices of the BDO, SDO and ADSS3. An example of an online MIS/database being developed in Jehanabad can be viewedhere: www.sapjehanabad.inThe ‘final’ verification of beneficiaries to clean the database will be done at the time ofpension disbursement through shivirs.
Lessons learnt• Proactive identification of beneficiaries works better thandemand based approach due low awareness, difficulty inobtaining documentary proof, transaction cost ofapplication, and weak ability to follow up on outcome• Support for filling applications to reduce rent-seeking anddelays from use of intermediaries; and support for obtainingdocuments required• Cross-verification with key database and use biometricauthentication when feasible• Robust transactional MIS with central database to supportimplementation and to reduce work load• PDA (banks and/or PO) must maintain service standardsdefined clearly and monitored rigorously.• CSP connected with local community, paid according totransactions, viable business with multiple programs(+NREGA)• Coordination and capacity building
Payment mechanismsAndhra Pradesh Bihar Delhi Haryana Uttar PradeshImplementing Entity SPV (SERP) underRDDDoSW DoSW DoSW 3 DepartmentsMode of payment tobeneficiariesBank/ Post Officeaccount credits; andcash disbursement byBC/CSP’sCashdisbursementby BDO’sCredit tobeneficiarybank accountthru RBICashdisbursementby GramSarpanchCredit tobeneficiary bankaccount bydistrictsFunds managementModelCentralized Decentralized(funds drawn byBDOs intodedicated bankaccount )Centralized Decentralized(fundstransferred todedicatedbank accountof GP)Decentralized(payment bydistricts)Paying agent BC’s supported byCSPs(SHG’s, Post Offices)BlockDevelopmentOfficersDepartment ofSocial WelfareGramSarpanchDistrict SWOfficerFrequency Monthly Quarterly Quarterly Monthly Six monthlyDigitized beneficiarydatabaseYes + integratedtransaction basedsystemIn process ofdevelopmentYes Yes YesClaw-back Yes No No Yes No
Task Force on Comprehensive NSAP• Relaxing eligibility criteria particularlyfor widow and disability schemes• Phased universalization to include alleligible for benefits under the NationalFood Security Act (aims to cover 75% ofrural population and 50% of urbanpopulation)• Proactive identification of potentialbeneficiaries• Monthly payment using Bank and PObased systems and beneficiaries neednot to travel• Transaction based IT solution to coverall administrative processes and tointerface with fund managementsystem and that of other partners0 100 200 300 400 500FY12-13FY13-14FY14-15FY15-16FY16-17widowdiabledold age