Cash transfer of subsidy brings hope to Ranchi village, but hurdles remain

Tigra village, Ranchi: As officials in Delhi get busy trying to roll out the UPA government's Aadhar card-based direct cash transfer of subsidy scheme on January 1, 73-year-old Chawa Oraon in faraway Ranchi is getting hopeful.

Mr Oraon is a marginal farmer in Tigra village and gets his old age pension by making a monthly trip to the post office. He neither has a bank account nor an Aadhar card - both essential to benefit from the cash transfer scheme.

Once these are made, Mr Oraon can get his money at the village panchayat bhawan, using a micro ATM that works on a fingerprint-based identification system.

"I have difficulty in walking. But I have to go all the way to the post office, where we are asked to wait forever. This new system will reduce my troubles," he says with confidence.

Crucial to reducing Mr Oraon's troubles will be people like Mahmaud Alam, a 'banking correspondent' or outsourced agent of the local bank near Tigra village.

Mr Alam manages the micro ATM for his block and travels to the village every month to make payments. He cross-checks the identity of the beneficiaries using a mobile phone-linked biometrics reader.

The direct cash transfer of subsidies will first begin in 51 districts of the country next month and is expected to gradually cover the entire country by the end of 2013. It will cover several welfare payouts, such as pension and MNREGA wages.

By some estimates and given rural India's poor banking network, approximately 10 lakh people like Mr Alam will be needed to make the micro ATMs work.

Can a system so dependent on individuals then be transparent? Mr Alam concedes it may get tough for the government to monitor all 'banking correspondents', but hopes these agents will work with honesty.

Problems with technology too abound. In Dohakatu block of Jharkhand's Ramgarh district, villager Basudev Pahan spends more than 20 minutes trying to get the biometric machine to identify his fingerprints, but without success. There are many more like him.

In February this year, Dohakatu became the first panchayat in the country to implement Aadhar-based payments for scholarships, pension and MNREGA.

Banking correspondent Rajesh Kumar says if the machine doesn't read the fingerprint, the person has to go to the bank. Earlier, he would represent the beneficiaries, but now the bank insists they make a trip themselves.

Activists also say rural areas have trouble with mobile phone connectivity, which micro ATMs are totally dependent on. The government says these are technical issues and will eventually be sorted out.

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