Opportunities from Covid-19: Re-imagining the benefits management system in Digital India
Former Prime Minister Rajiv Gandhi had said in 1985 that only 17 per cent of the money meant for beneficiaries of government schemes actually reached them. Times have changed, and changed dramatically since then.
A silent revolution has happened over the last four years, whose true impact and most importantly the potential, is best illustrated when we recognise, amidst all the gloomy news centred around Covid-19, there was one positive news, which many of us would have missed. The government did a Direct Benefit Transfer (DBT) into the Aadhaar-linked bank accounts of more than four crore women beneficiaries with Jan Dhan accounts, as part of the recently announced Pradhan Mantri Garib Kalyan Yojana (PMGKY). As I write, Rs 28,000 crore has been released to 30 crore beneficiaries and has reached their accounts.
This DBT transaction is part of the plan to credit 20.39 crore Jan Dhan women account-holders with Rs 500 per month, for the next three months. Add to this, DBT transactions to be done for three crore senior citizens, the differently-abled and widows (to get a one-time additional amount of Rs 1,000 in two instalments over three months) and 8.69 crore farmers (to be given an instalment of Rs 2,000 under the Kisan Samman Nidhi scheme), and you can gauge the quantum and magnitude involved. And all of these happen seamlessly without much ado or loss in between. The 17 per cent that Rajiv Gandhi spoke about, has become 100 per cent today. This is what technology helps us achieve, something public sector had resisted for a long time, but no longer.
With this step, India has taken a giant technological leap wherein we are now able to uniquely identify a beneficiary, authenticate him/her and ensure that his/her due gets deposited directly into an Aadhaar-linked bank account. Technology is the third pillar that has been driving the JAM Trinity (Jan Dhan, Aadhaar and Mobile Technology) to enhance financial inclusion in the country. The complexity and enormity of technology-enabled public service delivery can be gauged from the following:
1. The scale that we are operating at is unparalleled. Just in this case, we are looking at 33 crore beneficiaries, which is more than the population of any country in the world except China, India and the US.
2. Aadhaar has ensured that almost every Indian resident has a unique and verifiable digital identity, which is now helping identify beneficiaries for services and benefits, who were earlier left out because of the lack of documents.
3. Jan Dhan Bank accounts could be opened with Aadhaar enabled e-KYC, thus taking banking to the ‘unbanked’ and eliminating the need for unnecessary paperwork, and helping banks reduce costs.
4. Multiple stakeholders are involved in the execution of DBT, including UIDAI, their KUA/KSAs and AUA/ASAs, NPCI, Banks and their ATMs and Bank Mitras, FinTech companies to name a few - this kind of seamless integration is noteworthy.
5. Benefits can now be given instantly to the beneficiaries at the click of a mouse, replacing the complex, cumbersome paper-based processes of the past. This has led to governments being more confident about meeting timelines and effectiveness of delivery.
6. Governments can now confidently say whether the benefit has reached the target beneficiary or not and with no scope for leakage.
The country is on the right path in its march towards leveraging technology and creating a disruptive solution for service delivery.
In recent times, the focus of this transformation has turned towards technology – Blockchain, AI, ML and many more that will come. However, my fundamental proposition is to redefine the benefits management system itself. This is also the first step towards a wider discussion on the importance of basic minimum income, which I also think will become a real public debate in the wake of Covid-19. In Spain, this is already being discussed. I suspect the US will also discuss this very soon, given the disproportionate impact Covid-19 has had on the poor — health and wealth.
This is where I want to introduce the concept of “choice” as a platform for reimagining the benefits management system. A benefits management system organised as a marketplace, which puts the beneficiary at the centre and empowers them to subscribe to a bouquet of schemes and benefits that he or she subscribes, based upon their socio-economic status, their household income, their occupation, the size and age of their family members, quality of service delivery in their neighbourhood, the extent of backwardness (tribals, for example), etc.
This single marketplace can integrate schemes, benefits, transfer of funds and beneficiary identification and authentication through a choice-based benefit system that is linked to Aadhaar and the digital backbone. Beneficiaries would have the choice to select benefits relevant to him/her and could be a game-changer in future. Such a platform will only strengthen the service delivery backbone in the country, making it more robust and leak-proof, which can ensure that benefits reach the intended beneficiaries on time.
(The author has been assisted by his colleague Nilaya Varma in this article.)
Also read: What privacy means in times of Covid-19