The country's cash-dependent infrastructure may hinder the government's Pradhan Mantri Garib Kalyan Yojana (PMGKY) from reaching the last mile to India's poorest, the Economic Times reported.
The Rs 1.07 lakh crore package, announced by Finance Minister Nirmala Sitharaman on March 26, depends on Aadhaar-linked Jan Dhan bank accounts to deliver the direct benefit transfer (DBT) schemes to 80 crore poorest Indians over a three-month period, effective immediately.
However, a large number of these beneficiaries, including migrant workers and labourers, may not have bank accounts - or Jan Dhan bank accounts - or have bank accounts linked to Aadhaar, the paper noted.
The DBT scheme presumes that all beneficiaries have Aadhaar-linked Jan Dhan accounts.
Besides this, banks, bank mitras, ATM operators and fintech companies have raised doubt over the “seamless execution” as they may not have enough cash or staff strength to service ATMs during the lockdown period.
Local authorities have also continued to enforce harsh restrictions even on essential services hindering movement, it added.
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They also raised the issue that rural India has low penetration of digital transaction infrastructure. Even ATMs are low in number over there. Only 45,000 of India’s 230,000 ATMs in rural areas.
While accepting that “low acceptance of digital payments is definitely a challenge in rural areas,” Rajnish Kumar, the chairman of State Bank of India (SBI), called it an “awareness and habit” issue as well adding: “We are urging all our customers to use digital means to transact as much as possible.”
Another concern is that once the scheme is deployed, the surge in transaction traffic would put pressure on Aadhaar Enabled Payment Systems (AePS) infrastructure, which already has higher failure rates – in some areas as much as 45 percent.
An official told the paper that, in the absence of directions from the finance ministry, the banking and payments ecosystem would have to undertake a coordinated effort to reach out to these unbanked citizens for transfer of relief funds.Follow our full coverage here.