Legal framework needs to be put in place for Aadhaar: Govt

Jain further suggest that DBT must be of two types, one is the Aadhaar-based and the other non-Aadhaar as there are only 69 crore people (out of 125 crore) with Aadhaar account currently. "Aadhaar connectivity is 55-60 percent and increasing. Legal framework needs to be put in place for Aadhaar,” adds Jain.

Below is verbatim transcript of the interview:

Q: How prepared is the banking system plus the Aadhaar, how much of Aadhaar is seeded into the bank accounts? If you can give us some numbers especially in the below poverty line (BPL) families where DBT will be effective?

A: We have already undertaken PMJDY as one of the major programmes for the country and are pressing hard. We review it almost on a weekly basis. New 6 crore accounts have been opened.

Under PMJDY, our first target is to ensure that we are able to provide banking facilities in every corner of the country.

There the planning is that we have got microplanning areas, about 5 kilometre radius circles have been drawn on the map of the country and we are trying to ensure that every such microplanning area is served either by a bank branch or by a fixed point online interoperable banking kiosk.

If we have a banking facility like that, for a citizen or an user there is no difference in the experience whether he is going to be a branch or banking kiosk and they are all technology enabled.

We are undertaking this drive in a big way and we need to set up about 1.55-1.56 lakh such centres out of which about 1.2 lakh centres have already been set up.

However, there are issues like all machines not being there. So that is going to take some time maybe, before the end of the year we will have all these places ready barring some 3,000-4,000 places where there are some connectivity issue.

By and large the whole country will have such banking points through which our citizens, villagers can access the cash-out points and that is one of the most important things for being DBT ready.

The second issue is Aadhaar connectivity. Aadhaar generation is between 55 percent and 60 percent in the whole country and is increasing by the day, an updated figure would be available with the UID authority.

When I looked at the data last week, 69 crore out of 125 crore population had Aadhaar number.

If you look at the seeding, which is also increasing by the day, overall about 8.75 crore bank accounts have got seeding done and out of the 6 crore accounts, which are opened under PMJDY, about 2 crore accounts have got Aadhar seeding done and that is the way we are going forward.

However, there will be certain issues, there was an order by the Supreme Court (SC) where it said that Aadhaar cannot be a compulsion for giving services.

Therefore, till the time the legal framework is put in place, what UID authority is trying to do and they are able to explain and get a revised order from SC whenever we want to do this DBT, it will have to be of two kinds, one is the Aadhaar-based and another is non-Aadhar based.

We were having this in LPG earlier which was discontinued in March 2014 and by that time we had extended it to 291 districts, there is a ministry of petroleum which was doing it, we were assisting.

In 291 districts the work has already begun, 2.9 crore LPG holders out of about 9 crore total connections have got their Aadhaar number seeded in the bank account and LPG data base both.

So they were the DBT ready customers and that was being done. In 42 districts, work had already been completely switched over to market price mechanism or transfer of subsidiary only through the Aadhaar based accounts.

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Q: You said 2.9 crore LPG cardholders have already been seeded and were receiving money right in 42 districts. What is the number now because that process got stopped when the SC said you cannot force Aadhaar? Will you start it all over again, were they given physical cylinders and will this subsidy scheme completely stop? Are you beginning from point zero again?

A: No, this 2.9 crore out of 9 crore is a figure of 291 districts and in 42 districts, we had completely switched over, which was around 70 lakh, remaining 2.2 crore was in the remaining districts where it had not been made compulsory where the transition phase was going on.

After the SC order, this order was disbanded and the cylinders at subsidised price were being given to the consumers. Now that there is a direction and ministry of petroleum has already consulted us, so as and when we start again, this 2.9 crore is a readymade thing. This does not get deseeded. It is ready now and we will start from this particular step.

Another issue for complying with the SC order, LPG subsidy transfer can directly take place to the bank account also. So for those consumers for whom Aadhaar number is not seeded, to being with the money can be transferred in the bank accounts and then over a period of time, Aadhaar can be seeded in the bank account that was the thinking of the ministry of petroleum in my understanding but a final decision will have to be taken by the ministry of petroleum and they put up their note to the cabinet.

Q: Can you give us a timeline on when you will be fully ready with this process and also what could the exact savings be for the government? We were speaking with the oil ministry and he said to the tune of around Rs 10,000 crore could be saved, what is your own estimate?

A: My estimate is based on ministry of petroleum and my job is to ensure that we are able to create a basic infrastructure and I will not be able to give you a different figure. It is the same figure as ministry of petroleum officials have given you.

Q: In terms of a timeline, when will you be fully ready and when will you start as well because you said you are yet to restart from that 291 districts?

A: That decision will be taken by the ministry of petroleum. As soon as this starts transferring, the infrastructure in those 291 districts is ready and for complying with the SC’s decision, they will consider that the people who don’t have an Aadhaar number already seeded, they will transfer the money into their bank accounts. So they are in process of creating a mechanism to capture the bank account of the LPG consumers.

Transferring to a bank account is already there. It is all electronic system. So that is not much of an issue as far as banking infrastructure is concerned.

Since this LPG thing is mainly in urban areas even the cash-out points is not a problem. That cash-out points that I talked about is for other 20:80 schemes of DBT under which people are residing in far flung areas in the country and for transferring those money even if I transfer the money, they need to have a cash-out point to withdraw that money. That is what I explained to you that we need to ensure that banking facilities are there across the country. That is number one.

Two, we seed as many Aadhaars as possible. So to the data which I have about those 121 districts where we had this DBT through Aadhaar, which is still going on - incidentally that was never stopped.

We got details of about 45 lakh beneficiaries out of which about 22.5 lakh roughly about 50 percent had their Aadhaar number seeded in the bank account. So for these 22.5 lakh people, the money was going through Aadhaar gateway and for remaining 22.5 lakh, the bank accounts were captured and it was going to the bank account directly.

Q: One clarification, are all the states transferring the subsidies through bank accounts or are there certain states like Andhra Pradesh, which are transferring it through the post office as well?

A: When I am talking about this 20:80 schemes, they are the centrally sponsored schemes. There we are doing it through the bank accounts but even in this MNREGA scheme, states are using all modes because as I understand almost against 9 crore beneficiaries about 4.5-5 crore are with the commercial banks and about 2.-2.5 crore are with the cooperative banks.

These cooperative banks, it is like a manual system and another 2-2.5 crore are on the post office front. There the disbursal is through the manual mode. So once our infrastructure of ensuring the full coverage across the country is ready, MNREGA will also shift on to these electronic based accounts.

Aadhaar seeding, there is a huge variation - if in a state like Bihar, there is about 15 percent Aadhaar generation, in UP it is about 25 percent Aadhaar generation, while there are states which are close to 100 percent or in Delhi it is more than 100 percent because of the floating population, taking the denominator as the population of 2011.

There are variations which will take time but PMO has given a very clear timeline to Aadhaar authorities also and they are in process of gearing up their infrastructure to ensure Aadhaar numbers are quickly generated all along.

Q: Old AP combined with Telangana was the state with actually 100 percent Aadhaar. So there, the transfer of money is completely sidestepping the banks despite having Aadhaar, they are not seeding it into the bank accounts that process is not going forward the money is getting transferred through post offices. Will you be able to get the states on board? This is important because banks keep opening Jan-Dhan accounts but it will make any economic sense only if DBT is transferred to that account, it is a very real complaint otherwise it is going to be a waste of money?

A: I will have to check facts on this. To my understanding, Andhra Pradesh is one state which is doing best as far as we are concerned.

Q: I have the IT secretary telling me they were giving it through banks but two-three years ago the government wanted it to be done through post offices and the IT secretary was livid that he is not going to transfer the whole thing back to banks so that was the conversation I had about two months back.

A: There are issues where in the earlier system when we were offering through banks as I just explained to you, you transfer the money in the bank account, opening a bank account is not very difficult.

We have transferred the money but the person needs access to the cash-out point. How would he withdraw money and if the cash-out point is about 15 kilometres away from his place then it is a problem for the person. So any state government if I were also the secretary of state government, I would say that I want to transfer it through a post office, which is nearer to that person.

Now under PMJDY, our major stress is for ensuring the banking facility close to the people so that resolves this major issue. Even in the earlier system when we were talking about, I think more than 50 percent money was being transferred through the bank accounts and remaining 50 percent where the banking facilities are not close to people, there it was being transferred through the cooperative banks and post office.

Those statistics were given to me by the ministry of rural development and right now we have very good and excellent relationship with the ministry of rural development.

Also, in my weekly video conferencing, the joint secretary of the rural development department does come once in a while, he interacts with the banks directly and we are hoping that by January 1, we should be able to transfer large programme of MNREGA in majority of the areas onto the banking platform wherever Aadhaar numbers are seeded.