Direct Cash Transfer scheme begins on low key

The government of India’s ambitious project to directly transfer cash to the accounts of beneficiaries of welfare schemes kicked off on January 1 on a rather low key. The government failed to launch the much-hyped pilots in all the 51 districts across 16 states as announced earlier. The government was able to extend Direct Cash Transfer to only seven welfare schemes in 20 districts in six states and three Union territories, covering a meagre population of 248,000. These states and Union territories are: Andhra Pradesh, Delhi, Karnataka, Madhya Pradesh, Punjab, Rajasthan Chandigarh, Daman and Diu and Puducherry.

The scaling down of the pilots was necessitated by the fact that a large number of beneficiaries who were to receive the cash transfers in the 51 pilot districts do not have bank accounts or Aadhar numbers. In November-December last year, Prime Minister Manmohan Singh along with several Cabinet ministers including P Chidamabaram and Jairam Ramesh had announced launch of the Direct Cash Transfer scheme in 51 districts of 16 states from January 1 (See Dash for Cash).

The Centre has also reduced the number of schemes eligible for direct cash transfer in first phase from 29 to seven. What's more, all the seven schemes (see box) would be implemented in some districts and not all the 20 districts in the first phase. The government’s new plan is that the remaining 31 districts would be covered by February 1 and March 1 in two phases.