General Awareness

April 04, 2017 @ 01:15 PM

April 04, 2017 @ 01:15 PM

K. J. Somaiya Institute of Management Studies and Research, Mumbai

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General Awareness topic for MBA aspirants - Cash Transfer Scheme is boon or bane?

MBA aspirants must be updated with General Awareness on current topics. General awareness topics with analytically drawn conclusions will benefit you in Essay writing   / GD & PI. Today, you will read General Awareness Topic:

Cash Transfer Scheme is boon or bane?

This January saw the roll out of the much awaited direct benefits cash transfer scheme (DBTS) in around 20 districts. The initial plan was to roll out this scheme in close to 45 districts, which obviously did not happen.

This scheme will affect close to 1 lakh people residing in these 20 districts initially at roll out. This facility has been specifically connected to six schemes which include pension, scholarship and employment guarantee. The cash transfer scheme for food or fuel will be rolled out at a later stage, the timeline of which is still unknown.

In the DBTS, beneficiaries who own an Adhaar card would get the money directly transferred to their bank account. They would just need a 12 digit Adhaar number to get this transfer done. In this scheme, the beneficiaries would get the cash instead of the subsidies for food, pension, scholarship etc. This scheme would mark a change for the poor. 

There would be no middle man and hence there would be no chance of anyone making big bucks out of these subsidies. Also the poor would get the money using which they can buy the services from the market. This scheme leaves no room for corruption or money getting transferred elsewhere.

As with any system, there are obvious drawbacks with DBTS as well. The first drawback occurs in the form of Adhaar card. UID is a system that is typically based on biometric impression which accepts your thumb impression. In 90% of the cases, this thumb impression is not detected in the first go by the machine implemented in these districts. 

A lot many times the machine becomes faulty seeking repair. The alternate provision in such cases for the Adhaar card owners would be manual thumb prints. If the cash transfer is to be accepted manually, it could lead to frauds. So, this system is not completely fault proof as yet.

This system if gives surety that all the cash transfers are made to the individual’s bank account. Now, of the districts where the scheme has been implemented, there are no banks. Also, in some cases the individuals do not have a bank account. There is no provision in the scheme for such cases. 

The scheme does not talk about opening any bank accounts for these individuals. So, how would these individuals seek their money or, what is the government planning to do in this situation.

Also implementation of this scheme is yet to be carried out in food, fertilizer and fuel. The government will surely face an issue when implementing them. In the purview of the current public distribution system, the food subsidies would be offered to the respective individual’s bank accounts only after they pay the amount for the food in full at the shops. Same is the case with the fertilizers or fuel. 

The cons are way too many when compared to the pros. In fact, the scheme is currently not benefitting a lot many people. It can be said that the scheme was implemented way too early and with less planning on the table. 

With no bank accounts/ branches, the government should have had a Plan B in their mind. As of now, it is a bane in the making if no alternate provisions are made. 

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