Out of Rs 1.7 lakh crore under Pradhan Mantri Garib Kalyan package, about Rs 16,146 crore under Pradhan Mantri KISAN, Rs 10,025 under Jan Dhan and Rs 1,400 crore under NSAP have been disbursed as on 22nd April 2020. That’s a total of Rs 27,571 crore which have been transferred as Direct Benefit Transfer (DBT) to 30.87 crore people across the country.
Clearly, fintech / DBT is a swift and efficient way to at least transfer the welfare from the center to such a large number of citizens. Most of the other countries have also adopted the same route of DBT. Ensuring money is actually transferred is just the first hurdle and possibly the easiest hurdle. DBT translating to actual cash in hand and then being spent on basic amenities are the second and third-order challenges that need to be looked at.
In most cases, DBT is like giving free Uber/Swiggy credits to people in villages who don’t have access to phones/smartphones. Not just that, there are no cars or restaurants in their vicinity.
Incentivising last-mile delivery
In our outreach of 5000 people across India, we came across similar trends with DBT. Most people don’t have their registered number with them, hence they don’t know if they received the DBT or not. There are no functioning ATMs nearby. Even if there are, they can’t go out due to social distancing. In one instance, the person mentioned that the nearest operational bank is 60 km away.
So, is there an existing mechanism to ensure cash reaches people? What are the incentives that will enable this and has this been done before but in a different context?
We have seen some of the state governments deliver not just food and ration but even cash through our ASHA and Anganwadi workers. In a completely different context, interestingly we have heard of vote-buying during elections. The incentives are clear during elections and hence the transaction happens in spite of all the challenges.
Right now, the biggest challenge in the last mile delivery is the incentives – why should banks send SMS for crediting Rs 500 when they usually don’t; why should the local corporator deliver when there are no upcoming elections; why should bank mitras/NBFC Agents/MFI agents go home to home, village to village to deliver the benefit. One may argue that people’s lives are at stake and that itself should be an incentive. If not incentive, we need a clear directive to all stakeholders like banks, local governance and Bank Mitras/NBFC agents to deliver cash for their locality.
The answer to income security for millions of people for a country like India – where the access to tech is still limited among low-income citizens – perhaps lies not in the technology of DBT but in people like the ASHA and Anganwadi workers – who are local community champions – delivering not just money but Welfare Directly to People (WDP).
*Views expressed are personal.