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Recently, the government announced that it plans to transfer benefits under various schemes directly into the bank accounts of individual beneficiaries. Benefits can be the Mahatma Gandhi National Rural Employment Guarantee Scheme (MNREGS) wages, scholarships, pensions and health benefits. Beneficiaries shall be identified through the Aadhaar number (Aadhaar is an individual identification number linked to a person’s demographic and biometric information). The direct cash transfer (DCT) system is going to be rolled out in 51 districts, starting January 1, 2013. It will later be extended to 18 states by April 1, 2013 and the rest by April 1, 2014 (or earlier). Presently, 34 schemes have been identified in 43 districts to implement the DCT programme. Currently, the government subsidises certain products (food grains, fertilizers, water, electricity) and services (education, healthcare) by providing them at a lower than market price to the beneficiaries. This has led to problems such as high fiscal deficit, waste of scarce resources and operational inefficiencies. The government is considering replacing this with an Aadhaar enabled DCT system. It has claimed that the new system would ensure timely payment directly to intended beneficiaries, reduce transaction costs and leakages. However, many experts have criticised both the concept of cash transfer as well as Aadhaar (see here, here, here and here). In this blog, we provide some background information about cash transfer, explain the concept of Aadhaar and examine the pros and cons of an Aadhaar enabled direct cash transfer system. Background on cash transfer Under the direct cash transfer (DCT) scheme, government subsidies will be given directly to the beneficiaries in the form of cash rather than goods. DCTs can either be unconditional or conditional. Under unconditional schemes, cash is directly transferred to eligible households with no conditions. For example, pension schemes. Conditional cash transfers provide cash directly to poor households in response to the fulfillment of certain conditions such as minimum attendance of children in schools. DCTs provide poor families the choice of using the cash as they wish. Having access to cash also relieves some of their financial constraints. Also, DCTs are simpler in design than other subsidy schemes. Even though cash transfer schemes have a high fixed cost of administration when the programme is set up, running costs are far lower (see here, here and here). Presently, the government operates a number of DCT schemes. For example, Janani Suraksha Yojana, Indira Awas Yojana and Dhanalaksmi scheme. In his 2011-12 Budget speech, the then Finance Minister, Pranab Mukherjee, had stated that the government plans to move towards direct transfer of cash subsidy for kerosene, Liquified Petroleum Gas (LPG), and fertilizers. A task force headed by Nandan Nilekani was set up to work out the modalities of operationalising DCT for these items. This task force submitted its report in February 2012. The National Food Security Bill, 2011, pending in Parliament, includes cash transfer and food coupons as possible alternative mechanisms to the Public Distribution System. Key features of Aadhaar The office of Unique Identification Authority of India (UIDAI) was set up in 2009 within the Planning Commission. In 2010, the government later introduced the National Identification Authority of India Bill in Parliament to give statutory status to this office.
For a PRS analysis of the Bill, see here. Aadhaar enabled direct cash transfers Advantages Identification through Aadhaar number: Currently, the recipient has to establish his identity and eligibility many times by producing multiple documents for verification. The verification of such documents is done by multiple authorities. An Aadhaar enabled bank account can be used by the beneficiary to receive multiple welfare payments as opposed to the one scheme, one bank approach, followed by a number of state governments. Elimination of middlemen: The scheme reduces chances of rent-seeking by middlemen who siphon off part of the subsidy. In the new system, the cash shall be transferred directly to individual bank accounts and the beneficiaries shall be identified through Aadhaar. Reduction in duplicate and ghost beneficiaries: The Aadhaar number is likely to help eliminate duplicate cards and cards for non-existent persons or ghost beneficiaries in schemes such as the PDS and MNREGS. Disadvantages Lack of clarity on whether Aadhaar is mandatory: According to UIDAI, it is not mandatory for individuals to get an Aadhaar number. However, it does not prevent any service provider from prescribing Aadhaar as a mandatory requirement for availing services. Therefore, beneficiaries may be denied a service if he does not have the Aadhaar number. It is noteworthy that the new direct cash transfer policy requires beneficiaries to have an Aadhaar number and a bank account. However, many beneficiaries do not yet have either. (Presently, there are 229 million Aadhaar number holders and 147 million bank accounts). Targeting and identification of beneficiaries: According to the government, one of the key reasons for changing to DCT system is to ensure better targeting of subsidies. However, the success of Aadhaar in weeding out ‘ghost’ beneficiaries depends on mandatory enrollment. If enrollment is not mandatory, both authentication systems (identity card based and Aadhaar based) must coexist. In such a scenario, ‘ghost’ beneficiaries and people with multiple cards will choose to opt out of the Aadhaar system. Furthermore, key schemes such as PDS suffer from large inclusion and exclusion errors. However, Aadhaar cannot address errors in targeting of BPL families. Also, it cannot address problems of MNREGS such as incorrect measurement of work and payment delays. Safeguard for maintaining privacy: Information collected when issuing Aadhaar may be misused if safeguards to maintain privacy are inadequate. Though the Supreme Court has included privacy as part of the Right to Life, India does not have a specific law governing issues related to privacy. Also, the authority is required to maintain details of every request for authentication and the response provided. However, maximum duration for which such data has to be stored is not specified. Authentication data provides insights into usage patterns of an Aadhaar number holder. Data that has been recorded over a long duration of time may be misused for activities such as profiling an individual’s behaviour.
As of April 22, 2020, Sikkim does not have any confirmed cases of COVID-19. As of April 21, 2020, 87 samples have been sent for testing from Sikkim. Of these, 80 have tested negative for COVID-19, and the results of seven samples are awaited. The state has announced several policy decisions to prevent the spread of the virus and provide relief for those affected by it. In this blog post, we summarise some of the key measures taken by the Sikkim state government in this regard as of April 22, 2020.
Response before national lockdown
On March 16, the state government responded to the growing number of suspected cases in India by notifying certain directions to be applicable till April 15, 2020. These included: (i) banning the entry of all domestic and foreign tourists in to the state, (ii) closing all educational institutes and anganwadis, (iii) prohibiting the use of recreational facilities such as, casinos, gym, and cinemas, (iii) closing three out of five check posts (border opening) for all visitors in to the state and opening the other two only for medical and police teams, and (iv) banning private industries from getting migrant workers from outside the state and avoiding large concentration of workers at one place.
On March 19, assembly of more than five people was prohibited in the state until April 15, 2020. The government ordered the suspension of all non-essential work on March 19. The supply of all essential commodities such as food grains, vegetables, sanitisers and masks was allowed. Further, the formation of a sub-divisional task force to detect suspected cases was ordered.
On March 22, the government regulated intra-state movement of private vehicles, two-wheelers and taxis on an odd-even basis (allowing plying of vehicles on alternate days as per the number plate) until April 15, 2020. The government also reduced the budget session of the state to two days on March 23.
On March 25, the central government announced on a 21-day country-wide lockdown till April 14. During the lockdown the state government took various steps for physical containment, health, financial and welfare measures. These are detailed below.
Measures taken during lockdown
Movement Restrictions
Certain movement restrictions were put across the state. These include:
Essential Goods and Services
On April 5, the state government issued an order requiring establishments such as shops, hotels, private offices, and commercial establishments to remain closed until April 15. Establishments which were permitted to remain functional include law enforcement agencies, health services, electricity and water services, petrol pumps, and media. Shops for PDS, groceries, vegetables, milk and, medicines were only allowed remain open from 9 am to 4 pm.
Health Measures
On March 31, the Sikkim government identified and set up dedicated isolation wards and treatment centres in the STNM hospital, Sochakgang as a precautionary measure. The government also issued directions for citizens to avoid getting infected by coronavirus. These included social distancing, and maintaining proper hygiene.
On April 18, the state government made it mandatory for all the public, students, teachers, and government employees, to install the Aarogya Setu application. The government of India launched a mobile app called ‘Aarogya Setu’ to enable people to assess the risk of catching COVID-19 on April 2, 2020. The app uses Bluetooth and Global Positioning System (GPS) based device location for contact tracing in order to prevent the spread of COVID-19.
Welfare Measures
Certain relaxations after 20th April
On April 14, the nation-wide lockdown was further extended till May 3, 2020. On April 15, the Ministry of Home Affairs issued guidelines outlining select activities which will be permitted from April 20 onwards. These activities include health services, agriculture related activities, certain financial sector activities, operation of Anganwadis, MNREGA works, and cargo movement. Further, subject to certain conditions, commercial and private establishments, industrial establishments, government offices, and construction activities will also be permitted. The Sikkim government took the following steps in the same line.
For more information on the spread of COVID-19 and the central and state government response to the pandemic, please see here.
