Eighty-year-old Shakunthala is hardly able to stand steady on her feet. With slumped shoulders and hunched back she came to the Puducherry civil supplies and consumer affairs office to complain that she had not received cash for the past three months in her bank account to buy food grain. With consumers swarming the overcrowded civil supplies office, it took her two trips to the office to finally register the complaint.

 The civil supplies and consumer affairs office in the union territory (UT) receives nearly 50 complaints every day about the problems faced by beneficiaries in the direct benefit cash transfer (DBT) scheme that was implemented in September 2015 as a pilot project in lieu of the public distribution system (PDS).

Shakunthala, a resident of Kamatchi Amman Koil street, stays with her 77-year-old brother V Murugan. With the change in the subsidy policy in September last year, Shakunthala, a red-card holder, is entitled to get direct cash transfer of '115 per household member (aged 14 and above). While beneficiaries like her receive 10 kg of free rice every month under the local government scheme, they were also entitled to 20 kg of rice under the central government’s PDS scheme. Overall a household with the Antyodaya Anna Yojana (AAY) card used to get 35 kg of food grains. AAY beneficiaries, however, are now entitled to cash transfer of Rs. 809 per household per month.

 Since Shakunthala’s share of rice under the local government scheme is guaranteed, she prefers cash transfer under the central government scheme. Her logic is simple: she can get better quality rice from open market than what the PDS supplies. No wonder then, she is unhappy and agitated. “Why is our money delayed,” she asked the consumer centre official.

Another beneficiary, 42-year-old Thulukkanam, a resident of Mudaliarpet locality, complains of cash not credited in her bank account. “My bank account was opened in December last year and since then I have been waiting for cash to be credited. With this cash I can buy other essentials like soap, shampoo and oil. I am already getting 10 kg rice of my choice from the fair price shop (FPS),” she reasoned with a smile.
Thulukkanam is a daily wage earner. She sells fish and earns '150 per day. She is the only earning member of her family of four.
Collecting rice from FPS is, however, easier for Thulukkanam. With the cash transfer she has to first check with the bank to see if her account has been credited, then come to the shop. “At times, this may cost a day’s earning,” she pointed out.

A little more than a kilometre away from the civil supplies office in Lawspet is the FPS number 181 that has a long queue of beneficiaries. 40-year-old K Muthu Mary, a red-card holder and AAY beneficiary, is here to get her monthly quota of rice. She takes out her red ration card booklet and a smartcard and waits for her turn. After collecting rice from the shop she rushes to her home nearby and brings out her passbook. “I don’t even know whether I have received money in my bank account for buying rice. When I approached bank they were unable to answer my query. Even at the civil supplies office I did not receive satisfactory reply,” Mary said, showing her passbook to this reporter.

Nearby, at Pakkamudayanpet street, 58-year-old Lingammalle and 56-year-old Pachiappan echo similar sentiments. Many even complain that they did not benefit from the cash transfer as the money that was remitted to their bank accounts got auto-debited under other heads like pending dues for self-help group membership.

However, there are others like Victoria of Lawspet locality who favours cash transfer. “Getting cash in bank account is a better option. The account is in my name. The cash transfer scheme is a blessing for us. Now the chances of my husband stealing cash are less as money is directly deposited in my account,” the 47-year-old said.

For 38-year-old K Nagarajan, another resident of Lawspet locality, switch to the new system of cash transfer is easy. As a red-card holder, he withdraws money with an ATM card and collects rice from the shop of his choice.
“People here prefer single boiled rice distributed by the local government. The 20 kg rice earlier supplied by the centre was double-boiled, which did not suit our taste. At least with the cash transfer in our accounts we can buy rice of our choice,” Nagarajan said. “Rice is the most staple food in the region. People don’t want to compromise on its quality,” he added.

But the story is not the same everywhere. In fact, beneficiaries in the UT are a divided lot. While there are those small families that have worked out the arrangement between the supplies from the UT administration and cash from the central scheme, apparently many people – particularly those with larger families – do not want cash.

Divided they stand
Similar to this cash transfer scheme of the centre, the Puducherry government had launched a project in March last year. Under this scheme, in place of the monthly ration of 10 kg rice and 5 kg wheat, the local government transferred '300 to the bank account of every family’s head. The objective was that the person need not come to the FPS but could use the cash to buy rice from any shop.
Following high-decibel protests from ration shop owners, complaints from citizens and also opposition from political parties, the government cancelled the scheme after two months.

The story and the concerns were same even then. Back then too, many wanted rice and not money and even today there are voices that do not favour cash transfer and are happy with traditional public distribution system.
For 75-year-old Vadivambal, who lives in a hutment at Azeez Nagar in Reddiar Palayam locality, collecting rice from FPS is easier. “When we get rice from ration shops at least our meal is ensured. The cash usually gets diverted for other purposes and people may not necessarily use it for buying rice,” she said expressing her concern. Vadivambal’s elder son Dakshinamoorthy too prefers rice and not cash. “Items supplied through PDS are useful for family members. If cash is deposited men can take that money and spend it as per their wish,” he added.

Read Interview with chief secy Puducherry: “Cash transfer in PDS is successful in Puducherry”

Women of the locality complain that even if cash were deposited in their bank accounts, their husbands would take their money to purchase liquor. “When we get rice at least we will be able to cook it and feed our families,” reasoned 38-year-old Jaya and her 34-year-old neighbour Valli.
There are others too who are not happy with the direct cash transfer. 52-year-old Mangla expresses her anger as she said, “We don’t want cash transfer. Our young boys remain without employment. They are hardly able get any work and they spend whatever money they earn. The government should first solve the problem of unemployment. Cash transfer for foodgrains can be taken care of later.”
For 45-year-old Jayalakshmi first marching to the bank and then to the market or ration shop is a difficult task. She has two disabled members in her family who are dependent on her. Plus, transfer of cash in her bank account is not regular. “We don’t come to know when money is credited and when it is not. So I certainly prefer collecting rice directly from ration shops,” she said.

Similarly, for 47-year-old Krishnamoorthy the money transferred in bank account is not enough to meet nutritional requirements of his family of five. 38-year-old A Joseph too feels that money being credited is not sufficient to buy ration. “And what if food prices go up?” he asked. Easa Mary and Thamizhselvi who are in their late twenties, too want rice and not money.
 But for 61-year-old Arpudameri rice supplied through ration shops is of poor quality and takes more time to cook resulting in more consumption of cooking gas. So, he prefers cash transfer as it gives him choice to buy rice of his preference from any shop. 

 At a nearby street in Reddiar Palayam locality is FPS where Gunasundari, 40, has come to collect her quota. For her, coming to the ration shop and collecting rice is easier. She has two daughters, and is the sole breadwinner. She is a widow and works as a daily wage labourer. Her workload doubles when she first has to go to the bank and then to the shop to buy food grains. Moreover, often at the bank waiting periods are long. Gunasundari works in a factory so it is all the more difficult for her to trudge to the bank during weekdays.

Many consumers even complain of smartcards not functioning properly or machines not reading finger prints. A smartcard is a biometric plastic card used to purchase the PDS commodities in FPS by using finger prints in point of sale device, which are provided to each PDS outlet. The purpose was to replace ration cards with these smartcards. Beneficiaries use these cards to avail benefit under the local government scheme.
72-year-old Saliathmarie’s smartcard is not working so after producing her ration card she collects rice from FPS. Access to bank poses problem for her. She doesn’t know how to read and write. “I want foodgrains. People in the family could use money transferred in the bank account for any purpose they want. I don’t want to starve,” she said.

Confusion galore
While Governance Now gathered feedback from the consumers in Puducherry randomly and there seems to be a clear division of people’s view for and against direct cash transfer, the overall DBT picture emerging from the union territory indicates that the scheme is facing too many challenges.
Puducherry undoubtedly has got the edge over other places as it has about 95 percent Aadhaar enrolment and claims 100 percent financial inclusion. Also, the union territory administration is following last year’s apex court verdict, which ruled that a beneficiary no longer needs to produce his Aadhaar card to avail social security schemes. Thus, Aadhaar is not mandatory. It can either be Aadhaar or bank account which is validated by the central government agency, and cash is thus transferred under the scheme.

But as of now, Puducherry seems to be in a state of utter confusion and is struggling to administer the cash transfer scheme, which is implemented in its four districts – Pondicherry, Karaikal, Yanam and Mahe. There are a lot of hitches and technical issues on how the cash is getting transferred.
The local government, however, claims that almost 1.5 lakh residents of this union territory are getting part of their food grain subsidy as cash.
According to P Priytarshny, director of food and civil supplies department, “We want to ensure that the maximum number of beneficiaries get money. There are 1.8 lakh beneficiaries and money has reached 1.5 lakh beneficiaries. For the remaining, there is some technical issue with their bank accounts that we are looking at.” She further added that it would be too early to evaluate the success of the scheme. “We need at least one year to set it in motion,” the director said.

However, she is candid while admitting that there are complaints that several beneficiaries have not received the money. “We are working with the team from the centre to solve the problem. Some of the technical issues like how the money gets transferred are handled at the centre level. Firstly, we have to ensure money goes every month exactly on a particular day. We are in the process of streamlining it,” she said adding that, “We also need to see whether people are using money for the purpose for which it has been transferred.”

Priytarshny points out that collection and validation of Aadhaar and bank accounts from beneficiaries is a challenge. Sometimes there is a lot of mismatch. At times dormant accounts get seeded and beneficiaries don’t even know that money is going there. The other thing is, even if a beneficiary has an Aadhaar number and a bank account, they are not seeded and then money will not reach the beneficiary.
DBT is done through the National Payments Corporation of India. So cash transfer is possible only if the consumer has bank account that has a core banking system (CBS), and it is seeded with Aadhaar. But DBT cannot take place for families that have accounts with co-operative banks without CBS, or who do not have an Aadhaar card yet.

As far as cash transfer for 1.5 lakh beneficiaries is concerned, there is 100 percent success, Priytarshny said, adding that in some cases the money might have been credited to one of their bank accounts.
Pointing out the grey area and the reason for confusion, a senior government official on condition of anonymity said, “The money would be going to beneficiaries but they are not aware in which account it is getting credited. It must have gone to one of the family members’ accounts. Since we don’t have the response file from the centre we are unable to answer to the consumers that in which of the accounts money is credited.”
Explaining further, the official said, “To ensure that a maximum number of people get benefit we have asked to credit money in any one of the member’s account in that family. In some cases cash could have even got transferred to the son’s scholarship account if wife’s and husband’s account is not validating.”

Also, Priytarshny points out, “There should be improvement in banking sector. Branch network should expand. They should become people-friendly. More banking correspondents are needed who can go to the field and transfer money. When beneficiaries come to the bank their day’s wage is lost. Nobody wants to lose a day’s wage of around Rs. 300 to draw Rs. 100 from the bank. So reaching out to people and working among the people is needed.”
P Anbukamaraj, lead district manager of a nationalised bank, says, “As far as DBT is concerned we are coordinating it, the technical part like how transfer of cash is being done is taken care by another bank.” He mentions that bank staff is stressed out during peak periods when users come in large numbers to withdraw money. This affects the regular working of a bank. 
 
The evaluation study
A team from an organisation appointed by the centre to conduct an evaluation study in Puducherry, points out the challenges in making cash transfer in PDS. “This union territory looks to be well equipped in terms of beneficiary database digitisation, linking of bank accounts with Aadhaar details, etc. But, there is a hiccup in the beneficiary interaction with banks from where they have to access the amount. With a larger number of people approaching the banks to withdraw the amounts being credited, banks need to rise to the occasion as well,” said a member of the team on condition of anonymity.
 The objective of the study is to understand the administrative readiness and status of the ongoing direct benefit transfer in the union territory of Puducherry. However, Mahe and Yanam are not included in the study. It was decided to focus on Puducherry and Karaikal only as they are the bigger regions in terms of total eligible beneficiaries and ration card holders.

Sharing the highlights of the study, the team members pointed out that the evaluation has focused upon the coverage of ration card holders in a post NFSA scenario. Post NFSA, the number of ration card beneficiaries has increased since it is mandated by NFSA to cover 76 percent of the UT’s population. This has gone a long way to ensure that people who do not have ration cards are also provided with one. The administration has also consciously started a drive to increase the BPL or priority household coverage by inviting forms from people without ration cards or those with APL ration cards. This is a welcome move as it helps address exclusion errors.

shivani@governancenow.com

This article appears in the March 16-31 issue

Also read: DBT special - A new order cometh