1.57 lakh cr Total amount transferred through DBT from January 2013 to December 2016

Transcription

1 BUDGET BRIEFS Voume 9, Issue 6 Direct Benefit Transfer (DBT), Jan Dhan, Aadhaar and Mobie (JAM) GOI, Direct Benefit Transfer (DBT) is a Government of India (GOI) initiative to transfer cash benefits such as wage payments, subsidies and incentives for a number of government programmes directy into bank accounts of beneficiaries through eectronic systems. DBT was designed with the objective of minimising deays in fund fows, ensuring accurate targeting of beneficiaries, and curbing eakage and dupication. A key roe in arge-scae, rea-time impementation of DBT has been envisaged for the JAM trinity: Jan Dhan accounts, Aadhaar numbers and Mobie numbers. Jan Dhan bank accounts aim to ensure universa financia incusion, Aadhaar numbers provide a means for identification and authentication, and mobie banking offers an aternative mechanism of payment and withdrawa. Using government data, this brief reports on the foowing parameters: HIGHLIGHTS 1.57 akh cr Tota amount transferred through DBT from January 2013 to December 2016 SUMMARY & ANALYSIS Trends in coverage of DBT and JAM Extent to which these are being used by government and citizens. Data for DBT is as of December 2016, Jan Dhan and Aadhaar are as of January Mobie coverage data is avaiabe ti September 2016, and mobie banking usage data is avaiabe ti November of 536 appicabe schemes are impementing DBT 84 schemes across 17 departments and ministries of GOI were using DBT as of December This accounts for 16 per cent of the targeted 536 schemes akh crore had been transferred through DBT since the scheme s inception. In FY , the pace of DBT has sowed down. Ti December 2016, ony 52 per cent of GOI aocations (revised estimates/re) for LPG subsidies, 58 per cent for MGNREGS and 62 per cent for NSAP had been transferred through DBT. As of 28 December, 2016, 26 crore Jan Dhan bank accounts had been opened across the country a rate of 2.2 akh new accounts daiy since 31 December, The demonetisation of 500 and 1,000 rupee notes saw a sharp increase in deposits in Jan Dhan accounts - from `44,867 crore to `74,321 crore, or 66 per cent, between 31 October and 30 November As of January 2017, 88 per cent of the popuation of India as per Census 2011 hed Aadhaar numbers. This is an increase from 80 per cent as of 2 January, There are, however, arge regiona variations in coverage. A tota of 68 crore mobie transactions were reported between JanuaryNovember 2016, a sharp 152 per cent increase over the corresponding period in Accountabiity Initiative, Centre for Poicy Research, Dharam Marg, Chanakyapuri, New Dehi Prepared by: Vikram Srinivas, vsrinivas@accountabiityindia.org & Avani Kapur, akapur@accountabiityindia.org

2 DIRECT BENEFIT TRANSFERS In January 2013, GOI aunched the Direct Benefit Transfer (DBT) scheme an initiative to transfer cash benefits such as wage payments, subsidies and incentives for a number of government programmes directy into bank accounts of beneficiaries through eectronic systems. The scheme was designed with the objective of minimising deays in fund fows, ensuring accurate targeting of beneficiaries, and curbing eakage and dupication. DBT was initiay roed out as a piot project. Phase 1 (January 2013-November 2014) covered 43 districts and 24 seected Centra Sector and Centray Sponsored Schemes. This was expanded to 78 additiona districts in Phase 2, starting December In addition, a number of other schemes were incuded in its ambit such as wage payments under the Mahatma Gandhi Nationa Rura Empoyment Guarantee Scheme (MGNREGS) and Liquefied Petroeum Gas (LPG) subsidies. Coverage DBT is appicabe to a GOI programmes invoving cash transfers to individua beneficiaries. To this end, DBT aims to cover 536 schemes across 65 ministries and departments, of the tota 1,182 schemes administered by the 75 ministries and departments of GOI. However, as of December 2016, ony 84 schemes (16 per cent of the target) across 17 departments and ministries were using DBT. In terms of the quantum of transfers, since the scheme s inception, `1.57 akh crore had been transferred through DBT. `1.57 LAKH CRORE TRANSFERRED THROUGH DBT AS OF DECEMBER ,80,000 1,60,000 1,40,000 1,20,000 1,00,000 75,412 90,471 1,08,117 1,30,859 1,44,044 1,56,922 80,000 60,000 46,294 40,000 20, , Sep Oct Nov Dec Jan Feb Mar Apr May Jun Ju Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Ju Aug Sep Oct Nov Dec Tota funds transferred through DBT (in ` crore) Source: Direct Benefit Transfer Porta, GOI. Avaiabe onine at: Last accessed on 20 January, Three schemes MGNREGS, LPG subsidies and pensions under the Nationa Socia Assistance Programme (NSAP) make up the buk of DBT. Ti December 2016, these schemes together accounted for 99 per cent of the tota beneficiaries and 90 per cent of funds transferred through DBT. Schoarship programmes accounted for 8 per cent of the tota DBT funds transferred. A significant portion of the budgets for these three major schemes is transferred through DBT. In FY , `55,647 crore was transferred through DBT for these three schemes. This amounted to 100 per cent of GOI aocations for LPG, 92 per cent for NSAP and 70 per cent for MGNREGS. 2 ACCOUNTABILITY INITIATIVE, INDIA

3 9 OF FUNDS TRANSFERRED THROUGH DBT ARE FOR THREE SCHEMES MGNREGS 47 LPG 29 NSAP 14 Schoarships 8 Others 2 Percentage share of schemes in DBT from January December 2016 Source: Direct Benefit Transfer Porta, GOI. Avaiabe onine at: Last accessed on 20 January, In FY , the pace of DBT appears to have sowed. Ti December 2016, ony 52 per cent of GOI aocations (revised estimates/re) for LPG subsidies, 58 per cent for MGNREGS and 62 per cent for NSAP had been transferred through DBT. 58% OF BUDGET ALLOCATIONS FOR MGNREGS HAD BEEN TRANSFERRED THROUGH DBT IN TILL DECEMBER LPG MGNREGS NSAP Percentage of GOI aocations transferred through DBT in (ti December) Percentage GOI aocations transferred through DBT in Source: Direct Benefit Transfer Porta, GOI. Avaiabe onine at: Budget figures from Union Budget, Expenditure Budget, Vo. 2. Budget aocations are RE. Last accessed on 1 February, In February 2015, the Economic Survey discussed the roe of DBT in reducing eakages in government subsidies. Whie DBT, in principe, can be carried out through any system of eectronic bank transfer, a key roe in arge-scae, reatime impementation of DBT has been envisaged for the JAM trinity: Jan Dhan bank accounts, Aadhaar numbers and Mobie coverage. Jan Dhan bank accounts are to ensure universa financia incusion. The idea is that citizens woud be identified uniquey by their Aadhaar numbers to which these accounts woud be inked. DBT payments to a citizen s Jan Dhan account thus coud be made soey on the basis of his or her Aadhaar number. Mobie banking offers a way to bypass poor banking infrastructure by enabing an aternative mechanism of payment and withdrawa. PRADHAN MANTRI JAN DHAN YOJANA The Pradhan Mantri Jan Dhan Yojana (PMJDY) a nationa mission for financia incusion was aunched on 28 August, The scheme s main objective is to further financia incusion by providing a househods in the country with at east one bank account. Coverage In 2015, 9.4 crore accounts were opened, averaging neary 2.6 akh accounts per day. In 2016, as of 28 December, 26 crore Jan Dhan accounts have been opened across the country a rate of 2.2 akh new accounts daiy since 31 December, Jan Dhan accounts form a significant proportion of the overa bank accounts in the country. As of March 2015, 10 per cent of a deposit accounts had been opened under PMJDY. By 11 January, 2017, the scheme covered 107 per cent of a househods as per Census BUDGET BRIEFS, DBT, GOI , VOL9/ISSUE 6 3

4 NEARLY 27 CRORE JAN DHAN ACCOUNTS HAVE BEEN OPENED TILL JAN Sep Oct Nov Dec Jan Feb Mar Apr May Jun Ju Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Ju Aug Sep Oct Nov Dec Jan Accounts (in crore) Source: Jan Dhan Porta, Archives, GOI. Avaiabe onine at: Last accessed on 20 January, There are sharp state-wise variations. States that had ow coverage of bank accounts prior to the aunch of PMJDY have seen a higher number of Jan Dhan accounts being opened. For instance, Chhattisgarh and Assam had about 60 per cent coverage of bank accounts before the scheme was aunched. However, as of 11 January, 2017, the number of Jan Dhan accounts stood at 200 per cent of househods in Chhattisgarh and 166 per cent of househods in Assam, as per Census This suggests that many househods had more than one adut member open an account under PMJDY. In contrast, coverage of Jan Dhan accounts was ow in Keraa and Tami Nadu where 90 per cent and 77 per cent of househods, respectivey, aready had a bank account prior to the aunch of the scheme. Ti 11 January, 2017, ony 41 per cent of househods in Keraa and 46 per cent in Tami Nadu had a Jan Dhan account. CHHATTISGARH HAS NEARLY 2 JAN DHAN ACCOUNTS PER HOUSEHOLD Chhattisgarh Assam Madhya Pradesh Rajasthan Jharkhand Bihar Manipur Uttar Pradesh Haryana Odisha Gujarat Karnataka Meghaaya Tami Nadu Keraa Jan Dhan accounts as percentage of househods Percentage of househods with bank account in 2013 Source: Jan Dhan Porta, Statewise statistics, GOI. Avaiabe onine at: househod data from NSSO 70th round, Key Indicators of Debt and Investment in India. Avaiabe onine at: pubication_reports/ki_70_18.2_19dec14.pdf. Last accessed on 20 January, Usage As of October 2016, the tota baance avaiabe in Jan Dhan bank accounts stood at `44,867 crore. The proportion of Jan Dhan accounts with no baance has been steadiy decining, from 77 per cent at the scheme s inception to ony 23 per cent as of October 2016 (before demonetisation). A primary objective of PMJDY is to enabe citizens to perform financia transactions in the forma banking system. One way of measuring this is to anayse the average baance in active accounts. This reduced from `3,428 in September 2014 to `2,315 in October 2016 a drop of 32 per cent. 4 ACCOUNTABILITY INITIATIVE, INDIA

5 BALANCE IN ACTIVE JAN DHAN ACCOUNTS SAW LITTLE CHANGE UNTIL NOVEMBER ,428 3, , ,394 2, ,180 2, ,334 2,315 3,736 3, `4,000 `3,000 `2,000 `1,000 Sep Oct Nov Dec Jan Feb Mar Apr May Jun Ju Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Ju Aug Sep Oct Nov Dec Jan ` Demonetisation 2017 Percentage of zero baance accounts Average baance in active account ( `) Source: Jan Dhan Porta, Archives, GOI. Avaiabe onine at: Last accessed on 20 January, However, despite significant progress in coverage, deposits in PMJDY accounts form a very sma fraction of the overa deposits in the banking system, standing at 0.7 per cent as of December In March 2015, this figure stood at 0.2 per cent. Effect of Demonetisation The demonetisation of 500 and 1,000 rupee notes on 8 November, 2016 saw a sharp increase in deposits in Jan Dhan accounts. Deposits increased from `44,867 crore to `74,321 crore, or by 66 per cent, between 31 October and 30 November However, baances have since been decining. Deposits stood at `69,027 crore as of 11 January, 2017 a fa of 7 per cent since the end of November. The monthy growth rate of Jan Dhan accounts in November and December has remained steady, at 2 per cent. However, the proportion of zero-baance accounts has seen a margina increase: from 23.4 per cent on 31 October, 2016 to 24.6 per cent as of 11 January, AADHAAR Aadhaar is a 12-digit unique identifying number assigned to individuas. Every resident of India is eigibe for one. Aadhaar was aunched as a scheme in November The system is now administered by the Unique Identification Authority of India (UIDAI), a statutory body estabished by the Aadhaar Act of The objectives of the project incude: Universa provision of Aadhaar to residents of India Integration with existing databases to enabe unique identification and authentication of Aadhaar hoders Provision of a secure and ow cost patform to directy remit benefits to residents Aadhaar enabes unique identification of citizens. This aows DBT payments to a citizen s Jan Dhan account soey on the basis of his or her Aadhar number. In addition, biometric authentication offers a repacement for ATM cards, as citizens can withdraw money from micro-atms with their thumbprint aone. Coverage As of 2 January, 2017, 88 per cent of the popuation of India (as per Census 2011) hed Aadhaar numbers. This was an increase from 80 per cent as of 2 January, There were, however, arge regiona variations in coverage. BUDGET BRIEFS, DBT, GOI , VOL9/ISSUE 6 5

6 The proportion of the popuation that had been issued Aadhaar numbers was highest in the Union Territories of India (incuding Dehi), standing at 118 per cent of the Census popuation as of 2 January, Aadhaar numbers had aso been issued to more than 100 per cent of the Census popuation in the states of Punjab, Keraa, Jharkhand and Andhra Pradesh. In contrast, coverage was owest in the North East region. Less than 6 per cent and 8 per cent of the popuation of Assam and Meghaaya had been issued Aadhaar numbers. DISTRICT-WISE PERCENTAGE OF POPULATION HAVING AADHAAR NUMBERS IN INDIA Haryana Keraa Andhra Pradesh Jharkhand Maharashtra Madhya Pradesh Uttarakhand Chhattisgarh Karnataka Tami Nadu Gujarat Rajasthan Odisha Uttar Pradesh Bihar Jammu and Kashmir Nagaand Arunacha Pradesh Mizoram Meghaaya Coverage in the highest and owest districts Percentage of popuation having an Aadhaar number: State average Source: UIDAI Pubic Data Porta. Avaiabe onine at: Data for 2 January, Last accessed on 20 January, Seeding The process of inking a database of individuas to their Aadhaar numbers is known as seeding. Government schemes using DBT report a steady increase in the proportion of beneficiaries inked to their Aadhaar numbers, from 57 per cent in December 2015 to 78 per cent as of December LPG subsidies and MGNREGS reported the highest proportions of beneficiaries seeded, at 82 per cent and 79 per cent, respectivey. However, Aadhaar seeding was ower in NSAP, with ony 51 per cent beneficiaries seeded. Simiary, ony 58 per cent of Jan Dhan accounts had been inked to an Aadhaar number. AADHAAR SEEDING IS AT AROUND 5 FOR JAN DHAN AND NSAP PENSIONS DBT for LPG MGNREGS PMJDY NSAP Percentage of beneficiaries inked with Aadhaar Source: UIDAI Pubic Data Porta. Avaiabe onine at: Last accessed on 20 January, ACCOUNTABILITY INITIATIVE, INDIA

7 Usage There are two main channes of Aadhaar usage: a) Aadhaar Payment Bridge (APB) and b) Aadhaar Enabed Payment Services (AEPS). Whist the APB aows government agencies to transfer funds to citizens using their Aadhaar number aone such as for DBT, the AEPS aows for biometric authentication of transactions. For exampe, AEPS is used by micro- ATMs for banking services and point-of-sae machines for eectronic Pubic Distribution Systems (PDS). Of the tota funds transferred cumuativey through DBT in FY ti December 2016, 30 per cent was transferred through APB a margina increase from 27 per cent in FY A scheme-wise break-up reveas that 71 per cent of DBT funds for LPG subsidies used APB in FY ti December. In contrast, ony 22 per cent of DBT funds in MGNREGS and 20 per cent in NSAP used APB in the same period. AEPS requests for micro-atm usage stood at 95 miion transactions in FY The number of transactions from Apri to December 2016 increased sharpy to 203 miion, a growth of 115 per cent in just three quarters of the financia year. MOBILE Mobie technoogy hods the potentia of giving a arge number of Indians access to banking services. According to the Economic Survey , in order to enabe citizens to access their DBT, there is a need to strengthen the ink between banks and beneficiaries. It accordingy caed for greater use of mobie payments technoogy to everage India s deep mobie penetration. Coverage Coverage of mobies can be measured by per-capita number of wireess subscriptions, aso caed as tee-density. Tee-density stood at 82 per cent for India in September However, there were sharp state-wise variations. The reativey prosperous regions of Punjab, Tami Nadu, Himacha Pradesh and Dehi had a tee-density exceeding 100 per cent. In contrast, tee-density was ow in Bihar and Jharkhand at 55 per cent, and in Uttar Pradesh and Uttarakhand at 66 per cent. When rura areas aone are considered, tee-density is sharpy ower. The a-india rura tee-density was 51 per cent as of September Corresponding figures for Bihar, Madhya Pradesh and Uttar Pradesh stood at 36 per cent, 39 per cent and 42 per cent, respectivey. TELE-DENSITY IN RURAL BIHAR CIRCLE WAS ONLY 36% Himacha Pradesh Tami Nadu Karnataka Gujarat Maharashtra North East Rajasthan West Benga Haryana Jammu and Kashmir Odisha Uttar Pradesh Assam Madhya Pradesh Bihar Tee-density Rura tee-density Source: TRAI Performance Indicators Juy to September Avaiabe onine at: Reports_Ending_Sep_ pdf. Last accessed on 23 January, Note: Teecom circe of Tami Nadu incudes Puducherry; Gujarat incudes Daman, Diu, Dadra and Nagar Havei; Maharashtra incudes Goa, West Benga incudes Sikkim, Andaman and Nicobar Isands, Uttar Pradesh incudes Uttarakhand, Madhya Pradesh incudes Chhattisgarh, Bihar incudes Jharkhand. Areas of Ghaziabad and Noida are excuded from Uttar Pradesh circe, and areas of Panchkua, Faridabad and Gurgaon are excuded from Haryana circie. BUDGET BRIEFS, DBT, GOI , VOL9/ISSUE 6 7

8 Usage A tota of 68 crore mobie transactions were reported between January-November 2016, a sharp 152 per cent increase over the corresponding period in On average, transactions in 2016 ti October were worth `12,680. This was 41 per cent more than in Mobie requests for transfer of funds between banks accounted for 10 per cent of overa retai fund transfer requests in FY up to November, compared to 7 per cent in FY During the same period, mobie banking as a proportion of the vaue of funds transferred between banks increased from 1.8 per cent to 2.8 per cent. MOBILE TRANSACTIONS HAVE INCREASED MORE THAN SIX-FOLD SINCE AUGUST 2014, AND THEIR VALUE HAS QUADRUPLED ,969 6, , , ,871 8,665 8, , , , ,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Ju Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Ju Aug Sep Oct Nov Vaue per transaction )( No. of transactions (Miion) Source: RBI Monthy Buetin, Payment System Indicators. Avaiabe onine at: Last accessed on 20 January, Mobie banking is meant to provide citizens an aternative means of accessing financia services. ATM usage is a usefu comparison to assess the growth of mobie transactions. The vaue of mobie transactions stood at 29 per cent of ATM usage in FY up to November, up from 9 per cent in FY MOBILE BANKING IS OVER A QUARTER OF ATM USAGE 3 2 Percentage of mobie banking in inter-bank transfer Percentage of mobie banking as compared to ATM (excuding inter-bank transfer) FY (ti December) FY Source: RBI Monthy Buetin, Payment System Indicators. Avaiabe onine at: Last accessed on 20 January, ACCOUNTABILITY INITIATIVE, INDIA