Manmohan Singh-led government proposes second wave of FDI reforms
Manmohan Singh-led government proposes second wave of FDI reformsReuters

In a bid to cut down the bureaucracy drastically and reduce red-tapism that hinders the timely transferring of cash benefits to the poor, Prime Minister Manmohan Singh on Friday set up architecture to implement electronic Cash Transfer System at the earliest.

Transferring cash directly to the beneficiaries' bank accounts based on Aadhaar is in place already but is being tried in pilots on a small scale. The encouraging results of innovative cash rendering system have supposedly motivated the Prime Minister to expand the operation.

Here is the flow chart of architecture for cash transfers:

-The architecture for cash transfers will be monitored by National Ministerial Committee under the PM's observation. All the concerned ministers of Finance, IT, Social Justice, HRD, Minorities, Labour, Health, Food, P&NG, Fertilizers, Planning Commission, UIDAI will be members of this high-profile panel.

- National Executive Committee - with the Secretaries of all concerned Ministries as members. This committee would meet frequently to coordinate action, ensure adherence to time lines and sort out hitches in the program as it is rolled out.

- Implementation Mission and Committees - main object is to work on and finalise all operational and implementation details relating to the design and operation of the transfer system. This committee will have the following sub-committees to have a smooth roll-out:

(a) Cash Transfer Mission - Technology Committee - to focus on the technology, architecture and IT issues.

(b) Cash Transfer Mission - Financial Inclusion Committee - to focus on ensuring Universal Access to Banking and achieving complete Financial Inclusion.

(c) Cash Transfer Mission - Electronic Benefit Transfer (EBT) Committees - to work out the details relating to EBT such as data bases, transfer rules, controls, audits, etc. There would be one for each Ministry which is engaging in benefit transfers.

Commenting on the government's move to curb the intervention of the different level of bureaucracy in channelizing cash benefits for poor and needy, the Prime Minister's Office said that this programme will have a momentous impact on several other social programmes aimed at benefiting the poor.

"The milestones and timeliness for each of these Committees will be clearly laid down. The National Executive Committee will monitor progress and ensure timely roll-out.  This scheme will have a momentous impact on the government's various social programmes and help million of beneficiaries," said PMO in a release.

A Cash Transfer System can be used for transferring cash benefits such as NREGA Wages, Scholarships, Pensions, income support of other types and health benefits. This system is expected to improve targeting, reduce corruption, eliminate waste, control expenditure and facilitate reforms.