India sets up architecture for electronic cash transfer, major technology adoption in the offing [Direct Cash Subsidies]


India sets up architecture for electronic cash transfer, major technology adoption in the offing [Direct Cash Subsidies]

The Indian government on Friday announced a major move to port all government cash transfers to an electronic mode. The move, to cut wastage, duplication and leakages and enhance efficiency, is part of the governments long pending plan to implement direct cash subsidies in the country.

According to a press statement

Prime Minister has given a major push to transfer individual benefits from the Government directly into the bank accounts of beneficiaries. This is to be done in a fast-track, accelerated mode to be achieved in a time bound manner. The idea is to move to a completely electronic Cash Transfer System for the entire population.

Architecture for Cash Transfers

National Ministerial Committee – under the Prime Minister with membership of all concerned ministers including Finance, IT, Planning Commission, UIDAI and others.

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 – to work on and finalise all operational and implementation details relating to the design and operation of the transfer system. T

 Technology Committee –to focus on the technology, architecture and IT issues.

Financial Inclusion Committee – to focus on ensuring Universal Access to Banking.

Electronic Benefit Transfer (EBT) Committees – to work out the details relating to EBT such as data bases, transfer rules, controls, audits, etc.

The milestones and timeliness for each of these Committees will be clearly laid down, the government has said. According to the government, with the rollout of Aadhaar, now covering 20 crore people and growing to 60 crores, and with the National Population Register covering the other half, it is possible to move to a system of transferring cash benefits directly to the poor.

Cash Transfer System can be used for transferring cash benefits such as NREGA Wages, Scholarships, Pensions, Income support of other types and Health Benefits.


Electronic Benefit Transfer (EBT) has already begun in many cases. The Government and RBI have issued Guidelines to Banks for implementation of EBT. Pilots are under implementation, including in AP, Chhattisgarh, Punjab, Rajasthan, TN, WB, Karnataka, Puducherry and Sikkim.

So many committees and sub committees to work together?

Leave your thought here