Millions of free smartphones for the poor will have free Internet, to be Aadhaar enabled

More details about millions of free phones that the government is planning to distribute to the poor next year are emerging. On Monday, a newspaper report said that the phones will be Aadhaar enabled and tied to the government’s direct cash transfer scheme. [Source]

Aadhaar is the online,verifiable, unique identification number issued by the Government to all Indians. Under the direct cash transfer scheme, the government wants to transfer money directly to the bank accounts of beneficiaries of various government schemes.

The government’s free phone scheme, called “Har hath mein phone,” which means a phone in every hand, will cost the exchequer Rs 7,000 crore (~$1.28 billion) and will come with free Internet, 100 hours of talk time and a “low-rental” plan.

The government had earlier announced that all departments which transfer benefits to individual citizen must quickly move to an Aadhaar based payment platform and start implementing direct cash transfers to beneficiaries from 2013.

To be eligible for the smartphone, one must have an Aadhaar number and an account in a bank or a post office [source].

An example of Direct Cash Transfer

The scheme will be partly funded by the money collected from Telecom operators under the Universal Service Obligation (USO) agreement.

Once the direct cash transfer is implemented, subsidies and money from the government under various schemes will go directly to the beneficiaries bank account using their unique identification number issued by the government.

Starting January, 51 districts will move to the new cash transfer scheme. From April 2013, 18 states will move to the new system.