The government has 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.

It means that people who get government pensions, subsidies and money from the government under various schemes will now get the money to their bank account directly once the respective department authenticates the beneficiary using their unique identification number issued by the government.

The government said that it will identify schemes to move to this system and prepare a roadmap so that the rollout is smooth. Starting January, 51 districts will move to the new cash transfer scheme. From April 2013, 18 states will move to the new system. The Unique Identification Authority of India which issues the Aadhaar number to citizen, will set up a dedicated cell of technical experts.

An example of how direct cash transfer will work

The government has been wanting to move to the direct cash transfer system for a long time now. However, there has been criticism from various corners. Under the direct cash transfer regime, the government will progressively move out of providing services and substances (like food grains) and transfer the money to the beneficiary who will then have to buy them in the open market. Critics argue that this will lead to the collapse of government delivery mechanisms like the public distribution system and will leave the poor with less than their due. Proponents argue that this will cut inefficiencies and losses.

UIDAI launches data portal

The UIDAI has also launched its public data portal. The authority has released five data sets which include data sets relating to Aadhaar authentication, enrollment and some demographics. Limited programmatic acces to the data sets is also provided for researchers. In September, the government had also launched data.gov.in, a transparency portal like the American data transparency site (data.gov)The site is powered by Open Government Platform (OGPL), a joint product from India and United States for data transparency and citizen engagement.