Comments to the Reserve Bank of India on the Report of the Working Group on Digital Lending including Lending through Online Platforms and Mobile Apps dated 18 November 2021
By Aarushi Gupta, Dvara Research
In this ongoing series, we will cover stories of citizens who have been excluded from social protection benefits delivered through the Direct Benefit Transfer (DBT) and Public Distribution Systems (PDS). In collaboration with Gram Vaani a grassroots-level social tech company, we document the stories of beneficiaries who have faced challenges in welfare access in Madhya Pradesh, Bihar, Uttar Pradesh and Tamil Nadu. A working framework to study exclusion in social protection has been employed to analyse these cases, mapping points of exclusion across the four key stages of scheme design and delivery as detailed here.
Errors in beneficiary records and other issues related to database management in the back-end of the Direct Benefit Transfer (DBT) system often lead to failures of credit into beneficiary accounts[1]. These failures may result from clerical errors either during digitization of the said record (as is seen in this case study[2]) or during validation checks when scheme databases are cross-mapped with those in the banking system. Given the large amount of data processed and the degree of inter-agency coordination required in the DBT back-end, the occurrence of certain errors cannot be fully eliminated, however, the mechanisms to resolve the same can be streamlined to ensure minimum burden on the citizen. This case study details the experience of a PM Kisan beneficiary who failed to receive any of the instalments under PM Kisan because somebody else’s bank account number was recorded as part of his scheme application. PM-Kisan, a cash transfer scheme for farmers who own small and medium-sized landholdings, provides Rs. 6,000 per annum which is transferred directly into the beneficiary’s bank accounts in three instalments spread throughout the year.
Mr. Amit Singh[3], a resident of Ghazipur in U.P., has not received any instalment under the scheme since being on-boarded successfully on 19th February 2019. He enrolled himself for PM-Kisan through a local camp set up by a ‘lekhpal’[4] in his village. Not having received any instalment, he approached the nearest Common Services Centre (CSC) to check his payment status online on the PM-Kisan website in August 2019. Beneficiary details accessed through the online portal showed that somebody else’s bank account number had been linked to his record during the application process. The mismatch between Mr. Singh’s Aadhaar number and the incorrect bank account number entered into the database had led to the failure in processing the payment. He then approached the lekhpal to resolve the said issue, who he surmised had inputted his details incorrectly into the system.
The lekhpal asked Mr. Singh to re-submit his Aadhaar card and bank passbook copy and a sum of Rs. 200 to process those documents again. However, for months after, the wrong account number continued to be reflected in his online profile. With the issue unresolved, Mr. Singh approached the Krishi Bhawan in Ghazipur, where he was asked to re-submit all his documents yet again. He also had to spend a total of Rs. 500, in payments to officials at Krishi Bhawan and petrol, but to no avail. After an additional three months, he proceeded to complain at the block-level Agriculture Development Officer in Jakhania in January 2020. For the third time, he was asked to re-submit the same documents with the process costing him an additional Rs. 300. He further stated that every time he approaches any of these officials, he is told that the error correction is pending at the state level where the updation of his record in the Public Financial Management System (PFMS) is yet to be done. The local officials claim that the clarification regarding the error has already been communicated to state-level officials.
Despite the aforesaid efforts, Mr. Singh’s issue continues to remain unresolved even after 16 months after since the time of registration. In this period, he has complained at three different levels, village (lekhpal), block (Agriculture Development Officer), and district (Krishi Bhawan) without any success. The process of resolving this data-entry error has proven to be extremely challenging and costly. He has had to spend a total of Rs. 1,000, without any success at getting the error corrected in the scheme database. Furthermore, this is not the only cost he has borne. Due to the inordinate delays in grievance redressal, he has also effectively foregone a sum of Rs. 10,000, i.e., the total amount he should have received through five instalments that he has been excluded from due to clerical errors.
Mr. Singh is not the only beneficiary whose payments have been delayed due to this multi-tier verification system within the PM-Kisan scheme. Reportedly, a total of 2.18 crore families are awaiting processing or are ‘caught somewhere within the four-stage validation process’ which has been set up to reduce inclusion errors[5]. It must be noted that the validation processes (which have proven to be quite slow-moving) under PM-Kisan were established only after the roll-out of the scheme, when the officials found discrepancies in the beneficiaries’ details. Volunteers at Gram Vaani, who directly engage with citizens facing issues in receipt of government benefits, cited that their team has come across around 20-25 cases in every village related to such errors in the transfer of funds in PM Kisan or National Social Assistance Programme in U.P. They further stated that a total of 13,000 errors related to account/Aadhaar linkage were pending for resolution in a tehsil in Ghazipur alone.
Under the Direct Benefit Transfer system, although the guidelines related to bank transfers have been protocolized, grievance redressal mechanisms, continue to remain not just manual, but also ill-defined. Scheme beneficiaries, when faced with the task of getting an issue resolved, have to navigate a system using a method of trial and error, incurring heavy time and monetary costs in the process. The inadequacies in the grievance redressal system also highlight the failure of the government to implement the principle of citizen centricity in service delivery.
Figure 1: Timeline of Exclusion and Costs Incurred (Case Study 2)
[1] Kodali, S. (2020, April 15). ‘COVID-19, Aadhaar-DBT and a Reminder of the Issues with Transaction Failure Data’. Retrieved from: https://thewire.in/government/covid-19-aadhaar-dbt-and-a-reminder-of-the-issues-with-transaction-failure-data
[2] The back-end errors related to information mismanagement emerge in the enrolment phase and hence the categorisation of this case study under ‘Enrolment’.
[3] The name of the respondent has been changed.
[4] A lekhpal is a clerical government officer who primarily maintains revenue accounts and land records at the village level.
[5] Jebaraj, P. (2019). About 44% of PM-KISAN beneficiaries await payment from Centre. The Hindu. Retrieved from https://www.thehindu.com/news/national/about-44-of-pm-kisan-beneficiaries-await-payment-from-centre/article26593787.ece
