WORKSHOP on ENHANCING DELIVERY OF PAYMENTS through DIRECT BENEFIT TRANSFERS Ministry of Rural Development Govt of India

Outline of Presentation Brief of schemes : NSAP, MGNREGA Basic data Work done- e FMS in MGNREGA Road ahead Issues

launched on 15 th Aug. 1995, in pursuance to Article 41 of the Constitution  to ensure national minimum standards of social assistance for vulnerable groups (old, sick & disabled)  in addition to the benefits that States are currently providing or might provide in future  transferred to State Plan in NATIONAL SOCIAL ASSISTANCE PROGRAMME [NSAP]

NSAP- Schemes, eligibility & Assistance SchemeEligibilityCentral Assistance IGN Old Age PensionBPL, 60 yrs & aboveRs 200/-pm upto 79 yrs Rs 500/-pm above IGN Widow PensionBPL widows (40-79 yrs) Rs 300/- pm upto 79 yrs Rs 500/- pm above IGN Disability PensionBPL with severe/ multiple disability ( yrs) - same- Note:1) Apart from Central Assistance, States also provide some addtl. amounts 2) There are 2 more schemes: Annapurna & National Family Benefit Scheme

Funding Pattern  NSAP was introduced as a Centrally Sponsored Scheme in 1995 but was transferred to State Plan in  Funds are released as Additional Central Assistance (ACA) to the States by the Ministry of Finance  For UTs, funds are released by Ministry of Home Affairs  Funds are released as a combined allocation for all the schemes together  States recommended to contribute at least an equal amount  State contribution varies from nil to Rs. 800/-

For enhancement of livelihood security of rural households Guarantees 100 days of wage employment to a family in every financial year Schemes are prepared by State Govts Execution by Panchayats & Line Departments Wages: calculated on piece rate basis to be paid through Bank/ Post Office Accounts must be paid within 15 days of work Mahatma Gandhi NREGA

Basic Statistics ParameterMGNREGANSAP Allocation ( ) (Rs in Cr) Rs 33,000 crRs 8,450 cr. Number of BeneficiariesAround 8.08 cr (database digitised) 2.6 cr (database partially digitised) Mode of disbursement --Post office Accounts --Cooperative Bank A/cs --Commercial Bank A/cs --Others 4.43 cr (55%) 1.04 cr (13%) 2.61 cr (32%) 18 lakhs 98 lakhs (banks) 32 lakhs (MO)

Initiative taken to streamline wage disbursement in MGNREGA- “e FMS”

Present practice Currently, at most places, wage lists along with cheques are sent to the banks/ post offices Physical movement & cheque clearance delays wage payment Large number of accounts required to be maintained Large amounts blocked Uneven balances with different entities Data entry an issue

SFTP server NREGAsoft -Data entry of muster rolls, material & admn. Exp. Bills -Generation of wage list, material list & admn exp. list Bank having Nodal agency account CEPT Mysore Bank having Nodal agency account Bank 1 Bank 2 Bank 3 ….. HO 1 A/C HO 2 A/C HO 3 A/C ….. 1 st signatory (panchayat secy/ acntnt generates FTO & digitally signs 2 nd signatory (Pradhan/ BDO approves FTO, digitally signs A/cs of workers in HO /SO1 HO /SO2 HO /SO3 ….. Accounts of workers in Wage List FTO Integration of response in NREGASoft Response e-FMS work flow

1.State to open an e-FMS account at state/ district Level in a commercial bank. (nodal agency account). 2.Identify various payment authorities & 2 signatories for each payment authority. 3.Provide Digital signature certificate(DSC) to each signatory. 4.Verify accounts of workers 5.Generate wage list and freeze all transactions of NREGAsoft related to account and payment of worker 6.Generate FTO to be digitally signed by 1 st signatory (Panchayat Secretary/Accountant) & then by 2 nd signatory(Gram Pradhan/BDO) 7.System checks for available fund in nodal agency account and rules imposed on various types of transaction. Steps in e FMS

8.Share the FTO with bank holding nodal agency account 9.Bank will process these transactions in FTOs and credit accounts of workers 10.Intrabank trasactions done by using CBS system of the bank & interbank transactions done by using NEFT/RECS payment gateway of RBI. 11.Bank gives response on fate of transactions & account (nodal agency account) statement daily to e-FMS 12.Response is integrated back into wage list & muster rolls of NREGASoft. 13.Failed transactions are dealt for revised account information & generation of revised FTO 14.Reconciliation of bank account statement with NREGASoft maintained account.

Progress of e-FMS States No. of Payment locations No. of workers’ accounts verified & frozen No. of DSCs enrolled No. of FTOs No. of transaction s Amount credited (in Rs.) Karnataka Orissa Gujarat Rajasthan Tripura Total ,24,37,101

Integration with financial institutions Integration with banks –State Bank of India –State Bank of Bikaner and Jaipur –State Bank of Mysore –Union Bank of India –Bank of Baroda –Oriental Bank of Commerce –Axis Bank –Punjab National Bank (in process) –Kotak Mahendra (in process) Integration with post offices –Successfully Piloted in Gujarat

Issues for resolution 1.Accounts in Post offices 2.Accounts in non CBS banks 3.Inadequate outreach of Banks/ BCs

Road Ahead - NSAP In select districts:  Pension to be credited to beneficiaries’ accounts from 01/01/2013  Bank Accounts of all beneficiaries to be opened  Data base to be updated incorporating bank account details and Aadhaar Number  Amounts to be transferred by disbursing authority to designated lead bank along with scroll using NSAP-MIS  Administrative expenses upto 3% of funds can be used for expenses on disbursement

Road ahead- MGNREGA In 5 pilot states: 1.All wage payments thru Commercial banks (March 2013) 2.Material bills (June 2013) 3.Admin Expenses ( June 2013) 4.Include Postal & Cooperative payments (Sept ‘13) In other states (except NE) 1.Expand Horizontally- cover all wage payments thru Commercial banks ( March 2014) 2.Material Bills (June 2014) 3.Admin expenses (June 2014) SEED IN AADHAAR NUMBERS

Thank you

Existing Activity flow

Re-engineered Activity flow