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Follow UsThe UPA government is serious about social inclusion. Accordingly,
finance minister
Mukherjee has announced a number of initiatives that would result
in transparent and efficient ways of reaching out to the poor. Most
such initiatives will have to leverage technology to achieve those
goals. The FM himself is explicit about the role of technology in many
such initiatives and has been generous to such programs that aim at
harnessing technology aimed at enhancing inclusion.
For example, in his Budget speech, the FM announced augmentation of Rs
100 crore each in allocations for the Financial Inclusion Fund and the
Financial Inclusion Technology Fund under
The minister also allocated a further Rs 1900 crore to the
ID Authority which has become the de facto platform for the
government to drive financial inclusion. Further, he has announced
setting up of a Technology Advisory Group for Unique Projects (TAGUP)
for all unique projects for the government.
An effective tax administration and financial governance system calls
for creation of IT projects which are reliable, secure and efficient.
IT projects like Tax Information Network, New Pension Scheme, National
Treasury Management Agency, Expenditure Information Network,
and Service Tax, are in different stages of roll out. To look into
various technological and systemic issues, I propose to set up a
Technology Advisory Group for Unique Projects under the Chairmanship of
Shri
Nilekani, said the minister in his budget speech.
All these mean the government is now proactive in promoting the usage
of technology in its
areas in general and in inclusion initiatives in particular. But
there are many hidden opportunities as well for the tech community.
The Other Opportunity
In the Economic Survey released a day earlier, the government talks of
a changed approach in public distribution system. In essence, it tries
to ensure that the subsidies reach the right recipient rather than
giving it to the channels. It says that the subsidy should be
handed over directly to the households, instead of giving it to the PDS
store-keeper in the form of cheap grain and then have him deliver it to
the needy households. It also outlines that the household should
be given the freedom to choose which store it buys the food from.
The Economic Survey talks of a unique coupon system wherein households
would be handed over coupons which can be used at PDS stores in lieu of
money when buying the items. Under this new system no grain will be
given at a subsidized rate to the PDS stores and they will be free to
charge the market price when selling grain irrespective of who the
customer is. The only change is that the PDS stores are now allowed to
accept these coupons which they can then take to the local bank and
change to money, and the banks, in turn, can go to the government and
have them changed to money. Further, households that get these coupons
should be allowed to go to any PDS store of their choice. Since BPL
buyers can go to any store with their coupons, they will be able to
boycott stores that try to sell them poor-quality grain or mix gravel
with the grain.
This is implementable but requires a robust platform to ensure that the
coupons reach the right people and the exchange of coupons for money is
hassle-free. That requires a lot of technology at the back-end. The
Economic Survey acknowledges that for the full success of this coupons
system what is needed is an effective method of identifying the poor.
It singles out the Unique Identification (UID) to help in this process.
Since the Unique Identification will not, in itself, have information
on peoples poverty status, these kinds of tailoring of information
will need to be added on to the UID System. Further, since households
do move in and out of BPL status there has to be provision for updating
on information, acknowledges the document.
The idea is to ultimately remove the need to have separate
outlets. Food will be available on the open market and poor people
will get a monthly ration of coupons which they can take anywhere and
buy food.
It is an ambitious aim. But with technology, it may now be possible to
achieve it faster than what one could think of just a few years back.
Is the tech industry ready?
Financial Inclusion: The Tech Opportunity
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