The Government of India runs a number of subsidy and social welfare programmes/schemes in agriculture, health, food and other sectors. The subsidies and benefits, under these programmes/schemes, are delivered to the end beneficiaries in cash or kind. However, various surveys and studies point to significant gaps between funds spent under these programmes/schemes and the outcomes being achieved. In many cases, the gap has been on account of leakages, diversion and supply chain actors replacing inferior quality products as it passes through the supply chain. The existence of a subsidized price and a market price for the end consumer creates some arbitrage opportunity for all the players in the supply chain.
Therefore, there is a need to revamp the delivery model used for delivering the subsidies and welfare benefits. Many of the subsidies and welfare benefits are now being given in cash which is being directly credited to the bank account of the beneficiaries. However, not everything can be converted to cash or be given as unconditional cash benefit. If that is done, there is a likelihood that the end outcome may still not be achieved. Therefore, in addition to Direct Benefit Transfer (DBT), the Government has to find a different mechanism to implement necessary in kind benefit schemes/programmes – possibly through conditional cash transfers (CCTs) that will enable the Government to embrace the efficient financial supply chain as well as use the already established market places where beneficiaries can encash their benefits.
Technology, today, can enable Government to use the existing physical supply and delivery network and create its own virtual supply and delivery network on top of it. Benefit Entitlement Tracking System (BETS), a platform developed by CDFI, makes this possible. BETS enables delivery of various forms of conditional cash transfers programmes / schemes. The platform enables a private or public entity to define one or more benefits for a population segment which can be availed cashlessly at registered outlets upon occurrence of specified events. In BETS, a Government Ministry / Department or any other fund provider (fund provider) can assign funds (benefits) at the individual beneficiary level in the form of pockets. Each pocket is a purpose for which the virtual funds are credited to a beneficiary and can be encashed at registered outlets. Rather than creating its own supply and delivery network, the fund provider can just register existing outlets (delivery points) from the marketplace. A transaction is initiated by the beneficiary / delivery point and after due authentication of the beneficiary and validation of the entitlement / subsidy available to the beneficiary, the transaction is completed. Subsidy amount is directly transferred, thereafter, from the fund providers’ account to the delivery points’ account. Beneficiaries, thus, get the benefits at the market price as the subsidy is credited to the beneficiaries’ account thereby eliminating subsidized price model and enabling beneficiaries’ to buy at the market price.
A pilot project on BETS platform is currently underway in Maharashtra in partnership with Radhakrishna Food Services Private Limited (RFSPL) to deliver benefits (hot cooked meals) to pregnant women, lactating mothers and children below age of 6 years. The BETS platform is being used for enrolment and authentication of beneficiaries, stock management, monitoring of benefits delivered at the Anganwadis, and generating granular reports for reconciliation.