Delivery of Developmental Programmes in India by Jandhan-aadhar-Mobile Service

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Table of Contents

  • Executive Summary
  • Introductions
  • The Three Phases of JAM Trinity
  • Jan Dhan (PMJDY)
  • Review of the Current Policy
  • Impact of JAM Framework
  • Problems in Implementation of Jam
  • Recommendations
  • Inclusion of Ineligible Beneficiaries
    Exclusion of Eligible Beneficiaries
  • Inability to Access Programmes
  • Issues related to Financial Inclusion, Mobile and Aadhar
    Issues Related to Migration
    Issues Related to the Physically Disadvantaged or Chronically Ill

Executive Summary

This paper looks at Jandhan-Aadhar-Mobile (JAM) mode of service delivery adopted by various states of the Government of India for the delivery of developmental programmes with a view to identify the problems within and potential solutions. It highlights how JAM mode of delivery has resulted in substantial savings to the tune of Rs. 90,000 Crores until March 2018. This mode has drastically reduced the inclusion errors due to duplicates, ghost beneficiaries, dead beneficiaries, and eliminated diversion related leakages wherever feasible. On the other hand, it points out that these savings not only reflect desired/assumed savings but also reflect forgone benefits to citizens due to exclusion of eligible beneficiaries or foregone benefits to enrolled beneficiaries who are not able to access the schemes due to lack of Aadhar, lack of immediate access to bank accounts, mobile network or due to physical disadvantage, migration etc.

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After careful examination and brainstorming the issues mentioned, this paper makes the following policy recommedations:

  • Exploring the inclusionary potential of Aadhar as a Governance instrument rather than the current exclusionary positioning by inclusion of beneficiaries as detailed below:
  • Seeding databases of various assets like Land, Vehicle, House etc., with Aadhar and thereby determining the eligibility of beneficiaries by the Government departments and auto enrollment of beneficiaries for various schemes and programmes. The same exercise can be used to exclude ineligible beneficiaries.
  • Calculating ‘JAM/BAPU Preparedness Indices’ at field level rather than at state level to determine the potential efficacy of JAM based mode of service delivery
  • Enabling beneficiaries to draw services regardless of their physical location in the country by working out appropriate compensation mechanisms between states or at the very least promoting states to enable receiving benefits anywhere within the state
  • Empowering physically disadvantaged/chronically ill beneficiaries to nominate a person for receiving their services/goods so that they need not go to the service delivery point, or alternately, provide for door-step delivery to help such people
  • Recording reasons for non-access of schemes at the field level to determine root causes and determine potential solutions

Transitioning to ‘JAM based complete cash transfer’ only after ascertaining local market thickness (number of sellers of goods) and after promoting customized block/mandal based service delivery.

To bring out a robust mechanism to fight out the ‘Cyber Crime’ – in order to tackle this both the ‘Cyber Laws’ and ‘Cyber Policies’ are not yet equipped. Once the financial infrastructure goes digital, it needs strong digital security as it becomes intangible.


When India gained independence 70 years ago, around 80 % of the population was poor and suffering from divisions based on caste, religion, language and culture. The Government started many poverty alleviation programs focusing on social security and livelihood assistance and dedicated many resources. These programmes include Public Distribution System, Pensions, Agricultural Subsidies, Transport, Fuel Subsidies, etc. These programmes were estimated to cost Rs. 3.77 Lakh Crores or 4.24% of 2011-12 GDP to the Government of India (GoI) every year, as stated in the Economic Survey 2014-15. But the whole system was plagued with inefficiencies and leakages leading to rampant corruption. The benefits meant for the poor landed in the pockets of the middlemen and corrupt officials.

The service delivery of these programmes have the following issues which lead to inefficiencies and leakages:

  • Inclusion Errors
  • Inclusion of Ineligible Beneficiaries
  • Inclusion of Duplicates amongst the Existing Beneficiaries
  • Inclusion of Ghost Beneficiaries (Non Existent/Dead)
  • Diversion to Non-Beneficiaries
  • Exclusion Errors
  • Exclusion of Eligible Beneficiaries
  • Low Quality Goods (PDS Items)

In order to maximize the value of each rupee spent, and to plug leakages, GOI decided to introduce JAM Trinity. It was first announced on 15 August 2014 by the Prime Minister through his Independence day speech and was formally launched on 28th August 2014. The main focus was Direct Benefit Transfer as it could effectively plug leakages in subsidy delivery which was based on a robust authentication mechanism – access to a Bank Account with an ability to access funds directly by the beneficiary with Mobile serving communication/authentication purposes

The Three Phases of JAM Trinity

Jan Dhan (PMJDY)

It is a National Mission on Financial Inclusion encompassing an integrated approach to bring about comprehensive financial inclusion of all the households in the country with a purpose to introduce the concept of Direct Benefits Transfer (DBT) scheme of the Union Government.


A unique identification number that captures all the details, including demographic and biometric information, of every resident Indian.


The third aspect of JAM is to consolidate the aforementioned initiatives in a digital architecture through mobile so as to make the financial services accessible, while giving real time information to the beneficiary.

JAM is proving to be an important tool to prevent leakages, make financial delivery mechanisms robust and improve the efficiency leading to realization of goals of all social welfare schemes in a time bound manner, and maximize the value of each rupee spent. However, there are still gaps in the implementation of the JAM mechanism due to the following issues:

  • Exclusion Errors – Exclusion of Eligible Beneficiaries
  • Inclusion of Ineligible beneficiaries.
  • Inability to access the programs due to mobility issues.
  • Lack of access to Banking Services in proximity despite having access to Bank Account

Review of the Current Policy

Impact of JAM Framework

The Economic Survey of 2014-15 proposed the Jan Dhan – Aadhar – Mobile (JAM) trinity framework for addressing the problems in delivery of various developmental programs for seamless linking of the Trinity so that the direct income support to the poor may finally be possible. Accordingly, the scheme has been launched on 28th Auust 2014.

As presented in Direct Benefit Transfer Website, the savings by using Aadhar until March 2018 stands at Rs. 90,012 Crores. The details are as given below :

  • S. No. Ministry/ Department Scheme Estimated Savings / Benefits
  • (in Rs. Crore) Remarks
  • Cumulative upto March 2017 Total during 2017-18 Cumulative upto March 2018

Petroleum & Natural Gas PAHAL 29,769 12,506 42,275 3.79 crore duplicate, fake/ non-existent, inactive LPG connections eliminated. In addition 2.22 crore consumers stopped claiming subsidy (including 1.04 crore ‘Give It Up’ consumers).

Food & Public Distribution PDS 14,000 15,708 29,708 Deletion of 2.75 crore duplicate and fake/ non-existent Ration Cards (including some due to migration, death etc.)

Rural Development MGNREGS 11,741 4,332 16,073 Based on field studies, Ministry has estimated 10% savings on wages on account of deletion of duplicate, fake/ non-existent, ineligible beneficiaries.

NSAP 399 39.6 438.6 Deletion of 2.2 lakh duplicate, fake/ non-existent, ineligible beneficiaries (including some due to migration, death etc.).

Minority Affairs Scholarship Schemes – 159.15 159.15 Deletion of 5.26 lakh duplicate, fake/ non-existent beneficiaries.

Social Justice & Empowerment Scholarship Schemes – 238.27 238.27 Deletion of 1.79 lakh duplicate, fake/ non-existent beneficiaries.

Others Others 1,120 0.69 1,120.69 –

Total 57,029 32,983.71 90,012.71

These statistics are quite encouraging and showed the way to go for plugging leakages in Service Delivery.

However, this does not throw light on various problems that have crept through JAM based service delivery. The impact of this framework (if completely adopted) with respect to problems cited above in service delivery of developmental programmes is as follows:

Problems in Implementation of Jam

Inclusion Errors – Inclusion of Ineligible Beneficiaries: JAM being dependent on identification of the beneficiary through Aadhar is venerable to non eligible beneficiary getting the benefit as Aadhar only identifies the person; not whether he is eligible to get that benefit. Hence there could be cases where a person is declared as a beneficiary on money or political consideration. Though the age of beneficiary can be verified through Aadhar authentication, in many cases, for senior citizens, their age as recorded in Aadhar is not entirely reliable. Therefore JAM has not been fully able to prevent leakages on this account.

Diversion to Non-Beneficiaries: JAM framework would have reduced this aspect also, as the biometrics is verified during the service delivery to some extent. However, UIDAI also admits that the Aadhaar (UID) database has never been verified or audited. Hence, there is scope for creating benami bank accounts and scaling benami bank transactions. This means the actual beneficiary can be taken for a ride or grants can be routed to non-existing beneficiaries. Feed back from the ground is that vested interests use biometric jugglery like using combination of persons, biometric masks, biometric modifications, and other ingenious methods to maximize enrolment. More than 34,000 operators who tried to make fake Aadhaar Cards have been blacklisted. In Ahmedabad, Gujarat, during the raid lead by the enforcement department regarding GST, it was found that a person holding Adhaar cards and PAN cards of around 300 beneficiaries was operating bank accounts by using ID-passwords of the bank accounts. This will not only lead to corruption in the system but also threatens to compromise the country’s banking system. Inaccessibility of bank accounts and banking illiteracy among the rural poor is one of the issues to be tackled.

Exclusion Errors – Exclusion of Eligible Beneficiaries: JAM framework does not address the aspect of exclusion of eligible beneficiaries. If it has made any impact, JAM framework only would have increased the exclusion of eligible beneficiaries due to lack of Aadhar, Bank Account or Access to Bank Account, Mobile, Access to Mobile Signal etc. Many places in the country lack Banking, Mobile and Internet services. Only 27% of the villages have bank within 5 kilometers. In 4 states namely, Nagaland (48.9), Mizoram (38.0), Meghalaya (2.9), and Assam (2.4), where less than 50% Aadhaar holders were there, leads to exclusion of eligible beneficiaries. The Kenyan Banking Correspondent to population ratio is 1:172. By contrast, India’s average is 1:6630 – less than 3 per cent of the Kenyan level. Though the Mobile penetration is good in India, a lot need to be done in states of Bihar (54%) and Assam (56%). Also, there are areas across the country where these services are poor or non-existent, and these are the areas where the poorest of the poor generally reside.

Lack of Literacy, especially financial literacy: 26% of the population in the country is illiterate. Females are the most vulnerable due to gender issues, which is further compounded by the fact that 35% (in some states 45%)of them are still illiterate. Efforts have been made by the government to create awareness but the same are giving desired results. Which makes them vulnerable to manipulation by unscrupulous agents, and corrupt officials.

Inability to Access Programmes – This is a new problem created by JAM framework, wherein eligible beneficiaries, who are in the list of beneficiaries, are not able to access programmes, due to:

  • Failure of biometrics
  • Failure of ePOS machines
  • Mobile related issues such as
  • No ownership of Mobile
  • Failure of mobile signal
  • Inability to use Mobile

Inability to Access Programmes in Person due to physical disability, migration or illness etc. For instance, if a neighbor or a family member was drawing PDS for an elderly unhealthy person in a pre-JAM era, such possibilities are eliminated due to mandatory nature of biometrics. Therefore, the elderly unhealthy person must go to the PDS shop. It may be noted these concerns are so substantial that, even in technologically advanced administrative apparatus like Government of Andhra Pradesh, pensions are distributed in cash at doorstep.

Low Quality Items (PDS): JAM Framework does not in anyway address the issue of the quality and diversion of goods delivered in PDS. Though the beneficiaries have been linked with JAM and POS machines are being installed at the distribution points, but till the grant is being extended in Kind the scope of leakages remains.

Savings or Foregone Benefits:

It is in this context that the Savings of Rs. 90,012 Crores should be assessed. These savings will include the following components:

  • Savings from decreased Inclusion Errors – Duplicates
  • Savings from decreased Inclusion Errors – Dead/NonExistent
  • Savings from decreased Diversion to Non Beneficiaries
  • Foregone Benefits to Citizens from increased Exclusion Errors – Eligible Beneficiaries
  • Foregone Benefits to Citizens from Inability to Access Programmes

However, the remarks column indicates that all savings are being accounted for as savings due to reduction in inclusion errors and diversion. The reality is never so one-sided. Therefore, it is imperative to get an accurate estimate of different components of the above to assess the true extent of Savings and Foregone Benefits to Citizens due to the adoption of JAM framework.


Inclusion of Ineligible Beneficiaries

So far, Aadhar is only serving as an identification authentication system. It is not an eligibility authentication system. An eligibility database is to be prepared by pooling up the available database, such as Socio Economic Caste census, the data of sale transactions of land, house or motor vehicles, Aadhar linked bank accounts, PAN card data. If any individual is transacting or owning an asset which is more than a certain value, she/he shall be made ineligible to access government subsidies. In order to save the database from redundancy, it shall be updated on real time base. Further, Socio Economic Caste Census data shall be updated regularly to serve as a baseline in sectors where data does not exist. The population which is not covered by any of the said transaction and not brought into the master database shall be surveyed and national eligible beneficiary database shall be prepared. By using this system linked with Aadhar, any ineligible beneficiary can be successfully eliminated from the system.

Exclusion of Eligible Beneficiaries

Similarly, with the same Aadhar linking, eligible beneficiaries who could not be enrolled for these developmental programmes can be enrolled taking suo moto action. Till date, Aadhar has always been presented strictly as a Governance instrument, mainly for excluding ineligible beneficiaries. If this reform for suo moto inclusion was carried out, it will significantly change the nature of Aadhar, and make people look at it as an inclusionary instrument as well.

Further, analytics can be undertaken to see if there are hotspots where there is high level of exclusion. Depending on the issue at hand, necessary measures like increasing awareness programmes, increasing mobile signal strength, increasing banking infrastructure or presence of banking correspondent can be undertaken to decrease exclusion of eligible beneficiaries. Extra care shall be taken to include highly vulnerable HHs in to the system, such as landless rural HHs, women-headed households, families without the head of families in the age group of 21 to 59, families with differently abled persons.

Inability to Access Programmes

Issues related to Financial Inclusion, Mobile and Aadhar

There are various indices proposed in Economic Survey of 2015-16 like JAM Preparedness Index and BAPU Preparedness Index. It may be noted that the Index for a state as a whole will not be reflective of Index in poor regions. When the programmes are limited to people in poverty, it is necessary to ensure that the corresponding index is calculated for regions where poverty is high. For instance, JAM Index or BAPU Index for Andhra Pradesh does not in anyway reflect JAM/BAPU preparedness in tribal areas, where the majority of the people are poor. In urban areas, Madhya Pradesh and Chattisgarh show preparedness scores of about 70% while Bihar and Maharashtra, have scores of only about 25%. DBT rural preparedness has an average score of 3% and a maximum of just 5%(Haryana). Therefore, the decision to implement JAM or a quasi-JAM mode should depend on block/mandal level conditions and not a district/state as a whole.

The last-mile financial connectivity (by developing the BC and mobile money space) should be improved. States should be incentivized by sharing fiscal savings from DBT. Centre can invest in last-mile financial inclusion via further improving BC networks and promoting the spread of mobile money. Regulations governing the remuneration of BCs need to be reviewed to ensure that commission rates are sufficient to encourage BCs to remain active.

India’s Postal Network can also be linked to the Aadhaar-related benefit schemes. According to the Economic Survey, Post Offices can seamlessly fit into the Aadhaar linked benefits-transfer architecture by applying for an IFSC code, which will allow them to start seeding Aadhaar linked accounts.

Issues Related to Migration

With linkage of services to Aadhar, it is completely possible for the state Governments to work together to allow beneficiaries to claim their benefits even when they migrate. A financial mechanism may have to be worked out to account for benefits given to beneficiaries under a different state programme.

At the very least, states should be encouraged to institute service delivery across the state, regardless of where the beneficiary is registered in.

Issues Related to the Physically Disadvantaged or Chronically Ill

It is noteworthy that there are significant number of physically disadvantaged/chronically ill people amongst the most vulnerable sections of society who are beneficiaries of various programmes. Regardless of the mode of service delivery adopted by the Governments, it has to be ensured that the most vulnerable are never excluded.

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