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Between Apr’18 and Oct’18, Labour and Employment Ministry DBT transactions worth more than Rs 2 crore failed

You are reading it here first: Between April 1 and October 31, 2018, 2.87%, or 13,817 of all direct benefit transfers (DBT) transactions — worth more than Rs 2 crore — made to 7 schemes of the Ministry of Labour and Employment failed, RTI documents accessed by MediaNama showed. In several cases, the transactions failed because beneficiaries had inactive Aadhaar numbers or hadn’t linked them to their banks accounts, their bank accounts were blocked or frozen or dormant (that is, no transactions for the last 6 months). At times, the transactions failed because the DBT amount exceeded the credit limit per transaction set on those bank accounts. The RTI was filed by independent researcher Srinivas Kodali.

The percentage of failed DBT transactions for the 7 schemes under the Labour Ministry marginally increased in FY2019, compared to FY2018, when 2.75% DBT transactions had failed. Also, the value of failed DBT transactions in FY2018 was more than Rs 1 crore for the same 7 schemes — meaning that in the next 7 months, the rate of failure of DBT transactions almost quadrupled. This is significant because data related to DBT transfers maintained by the central government does not record how many DBT transactions failed.

3 schemes saw highest percentage of failed DBT transactions: For 3 schemes — NCLP (National Child Labour Project), DGE-CGC (Director General of Employment Coaching-cum-Guidance Centres) for SC/ST, DGE-VRC (Vocational Rehabilitation Centres) for PWD — the cause for most failed transactions is unknown. Incidentally, the failure rate of DBT transactions was the highest for these very 3 schemes:

  • 27.38% (589) of 2,151 DBT transactions made towards DGE-VRC for PWD failed in FY2019.
  • 13.57% (1,981) of 14,603 DBT transactions failed transactions to DGE-CGC for SC/ST.
  • 5.64% (2,325) of 41,226 NCLP DBT transactions failed.

Another scheme called DGLW-Scholarship, which is financial aid for children of workers in the unorganised sector, had the highest number of attempted DBT transactions at 2,62,305, and also the highest number of failed transactions at 6,061 — a failure rate of 2.31%. Also, transactions failed in this case because beneficiaries’ names differed, or their accounts did not exist, or they had an inactive Aadhaar. Most transactions failed without stating any reason in this case as well.

Here is a breakdown of failed DBT transactions under Labour Ministry for between April 1 and October 31, 2018, and the reasons behind those failures:

In FY2019, till October 31, 2018. Source: RTI responses received by Srinivas Kodali.

Numbers starkly increased in only 4 months: We also have a copy of failed and successful transactions for FY2019 until June 30, 2018. In April, May and June 2018, no DBT transactions made towards VRCs for PWDs had failed — meaning that all failed transactions happened in the next 4 months. Although the overall failure rate in the initial 3 months of FY2019 was higher (3.26%) than the overall percentage until October 31, 2018, the data for April-June 2018 does not mention one scheme — DGLW Scholarship — which is included in the data till October 2018.

  • Similarly, only 2.86% transactions made towards CGCs (Coaching-cum-Guidance Centres) for SC/STs had failed in FY19 till June, compared to 13.57% failed transactions between Aptil and October 2018.
  • NCLP (National Child Labour Project) had the highest rate (8.55%) and number (1,019) of failed transactions till June.

Also, in the first 3 months of FY19, DBT transactions worth Rs 25,73,730 failed — this means that in the subsequent 4 months, DBT transactions worth Rs 1,83,80,966 failed.

Here is a breakdown:

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In FY2019, till June 2018. Source: RTI responses received by Srinivas Kodali.

Nodal officer had raised the issue with Finance Ministry: MediaNama has also accessed a copy of a letter where a nodal officer for DBT had raised concerns around the technical glitches in the PFMS (Public Financial Management System) portal — used to disburse DBT — and had suspected that DBT amounts were not reaching beneficiaries in a time bound manner. The letter, dated July 16, 2018, was written by Rekha Raikar Kumar, a nodal officer for DBT under the Labour and Employment Ministry, and addressed to S.K. Mathur, additional controller general of accounts, PFMS at the Finance Ministry. Kumar had written:

“The MIS reports at PFMS portal under ‘DBT Reports’ are not reflecting real time data, making it difficult to track the DBT transactions and their success and failure. It seems, PFMS is not crediting benefits in the bank accounts of the beneficiaries in time bound manner even after the payments files are approved by the Program Divisions as well as PAO Section, sometimes even after 2-3 months.” — from the letter [emphasis ours]

The cancellation/failure rate of DBT transactions was high during FY2018 and FY2019 for NCLP, CGC and VRC schemes, Kumar had written. In fact, she had pointed out that the technical glitches on the PFMS portal had existed since as early as 2015, which resulted in an “inordinate” delay in transferring money to beneficiaries.

The letter which highlights the high percentage of failed DBT transactions. Source: RTI responses received by Srinivas Kodali.

Failed to buck the trend between FY2018 and FY2019: In FY2018, 32.19% of DBT transfers made towards vocational rehabilitation centres for PWDs failed, while CGCs for SC/STs saw 11.13% of transactions fail. NCLP, yet again, had the third highest DBT failure rate, with 5.07% transactions failing. This suggests than in FY2018 and the initial 7 months of FY2019, the government could not buck the trend of failed DBT transactions in these 3 particular schemes. The RTI response for FY 18, does not specifically mention why transactions failed for particular schemes, but even there, the reasons behind all failed transactions were similar:

In FY2018

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