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Are Technology-enabled Cash Transfers Really ‘Direct’?

In an era increasingly dominated by the digital, technology-enabled solutions have come to be viewed as a one-stop solution to the age-old administrative woes of corruption and inefficiency. Evidence from a detailed case study of payments under the Mahatma Gandhi National Rural Employment Guarantee Act in a region of Telangana shows that technological solutions in the domain of government-to-citizen cash transfers are far from perfect. The mechanisms of techno-utopianism suffer from many of the same flaws as the ones they replaced and, in some cases, they have introduced new flaws.

In a democracy, citizens expect payments that the government makes to them to be transacted in ways that protect them from vulnerabilities. In India, payment programmes run by the government include pensions, scholarships, maternity benefits, and the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), which is India’s largest workfare programme. While the cash disbursed through these schemes is critical to the lives of millions, the transfer process is vulnerable to a host of problems—corruption and extensive delays being chief among them. The last decade has witnessed a fundamental shift marked by the introduction of technology-mediated transfers. Propelled by this, the Indian government has recently experimented with several digital methods to reduce the last-mile problem in the payment process.

Proponents of digitisation argue that the key benefit of technology is that it enables governments to transfer cash directly to citizens, eliminating intermediaries. Typically, three reasons are offered in favour of removing intermediaries in government-to-citizen payments:

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Updated On : 30th Jul, 2018

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