Aadhaar linkage improves efficiency in subsidy payments at KVIC

The Khadi and Village Industries Commission (KVIC) has been able to improve the efficiency of subsidy paid under Marketing Development Assistance (MDA), due to the linkage of the payment with Aadhaar. This is reflected in the following data.

It can be seen that the implementation of online Direct Benefit Transfer (DBT) system through Aadhaar-seeded bank accounts in January 2016 has brought about a reduction in the subsidy amount as well as the number of institutions claiming the subsidy. KVIC Chairman Vinai Kumar Saxena categorically explained the reason. “The KVIC rank and file – right from CVO, directors and members were asked to move in the field to verify the identities of the artisans. Almost everyone found that many Khadi institutions used to claim subsidy even for non-existing artisans, thereby usurping subsidy meant for artisans in the last 10-odd years. This meticulous exercise has weeded out almost seven lakh fake artisans as the number of registered number of artisans was found to be 4.6 lakh instead of inflated 11.6 lakh; this has thereby reducing the subsidy burden on the government by around Rs 153 crore. Not only that, the number of Khadi institutions who claimed subsidy has also come down to 1,423 in current FY till March 13, 2018 from 1,759 in FY 2016-17 and 1,918 in 2015-16,” he said.

The Chairman added that KVIC has zero-tolerance policy towards corruption and transparency in all transactions is its top priority. “A need was therefore, felt by us to cleanse the data and remove numbers of the non-existing artisans, so that the MDA could be paid directly to the artisans, in their accounts. We introduced online Direct Benefit Transfer (DBT) system through Aadhar-seeded bank accounts in January 2016, which resulted in flushing out ‘ghost’ artisans, who were usurping government subsidy,” he said.

MDA is calculated as 30 per cent of prime cost of production. Out of this eligible amount, 40 per cent is paid to the Khadi-producing institutions, 40 per cent to the artisans and remaining 20 percent to those same institutions for giving discounts to customers.