Printed on: January 02, 2013

India launches new welfare pay system

NEW DELHI (AP) -- India will send billions of dollars in social welfare money directly to its poor under a new program inaugurated Tuesday, aiming to cut out the middlemen blamed for the massive fraud that plagues the system.

Previously, officials only handed out cash to the poor after taking a cut -- if they didn't keep all of it for themselves -- and were known to enroll fake recipients or register unqualified people. The new program would see welfare money directly deposited into recipients' bank accounts and require them to prove their identity with biometric data, such as fingerprints or retina scans.

Finance Minister P. Chidambaram has described the venture as "nothing less than magical," but critics accuse the government of hastily pushing through a complex program in a country where millions don't have access to electricity or paved roads, let alone neighborhood banks.

The program is loosely based on Brazil's widely praised Bolsa Familia program, which has helped lift more than 19 million people out of poverty since 2003. It began in 20 of the country's 640 districts Tuesday, affecting more than 200,000 recipients, and will be progressively rolled out in other areas in the coming months, Chidambaram said Monday. The country has 440 million people living below the poverty line.

"In a huge new experiment like this you should expect some glitches," Chidambaram said. "There may be a problem here and there, but these will be overcome by our people,"

He appealed for patience with the program, which he called "a game changer for governance."