1 in 3 Aadhaar-based Payments for PM Matru Vandana Yojana Credited to Wrong, Untraceable Bank Accounts, Says NITI Aayog Report

One in three Aadhaar-based payments for the Pradhan Mantri Matru Vandana Yojana (PMMVY) was credited to wrong bank accounts which are even untraceable by beneficiaries and field functionaries, reveals a report released by the NITI Aayog.

The progress report till September 2019 released by the NITI Aayog on Prime Minister’s Overarching Scheme for Holistic Nourishment (POSHAN) Abhiyaan, says, "A substantial number of payments, about 28% cases of all Aadhaar based payments, i.e. in case of 31.29 lakh payments are going to different bank accounts than what had been provided by the beneficiaries. Sometimes these are even untraceable by beneficiaries and field functionaries. A telephonic survey of 5,525 beneficiaries was conducted by ministry of women and child development (MoWCD) which has revealed that only 60% were aware of both the receipt of the benefits and the bank account to which the money was remitted. It is a prime cause of dissatisfaction amongst beneficiaries, which needs to be addressed on urgent basis."

Till 31 March 2019, a total of 8.22 million beneficiaries have been registered under PMMVY, of which around 83.5% of the eligible beneficiary have received 1st instalment with cumulative payment of Rs2,611 crore.

"The average time taken in payment of 1st instalment from the date of registration is around 45 days, but when calculated with respect to the last menstrual period (LMP) the average time taken is 234 days. Only 22% of the 1st instalments have been paid within 150 days with respect to the date of LMP. Analysing the method of payments, 66% of the total transfer under the direct benefit transfer (DBT) scheme were made through Aadhaar based payments out of which 72% matched with the bank accounts provided by the beneficiaries. The scheme has been successful in registering around 19,000 beneficiaries per day in the quarter ending March 2019," the report says.

PMMVY is a conditional maternity benefit scheme which provides Rs5,000 to pregnant women and lactating mothers in three instalments of Rs1,000, Rs2,000 and Rs2,000, respectively. The conditions for the payment of instalments are early registration of pregnancy, antenatal check-ups (ANC) and first cycle of immunisation of the newborn. Additionally, the women get their entitlement of Rs1,000 under Janani Suraksha Yojana (JSY) after institutional delivery.

Read: How Aadhaar linkage can destroy banks ) . We also pointed out how Jan Dhan accounts, which were opened with a simple Aadhaar number, had deposits as high as Rs93.82 crore! ( Read: Rs93.82 Crore Was Deposited in a Single Jan Dhan Account, Reveals RTI ) Over the years, Moneylife has been constantly highlighting risks associated with Aadhaar-based payment solutions and how it can be used to propagate money laundering -- make money transfers un-auditable, propagate money laundering propagate money laundering and financial fraud. (. We also pointed out how Jan Dhan accounts, which were opened with a simple Aadhaar number, had deposits as high as Rs93.82 crore!

"Even if Aadhaar numbers were proof of identity, which it is not, its use to make financial transfers, is the best way to make financial transfers un-auditable, propagate money laundering and financial fraud. There is no rational justification for introducing an unverified and unaudited number to allow payments and settlements," Dr Anupam Saraph, a future designer of systems, wrote in his 2014 article.

Interestingly, in 2018, NPCI itself had asked banks to discontinue Aadhaar-based payments through the Unified Payments Interface (UPI) and Immediate Payment System (IMPS) channels.

An Aadhaar number becomes a financial address when an Aadhaar is 'seeded' into a table called the 'NPCI mapper' by anyone linking the Aadhaar to a bank account. This mapper is a directory of Aadhaar numbers and institution identification number (IIN) used for the purpose of routing transactions to the destination banks. The IIN is a unique 6-digit number issued by NPCI to any participating bank.

If you or anyone else link your Aadhaar with another bank account, the NPCI mapper is overwritten with the new bank’s IIN. Money transferred to an Aadhaar number using the AEPS gets transferred to the bank account linked to the Aadhaar number at the branch recognised by the IIN.

This idea of a mapper, as used by NPCI’s AEPS, does not allow for instructions from sender about the account to deposit money, but relies on periodic update of IIN in the NPCI’s table mapping Aadhaar numbers from banks. This mapping is volatile because multiple banks periodically update the Aadhaar numbers linked with accounts held by them. Neither the banks, the NPCI nor you have control on where you would like your payments to go.

According to Dr Saraph, who is a renowned expert in governance of complex systems, money launderers exploit this volatility to make money transfers untraceable. He says, "A money launderer can transfer money to an account linked to an alternate IIN and then re-seed the NPCI’s mapper with the original IIN for the Aadhaar number, completely wiping out any trace of money to the alternate IIN. Like transactions of bearer shares in Panama, such money transfers becomes no different from a hawala transaction between real parties who remain anonymous or benami."

Read: Rs93.82 Crore Was Deposited in a Single Jan Dhan Account, Reveals RTI) Later in September 2018, we found out a single account opened in United Bank of India, under the Pradhan Mantri Jan Dhan Yojana (PMJDY), or the ‘no frills’ or basic savings bank deposit account (BSBDA) had a whopping Rs93.82 crore deposited. This was revealed in a right to information (RTI) query. (

Remember, the Jan Dhan account was meant for financial inclusion of the unbanked and is even below the category of regular, basic savings accounts of banks. In fact, since Jan Dhan was a tool for financial inclusion and empowerment, there ought to be a cap on deposits in these accounts. Once a Jan Dhan account has, say, over Rs50,000 deposited in it, it ought to be converted into a regular account. Since Aadhaar numbers are unverified even by the Unique Identification Development Authority of India (UIDAI), these accounts, in all probability, have not gone through the usual know your customer (KYC) checks and verifications.

However, this is not happening as the NITI Aayog report has revealed, even in schemes like PMMVY 28% of all Aadhaar-based payments, of 3.12 million are going to different bank accounts, many of which are untraceable by the beneficiaries and even the field functionaries.

POSHAN Abhiyaan aims to reduce stunting, anaemia and low birth weight across high malnutrition burden districts. The Abhiyan recognises the need for convergence and coordination such that the benefits of government schemes and programmes reach women and children in the first 1,000 days. The POSHAN Abhiyaan lays out targeted determinants of nutritional outcomes that exist in various schemes and programs. These include maternal nutrition, new-born care practices, infant feeding and care practices and underlying determinants, such as age at marriage, age at first birth and sanitation.

However, as per the progress report, there are several gaps in human resources, particularly at the supervisory level.

Overall across states, there are huge vacancies in supervisory cadre positions including that of lady supervisors, child development project officer (CDPOs) and development project officers (DPOs). "At a national level, the vacancy rates are in the range of 25% at both the CDPO and lady supervisor levels. This is the aggregated national scenario that varies from state to state; however, it is a clear indication of the relatively higher number of vacancies at the supervisor level. For positions sanctioned under the POSHAN Abhiyaan, state project management units (SPMUs) have not been established in two of the 19 large States (Punjab and Karnataka)," it says.

Even where SPMUs have been established, 10 states have vacancy rates in the excess of 30%. In Uttar Pradesh and Haryana, less than 5% of the sanctioned posts have been filled. Gujarat is the only large state where all SPMU positions have been filled up. The position in smaller states is even worse. With the exception of two states (Meghalaya and Mizoram), in the rest of the states either the SPMU has not been set up altogether or even where it has been set up all positions remain vacant due to non-completion of the recruitment process.

The Union Territories (UTs) are slightly better placed with four UTs having more than 75% of the SPMU posts filled. None of the posts was filled in Puducherry and Delhi. Under the PMMVY scheme, against the provision of hiring 60 contractual staffs at state level and 1,434 contractual staffs at district level across the states and UTs, so far only 42% and 26% recruitments have been done at state and district levels, respectively, as on 18 February 2019, the report says.

The NITI Aayog report also highlights gaps in procurement and integrated child development scheme (ICDS) and child application software (CAS). It says, "There are significant challenges with the procurement and distribution of growth monitoring devices and smart phones. While there is a great emphasis in the Abhiyaan on the procurement of smartphones and growth monitoring devices, as per the last update only 27.6% of AWWs across the country have been provided with Smartphones and about 35% of AWWs have growth monitoring devices, such as infantometer, stadiometer and weighing scales."

Non-availability of Internet is also one of the hindrances highlighted by NITI Aayog. "Another issue that needs to be addressed for smooth functioning of the ICDS-CAS pertains to internet connectivity in remote rural areas and also help-desk facilities for front line workers to help them navigate the software as first-time users. Only a few States like Maharashtra, Rajasthan, Sikkim, Andaman & Nicobar Islands, and Daman & Diu have established such helpdesks in all districts," it says.

MoWCD and ministry of health and family welfare (MoHFW) currently use different applications for tracking the same beneficiaries leading to unnecessary duplication of efforts in data entry, besides lack of coordination in due-lists leading to a siloes approach to service delivery. "Although significant resources have been dedicated to a pilot project to develop a common platform for the functionaries and it has been in the works for some time now, we are yet to see a fruition of that effort," the report added.

The report also points out at low utilisation of funds. Utilisation of funds for any programme is one of the proxy indicators of its successful implementation. It says, "The cumulative utilisation rate is about 20% in the large states; small states and UTs have utilised on an average about 42% of the allocated funds. Haryana, Tamil Nadu, Punjab, Kerala, Delhi and Goa have an utilisation rate of less than 5%. Even where funds have been released by the union government, tardiness in completing the procurement process of growth monitoring devices and smart phones through the government e-marketplace (GeM) portal precludes us from reaping the full benefit of scheme by the frontline workers and intended beneficiaries."