A shift from static to dynamic income indicators has been mooted to weed out ineligible beneficiaries and also for saving at least 30% of the funds expended by the government as welfare pensions.
D. Narayana, Director, Gulati Institute of Finance and Taxation, who conducted a scrutiny of pension disbursal to streamline the system and plug the loopholes, says the government spent ₹5,030.21 crore in 2017-18 to provide pension to 42.41 lakh beneficiaries. This amount will grow rapidly in the coming years. “A conservative estimate puts the ineligible beneficiaries at present at 30% and it may range up to 60% in certain areas. Even if it is 30%, the government can save about ₹1,500 crore by changing the income indicators of the pensioners,” says Mr. Narayana.
Dynamic indicator
The government should substitute static indicators, house and land resources, with a dynamic indicator such as electricity bill of applicants.
“The inappropriateness of plinth area of the house and land owned as income proxies could lead to serious errors of inclusion of the ineligible and exclusion of the eligible beneficiaries. The same applies to the use of income reported for issuing ration cards, ownership of vehicle and such others, since it was found to be manipulated in a number of cases. Electricity bill is the sound option,” he says.
The power bill is an excellent composite indicator of the level of household welfare as it reflects the ownership and use of electrical gadgets that a family uses in tune with their change in income.
Easy method
“Once the standard of living goes up, the number of gadgets and power consumed too will change and hence weeding out those who manage to figure on the list by fudging income details will be easy,” he says.
This will also simplify the procedure for applying for pensions and also deny room for elected members to squeeze in the ineligible to create vote bank on the strength of the pensions they secure for the voters. It should be linked with Aadhaar and introduction of an online verification system, avoiding human interface, will automatically edge out such beneficiaries.
A periodical verification of the bills will be a panacea to the issue.