On March 24, with little advance notice, India’s federal government announced a strict countrywide lockdown to contain the spread of COVID-19. Within two days, it also announced a relief package providing cash transfers to women, elderly and farmers, as well as food grains through the Public Distribution System (PDS). For nearly a decade, India has invested in building a digital infrastructure to transfer social benefits to its citizens directly to their bank accounts. The COVID-19 lockdown provided a test of whether these investments in digital infrastructure would pay off and help the government deliver relief quickly and efficiently.
With the lockdown eliminating their sources of income, the lack of access to social assistance was an important consideration for migrants to undertake the journey to get back ‘home’, the place where they are registered to receive them. While some made it back to their hometowns and villages, the majority of migrants were left stranded in the cities where they worked. As India’s economy ground to a halt, the situation of those employed in the informal sector, in particular, became increasingly desperate. Many came from Bihar, a north Indian state of 120 million people. Responding to their plea for help, on April 7, the State government launched the ‘Corona Sahayata (Assistance)’ scheme to provide cash assistance through payments into bank accounts to tide over the immediate crisis.
Bihar’s initiative addressed a critical need for cash assistance that had to be designed, directed and delivered digitally. We do not, however, have enough data to make a judgement on its efficiency and impact. Bihar’s case indicates several lessons for over 200 countries delivering COVID-19 social assistance payments to over a billion new beneficiaries. Even with a unique, universal and digital ID platform, high rates of bank account and mobile phone ownership, identifying and paying migrants is a challenging proposition. Digital technologies help to quickly rollout and scale up programs but a lack of unified social registry is a serious constraint. Complex design, eligibility norms and ID verification can be critical roadblocks. Finally, receiving and accessing the cash transfer is not straightforward and bank accounts may not always be the best option to receive emergency payments especially with restrictions to mobility and access to cash out points.
Exclusion remains a daunting challenge. Digital first programs often ignore people at the bottom of the digital pyramid with the least digital capacity – Bihar’s program is no exception. People with smartphones could use the Android application (iOS was not supported) to register for the program while those without it had to overcome additional hurdles to complete the process. Last mile payment through bank accounts and many people faced problems entering correct bank account details, dormant accounts requiring KYC, and to cash out once the assistance was received. Bihar’s program could have paid to digital wallets or provided e-vouchers to cash out at bank or mobile money agent points, as was done in Togo, Namibia and Colombia – it was a policy choice not to do so.
In spite of all the drawbacks, Bihar’s Corona Assistance managed to reach over two million people within few weeks of its launch. This provides us with a case study on how to design a new program to target the “new poor”, using digital mechanisms and platforms to identify, onboard and transfer social assistance remotely, overcoming the challenges posed by the COVID-19 pandemic.Read More
- Beneficiary Identification, Targeting, Onboarding;
- Digital Payment Ecosystems;
- Financial Inclusion;
- South Asia;
- Country Studies;