Nilekani Panel’s Terms of Reference extended to include Unified Payment Infrastructure

The Union government on 20 September 2011 extended the terms of reference of the Nilekani task force on direct transfer of subsidies. The extended terms of reference is to include an Aadhaar-enabled unified payment infrastructure.

Considering the expansion the government enlarged the task force by adding five new members. The new members is to include a representative from the Reserve Bank of India, a representative from the Indian Banks Association (IBA), Director of the National Informatics Centre (NIC), the Controller-General of Accounts (CGA) in the Finance Ministry or one of his representatives and the Chief Executive Officer of the National Payments Corporation of India (NPCI).

Set up by the Union Finance Ministry under the chairmanship of Unique Identification Authority of India (UIDAI) chief Nandan Nilekani in February2011, the task force was asked to recommend and implement a solution for direct transfer of subsidies on kerosene, LPG and fertiliser to the intended beneficiaries.

In tune with the decision to expand the terms of reference the panel was asked to recommend an architecture for e-banking through inter-operable business correspondents and examine the alignment of current standards for devices that will be deployed by them. The panel was also asked to suggest one to align the recommendations of the Inter-Ministerial Group (IMG) on a Framework for the Delivery of Basic Financial Services using mobile phones with Aadhaar-enabled payments infrastructure.

The panel was directed to:

•    Recommend a solution that incorporates a robust customer support and grievance redress mechanism
•    Recommend the feasibility of extending the solution architecture to include payment instruments apart from bank accounts and post office savings bank accounts to facilitate the fostering of e-commerce oversee and evaluate the implementation of the solution proposed on a pilot basis.
•    Suggest a common framework to adopt it for all government welfare schemes involving disbursements to individual beneficiaries.

Solutions devised by the panel should ensure that the entire country can leverage the same payments platforms. while recommending an approach to harmonise various exercises related to opening bank accounts for financial inclusion and electronic benefit transfers, the panel should also identify and recommend amendments which it felt was required required to enable direct subsidy transfers.

The task force is to submit its final report on the extended Terms of Reference within three months of the extension of the Terms of Reference.

The task force had submitted its interim report on 5 July 2011 and the suggestions therein were taken up by Ministries on a pilot basis under its supervision of the task force. The interim report had suggested direct cash transfers through banks, ATMs or even mobile banking to beneficiaries of kerosene, LPG and fertiliser subsidies.