Discuss the significance and challenges of JAM Trinity.
Jan Dhan-Aadhaar-Mobile (JAM) trinity is a combination of a zero-balance account scheme(Jan Dhan Yojana) linked with the biometric identification scheme(Aadhaar) and with mobile to bring transparency in the disbursement of the welfare schemes in India.
Importance of JAM Trinity
- Plugs Leakage - Inclusion errors: As there can be no diversion of welfare funds in the name of fake beneficiaries like bogus ration cards etc.
- DBT and freedom of choice: This allows direct benefit transfer(DBT) in which people have freedom to purchase food product or LPG cylinder or fertilizer as per their dietary needs and wants.
- Digitalization can bring efficiency: For example, with actual data, government can calculate the amount of grain actually required for India’s buffer stock needs could be held in better-quality warehouses, eliminating waste and rotting.
- Transparency - Empowerment of the People/Social Justice: People get the power to know if there is a benefit accrued on their name or on their mobile number.
- Reduce fiscal deficit on Subsidy: by curbing expenditures that are siphoned off through corruption, as well as avoiding substantially higher costs of transferring food rather than cash.
- Reduce Inventory Cost: FCI, CWC and state corporations pay huge cost for storing food grains, the inventory cost will be minimum in this system.
- Market Competition and Quality: With decreased leakage in open market and increased dependence on markets through DBT, quality of food and other services can be improved.
- Promotion of Value addition industries: Increased competition in the market can allow opportunity for the private players to enter the markets.
- Reduced disparity: Uniform procurement from all states(3-4%), stringent quality checks and direct benefit transfer to farmers instead of procurement.
Challenges in implementing JAM Trinity:
- Not leakage proof - creating inclusion erros: Inclusion errors such as fake beneficiaries can still exist with wrong enrolment of non-eligible Aadhaar holders such as of four-wheeler owners in PDS system.
- Problems in biometric identification - creating exclusion errors: Often the biometrics such as thumb impression of a person changes with time especially those involved in hard labour. This leads to exclusion of beneficiaries. There have been reported incidents of deaths of people due to hunger in such scenario.
- Weak Digital Infrastructure: According to a study Banks and CSCs were 6 km away for more than 20% of households which meant that they spent over 13 hours every month, on average, collecting their benefits.
- DBT cannot solve all problems: For example, MSP a shield against Inflation as it ensures production of certain crops. Further, it leads to the establishment of government supply chain networks of commodities such as fertilizers in the far flung areas, which if removed will lead to inflation in open market.
- Opacity surrounding APBS - dilution of accountability: Cash transfers through both the payment methods can fail. The wrong account number of the worker in the system or “Inactive Aadhaar.” when there is a software mapping failure with the centralised National Payments Corporation of India, the clearing house for APBS.
Thus despite various challenges in the implementation of the JAM trinity, it is the best way to bring efficiency in the government ecosystem of welfare schemes. Thus the only solution is to strengthen the system by repeated and easy updating of biometric information so that the exclusion and inclusion errors can be addressed.
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