Observing that smart card system could facilitate individual identification and remote transaction processing/storage, the global lender says, these could be redeemable also at approved private traders and/or fair price shops.
Stating that despite recent economic progress, India is not getting the “bang for the rupee” that expenditure warrants, with needs of population groups partially addressed, it said, while India spends significant resources on its safety net programmes, these safety nets have remained primarily “nets” rathar than “ropes” or “ladders” promoting sustained movement out of poverty.
Making out strong case, it says, smart cards have ability to store and record large amount of data and authorised biometric information (signature or fingerprint image) that can be matched to actual fingerprint or signature of individual involved in a transaction. Citing an example of food ration system, it says, the card can store information on identity of individual, eligibility for rations, quantity, price and time intervals at which he/she could be supplied rations. Smart card applications are feasible for wide scale use even in poor and low capacity settings, provided the right mix of institutional players is involved and there is rigour in standard setting and implementation.
Explaining its features, it says, individual beneficiary receives the card from welfare office where it is ‘recharged’ with relevant information and amount of rations he/she is entitled to. Once he goes to the shopkeeper, transaction is recorded both on the card and the point of sale device, the shop keeper maintains. The transaction is backed up on handheld device for upload on central database and for being transmitted to the bank to reimburse the shopkeeper. Once every week or fortnight, the trader takes the device to a local agency to uplaod all transactions to the centralised system and be compensated for transactions through money being transferred to his bank account. In addition, the World Bank, as part of its report Social Protection for a Changing India, has also suggested the use of GPS for tracking movement of vehicles transporting commodities.