Implementation Review of Social Pension Schemes in India

Changqing Sun

South Asia Social Protection

The World Bank

About the Review

• Jointly with Ministry of Rural Development, GoI – Feed into government’s own program review

• Objective – Review progress in implementation, highlight what has worked

across States, identify challenges, and recommend improvements

• Two phases: – Phase 1: Rapid State Assessment

• focusing on administration of social pensions and processes in planning/budgeting, application/sanctioning, fund flows and payment mechanisms, audit/assurance mechanism, grievance redressal, monitoring

– Phase 2: Field Assessment on performance on the ground, through household surveys: • Information on both outcomes and processes, particularly beneficiary

perceptions of application process and payment systems

Background

• National Social Assistance Programme (http://nsap.nic.in/)

– National Old Age Pension (1995) – Widow Pension (2009) – Disability Pension (2009) – National Family Benefit Scheme (1995) – Annapurna (2000)

• Objective – alleviate chronic poverty through regular cash transfers to the elderly, widows and disabled persons (most vulnerable among the poor)

• Ongoing debates – Universal vs. targeted – Level of benefit (Rs 300 vs. Rs 2000 or ½ minimum wage) – Fiscal space vs. priority (is spending 3.4% of GDP on social

pension too high?) – Implementation model: CSS vs. ACA

Eligibility Criteria “Plus”

Eligibility

Criteria GOI Guideline Andhra Pradesh Bihar Delhi Uttar Pradesh

Old Age

Pensions

1) Age: >=60

years

2) BPL

3) Resident of district

4) Not covered under

other schemes

2b) Family Income <

Rs. 60000 per annum

3) Resident of Delhi for >5

years

3) Resident of state

4) Not covered under

other schemes

Widow

Pension

1) Age: >=40

&<=59 years

2) Widow

3) BPL

1b) Age >=18 years

4) Resident of district

5) Not covered under

other schemes

1b) Age >=18

years

3b) BPL OR non –

BPL & Income

<Rs. 60000 per

annum

1b) Age:18-60 years

3b) Family Income <

Rs. 60000 per annum

4) Resident of Delhi for >5

years

1b) Age: 18-64 years

3b) BPL or Annual Income

<Rs. 25,546 in urban areas.

If non BPL, then Annual

Income< INR 19,884 in

rural areas

Disability

Pension

1) Age : >=18

&<=59 years

2) Severe or

multiple disability

(80% disability)

3) BPL

1b)Age: No limit

2b) 40% disability

4) Resident of district

5)Not covered under

other schemes

1b)Age: No limit

2b) 40% disability

1b) Age: 0 -60 years

2b) 40% disability

3b)Family Income<Rs.

75000 per annum

1b) Age: No limit

2b) 40% disability

3b) BPL OR Income <Rs.

1000 per month

Coverage and Expenditure by GoI and States

• Three social pension schemes covered 26 million beneficiaries for FY2012-13, costing GoI US$ 1.5 billion (0.55% budget). BUT states expand coverage (some also benefit level) significantly

0

20

40

60

80

100

120

140

160

All India UP Bihar AP Delhi

NSAP-financed pensioners as % of GoI targets

Old Age Pensions Widow Pensions Disability Pensions

0

20

40

60

80

100

Uttar Pradesh Bihar AndhraPradesh

Delhi

% pensioners financed by GoI

Old Age Pensions Widow Pensions Disability Pensions

Tale of two states AP • Pioneered with biometric based

smart card technology for beneficiary identity and pension payment

• Centralized administration through functioning MIS

• Viable “banking correspondent” model for SP & NREGA

Bihar • Used Post Office exclusively • Complete paper based processing of

administrative tasks, with no MIS to support implementation

• Beneficiary list was digitized for reporting purpose

Roles and Responsibilities in AP

GP/Ward Mandal / Municipality District State

Key Player GP Secretary or Ward Councilor; CSP

Mandal Parishad Development Officer (MPDO) or Municipality Commissioner; PDA (TSP) Mandal Coordinator

DC; PD of DRDA; PDA (TSP) Commissioner RD; CEO SERP

Application & Identification

(1) GP Secretary or Ward Councilor identifies eligible individuals and collects application

Verification (2) After reviewing applications, MPDO or Municipality Commissioner enters eligible applicant data into SSPS offline application and upload into SSPS

(3) SERP conducts Six-Steps-Validation; (4) SERP adds validated applicants to pensioner list or gives reason for rejection

Sanction (5) MPDO provides Sanction Order to pensioner

(6) TSP enrolls pensioner

Fund Flow and Cash Disbursement

(13) CSP disburses cash to pensioners; (14) CSP returns undisbursed cash to PDA MC;

(11) MPDO downloads & prints out AR and handovers to MC; (12) MC takes cash and AR & handovers to CSP

(8) DC approves Acquaintance Roll and PD sent FTR; (10) PDA receives Acquaintance Roll and fund released, and credits pensioner accounts

(7) SERP freezes Acquaintance Roll for that month; (9) CEO SERP releases fund to PDA

Monitoring & Social Audit

(15) CSP returns signed/thumb printed AC to both PDA and MPDO, with reason for non-disbursement; (17) GP Secretary or Ward Councilor verifies non-disbursement cases

(16) PDA consolidates cash disbursement and pension non-disbursement reason and feeds data into SSPS; (18) MPDO modifies/confirms pensioner status for non-disbursement cases

PD monitors implementation

CEO SERP monitors implementation

Evaluation CEO SERP is responsible

Application & Sanction of New Pensions in AP

Applicant- Submits

form with white ration card, and/or other documents

Panchayat Secretary/Bill

Collector- Collects form

Mandal Parishad Development Officer (MPDO) / Municipal Commissioner (MC)

MPDO/ MC enters data offline&

uploads to central server

Six step validation with ration card

database

Sanction/ Reject

MPDO /MC synchronize with

central server gets list

Provides Sanction order to beneficiary

INDIRAMMA/ Rachabanda-

Collects Form, white ration card

PDA/ TSP downloads list of new sanctions

for enrollment

Village/ Ward meetings with

Sarpanch/ Ward Councilor

Proactive identification’s effect

0

5

10

15

20

25

30

35

40

45

50

2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12

Number of Beneficiaries: Target (in lakhs)

Old age Pensions Widow Pensions Disabled Pensions

Verification of beneficiaries

• MPDO cross-checks documents for age- proof and the details on ration card against application form.

• Six Step Validation at state level – Stage 1: The data of applicants compared with the

sanitized ration card database and invalid ration cards are filtered out.

– Stage 2: All duplicate applicants filtered with ration cards numbers

– Stage 3: Verification of the applicant name against ration card with software for phonetic comparison.

– Stage 4: Check for one pensioner per family (No longer done)

– Stage 5: Applicant`s name is matched with live pensioners and those with the same name and fathers name within a GP.

– Stage 6: Applicant`s name compared with names deleted during Integrated Common Field Survey (ICFS).

57139 26151

72581

27010

21430

3008

349391

invalid ration card #

duplicate ration card #

name not matched

one OAP per family

duplicate with existing live pensioner

deleted in ICFS

eligible applicants

State generates acquittance monthly

online

Mandal Coordinator takes list & cash to

CSP

CSP disburses &marks absentee pensioners as TM,

PM or dead

Un disbursed cash & signed acquittance returned to Mandal

Coordinator

PDA shares disbursement

details with social pensions server

MPDO prints 2 copies of

acquittance list

State Nodal Account (SNA) transfers funds to PDA

PDA credits beneficiary accounts

& gives cash to TSP/MC

MPDO validates TM, PM or death cases online after field

verification

Mandal Coordinator hands over signed

physical acquittance to MPDO/MC

Payments to beneficiaries

PDA remits undisbursed amount

to SNA

CSP uploads disbursement data to PDA server daily

MPDO keeps physical copy of

signed acquittance for audit purpose

Actors involved in payment in AP

• PDAs – Paid 2% by SERP – mostly banks (e.g. Warangal has 8 banks), Post Office has 2.5 districts

• MIS vendor (develop, upgrade and operate)

• TSP – Paid 1.75% by PDA – IT (hardware, software, connectivity, data) and operation services

(enrollment, cash delivery, HR capacity)

– District Coordinator - Monitors enrollments and disbursements.

– Mandal Coordinator - coordinates enrollment process, collect payment documentation, manage cash movement from banks to CSP.

• CSP – Payment agent – Must be SHG member of GP

– Paid by Rs 300 + 2.5 * # of pensioners paid

• Village Organization (V0) – Safe keeps physical cash for the CSP prior to disbursement

2 filled Applications, 2

Photos, BPL List, Voter List,

(Death/ Disability Certificate)

Application + Attachments +

RTPS Application

Number

Applicant RTPS Counter

Application + Attachments Application Number +

Block Register ID

Block Office

RTPS Database

Application + Attachments Application

Number + Block Register ID + SDO Sanction

Number + Sanction Order

SDO Office

Block Register by panchayat

SDO Register by

Block

Apps + Supporting

stored block wise

RTPS Application Number + SDO

Sanction Number + Sanction Order

Block Office

Number of Sanctioned

ADSSO

Total number of sanctioned

pensioners by block (no details)

Number of beneficiaries in State

DoSW

Social Pensions Document/Information Flow in Bihar

Issues in administration processes in Bihar

Stage On Paper In Practice Gap

Applicant Application Filling & Submission to BDO

• Submit application in person to RTPS counter at block office

• Supporting documents checked at the time of submission and receipt provided

• Application submitted to mukhiya/ward member/vikas mitra/panchayat sachiv who submits on behalf of the beneficiary

• Supporting documents (Death Certificate, BPL list ) not easy

• Need support to fill form at the RTPS counter

• No support for those unable to go to the block office in person

• May need to pay for submission

Panchayat Sachiv Verification

• Panchayat Sachiv to conduct physical verification before sanction and for updation of pension beneficiary list

• Verification carried out before submission of application form

• No procedure in place for systematic updation of pension beneficiary list

• Unclear parameters of verification

• Errors of age in age proof used • Death certificate not easily

available (10+ years)

BDO Verification, Recommendation, Monitoring (Physical Verification)

• BDO to receive application at RTPS counter, verify documents and ensure that Panchayat Sachiv conducts physical verification

• Block office receives documents at the RTPS counter, sorts by GP and recommends to SDO

• RTPS: Acknowledgement receipt in English

• RTPS system only front end, no system of tracking other than whether disposed or not.

• No physical verification undertaken

Issues in Bihar (2) Stage On Paper In Practice Gap

SDO Sanctioning & notifying ADSS of new sanction

• Sanction pension based on verification already done

• Intimates ADSS, PO superintendent & BDO of Sanctioning

• Verification of the documents multiple times (by 2 assistants),

• Intimates BDO & ADSS of sanctioning

• Verification only involves checking if all supporting documents attached

BDO Intimation to applicant

• Sanction orders mailed to beneficiary/available for pick up at RTPS counter.

• Update RTPS application on status of application

• Sanctions sent through the Mukhiya/Panchayat Sachiv (PS)

• No sanction orders mailed

• Sends sanction order to Branch level PO for account creation

• Creates opportunity for rent seeking by letting Mukhiya/PS collecting sanctions

ADSS Compilation of records & Monitoring

• Compilation of number of sanctioned pensioners and reporting to DoSW monthly

• Monitoring of Pensions

• Compilation of number of sanctioned pensioners

• ADSS not always able to exact accountability directly from BDOs and SDOs. Require intervention of the DM.

Applicant BDO : Verification and

Recommendation SDO: Sanctioning

ADSS: Compiling & reporting

DoSW: Compiling & request fund release

State Treasury: Fund release

Postal Department Bank Account

CPMG Divisional (head) PO

Sub Post Office Branch

Information

Physical Verification by Panchayat Sachiv

21 days (RTPS)

21 days (RTPS)

Monthly

RTPS Receipt Sanction Order

District Aggregate

Aggregate numbers

Application & Supporting documents

Funds Flow

BDO: Intimation to applicant

Applicant via Mukhiya/PS

PO Account

Update RTPS

Pensions Process Sanctioning

Bank/Post Office networks

Coverage of Banks and Post Office in the rural areas

S.No State No of

G.Ps

No of

Bank

Braches

Of which

Rural

Post

Offices

(SO&BO)

Total Bank

Branches/

GPs (%)

Rural Bank

Branches/

GPs (%)

BO & SO

/GPs (%)

1 2 3 4 1/2 1/3 1/4

1 Bihar

8474 5247 2809 8982 62% 33% 106%

2 Uttar

Pradesh

51973 13507 6095 17536 26% 12% 34%

3 Andhra

Pradesh

21695 9020 3090 16130 42% 14% 74%

4 Haryana

6081 3659 1392 2642 60% 23% 43%

Source: Banks include RRBs & Coop Bank; data is as of March 31, 2012 from RBI website; Post office data from website of India Posts.

The proposed cash disbursement model

All pension payments will be made in cash through quarterly panchayat level camps supervised by the BDO.

1. Funds will be transferred by DoSW from the State Treasury to the district.

2. DM will transfer money from district accounts to BDO

3. BDO withdraws money based on sanctioned accounts

4. Supervisors will make payments in camps with support from Panchayat Sewak

Arrangements for cash payments currently underway in Bihar:

1. Printing of colour-coded passbook for each type of pension

2. Creating a consolidated database of all pension beneficiaries based on records in the offices of the BDO, SDO and ADSS

3. An example of an online MIS/database being developed in Jehanabad can be viewed here: www.sapjehanabad.in

The ‘final’ verification of beneficiaries to clean the database will be done at the time of pension disbursement through shivirs.

Lessons learnt • Proactive identification of beneficiaries works better than

demand based approach due low awareness, difficulty in obtaining documentary proof, transaction cost of application, and weak ability to follow up on outcome

• Support for filling applications to reduce rent-seeking and delays from use of intermediaries; and support for obtaining documents required

• Cross-verification with key database and use biometric authentication when feasible

• Robust transactional MIS with central database to support implementation and to reduce work load

• PDA (banks and/or PO) must maintain service standards defined clearly and monitored rigorously.

• CSP connected with local community, paid according to transactions, viable business with multiple programs (+NREGA)

• Coordination and capacity building

Payment mechanisms Andhra Pradesh Bihar Delhi Haryana Uttar Pradesh

Implementing Entity

SPV (SERP) under

RDD

DoSW DoSW DoSW 3 Departments

Mode of payment to

beneficiaries

Bank/ Post Office

account credits; and

cash disbursement by

BC/CSP’s

Cash

disbursement

by BDO’s

Credit to

beneficiary

bank account

thru RBI

Cash

disbursement

by Gram

Sarpanch

Credit to

beneficiary bank

account by

districts

Funds management

Model Centralized Decentralized

(funds drawn by

BDOs into

dedicated bank

account )

Centralized Decentralized

(funds

transferred to

dedicated

bank account

of GP)

Decentralized

(payment by

districts)

Paying agent BC’s supported by

CSPs

(SHG’s, Post Offices)

Block

Development

Officers

Department of

Social Welfare

Gram

Sarpanch

District SW

Officer

Frequency Monthly Quarterly Quarterly Monthly Six monthly

Digitized beneficiary

database

Yes + integrated

transaction based

system

In process of

development

Yes Yes Yes

Claw-back Yes No No Yes No

Task Force on Comprehensive NSAP

• Relaxing eligibility criteria particularly for widow and disability schemes

• Phased universalization to include all eligible for benefits under the National Food Security Act (aims to cover 75% of rural population and 50% of urban population)

• Proactive identification of potential beneficiaries

• Monthly payment using Bank and PO based systems and beneficiaries need not to travel

• Transaction based IT solution to cover all administrative processes and to interface with fund management system and that of other partners

0 100 200 300 400 500

FY12-13

FY13-14

FY14-15

FY15-16

FY16-17

widow

diabled

old age