UPSC 2013 Mains GS2 Model Answer - An electronic cash transfer system for welfare schemes is an ambitious project to minimize corruption, eliminate wastage, and facilitate reforms. Comment.

Model Answer:

The Electronic Cash Transfer System (ECTS) is an ambitious initiative aimed at improving the efficiency and transparency of welfare schemes in India by directly transferring benefits to beneficiaries' accounts, reducing corruption and wastage.

Advantages:

• Reduction in Corruption: ECTS minimizes the role of intermediaries, ensuring that financial benefits directly reach the intended beneficiaries, reducing opportunities for corruption.
• Elimination of Wastage: By providing cash transfers instead of physical goods or services, the system reduces logistical inefficiencies and ensures targeted assistance.
• Transparency: Digital transactions create an auditable trail, enhancing accountability in the disbursement process.
• Inclusion: With the use of Aadhaar and bank accounts, marginalized sections of society can be better included in welfare programs.

Challenges:

• Digital Literacy: A large portion of rural India lacks access to technology and digital literacy, hindering the system’s effectiveness.
• Banking Infrastructure: Issues like limited banking access in remote areas can delay transfers or cause inconvenience.

‍While the Electronic Cash Transfer System has significant potential for reforming welfare schemes, its success depends on overcoming challenges like digital inclusion and improving banking infrastructure.

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