5 Pros and Cons of Direct CASH Transfer Scheme

As due to difficulties at the first stage of implementation, 20 districts have been identified in India to implement the direct cash transfer scheme, work has begun under this scheme to facilitate cash transfer of subsidy amount to the accounts of the beneficiaries. Although the scheme comes with a good motive to facilitate the beneficiaries of subsidy money, to implement this, government requires solid infrastructure of banking.  For this reason, this scheme is being conducted as a pilot project and experts are studying about various difficulties in connection with the implementation of this scheme.

The main five pros and cons of direct cash transfer via aadhar card scheme have been summarized in the table below.

Scheme Pros Cons
 Direct Cash Transfer Scheme
  1. Under this scheme, the beneficiaries of pension, scholarship and rural employment guarantee will get cash transfer to their accounts. This scheme is intended to help the people of rural areas, who have availed the Aadhar card.
  2. The advantage of this scheme is it will eliminate the role of middleman and corrupt practices.
  3. This initiative can help the farmers a lot. They can get the advantage of making payment of the exact price of the fertilizer and avail the benefits of subsidy money in their bank accounts.
  4. The “direct cash transfer scheme” also includes the recipients of LPG cylinders, who will get their subsidy money on LPG directly transferred to their bank accounts.
  5. The beneficiaries would also avail the transfer of money to the bank accounts that they get under various food schemes under the public distribution system (PDS).
  6. Although this is a good scheme for the people, it is going to put extra pressure on the nationalized banks in the rural areas.
  7. As of today, there are many villages in India, which are inaccessible by road without any banking facility.

  1. But as the Aadhar card project has not been completed and many people have not received the aadhar letters, it is almost impossible to include all the farmers, who come in the “farmer” category.
  2.  India is the second most populous country in the world. Taking in to consideration the bulk transfer of money for LPG, it will literally paralyze the banking system of India.
  3. The public distribution system is huge and facilitating so many cash transfers is impossible. The main hurdle under the direct cash transfer scheme is high population of India and slowness in executing every work.


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