With eye on elections, sarpanches empowered to give old-age pension

In a decision taken with an eye on the next assembly elections, from this month-end, for over 16 lakh old-age pensioners in Punjab, village sarpanch will be the king. The first lot of the increased pension (from Rs 250 to Rs 500) will be disbursed through sarpanches following the state government’s recent decision to go back to the system of distributing pension through the village head.

For the past four years, the state government was distributing pensions through banks, directly into the account of pensioners. However, now the village sarpanch will get the total pension amount of beneficiaries living in his village every month and pensioners will line up at his house to receive it. The move will lead to over 20 lakh bank accounts going defunct causing a major setback to the national goal of 100% financial inclusion.

Also, the “empowering” of village sarpanch is expected to lead to favouritism and unfairness in the distribution of pensions.

Almost every review of the pensioners’ list since 2008 has found that scores of people included in the list do not deserve the pension and many who deserve it are not included.

It was only when the process of opening of bank accounts of beneficiaries started in 2012 as a pilot project in one block each of Mansa and Muktsar that the real picture began emerging.

Distribution of pension through electronic benefit transfer (EBT) was extended to five districts in 2013 and later across the state when almost 20 lakh bank accounts were opened and biometric data of every beneficiary was linked to the account.

Even though the pension amount came directly into the account of the beneficiary, the process of distribution involved the delivery of the amount at his doorstep through banking correspondents (deployed by banks) who gathered biometric evidence before handing over the amount.

The state’s social security department justifies going back to the old system saying the banks “failed” to deliver what had been promised.

“Banking correspondents were the weakest link. They would not go to villages for weeks or decide one day that they did not want to work. The biometric evidence would fail often. Fingerprints of old people undergo lots of changes and in hundreds of cases, banking correspondent would go back without giving the pension,” said Gurkirat Kirpal Singh, director, social security.

Deputy chief minister Sukhbir Singh Badal said the move was not political. “The feedback we got was that in many cases the pensioner would travel from the village to the bank, which was in the district headquarters or several villages away, to withdraw pension. Old people are getting on and off buses, spending their own money to get Rs 250. The sarpanch is always available and pensioners have the freedom to collect pension whenever they want.”

And how about ensuring that the sarpanch does not play favourites?

“The list of beneficiaries will be given to the sarpanch by the department where these are compiled and reviewed centrally. The sarpanch cannot include or exclude anyone at his level. Unlike the earlier practice, now a committee of five people, including public representatives from the village, will countersign the payment of pension to the listed beneficiary,” said Gurkirat Kirpal Singh.

A backward step

For the past four years, the state government was distributing pensions through banks, directly into the account of pensioners. However, now the village sarpanch will get the total pension amount of beneficiaries living in his village every month and pensioners will line up at his house to receive it.

The move will lead to over 20 lakh bank accounts going defunct causing a major setback to the national goal of 100% financial inclusion. The state’s social security dept justifies going back to the old system saying the banks “failed” to deliver what had been promised.