Bolsa Familia program: India to pay welfare directly, aims to end fraud

Eventually the transfers are expected to help fix much of the rest of India's welfare spending, though Chidambaram said the government's massive food, kerosene and fertilizer distribution networks _ which are blamed for much of the corruption and lost money _ would be exempt.

The program will eliminate middlemen and transfer cash directly into bank accounts using data from Aadhar, a government project working to give every Indian identification numbers linked to fingerprints and retina scans. Currently hundreds of millions of Indians have no identity documents.

On Monday, 208 activists and scholars published an open letter expressing concern that the government was forcing the poor to enroll in Aadhar to get welfare benefits without putting safeguards in place to protect their privacy. They also expressed fears the government planned to eventually replace the food distribution system for the poor, the largest program of its kind in the world.

"Essential services are not a suitable field of experimentation for a highly centralized and uncertain technology,'' they wrote.

Others said the government was trying to do too much too soon.

"A very important concern is are we ready for this sort of thing? The banking infrastructure is very poor, people are far from these banks, when they exist they are overcrowded. Sometimes people have to walk for a day to get to the bank,'' says Reetika Khera, a development economist with the New Delhi-based Institute for Economic Growth.

Mihir Shah, a member of India's Planning Commission accepts that the government's timeline is "unrealistic,'' but said many critics had confused the lack of readiness with flaws in the plan itself.

"My question to them is is it better than what is there today? That is the only way we can judge policy. I don't think there's a perfect solution to any of mankind's problems,'' he said.

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