India - Not so smart after all (G.Read)

The Rajasthan government plans to distribute 5 million smart cards, each the size of your normal debit/credit card, as part of a financial inclusion scheme called Bhamasha. The cards have Rs 1,500 of credit pre-loaded in them, and can be cashed at the nearest Punjab National Bank branch. A lakh such cards have been issued and the process of identifying beneficiaries and getting their details (name, fingerprints, etc) and verifying them is on.
The card also has fields which can be used for other schemes in future, like PDS, pensions and so on. So, theoretically, the card can be used for other schemes as well, such as the central government’s Rashtriya Swasthya Bima Yojana (RSBY) under which a total of 300 million smart cards are to be issued (to 60 million families) across the country over the next five years. The RSBY card allows beneficiaries to get cashless treatment worth Rs 30,000 each year at various public and private sector pre-specified hospitals — in return for a premium of Rs 30 (the rest of the premium is paid by the central and state governments). While states like Assam, Tripura and Delhi have already rolled out the scheme, Gujarat, Rajasthan, Kerala and West Bengal are readying to issue them.
Though it’s early days yet, a plethora of similar smart card-schemes are being planned by various state governments as well. All told, when complete, the schemes hold the promise of completely transforming how the government will deliver services/subsidies to the target audience. Instead of ration shop food, for instance, fixed amounts of money can just be put into the State Bank of India, say, and the bank can then transfer the exact funds needed for residents in Jhumritalalya in Bihar. Ditto for the labour payments for job work done under the NREGA.
The Andhra government, for instance, is in the process of distributing biometric smart cards for NREGA payments and a successful pilot programme has been running for a while in a few villages in Karimnagar and Warangal districts. Orissa and Karnataka are also in the process of doing the same. While costs vary depending on the volumes, by and large, the process costs around Rs 100-120 per person.
The problem, however, is that the smart card dream is fast deteriorating into a Tower of Babel with, believe it or not, the cards not designed to ‘talk’ to each other. A good example of this, and the sheer waste involved in the programme, is what happened with the Rajasthan Bhamasha cards and the central government’s RSBY. Since the RSBY was to be implemented in Rajasthan anyway and through smart cards as well, the Rajasthan government asked the central government to implement the scheme in the state using its cards.
Logically, there is no reason why the Rajasthan cards cannot be used, according to Vijay Mahajan, chairman and managing director of Basix which, along with IL&FS, is responsible for distributing the cards in Rajasthan — it has enough fields for the RSBY required data to be fed in, apart from the data required by the Rajasthan government.
According to Mahajan, the problem lies in the fact that there hasn’t been a technical working group which has laid down clear standards that everyone putting out smart cards follows. If such a group had been set up, for instance, there would be set protocols that would allow different cards to be ‘read’ by different programmes in the same way, for instance, most computer software can read files created in other software as well. So, logically, people living in Rajasthan should be able to get their Rs 1,500 from the Punjab National Bank branch and also be able to use this card to get treatment worth Rs 30,000 from an Apollo Hospital, say, in the region. Yet, the central government refused to accept the Rajasthan cards and said the RSBY would not be implemented through these cards. So, when the RSBY is finally implemented in Rajasthan, another lot of new smart cards will be issued, immediately doubling the cost of issue. If there are six pan-Indian schemes being implemented for 300 million people, this will cost Rs 18,000 crore instead of just Rs 3,000 crore for a single and well-designed card with all schemes operating on the same card.
Worse, the cards are even locked into certain banks. The Rajasthan cards, for instance, are locked into the Punjab National Bank software and, right now, government officials there are trying to see how other banks, such as the State Bank of India can be used for the scheme. In other words, standards haven’t been set so that different cards issued can be used by different banks.
Interestingly, the home ministry was, at one point, planning to issue National ID cards, but nothing has come of this. In an ideal situation, this should have been the parent card with additional fields for pensions, NREGA payments, financial inclusion schemes and so on, and the National Informatics Centre or the Ministry of Information Technology should have laid out standards to ensure this card was compatible with other schemes. Instead, as is happening now, each department/state is coming out with its own card. (The food ministry, it appears, may however, refrain from issuing its own card and may piggyback on the home ministry one.)
Fortunately, all may still not be lost. According to Mahajan, the architecture of cards is such that the only real difference is where the data is stored and how it is stored. As Jagdish Rajpurohit, general secretary of Smart Card Forum of India, puts it, ‘Interoperability is an issue which players have to decide. Technically, the smart cards are interoperable as they speak the same language.’ According to Purohit, the problem stems from the fact that users, such as banks, just don’t want to share data. And until this happens, the problem of multiple cards instead of one or two, and of them not being able to talk to each other will remain.
Rishi Gupta, President and CFO of Fino which was the architect of RSBY says that while the NREGP cards are built using a JAWA platform, the RHBY cards are built using a SCOSTA platform. Gupta says there is no national policy as such on the use of a common standard. That has to come if confusion has to be avoided. If SCOSTA is to become the national platform or national smart language then all the other cards would have to be reissued in that language. There is no other option for now, says Gupta.
So it is over to the Government now to announce a national language for smart cards or see the country’s smart initiatives collapse like a house of cards.