Post office accounts to be used for direct cash transfer schemes

NEW DELHI: The government will use readymade network of post office accounts to transfer pensions, welfare payments and scholarships.

Currently, there are 36 million post office accounts used only for wages under the employment guarantee scheme. These account for 43% of all accounts opened for wage earners under the rural employment guarantee scheme.

With the government now moving to an Aadhar-linked direct cash transfer system for benefits paid out to poor and marginalized, these post office accounts can be used for making payments.

Earlier, as per August 2008 notification of department of posts no deposit other that NREGA wages could be made to these accounts.

Rural development minister Jairam Ramesh, who has been closely involved with the direct cash transfer plan, had written to finance minister P Chidambaram in mid-December pointing out the need to withdraw the August 2008 notification.

Referring to the circular, Ramesh said, "this, you will agree, defeats the very purpose of the direct benefits transfer initiative launched by our government recently and described by you as a game-changer."

Nine days after the matter was brought to Chidambaram's notice, the finance ministry withdrew its August 26, 2008 notification. The notification issued on December 24, provides the amended version of Post Office Savings Account (Amendment) Rules, 2012, by which beneficiaries of rural job scheme can have other "government benefits" like social security pensions and scholarships and "deposits" into their post office savings accounts opened exclusively for MNREGA wages.