An Effective Tool for Government Welfare Schemes

24 May 2023

Keynote Session: Shri Karma Zimpa Bhutia, Joint Secretary Skills, Ministry of Rural Development


The Ministry of Rural Development (MoRD) faces many challenges in the implementation of centrally sponsored schemes such as the Deendayal Upadhyay Grameen Kaushalya Yojana (DDU-GKY) and the Rural Self Employment Training Institutes (RSETIs) aimed to provide livelihood opportunities to rural youth below the poverty line through skill development programs. These initiatives focus on two key aspects: wage employment through DDU-GKY and self-employment through RSETI. These initiatives, operating under the National Rural Livelihood Mission, involve a decentralised implementation approach where State Rural Livelihood Missions (SRLMs), play a crucial role.

Under DDU-GKY, around 14.5 lakh individuals received training, while RSETIs trained approximately 35 lakh candidates. The number of placements and settlements achieved measured the success of these programs. In the case of DDU-GKY, “placed” beneficiaries are referred to as candidates securing employment at firms after completing their training. On the other hand, “settled” in RSETI parlance indicates beneficiaries who received training and accessed loans for self-employment facilitated by credit linkages with banks. Notably, 8.65 lakh individuals got placements through DDU-GKY, and 26.13 lakh individuals found settlements through RSETIs.

However, despite the significant numbers, there existed a disparity between the training outcomes and the onerous task of ensuring every candidate was placed or settled. The Project Implementing Agencies (PIAs), contracted to provide skilling and employment opportunities, had a crucial condition tied to their payment: they would only receive compensation once the beneficiaries found employment successfully. This requirement was backed by proof such as offer letters, salary slips, and bank statements demonstrating three consecutive months of salary or wages above the minimum wage.

To oversee the placement and settlement process, the State Rural Livelihood Missions (SRLMs) were responsible for verification and tracking. In the process of due diligence, the actions of some PIAs have raised concerns about fraudulent practices. Instances of duplicate papers, double placing of candidates, and other deceptive behaviors emerged, increasing the monitoring load on the SRLMs.

AI Fraud Analytics

To address the challenges in the implementation, an AI tool was incorporated into the Kaushal Bharat ERP system to detect and flag potential frauds committed by the PIAs. This fraud analytics tool issued warnings highlighting irregularities and fraudulent documents submitted by the PIAs as placement proofs. Uploading documents into the ERP system has been made mandatory for the PIAs to receive payments. The AI tool flagged various types of fraud, including incorrect documents, missing personally identifiable information, blank documents, and password-protected or corrupted files.

The statistics revealed the extent of the problem: out of the total 13,45,270 documents uploaded, approximately 2,12,000 warnings were issued, with more than one warning appearing on 1,37,806 documents. Despite the AI tool’s ability to flag irregularities, the subsequent actions taken by the state and the PIAs were lacking. The process of addressing these frauds seemed to lack efficacy and commitment, resulting in mediocre success for the fraud analytics system.

PIAs have continued exploiting poor candidates’ vulnerabilities, hoodwinking them for personal gain. The need for improved monitoring and stricter enforcement of consequences for fraudulent behaviors became evident to safeguard the interests of the rural youth seeking livelihood opportunities.


Due to the lack of efficacy in the monitoring and follow-up processes employed by the SRLMs towards the PIAs, the welfare of rural youths has taken a toll. The major challenge stems from a manual collection of documents, which has proved time-consuming and hampered the ease of doing business. The reliance on manual processes introduced the risk of inaccuracies and errors, affecting the reliability of scheme outcomes.

Furthermore, the need for robust mechanisms to prevent the provision of fraudulent documents has exacerbated the challenges. The sheer volume of documents and the limitations of manual verification made it difficult to identify fraudulent practices by Project Implementing Agencies (PIAs). The scheme’s integrity is at risk without a reliable system to flag and scrutinize potential fraudulent documents.

Another significant challenge is the resource-intensive nature of the monitoring process and its limited scalability. The administrative burden will grow as the scheme’s scale increases and more candidates are enrolled. The manual handling of documents and the need for extensive verification procedures strained the resources and capacities of the SRLMs. This limited their ability to monitor progress efficiently and ensure timely payments to the PIAs.

The challenges faced highlight the need for systemic improvements in the monitoring process and its limited scalability. The reliance on manual document collection and verification introduces inherent risks of errors and fraudulent practices. Overcoming these challenges enables them to handle larger scales of operations and ensure smoother implementation of DDU-GKY & RSETI programs and similar welfare schemes undertaken by the ministry.

How can AAs help?

Implementing the Account Aggregator (AA) framework can significantly enhance the effective monitoring of schemes implemented by the MoRD. The framework brings several benefits that improve the monitoring process and ensure the scheme’s integrity.

One of the immediate benefits is the significant reduction in the time cycle required for monitoring. The AA framework enables the digitization of data collection and verification, eliminating the need for manual processes and ensuring timely interventions.

The accuracy of documents and information is greatly enhanced through AA. By directly accessing financial data from sources, the chances of errors or discrepancies in the documentation are minimized, which strengthens the accuracy and reliability of the process.

The AA framework simplifies the monitoring process and dilutes the process’s resource-intensive nature, allowing for wide scalability. Digitization of data flow enhances the overall efficiency of the monitoring process, allowing for a more significant number of beneficiaries to be effectively monitored.

The verification process becomes more reliable by enabling 100% online placement verification. This includes verifying take-home salaries, which can be done without a human interface, ensuring accuracy, and minimizing errors. The streamlined and automated processes save significant resources in time and manpower.

The financial viability of the AA framework makes it a feasible solution for monitoring various schemes. Its cost-effectiveness and scalability make it applicable to different programs, maximizing the benefits of digital monitoring and data flow. Moreover, using AA ensures a foolproof technology that prioritizes data privacy and security.


Implementing the Account Aggregator (AA) framework for monitoring welfare schemes also needs to consider various factors to safeguard the interests of beneficiaries.

Given the low technical literacy among beneficiaries, protecting them from potential hacks & scams is imperative. Measures should be in place to educate beneficiaries about potential risks and ensure they are not misled into providing sensitive information or One-Time Passwords (OTPs) to unauthorized entities.

Information security is of paramount importance as beneficiaries come from vulnerable backgrounds. Strict adherence to data protection norms & best practices is essential to maintain the confidentiality and privacy of beneficiaries’ data.

Obtaining informed consent from beneficiaries ensures their understanding and agreement to participate in the process. Agencies should communicate clearly and transparently about the purpose, benefits, and potential risks of sharing their financial information.

As AAs make it easier to access loans, financial literacy, and responsible lending practices need to be promoted. Avoiding predatory lending practices and enabling beneficiaries to make informed financial decisions is imperative.

In full spirit of inclusion, it is crucial to address the challenges faced by beneficiaries who do not have access to smartphones. Alternative methods, such as the Assisted Account Aggregator model, should be implemented to ensure their inclusion.

This pilot project has been planned to be implemented in two phases:
  • Phase 1: The initial phase of this pilot project focuses on enabling the discovery of bank accounts based on the mobile numbers of the beneficiaries of the scheme. The roll-out of this phase has been completed.
  • Phase 2: The final stage of the project involves creating assisted Aadhaar-based journeys for the beneficiaries to reap the benefits of the AA framework. Currently, this phase of the project is underway with UIDAI and AA readiness to be made available.


In conclusion, the implementation of the Account Aggregator (AA) framework holds great promise for addressing the challenges faced by the Ministry of Rural Development (MoRD) in the implementation and monitoring of centrally sponsored schemes (CSS) like DDU-GKY and RSETIs. The AA framework can streamline monitoring, reduce time cycles, improve accuracy, simplify procedures, and enhance efficiency and scalability. With 100% online placement verification and secure take-home salary verification, AAs offer reliable and automated processes, saving resources and reducing costs. However, it is crucial to incorporate safeguards to protect beneficiaries from potential hacks, ensure data security, obtain informed consent, promote financial literacy, and address the needs of beneficiaries without smartphones. Considering these factors, the AA framework can facilitate inclusive and effective monitoring of welfare schemes, safeguarding the interests of rural youth seeking livelihood opportunities.

Check out the complete session here:

This talk was a part of the ‘SamvAAd 2023: Let’s Open Finance’ event hosted by Sahamati. The first annual Account Aggregator (AA) community event brought together more than 300 financial institutions across sectors such as banking, investment, pension, and insurance and fintech TSPs (technology service providers). Take a look at all the sessions of the event here: Samvaad 2023