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American International Journal of Research in Humanities, Arts and Social Sciences

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ISSN (Print): 2328-3734, ISSN (Online): 2328-3696, ISSN (CD-ROM): 2328-3688 AIJRHASS is a refereed, indexed, peer-reviewed, multidisciplinary and open access journal published by International Association of Scientific Innovation and Research (IASIR), USA (An Association Unifying the Sciences, Engineering, and Applied Research)

Leveraging Technology for Financial Inclusion: A case of Rashtriya Swasthya Bima Yojana (RSBY) Deepshikha Kalra1, Vinod Kumar Bishnoi2 Assistant Professor, Management Education & Research Institute (MERI), 53-54 Institutional Area, Janakpuri, New Delhi- 110058, INDIA _______________________________________________________________________________________ Abstract: Financial inclusion is prerequisite for poverty alleviation and economic growth of any nation. It has always been one of the major agenda of policy makers but the development process so far has not brought balanced economic growth across the country. Government of India has launched thousands of policies for inclusion of poor but success rate is poor one major challenge being lack of awareness among the masses. Rashtriya Swasthya Bima Yojana (RSBY) launched by Govt. Of India on April 1, 2008 to improve access of BPL population towards quality health care, is one such policy which has a very low enrolment and utilisation. Various studies on the issue have proven that awareness programmes launched by government in accordance with NGOs, State nodal agencies (SNA) etc, have failed to achieve their targets. This a conceptual paper which explores the various avenues created by digital India project which will reduce the digital divide in the country and help in improving awareness among the beneficiaries and finally the effective implementation of such schemes. Key Words: financial inclusion, rashtriya swasthya bima yojana(rsby), digital divide, digital India, technology. ______________________________________________________________________________________ 1,2

I. Financial inclusion status of India Financial Inclusion or inclusive financing is the delivery of financial services at affordable cost to sections of disadvantages and low income segments of society, in contrast to financial exclusion where those services are not available or affordable. India has made consistent efforts in the direction of alleviating poverty through various schemes but the contrasting fact is some 680 million Indians, or 56 percent of the population, still lack the basics of a minimum acceptable standard of living. As per the survey by Invest India Incomes and Savings Survey (IISS 2007), 97 per cent of all households do not have any health insurance and 61 per cent do not have life insurance. The major reason for this disparity is issues related to both supply and demand side in terms of supply the challenge is of accessibility, affordability and infrastructure while on the demand side lack of financial literacy and awareness is the major bottleneck. Since 2005 RBI and Government of India (GOI)is trying to achieve financial inclusion through self help groups(SHG), Know your customer (KYC), bank correspondents ,mobile technology etc. But still only 18 percent of the lower income group has their bank accounts or are availing any financial service of the govt. (table1) Table 1: Percentage of household without essential financial instrument Rural Urban All India

Without bank accounts 59.59 36.67 52.41

Without life insurance 68.30 45.40 52.41

Without health insurance 98.58 94.72 97.39

Source: IISS Survey The above data reflects that penetration of health insurance is least both in urban and rural India. Lack of willingness to get insured and 90 percent of the working population being unorganised has led to poor penetration. According to IRDA financial inclusion means making insurance available to lower income groups at an affordable cost. There are over thirty health insurance schemes like employee state insurance scheme(ESIC), central government health scheme (CGHS) and maternity benefit act etc. but they were all meant for formal organized workers. For the BPL it was mainly community health insurance (CHI) schemes which were successful. According to the world health organization (WHO), more than 80 percent of total expenditure on health in India is passed to private for profit health care units.(WHO,2004),most studies on health care spending have found that more than 80 percent of this cost is out-of-pocket cost (Devadasan, et al., (2004); Dror,(2006); Rajasekhar,(2010)). Further studies estimated that between thirty two to sixty two million people impoverish every year due to expenditure on health care (Sun(2010);Hou and Palacious (2010)).Peters et al.(2002) estimated that at least 24 per cent of all Indians hospitalized fall below poverty line(BPL).

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A number of insurance schemes like janarogya, mediclaim and Rajiv Gandhi arogya yojana, janani suraksha yojana (JSY) etc. are being tried out for low income people in India. But none has performed well because of various gaps in terms of poor coordination between insurer, central and state govt. Hence there is a need for introducing public health financing schemes aimed at improving national health outcomes and reducing vulnerability of the masses. Keeping this aim ministry of labor and employment launched Rashtriya swasthya bima yojana (RSBY) on 1st April, 2008 for the unorganized below poverty line workers. II. RSBY Salient Features RSBY is a unique scheme in itself where a beneficiary is required to pay just INR 30 as a fee for the smart card, head of the family, spouse and upto three dependents gets entitled to an insurance coverage of INR 30,000 for most of the disease that require hospitalization. It is based public private partnership model including central and state government, insurer, the service provider and third party administrator(TPA) for setting the guidelines, implementation and monitoring. The premium is paid 75% by the central govt, and 25% by the state govt. The best feature of the scheme is effective use of technology as paper work is minimum, use of smart card with biometric identification that enabled instant enrolment, and control over fraud. The card has a unique feature of portability. Split card can also be issued if the head of the family travels from one district to other. Table 2: Selected state wise number of families covered under RSBY (2013-14) State Andhra Pradesh Assam Bihar Chandigarh Chhattisgarh Gujarat Haryana Himachal Pradesh Jammu and Kashmir Jharkhand Karnataka Kerala Madhya Pradesh Maharashtra Manipur Meghalaya Mizoram Nagaland Odisha Puducherry Punjab Rajasthan Tripura Uttar Pradesh Uttarakhand West Bengal India

Number of families 2184 1416919 6102774 5854 2265370 1900903 465797 341818 4988 1923138 29417 3662511 608748 234252 68140 108321 145842 151806 4238040 9486 236764 2511663 505327 5541225 285435 5748689 38515411

Source:- Lok Sabha Unstarred Question No. 21, dated on 07.07.2014 Various studies conducted by Sun (2010) , HoU and Palacious (2010) and Rahman and Hemrajani (2011) Krishnaswamy and Ruchismita (2011) in states like Haryana , Delhi, Odisha, Karnataka , Goa, Gujarat etc. found that awareness was lesser in districts with low literacy levels , delays of several months to issue the smart cards, poor knowledge of how and where to utilize the scheme, hospitals not trained to use card reading technology and month long delays and arbitrary caps in the reimbursement of treatment expenses to hospitals. The effectiveness of the enrolment process is poor due to the dubious data quality of the BPL list. Lack of motivation of doctors to treat empanelled patients because of payment delays. In general it is assumed that problems of lack of awareness among BPL can be resolved through NGOs, micro finance institutes or self help groups however Incentive, technology and scale is required to achieve the goal as it will lead to the reduction of cost of infrastructure, enhancing awareness and seamless connectivity among various departments of government. As per Mckinsey Global Institue (MGI) report (2014) there will be 300 million financially included people in India but this will require massive technology adoption initiatives. Some of the key technology initiatives by government or the private sector under Digital India project paving the way for solution to the above stated problems are as follows III. Some key Technology Initiatives Health Internetwork (HIN) Initiative announced in the millennium action plan in 2000 by United nations (UN) Secretary General Kofi Anan for improving the flow of timely , relevant and reliable health information is a project of WHO focuses on connectivity, content, capacity building lowering the barriers through integrated

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computer technology (ICT) into public health practices has developed computer and internet connectivity to meet needs even in remote areas . A careful assessment and involvement of local partners can help achieve the goal of financial inclusion through RSBY. National Optical Fibre Network (NOFN) Project:- a project funded by universal service obligation(USO) fund and implemented by BSNL, Power Grid Corporation aims to connect 2,50,000 gram panchayats (GP) with 100 mbps bandwidth. Phase I connecting 50,000 GP to be completed by March 2015 will lead to effective egovernance, e- health and e-education leading to better penetration of internet. As per IMRB-IAMAI study number of people accessing the internet in India will rise from 190 million as of June 2014 to over 550 million by 2018.rural internet population to grow by 40% from 60 million as of June 2014 to 280 million in 2018. Vernacular ( local language) content online estimated to increase from 46 % to 60% by 2018 . Left wing extremist(LWE): project funded by USO Fund will install telecom towers in 10 states Andhra Pradesh, Bihar, Madhya Pradesh, Chatissgarh, Jharkhand, Maharashtra, Odisha, Telangana, Uttar Pradesh, West Bengal. Govt technology development centre c-DOT palys a key role in developing technologies that can be deployed in rural areas. Rural teledensity will improve from 46.09% in Dec 2014 to 72.06% by 2018 with this project which will help the insurance firms and government in enhancing awareness of scheme. Beyond these initiatives Google ‘Project Loon’ which is a baloon mounted internet access service and Microsoft white space are some of the digital India initiatives by private players. Further regulatory framework for better e-payments can clear hospital treatment bills of RSBY patients by state nodal agencies faster leading to motivation of service provider and better utilisation of the scheme. IV. Conclusion GOI and private players initiatives in terms of mobile penetration, internet access will lead to seamless integration across departments to provide single window access to all persons. These initiatives will help in achieving the nine pillars of digital India namely Broad Band Highways, Universal Access to mobile connectivity , national rural internet mission,e-Governance, e-Kranti, Information for all, Electronic manufacturing, IT for jobs & Early harvest programme. Digital India will put together many existing schemes which would be restructured and re-focused and implemented in a synchronised manner. This will finally enhance the data quality , reduce frauds and lead to effective utilization of scheme References [1] [2] [3] [4] [5] [6] [7] [8] [9] [10]

Athukorala, Premachandra and Sen (1995), Economic Reforms and Rate of Saving in India, Economic and Political Weekly, 30(35),2184–90. Carrin,G. (2002). Social health insurance in developing Countries: A continuing challenge, WHO. International Social Security Review, 55(2),57-69 Das,J., and Leino, J. (2011). Evaluating RSBY: lessons from an experimental information campaign. Economic and Political Weekly, 46(32), 85-93. Devadsan,N., Ranson,K., Damme,V.W.,and Criel,B.(2004). Community health insurancein India: An Overview. Economic and Political Weekly,39(28),3179-3183. Dror,M.D.(2014). Health insurance for the poor :Myths and Realities. Economic and Political Weekly ,41(43),4541-4544 Dror, M. D., and, Vellakkal, S. (2012). Is RSBY India’s platform to implementing universal hospital insurance?, Indian Journal of Medical Research,135, 56-6.3 Rajasekhar, D. (2010). Implementing health insurance: the rollout of rashtriya swasthya bima yojana in Karnataka. Economic and Political Weekly,46(20),56-63. Reddy, K.S. (2011). Towards achievement of universal health care in India by 2012: a call to action. The Lancet, 377(97), 760768 http://www.indiaincorporated.com/index/item/4044-digital-india-a-paradigm-shift-for-governance.html#sthash.zKbboJLa.dpuf http://www.cisco.com/web/IN/about/lead/ how to create a digital India through public private partnership.

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