You're reading it wrong. You get 29 INR in your bank account, and add another 1 INR to pay 30 to the subsidy to the shop.

But while earlier it was just a walk to the shop and getting your ration card stamped, now you must:

1. Go to your bank (which may not even have a branch in your village)

2. Hope that the network is up

3. Confirm that the money has reached your account. If not, go home and retry (1) on another day

4. Withdraw the money and then go buy your ration at the subsidy shop

Edit: This the relevant quote from the article:

>Earlier, people would take their ration cards [...] and be able to purchase rice at Re 1/kg, with each member of a priority household allotted five kg. Now, [...] – money is first transferred into each household’s Aadhaar-linked bank account. They have to then withdraw this as cash, take it to the local ration dealer and buy rice at Rs 32/kg – of which Re 1/kg comes from the ration card holder [and the rest comes from the subsidy that you withdraw as cash].

OK, thanks!

Sounds like a massive business opportunity for banking. Your village may not have an ATM but I bet it has cellphone signal. Wasn't every Kenyan SMS-ing money around a decade ago?

We're trying this with "Payment Banks". The DBT scheme itself tries to solve it by directly debiting money from your account and crediting it to the shopkeeper's account on a monthly basis automatically, but the real implementation is still cash withdrawls as of now.

The Kenyan-SMS has also led to a monopoly of mpesa in the market, which the RBI is trying to avoid by bringing some decent regulations in the space of digital banking.

OK thanks. So maybe it will get there... with some elephant-sized teething difficulties!

Going by your example, the government deposits Rs. 29 into the account. The beneficiary has to pay Rs. 1 and withdraw the rest from bank.