NEW DELHI, Jan 1: India will send billions of dollars in social welfare money directly to its poor under a new programme inaugurated on Tuesday, aiming to cut out the middlemen blamed for the massive fraud that plagues the system.

Previously, officials only handed out cash to the poor after taking a cut — if they didn’t keep all of it for themselves — and were known to enrol fake recipients or register unqualified people. The new programme would see welfare money directly deposited into recipients’ bank accounts and require them to prove their identity with biometric data, such as fingerprints or retina scans.

Finance Minister P. Chidambaram has described the venture as “nothing less than magical,” but critics accuse government for pushing a complex programme in a country where millions don’t have access to electricity or paved roads, let alone neighbourhood banks.

The programme is loosely based on Brazil’s widely praised Bolsa Familia programme, which has helped lift more than 19m people out of poverty since 2003.

India has 440m people living below the poverty line. Whereas, the programme is planned to begin in 20 of the country’s 640 districts on Tuesday, affecting more than 200,000 recipients, and will be progressively rolled out in other areas in the coming months, Chidambaram said on Monday.

“In a huge new experiment like this you should expect some glitches. There may be a problem here and there, but these will be overcome by our people,” Chidambaram said. He appealed for patience while the programme is carried out and called it “a game changer for governance.”

The opposition Bharatiya Janata Party has accused the ruling Congress party of using the programme to gain political mileage ahead of elections expected in 2014. As a first step, the government has said it’s planning to begin transferring money it would spend on programmes such as scholarships and pensions.

The programme will eliminate middlemen and transfer cash directly into bank accounts using data from Aadhar, a government project working to give every Indian identification numbers linked to fingerprints and retina scans. Currently, hundreds of millions of Indians have no identity documents.

On Monday, 208 activists and scholars published an open letter expressing concern that the government was forcing the poor to enrol in Aadhar to get welfare benefits without putting safeguards in place to protect their privacy. They also expressed fears the government planned to eventually replace the food distribution system for the poor, the largest programme of its kind in the world.

“Essential services are not a suitable field of experimentation for a highly centralised and uncertain technology,” they wrote. Others said the government was trying to do too much too soon. “A very important concern is, are we ready for this sort of thing? The banking infrastructure is very poor, people are far from these banks, when they exist they are overcrowded. Sometimes people have to walk for a day to get to the bank,” says Reetika Khera, a development economist with the New Delhi-based Institute for Economic Growth.—AP