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'Cash scheme may not push up inflation'

Source : BUSINESS_STANDARD
Last Updated: Fri, Dec 07, 2012 07:40 hrs

pThe government&rsquos direct cash transfer scheme for subsidies might not lead to an increase in inflation said D Subbarao governor at the Reserve Bank of India RBIpp&ldquoIf cash is used for necessary consumption then it will be productively spent I don&rsquot think there will necessarily be any implication of inflation on that&rdquo he said to a media query after the central bank&rsquos board meeting here on ThursdayppThe scheme was initially announced by the former finance minister and current president Pranab Mukherjee Beneficiaries would get cash in their bank accounts instead of subsidies for food gas kerosene and other essential items The beneficiaries are expected to buy food from public distribution shops using this cashppThe government recently asked ministries to fast-track the scheme A deadline of December 15 has been given to state-run lenders to open bank accounts in 51 districts Subbarao noted that West Bengal was lagging other states in implementationpp&ldquoThe state government is very anxious to roll-out electronic benefit transfer to bank accounts A lot of states are already ahead of West Bengal&rdquo he said noting that not a single district in the state figured in the 51 chosen for the roll-outppFrom March he said the state government would begin implementing the direct cash transfer in six of its 18 districtsp

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