New Delhi: Finance Minister P Chidambaram today pitched for direct cash transfer of fuel, fertiliser and food subsidies that can help in reduction of the subsidies.
"The estimated major subsidies in 2012-13 would be around 2.4 per cent of GDP, and a sharp fall as assumed in the Plan may be over-optimistic.
"Direct cash transfer of subsidies in food, fertilisers and petroleum will help in this reduction," he said addressing the Full Planning Commission meeting to approve the 12th Plan Document.
He said by the end of the 12th Plan, these three major subsidies may be rolled out across the country through direct cash transfers to the beneficiaries.
"Pilot projects are already under implementation for LPG and kerosene and it is our intention to extend the direct transfer mechanism to the UTs in first phase," Chidambaram said.
The subsidy during the current fiscal was estimated at 1.9 per cent of GDP in the Budget. The major subsidies, include fuel, fertiliser and food, and the government has been proposing direct cash transfer to prevent leakages.
In order to check fuel subsidy bill, the government has raised the price of diesel by Rs 5.62 a litre and capped supply of subsidised LPG cylinders to six per family in a year.
Later, talking to reporters, Planning Commission Deputy Chairman Montek Singh Ahluwalia said the panel would take follow-up action on the suggestions made by Chidambaram and hoped that by the end of the 12th Plan period all subsidies would be paid through direct transfer to the beneficiaries.