PM rolls out direct cash transfer of subsidies

Last Updated: Mon, Nov 26, 2012 17:00 hrs

New Delhi, Nov 26 (IANS) In an ambitious policy initiative, Prime Minister Manmohan Singh Monday announced the launch of a scheme for direct cash transfer of subsidy amount (on items like foodgrain, fertilizers or fuel) into the bank accounts of the beneficiaries from Jan 1, 2013.

Manmohan Singh chaired the first meeting of the National Committee on Direct Transfers and asked all ministries "to work in right earnest" for implementation of this pioneering initiative which is expected to cut down waste and leakage in the system.

Initially, the government will implement the cash transfer scheme in 51 districts from Jan 1, 2013. The scheme will be worked in 18 states from April and the rest of the country later in 2013, the prime minister said.

The scheme will be operationalised by leveraging the Aadhar platform.

The scheme, which was unveiled barely 18 months before the next elections, could prove to be a potential game changer for the UPA−II, which has been besieged by charges of corruption.

"Apart from these direct benefits, the government also provides an amount of over Rs.300,000 crore in subsidies which too must reach the right people," the prime minister said.

"Direct Cash Transfers, which are now becoming possible through the innovative use of technology and the spread of modern banking across the country, open the doors for eliminating waste, cutting down leakages and targeting beneficiaries better."

"We have a chance to ensure that every rupee spent by the government is spent truly well and goes to those who truly deserve it," the prime minister added.

"They will need to digitize their databases, most of which are with the states, and seed them with Aadhaar numbers. You will be provided help by both the Unique Identification Authority and the IT ministry. But, you will in turn need to assist the states," he said in his closing remarks.

Manmohan Singh underlined that the twin pillars for the success of the scheme are the Aadhaar platform and financial inclusion.

"If either of these pillars is weak, it would endanger the success of the initiative. I would expect the finance ministry and the Unique Identification Authority to work in close coordination to achieve a collective goal," he said.

More from Sify: