New Delhi, Sept. 28: The Prime Minister today launched a scheme for subsidy delivery through direct electronic cash transfer to beneficiaries’ bank accounts rather than providing cheaper goods.
The idea is to check “leakages” — illegal sale of the subsidised goods in the market —improve targeting of the beneficiaries, and curtail duplication and waste, a statement from the Prime Minister’s Office (PMO) said.
The programme will initially cover scholarships, pensions and unemployment doles and later the rural job guarantee scheme payments, the Public Distribution System and health benefits.
Manmohan Singh today set up an architecture of committees for the shift to the new system, which will leverage Aadhaar. The Centre wants to move to a completely electronic cash transfer system for the entire population before the next general election.
The pilot project for a paper-based transfer of cash subsidies is already functional in nine states, including Bengal and Sikkim.
“In a move to cut down wastage, duplication and leakages and enhance efficiency, the Prime Minister has given a major push to transfer individual benefits from the government directly into the bank accounts of beneficiaries,” the PMO statement said.
“This is to be done in fast-track.... With the rapid rollout of Aadhar, now covering 20 crore people and rapidly growing to 60 crore, and with the National Population Register covering the other half, it is possible to move to a system of transferring cash benefits directly to the poor.”
The suggestion had come from the Planning Commission earlier this month. Similar programmes have been successful in Brazil, Mexico, New York and Washington.
The architecture for cash transfers will include the following panels:
A national ministerial committee headed by the Prime Minister and including the ministers of finance, telecom, social justice, human resource development, minority affairs, labour, health, food, fertilisers, and petroleum and natural gas, and representatives from the plan panel and the Unique Identification Authority of India.
A national executive committee of the secretaries of all the ministries concerned. They will coordinate action, ensure adherence to timetables, and sort out hitches.
An implementation mission and committee that will finalise the operational and implementation details relating to the design and operation of the transfer system.
Sub-committees for technology, financial inclusion (to focus on universal access to banking) and electronic benefit transfer (to work out details relating to databases, transfer rules, controls and audits).