Ride to the future

Patna, Feb. 28: Union finance minister Pranab Mukherjee appears to have taken a leaf out of Nitish Kumar’s book while formulating his model for direct subsidy that he laid down in his budget.

Mukherjee today announced that BPL families would get direct cash subsidy to buy fertilisers and cooking fuel at prevailing market prices from 2012. At present, money is given to retailers to sell subsidised kerosene, LPG and fertilisers.

The present policy allows a free hand to unscrupulous retailers. Mukherjee admitted as such, saying: “A significant proportion of subsidised fuel does not reach the targeted beneficiaries and there is large-scale diversion of subsidised kerosene oil.”

The subsidised kerosene is often diverted for adulteration in auto fuel. Similarly, subsidised domestic LPG gets diverted to commercial establishments.

By announcing that the government will move towards direct transfer of cash subsidy to those below the poverty line, Mukherjee appeared to be following in Nitish’s footsteps.

In 2007, the NDA government hit upon the idea of directly transferring funds to beneficiaries of several schemes. The direct cash transfer policy is followed in the chief minister’s cycle scheme for girl students, providing uniform to girl students, paying security money to girls at their birth, paying money for girls’ marriage and several other schemes for the aged and the elderly.

“We were the first to transfer cash to the beneficiaries’ accounts,” Bihar deputy chief minister and finance minister Sushil Kumar Modi told The Telegraph.

The measures, he added, went a long way in removing the intermediaries between the government and the poor people and in the process, checked corruption.

Nitish has himself stated time and again that had his government given money to some agencies to buy commodities and distribute them to the people, the middlemen might have siphoned off funds, leaving the beneficiaries in the lurch.

When pointed out that Mukherjee too had taken a policy decision to transfer the cash subsidy to the people below poverty line, Modi said: “The Union finance minister might have emulated Bihar to muster electoral gains in other states going to the polls.”

The direct cash model has paid dividends to the NDA as the people in the state’s backward regions felt more empowered.

Much ahead of the Assembly elections last year, Nitish dwelt, in his blog (April 19, 2010), dwelt at length on how the cycle scheme for students was the dearest to his heart.