Prime Minister Manmohan Singh has given the go-ahead for direct payment of cash to beneficiaries of various welfare schemes.
Accordingly, the Centre will transfer subsidies and wages under schemes such as the rural employment scheme (MNREGA) directly to the beneficiaries’ bank accounts.
Payments for scholarships, pensions, income support of other types and health benefits and also food and fertiliser subsidy will be made the same way.
While it is not clear if LPG will be brought under the system that could cover nearly one-fourth of the population, a pilot project includes kerosene.
According to agency reports, no date has been set for the implementation of the payment scheme.
A Government statement said: “The Prime Minister has set up the architecture for moving to electronic cash transfers leveraging Aadhaar (Unique Identity Number).”
The move is aimed at improving reducing corruption and eliminating wastage of subsidised items and also controlling expenditure and facilitating reforms. Although Government sources could not give the exact amount to be covered, going by the Budget estimates, the Centre has allocated Rs 33,000 crore for rural employment guarantee programme in the current fiscal. At the same time, a senior Government official indicated that nearly 50 per cent of the Rs 3.25 lakh crore spent on subsidies could be covered initially under direct cash transfer.
mechanism
In order to speed up activity and ensure that the shift to electronic cash transfers can be rolled out rapidly, the Prime Minister has set up the Architecture for Cash Transfers which will be the coordination mechanism.
This will consist of the National Ministerial Committee under the chairmanship of the Prime Minister. This committee would ensure coordination and decision-making at the highest level and impart the necessary urgency to the programme. The Government claims the milestones and timeliness for each of committees will be clearly laid down. The National Executive Committee will monitor progress and ensure timely roll-out.
The statement also said that Aadhaar is 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 people.
Pilots for electronic benefit transfer are under implementation in Andhra Pradesh, Chhattisgarh, Punjab, Rajasthan, Tamil Nadu, Karnataka, Puducherry and Sikkim.