Direct transfer of cash subsidy from Jan 1

The government will adhere to the January 1 deadline for initiating direct transfer of cash subsidy to beneficiaries of welfare schemes, even if the Aadhaar-enabled bank accounts are not ready by then.

In case the Aadhaar number is not available, the government may use voter identity cards for transferring the cash subsidy, said Financial Services Secretary D K Mittal.

He said the unique identification number is not yet available to everybody and there are operational issues as well. “Cash subsidies handed over on voter cards can be transferred to the Aadhaar number, once it is given out to the beneficiaries. The voter identity card is also considered a valid ‘know-your-customer’ or KYC proof.”

Another senior official said the government has announced that direct cash transfer of subsidies will begin in 51 districts from January 1 without any compromise.  The government had last week announced its decision to begin direct transfer of cash subsidy to the beneficiaries from January 1, through Aadhaar-enabled accounts.

The inclusion of voter cards along with the Aadhaar number has come after many states lodged complaints stating that the system was not foolproof yet.  Sheila Dikshit also pointed out that poor people were being harassed while opening bank accounts though Aadhaar numbers.

The Finance Ministry has now admitted to some glitches in the system.

Education loans, scholarships, MGNREGS payments, old age pension, PDS subsidies, LPG subsidies, Indira Awaas Yojna subsidies and fertiliser subsidies are to be paid to the beneficiaries in cash.

Meanwhile, Aadhaar will cover 18 states and Union Territories by April 2013 and 16 more states and UTs by April 1, 2014. Kerala, Haryana, Himachal Pradesh, Punjab, Rajasthan, Sikkim, Tripura, Goa, Gujarat, Jharkhand, Delhi and Puduchery will be the first ones to witness the roll-out.