Govt extends term of reference of Nilekani panel on subsidies

"It has been decided to extend the Terms of Reference of the Task Force to include an Aadhaar-enabled unified payment infrastructure," the Finance Ministry said in a statement.

Under the Aadhaar scheme of Unique Identification Authority of India (UIDAI), citizens are being allotted an unique identification number. The UIDAI is headed by Nilekani.

As part of its extended terms of reference, the Nilekani-led panel has been told to recommend a detailed solution architecture for direct transfer of subsidy by which ministries and state governments can transfer funds into any Aadhaar-enabled bank account on the basis of the unique identification number.

It will also "recommend an architecture for e-banking through inter-operable business correspondents and examine alignment of current standards for devices that will be deployed by them."

The task force has also been asked to suggest a system to align the recommendations of the Inter-Ministerial Group on a Framework for the Delivery of Basic Financial Services using mobile phones with Aadhaar enabled payments infrastructure.

Meanwhile, all ministries have been told to align their pilot projects on direct transfer of subsidies on kerosene, LPG and fertiliser with the recommendations of the Nandan Nilekani-headed task force.

"During this period (till the presentation of final report), along with other pilots, the current pilots being undertaken by the ministries implementing the interim report of the Task Force on Direct transfer of subsidies on Kerosene, LPG and Fertiliser will need to be aligned," the Finance Ministry said in its office memorandum.

The Nilekani-led panel, constituted in February, submitted its interim report on July 5, following which its suggestions were taken up on a pilot basis by the concerned ministries under the supervision of the task force.

In its interim report, that panel had suggested direct cash transfers through banks, ATMs or even mobile banking for beneficiaries of kerosene, LPG and fertiliser subsidies.

Pilot projects for transfer of direct cash subsidy will be launched in seven states -- Tamil Nadu, Assam, Maharashtra, Haryana, Delhi, Rajasthan and Orissa -- from October, according to the roadmap suggested by it.

"The task force will submit its final report on the extended Terms of Reference within three months of the extension of the Terms of Reference," the statement said.

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