Direct cash subsidy scheme to come soon

In a move to cut down wastage, duplication and leakages and enhance efficiency, Prime Minister Manmohan Singh on Friday gave a major push to transfer individual benefits from the government directly into the bank accounts of beneficiaries by setting up an architecture for the same.

The prime minister set up a national ministerial committee consisting of ministers connection with cash transfers and a national executive committee of senior officials.

“This is to be done in a fast-track, accelerated mode to be achieved in a time-bound manner. The idea is to move to a completely electronic Cash Transfer System for the entire population,” a press release from the prime minister’s office (PMO) said.

It added that with the rapid rollout of Aadhar, now covering 20 crore people and likely to reach 60 crores, 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.

A Cash Transfer System can be used for transferring cash benefits such as rural job scheme wages, scholarships, pensions, income support of other types and health benefits. “Electronic Transfer of Benefits (ETB) is a simple change as the transfers are already taking place and the only modification that would be involved is a movement from a paper-based, cash-driven system to an electronic direct transfer system,” the release said. Cash Transfer System would improve targeting, reduce corruption, eliminate waste, control expenditure and facilitate reforms.

The government and RBI have issued guidelines to banks for implementation of ETB. Pilot projects are under implementation in Andhra Pradesh, Tamil Nadu, Karnataka, and other states.

The national ministerial committee, headed by the prime minister will include ministers in charge of finance, IT, social justice, human resource development, minorities, labour, health, food, petroleum and natural gas, fertilisers, Planning Commission and UIDAI (Aadhar). This committee at the highest level would ensure coordination and decision-making at the highest level and impart the necessary urgency to the programme.