Cash transfer of subsidy from Jan 1: Chidambaram
will start direct cash transfer of subsidy amount to beneficiaries
in 51 districts from the beginning of the next year and targets to
introduce the new programme across the country by the end of 2013,
Finance Minister P. Chidambaram said Saturday.
New Delhi: In
preparation for the launch of the UPA government's direct cash
transfer (DCT) of subsidies and welfare schemes to millions of
people, Prime Minister Manmohan Singh will Monday hold the first
meeting to roll out the ambitious project which it hopes would be
a game changer for the government and the nation.
The subsidies and schemes are worth Rs.3.23 lakh crore ($65
billion) and the DCT is scheduled for launch Jan 1.
The DCT, a new system under which the beneficiaries receive cash
directly in their bank accounts, is expected to enable delivery of
the government's subsidies and welfare measures to the intended
targets without pilferage.
The project will be launched about 15 months ahead of the 2014
Manmohan Singh heads the national committee on DCT, set up in
September, with 11 cabinet ministers, two ministers of state and
others. The will coordinate action for the introduction of DCT to
The national committee's meeting comes 17 days after the executive
committee for DCT -- headed by the prime minister's principal
secretary Pulok Chatterji -- met Nov 9 and set the Jan 1 deadline
for launching the project in 51 districts of the country.
The scheme will cover 18 states and union territories by April
2013 and it will be extended to 16 more states and union
territories by April 2014, according to sources in the prime
minister's office (PMO).
The DCT architecture, being anchored by the planning commission,
involves departments of financial services, unique identity
authority (Aadhaar), information technology, expenditure, posts,
rural development, social justice and empowerment, tribal affairs,
minority affairs, higher education, school education, health and
family welfare, women and child development, labour and
employment, petroleum and natural gas, fertilizers, and food and
The executive committee, in its meeting Nov 9, had asked all the
departments to send a list of schemes, road maps, and time lines
for the DCT project to the planning commission and the PMO by Nov
The ultimate aim of this move is "a completely electronic cash
transfer system for the entire population", an official in the PMO
It was aimed to "cut down wastage, duplication and leakages and
enhance efficiency" in the delivery of welfare schemes, as also to
"improve targetting, reduce corruption, eliminate wastage, control
expenditure and facilitate reforms".
"The new system is expected to benefit a quarter of India's
households. It could mean several millions of people will be
beneficiaries," the official said.
The government, the official said, could immediately roll out the
cash transfer scheme for certain welfare schemes such as
scholarships and pensions and unemployment allowance, as pilot
projects had been executed in certain parts of the country,
including in East Delhi.
The Unique Identity Authority of India (UIDAI), which is
implementing the Aadhar scheme, has already enumerated around 200
million people from 2006 to now and has a target of reaching 600
million people within the next 18 months.
However, with regard to public distribution system and fuel
subsidies, the cash transfer scheme would take more time to