Direct cash transfer scheme will be extended to food subsidies

With strengthening data base and the JAM (Jan Dhan, Aadhaar, and Mobile phones) mechanism, the government is aiming to introduce direct cash transfer into the food subsidy programme also.

Senior Finance Ministry Official has today revealed the idea about the programme.

The motivation for sending over Rs 1.3 lakh crores into the bank accounts of the beneficiaries is the success of the direct benefit transfer for cooking gas to households.

Similarly, two days back the government has launched another database oriented project- the Digital Indian initiative.

The food subsidy of the country is the largest subsidy item followed by fertilizer and fuel subsidies.

It is estimated that introduction of cash transfer for providing fuel subsidy to households has saved nearly one fourth of the subsidy bill. The scheme of direct cash transfer for gas subsidy is one of the biggest in the world with nearly ten crores recipients.

Major gains for the government occurred under the programme with leakages bieng minimized. If the same direct cash transfer is extended to foods subsidies, the benefit will be at least 10-15% of the total food subsidy bill.

Project consulting firm, Standard and Poor estimated that India can save nearly Rs 25000 crores if the direct cash transfer scheme is extended to the whole subsidy scheme.

Finance Ministry expects that with nearly 800 million Aadhaar cards, 12.5 crores JDY accounts, and 90 crores mobile phones, the government is in a strong position to roll out any direct cash transfer scheme.

With this strong data base, the food subsidy can be efficiently provided to the people, if the local bodies can find the real beneficiaries. 

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