29.9.12

PM pushes Cash transfer system


In a bid to accelerate the creation of a cash transfer system for major subsidies that would cover the entire population, Prime Minister Manmohan Singh has set up several committees, including a ministerial panel, to ensure a swift rollout.
A cash transfer system linked to Aadhaar — a biometric database of residents of India — is at the heart of the government’s attempt to target subsidies efficiently and reduce elimination and wastage in programmes like the public distribution system, cheap cooking gas and fertilizer subsidy.
The announcement was billed by the PMO as a major step to improve government finances and tackle burgeoning subsidies, long seen as a bane on India’s economy by international rating agencies as well as domestic public policy experts and economists.
“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,” an official release said.
Such a system can be used for transferring cash benefits such as MNREGA wages, scholarships, pensions, income support and health benefits.
Activists and a section of policy planners have opposed cash transfers in schemes like PDS, arguing that beneficiaries may not able or capable of accessing bank accounts and may also divert the money towards social ills like drinking instead of buying food grain.

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