Now, govt to bring in indirect subsidies
POLICY SHIFT Centre to extend cash transfer schemes from entitlements to subsidies, may spark row
NEW DELHI: The government’s fiscal management plan in the budget could see a roadmap on extending the controversial cash transfer schemes from just entitlements to subsidies, a move that could add fuel to the already surcharged atmosphere over the land acquisition bill.
The finance ministry has issued instructions to bring all Central schemes having a financial component under the direct benefit transfer (DBT) from April, apparently to plug leakages and to keep the subsidy bill in check.
A similar mechanism would be adopted for fund transfer to institutions.
This means the Centre will transfer only a fixed subsidy directly into the bank accounts of beneficiaries. If the market price of the product increases, the beneficiary will have to pay the differential amount from his or her pocket.
The system will cover transfer of food subsidy, wages to lakhs of workers under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) and all social sector schemesdirectlyintobankaccounts of millions of beneficiaries.
Keeping this in mind, the Unique Identification Authority of India (UIDAI) has been directed to universalise Aadhaar enrollment by June.
Till now only 35 Central schemes — such as pension and scholarships — were in the direct transfer mode.
“For great and universal impact on efficiency in delivery of benefits, their timelines, along with accurately targeting of the intended beneficiaries, it is imperative that DBT may be extended beyond the transfers from the Centre directly to individuals in all schemes/ projects…” says a circular issued by Nidhi Khare, joint secretary in the finance ministry.
The ball started rolling after the food ministry issued simultaneous directions that beneficiaries would have to buy foodgrain from the open market. They would get the subsidy amount in their individual Aadhaar-linked bank accounts every month.