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Economy Dec 31, 2012

Cong being extra cautious in first phase of cash transfers

By Politics

The government will roll out its New Year's gift, direct cash transfers to beneficiaries, from tomorrow, 1 January, in 43 identified districts in a staggered manner. Since the hype around the announcement had raised public expectations, particularly in the hinterland, Finance Minister P Chidambaram clarified that direct transfers of subsidies on food, fertiliser and kerosene are not being contemplated for the present. This will take more time as the issues of entitlement are more complex.

This is the most ambitious project of UPA-2. Top functionaries in the government are keen to ensure that the impact of cash transfers becomes visible in the pilot districts. The idea is to show-case these successes to the rest of the country in case of an early election, just as NREGA and farm loan waivers were in 2008-09.

P Chidambaram. Agencies.

The government's top leaders are conscious of a potential mismatch between hype and reality. Chidambaram was thus careful to dispel the impression that it would be a substitute for the delivery of food and essentials through the public distribution system. "Direct benefits transfer will not replace food with cash under the public distribution system. The government is committed to legislating the National Food Security Act", Chidambaram said.

The official estimates are that around two lakh beneficiaries will start getting cash in the New Year. Though the scheme is to cover 26 schemes, it will begin with seven schemes. The number of schemes covered has been bloated by separate identification of schemes and districts to the same social groups: there is, for example, a separate scheme called post-matric scholarships for SC students in seven districts, pre-matric scholarships for SC students in one district, and a post-matric scholarships for OBC students.

Of the 43 districts identified, the scheme will be launched in 20 districts on 1 January, in another 11 districts on 1 February and in the remaining 12 districts on 1 March.

The finance minister clarified that it may not cover all 26 schemes in all the 43 districts. Further, under some of the 26 schemes, the next instalment will be due only in the next financial year.

The rollout has been phased based on the list of beneficiaries being digitised in the district concerned, opening of bank accounts for beneficiaries, enrolment of Aadhaar numbers, seeding of bank accounts with Aadhaar numbers, and availability of funds.

by Politics

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