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At a conference on the subject of basic income transfers, he said sale of subsidised LPG cylinders had come down by 25 per cent, as most “ghost” beneficiaries had been eliminated.
However, he cautioned against exuberance. “It’s necessary that we don’t overestimate the gain and under-recognise possible cost of doing this. In the case of DBT and Pahal, we have some preliminary evidence to suggest a lot of it is elimination of ghost beneficiaries but we can’t rule out that there could be exclusion of genuine beneficiaries.”
Under the scheme, LPG cylinders are sold at market rates and those eligible get the subsidy amount directly in their bank accounts. By linking it to the Aadhaar platform, the scheme tries to lower the illegal diversion and eliminate duplicate or bogus connections.
Subramanian, who coined the term 'JAM' - Jan Dhan, Aadhar and mobile - in the government's economic survey, said delivery of public services legitimises the state. "If the government can deliver these, it would arrest the ongoing trend of de-legitimisation of the state the world over."
He was, however, cautious about extending the DBT programme to cover kerosene. Unlike in the case of LPG, the poor, especially in rural areas, are the main beneficiaries of kerosene subsidy. Its delivery, he said, continued to be plagued by the problem of 'last mile' connectivity.
Addressing this would require setting up of payment banks, mobile money transfers and recruiting of banking correspondents. Even so, one has to tackle the 'first mile' challenge, of putting in place the information technology infrastructure to ensure correct identification and targeting of beneficiaries.
On extending the scheme to other subsidies, notably food, the CEA said no date had been finalised.
