To evolve mechanism for direct subsidy transfer
To curb the misuse of subsidised kerosene, cooking gas (LPG) and fertilisers, the Centre has constituted an inter-ministerial task force under Unique Identification Authority of India (UIDAI) Chairman Nandan Nilekani.
The team of experts will work to evolve a mechanism for direct subsidy transfer and give its interim report within four months. Several government committees in the past, including the Kirit Parikh committee, had recommended direct transfer of subsidies. States such as Haryana and Madhya Pradesh are close to implementing a direct subsidy transfer for grains.
“To evolve a suitable mechanism for direct subsidies to individuals and families entitled to kerosene, LPG and fertiliser, the Government of India has constituted a task force,” the Finance Ministry said.
The recommendations of the task force will be implemented on a pilot basis by the ministry under the supervision of the expert team during the subsequent six-month period. Besides, it is also expected to evolve a model of direct transfer of subsidies on the items by re-engineering existing systems, processes and procedures in the implementation process.
Nilekani is the chairman of UIDAI, the agency responsible for implementing the unique identification card project. Besides UIDAI chairman, the team will comprise secretaries from finance, chemicals & fertilisers, agriculture, food & public distribution, petroleum & natural gas and rural development with DG UID Authority.
The government had formed the task force in light of the “overwhelming evidence” that the present policy of giving subsidy on kerosene was resulting in “waste, leakage, adulteration and inefficiency”, the statement said. The government provides kerosene at subsidised prices to below poverty line families under the Public Distribution System. “Therefore, it is imperative that the system of delivering the subsidised kerosene be reformed urgently,” it added.
“Similarly, the system of provision and delivery of subsidised LPG to intended beneficiaries needs to be reformed. The current subsidy on kerosene is Rs 20.56 per litre while the same on domestic LPG is Rs 356 per cylinder. This leaves a massive scope for blackmarketing in these essential commodities,” the statement said.