Direct subsidy transfer to cover 78 more districts

PM on Friday acknowledged that it has 'run into difficulties', efforts must be made to ensure programme does not fail

The Direct Benefits Transfer (DBT) subsidy scheme is being extended to 78 districts in July, even as Prime Minister Manmohan Singh today acknowledged it had "run into difficulties". He said efforts must be made to ensure the programme did not fail.

Reviewing the progress, Singh said, “We have come some distance since the programme was rolled out in January. We have resolved a number of operational issues. I am encouraged by this and hopeful about the future.”

He said the programme’s implementation had "revealed the unsatisfactory nature of tracking and monitoring systems we have."

The flagship programme, rolled out in 43 districts in Phase-I in January, will be expanded to include the LPG subsidy in a phased manner, to cover 20 districts by May 15. More districts will be brought in its ambit, with the expansion of Aadhaar enrolment.

The total number of LPG consumers in the country is 140 million, and as the scheme rolls out, the subsidy amount will be transferred to consumers directly to their bank accounts.

With the subsidy going directly, there will be only one price at which cylinders will be sold at a dealer's shop. This will eliminate all ghost connections and diversion of cylinders, an official statement said. The scheme will be expanded to include post offices from October 1.

In the meeting of the National Committee on DBT attended by ministers concerned, including Finance Minister P Chidambaram and Deputy Chairman of Planning Commission Montek Singh Ahluwalia, the prime minister said the initiative had the potential of transforming the way in which government benefits are delivered to people.

At the meeting, it was decided the scheme, in Phase-II beginning July 1, will be extended to cover a fifth of the country, as 78 districts will be brought in its ambit in states like Odisha, West Bengal, Uttar Pradesh, Uttarakhand, Bihar and Chhattisgarh. Three pension schemes of the rural development ministry would also be included in the programme.

"Conceptually, DBT involves a few simple steps: Digitising data, enrolling in Aadhaar, opening bank accounts and seeding these accounts. However, Direct Benefits Transfers also require process re-engineering,” Singh said.

"We need to change the way we transact business, the way we release funds, the way we track funds and the information we have on beneficiaries. I hope due attention will be paid to these aspects as we move forward in implementing the programme," he told the meeting.

Singh asked all the departments to apply themselves with commitment to this major initiative. "The Planning Commission and the Finance Ministry have a special responsibility of working together for the achievement of the objectives that we have set for ourselves," he emphasised.

"If we need to ensure that the money we spend delivers outcomes, it is necessary that we have a robust monitoring system in place. That is one of the things that Direct Benefits Transfers will achieve, in addition to making the process of getting benefits simpler for the beneficiaries and eliminating corruption and wastage," he said.