The Hindu Business Line : Tackling subsidy

The editorial “Staunching the subsidy bleed” (Business Line, December 22) has correctly stressed that the need for “Novel solutions” to tackle and arrest the continued pilferage of “Subsidy”. Given the background of electoral arithmetics, one cannot expect a political decision to quickly eliminate the pilferage. It is, therefore, necessary that the beneficiaries learn to appreciate the efficiency of any new system and, over time, demand for its implementation.

Technology (read IT solution) needs to be leveraged to deliver the the subsidy to the intended beneficiary. Since bio-metrics and bank accounts are being introduced to the villagers, all transactions involving subsidy should be routed through the bank account. Care should, however, be taken to ensure that the funds transferred to this account are not drawn as cash and misappropriated. Simple systems can be programmed to announce to the account holder in the vernacular language, minimum account particulars and such other pertinent details.

The bio-metrics access terminals can be made available at the public distribution store, where the beneficiary buys kerosene and other essentials; at the farm store for seeds and fertilisers and pesticides. His income can be credited to the same account. He can electronically pay the electricity and telephone bills.

As the editorial suggests, such a system, over a period of time, will create a credit record of the borrower, which will facilitate targeted lending.

Balakrishnan V e-mail