Economy

Panel to suggest mechanism for direct transfer of subsidies

Our Bureau New Delhi | Updated on February 14, 2011 Published on February 14, 2011

Nilekani to head task force

The Centre has constituted a task force under the Chairmanship of Mr Nandan Nilekani to evolve a suitable mechanism for providing direct subsidies to individuals/families that are entitled to kerosene, LPG and fertilisers. Mr Nilekani is the Chairman of the Unique Identification Authority of India (UIDAI).

The task force has been mandated to evolve a model of direct transfer of subsidies on these items — kerosene, LPG and fertiliser — by re-engineering existing systems, processes and procedures in the implementation process.

It would also undertake designing appropriate IT systems and aligning these with the issuance of UID numbers, and bringing about changes in the administration and supply chain management.

Besides Mr Nilekani, the task force would comprise Secretaries from the department/ministries of expenditure, financial services, chemicals and fertilisers, agriculture, food and public distribution, petroleum and natural gas and rural development.

The task force has been asked to submit an interim report within four months of its Constitution. The recommendations of the interim report would be implemented on a pilot basis by the ministries concerned under the supervision of the task force in the following six months from the date of submission of the interim report.

The final report would be submitted thereafter which would include the results of the implementation of the solutions on the field.

The Centre is of the view that the current policy of providing kerosene at subsidised prices to below poverty line (BPL) families under the Public Distribution System (PDS) is resulting in waste, leakage, adulteration and inefficiency.

It is imperative that the system of delivering the subsidised kerosene be reformed urgently and hence the need for constitution of this task force.

The system of provision and delivery of subsidised liquefied petroleum gas (LPG) to the intended beneficiaries needs to be similarly reformed, an official release said.

Fertiliser subsidy, as it exists today, is available to all farmers. It is not possible to differentiate the segments for which the subsidy should be given in this sector.

There is a need to evolve a suitable mechanism for direct subsidies to individuals who are entitled to them, the release added.

> krsrivats@thehindu.co.in

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Published on February 14, 2011
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