UIDAI Chairman Nandan Nilekani submitted the report of the committee headed by him regarding direct transfer of subsidy to the beneficiaries, to the Finance Minister Pranab Mukherjee. The interim report of the task force on direct transfer of subsidies on Kerosene, LPG and Fertilisers suggested creation of a Core Subsidy Management System (CSMS) for maintaining information on entitlements and subsidies for all beneficiaries. The CSMS, as indicated in the report, will provide increased transparency in the movement of goods, level of stocks, prediction and aggregation of demand and identification of beneficiaries.
Nilekani Panel on Cash Transfer Scheme Highlights of Recommendations Nade in Interim Report Submitted by the Panel
LPG:
- Phase I: Cap consumption of subsidised cylinders (Policy decision of government and not a specific task force recommendation).
- Phase II: Consumers buy LPG at market price, with direct transfer of subsidy to their bank account.
- Phase III: Identify and target segmented customers for subsidy.
- Phase I: Information visibility up to the retailer level. Phase II: Direct transfer of subsidy to the retailer.
- Phase III: Farmers buy fertilisers at market price, with direct transfer of subsidy to their bank account.
Phase I: Cash transfer through state governments.
Phase II: Cash transfer to accounts of beneficiaries.
Report recommends creation of centralised software for the product and service transfer. The poors have been recommended to get the share of subsidies directly through bank branches, Automated Teller Machines (ATMs), business correspondents, the internet or mobile banking channels. Pilot projects for such direct cash transfers have been recommended to begin in seven places— Tamil Nadu, Assam, Maharashtra, Haryana, Delhi Rajasthan and Orissa—from October 2011.
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