Government plans to transfer cash subsidies from January 2013

NEW DELHI: The government plans to kick off direct transfer of cash subsidies under various welfare schemes into the bank accounts of poor beneficiaries from January 2013.

A high-level government panel on direct cash transfers led by the Prime Minister's principal secretary Pulok Chatterjee on Friday asked ministries to identify schemes whose benefits can be disbursed through direct cash transfers. The ministries have also been asked to revert with clear roadmaps and timelines for rolling out cash transfers under these schemes.

The new transfer regime will ride on the Aadhaar-based biometric identification of beneficiaries created by the Unique Identification Authority of India (UIDAI). To bring reluctant ministries on board with the Aadhaar-based cash transfer systems, Prime Minister Manmohan Singh had recently thrown his weight behind the UIDAI by creating a new National Committee on Direct Cash Transfers under his own chairmanship.

The PM is expected to chair the first meeting of this committee on 26 November, where the roadmaps and timelines submitted by ministries for shifting schemes to the direct cash transfer system will be presented.

The Congress-led UPA government is betting on cash transfers being a game changer ahead of the Lok Sabha elections of 2014 and the timelines dictated by the executive committee led by Chatterjee confirm this strategy.

While January 1 has been set as the target rollout date for cash transfers in 51 districts of the country, it would be extended to as many as 18 states by April 1, 2013. The rest of the 16 states, the committee decided, should have initiated cash transfers "from 1 April, 2014 or earlier," a release from the PM's office said.

To ensure a smooth transition, the department of financial services has been asked to ensure 'universal financial inclusion through individual bank accounts for all' in line with the region-wise roadmap for rollouts.

The UIDAI, chaired by Infosys veteran Nandan Nilekani, has been told to set up a dedicated cell of technical experts to help ministries move to Aaadhaar-enabled direct cash transfers. The authority has also been asked to expedite the rollout of Aadhaar numbers to citizens.