Prime Minister Manmohan Singh set the ball rolling for the UPA-2’s most ambitious programme—transfer cash into bank accounts of beneficiaries. It will start with about 20 Central schemes from January 1, 2013, in 51 districts of the country and is targeted to cover the entire country before the 2014 Lok Sabha elections.  As first reported by HT on September 24, the government intends to transfer benefits and subsidies worth R4,000 billion directly into bank accounts. A big chunk of these benefits will go to people below poverty line.

“We have a chance to ensure that every rupee spent by the government is spent truly well and PM Singh said in his concluding remarks at the first meeting of National Committee on Cash Transfers headed by him.  Cash transfers

As many as 12 Central ministries have identified schemes covering pensions, scholarships, wages under national employment guarantee programme and subsidised ration to be covered under the direct cast transfer in its first phase. The money under these schemes will be directly transferred into Aadhaar-linked bank accounts removing interface with government officials.

“The emphasis was to ensure that cash transfer succeeds in 51 districts before its expansion,” said a top government official.

A decision was also taken that other ministries would join when the cash transfer is expanded to 18 states by April next. The entire country would be covered by end of 2013 intended to transfer subsidies worth Rs. 3,000 bn to beneficiaries’ accounts, the PM said, adding the programme would “test” the “implementation capacity” of the government. 

The PM also emphasised on the challenges involved in implementing direct cash transfer having two key pillars — Aadhaar platform and financial inclusion. The reasons are Unique Identification Authority of India has issued Aadhaar numbers to just 210 mn people and half of rural Indians do not have a bank account.