Govt keen on direct subsidy; sets up task force under Nilekani | delhi | Hindustan Times
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Govt keen on direct subsidy; sets up task force under Nilekani

delhi Updated: Feb 14, 2011 21:16 IST
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Concerned over leakage and wastage of public funds, the government today constituted a task force under UIDAI chief Nandan Nilekani to suggest ways to provide kerosene, cooking gas and fertiliser subsidies to intended beneficiaries directly.

The inter-ministerial task force to streamline the subsidy distribution mechanism comes within three weeks of a brutal incident of burning alive an additional district collector Yashwant Sonawane in Maharashtra while he was trying to check illegal hoarding of kerosene and petrol.

The Centre provided a subsidy of Rs 14,257 crore on LPG and Rs 17,364 crore on kerosene during 2009-10. It had spend Rs 53,000 crore towards fertiliser subsidy. However, it is feared that only a fraction of these amounts reached the intended beneficiaries.

The task force, which has been asked to submit its interim report within four months, will suggest "a model of direct transfer of subsidies re-engineering existing systems, processes and procedures in the implementation process", said a finance ministry release.

The need to set up the task force arose in view of "overwhelming evidence that this (current) policy is resulting in waste, leakage, adulteration and inefficiency.

Therefore, it is imperative that the system of delivering the subsidised kerosene be reformed urgently," it added. The committee is headed by former chief of Infosys Nilekani, who at present is Unique Identification Authority of India (UIDAI) chairman.

The panel will include secretaries from ministries of finance, chemicals and fertilisers, agriculture, food, petroleum and rural development. Besides designing IT framework, the task force will align the systems with the issuance of the UID numbers and suggest changes in the administration and supply chain management.

The recommendations of the task force, the statement said, will be implemented on pilot basis by the concerned ministries and the final report would include the results of such projects. At present, the government provides kerosene at subsidied rates through the Public Distribution System (PDS) to families living below poverty line (BPL). The LPG is provided a subsidies rates to households.

As regards fertilises, the government provide subsidy to companies so that farm inputs, which include urea and imported fertilisers, can be provided to the farmers at cheaper rates. "It is not possible to differentiate the segments for which the subsidy should be given in this (fertiliser) sector. There is a need to evolve a suitable mechanism for direct subsidies to individuals who are entitled to them," it said.