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Centre tells states to plug subsidy leakage

businesspaper Updated: Jul 05, 2016, 07:29 IST
Timsy Jaipuria
Timsy Jaipuria

NEW DELHI: In a nation-wide drive, the finance ministry has asked states and Union Territories (UTs) to take crack down on duplicate and bogus subsidy accounts and inform the Centre about action taken.

Sources said the states and UTs have been asked to weed out fraudulent beneficiaries for ration cards, liquefied petroleum gas (LPG), kerosene and fertilisers, so that the subsidiaries reach the target audience.

The ministry has advised states to be more pro-active and use technology, as well as the Aadhaar database.

“The focus now is on the states to administer the intent of the policy, and through the use of technology and Aadhaar, they should weed out duplicate and bogus ration cards and accounts so that the Centre and states can cut expenditure and use the money judiciously,” Ashok Lavasa, expenditure and finance secretary , told HT.

The move is aimed at slashing state and central expenditures on subsidies.

The Budget 2016-17 pegged the subsidy bill on food, petroleum and fertilisers at about ₹2.31 lakh crore. This was 4% lower than the revised estimates of the subsidy bill of ₹2.41 lakh crore for 2015-16.

The directive issued by the expenditure department of the finance ministry comes after both the cabinet secretariat and the Prime Minister’s Office (PMO) have red-flagged bogus and duplicate subsidy accounts.

The government till now has eliminated 16 million duplicate ration cards, which has alone helped save about ₹10,000 crore on the subsidy bill annually.

Highlighting how an IT-based system can be helpful in improving subsidy management and bring in transparency, the government has asked states to put all the rations cards online for easy monitoring. As of now, about 97% of the ration cards have been digitised, and the rest would be done soon.

The finance ministry also plans to provide fertiliser subsidy through direct benefit transfer (DBT), a system used for giving LPG subsidy.

DBT sends the subsidy directly into the bank account of the beneficiary after he or she has incurred the expenditure for buying the subsidised product such as an LPG cylinder.

This ministry’s plan is in accordance with the concept of JAM trinity — the linking of Jan Dhan accounts with Aadhaar and mobile numbers — to plug subsidy leakages.

A critical component of minimum government and maximum governance is to ensure targeted disbursement subsidies, sources said.

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