International Monetary Fund quoted that integration of direct cash transfer with Aadhaar will take time but the scheme will help Indian government save 0.5 per cent of the GDP.
- Better targeting of spending on the poor
- Indian government save 0.5 per cent of the GDP
- The combination of schemes will eliminate the estimated 15 per cent leakage cited above for the programmes.
- Direct cash transfers can bring down costs and diversion by phasing out middlemen and complex bureaucracies present in current subsidy programs.
- Timeframe for bringing India’s population of 1.2 billion into the Aadhaar programme could extend beyond 2014
- Integrating this database with information on individuals eligible for subsidised fuel will take time
Current Subsidy programs
- Food & kerosene- Available from Government Stores at below market prices
- Fertilizers- All fertilizers sales are at subsidized Prices
- LPG Cylinders- distributed directly, with a limit on each household’s subsidised purchase
- Pilot programmes delivering subsidised kerosene using Aadhaar-based identification have been set up in Rajasthan
- Pilot scheme replacing subsidised LPG with direct cash transfers was also launched in Mysore, Karnataka