The government of India is making a plan to provide cash direct to the poor persons from Jan 2012 to reduce the corruption for preventing subsidized items and welfare benefits from reaching to needy persons. At least 720 million people (a population of whole of the Europe) a biggest part of the world will be affected by this big programme by giving money directly to the poor citizen of this country. The families below or above the Government set poverty line that is Rs. 28.65 per day income in urban area and Rs.22.42 for rural. This point for poverty definition was in criticism for being exceptionally low amount. The Government decided to form a committee to reconsider the amount for poverty. According to a government official an amount expects to transfer up to Rs. 40,000 a year to each household who are poor.
The government currently spends Cash handouts would replace the money subsidies on items like fuel, food and fertilizer which will be minimized. Only a fraction of subsidized goods reach to the poor due to bureaucratic inefficiencies and corruption lead to wastage. Welfare programmes, which are run by Government spending on subsidized fertilizers-will remain overall unchanged at roughly 4 trillion rupees a year to guaranteed employment for rural dwellers. Election 2014 is due Prime Minister Manmohan Singh’s government is looking for a way to make its large welfare programmes target oriented. The innovative use of technology and the spread of modern “Direct cash transfers, which is now becoming possible for banking across the country, to cutting down leakages and targeting beneficiaries better open the doors for eliminating waste, “Prime minister said earlier this week, after meeting officials who are a part of committee set up to implement the programme of transferring cash. 1st Jan 2013 is the target ambitious programmed to launch this plan to cover 18 states and December the last day for whole country.
Benefits to 29 welfare programs related to only subsidies and benefits such as healthcare and scholarship will be covered in this. Later on this will be expanded to cover subsidies on cooking gas, fertilizer and food. For that purpose subsidizes will only be given to households those use it honestly that is cooking gas and cash transfer. There is no opportunity for bureaucrats or businessmen to pad contracts to deliver food or other services to reduce corruption by giving poor people cash rather than subsidized services, some development economists say. Some Analysts predict that if this programme is successive than more cash in the hands of people could lead to a higher demand for goods thus spurring manufacturing and eventually boosting up our economic growth. It should not be inflationary, Our Government officials say it.
A senior representative from our Prime Minister’s office said that the roll-out of direct cash subsidy will not lead to any additional burden on the Government’s revenue. New way of cash transfer system will minimize the leakage of money through middleman and actual persons will be profited. Spokesperson said. Aadhaar will be the medium for cash transfer a numerical biometric identification that is currently being given to everyone in the country. The ID plan – officially called the Unique Identification Authority of India (UIDAI) project – will help people access services like banking. Those who are having this card and are eligible for will get the money directly to their bank accounts.
The possible hurdles to the success of the programme may come from the lack of penetration of Aadhaar cards, even bank branches and bank accounts. An approx 300 million people in the India of 1.2 billion have no official identification proofs. This prevents them from opening bank accounts or getting work, according to UIDAI report. The government has plans to guarantee simple bank accounts to the poor. But many poor families do not even have bank accounts, only 210 million people have Aadhaar cards and bank account.