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Union Budget 2012-13: Unviable, ineffective subsidies may be revisited


March 16, 2012 - New Delhi

Union Finance Minister Pranab Mukherjee today announced the government's commitment to fully provide for subsidies relating to the Food Security Act, but cautioned that some other subsidies which were incompatible with macroeconomic fundamentals of the economy, and were not reaching the intended beneficiaries, could be revisited.

Presenting the General Budget 2012-13 in the Lok Sabha, Mukherjee said efforts would be made to keep Central subsidies under 2 per cent of GDP, and that over the next three years it would be further brought down to 1.75 per cent of GDP.

He said the focus would now be on better targetting and leakage-proof delivery of subsidies.

Mukherjee said, based on recommendation of task force headed by Nandan Nilekani regarding direct transfer of subsidy, a mobile-based fertilizer management system has been designed to provide end-to-end information on movement of fertilizers and subsidies.

"This system would have anation-wide roll outthis year. Direct transfer of subsidy to the retailer, and eventually to the farmer, will be implemented in subsequent phases," he added.

He also announced an escalation in efforts to roll out Aadhaar- enabled payments for various Government schemes in at least 50 district within the next six months.

Mukherjee informed that the Public Sector Oil Marketing Companies have launched LPG transparency portals to improve customer service and reduce leakage.

A pilot project for selling LPG at market price and reimbursement of subsidy directly into the beneficiary's bank account is being conducted in Mysore.

A similar pilot project on direct transfer of subsidy for kerosene into the bank accounts of beneficiaries has been initiated in Alwar district of Rajasthan. The Aadhaar platform has also been successfully used to validate PDS ration cards in Jharkhand.

ANI

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