India on Monday announced a direct cash transfer of subsidies and welfare schemes for millions of its citizens, officials and news reports said. Under the plan, families will receive cash in their bank accounts, instead of being handed over subsidized foodgrains, fertilisers or fuel.
The Direct Cash Transfers (DCT) is expected to check corruption and pilfering in the existing subsidies system and enable effective delivery of the government's welfare measures. "We have a chance to ensure every rupee spent by the government is spent truly well and goes to those who truly deserve it," said Premier Manmohan Singh who announced the scheme late Monday night.
The DCT is scheduled for launch in 51 administrative districts in January 2013 and will cover the country's entire 640 districts by the end of the year, Singh said. The existing subsidies and schemes are worth over 65 billion dollars annually and the new system is expected to benefit millions of people, the IANS news agency reported. According to the 2001 census, at least 5.9 million households in India were categorised as impoverished.
Political observers say the scheme will be a "vote-catcher" for the ruling United Progressive Alliance at the 2014 national elections, much like the National Rural Employment Guarantee Scheme, acknowledged among the key reasons for its return to power in 2009. But implementing the ambitious scheme is ridden with procedural and logistical difficulties - including identifying beneficiaries and transferring cash to vast numbers who do not have bank accounts. "In the coming days we will need to make every possible effort to address these challenges," Singh said adding: "This is a programme in which the implementation capacity of our government will be tested."
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