Cash in hand for the poor - a Good move or a blunder?

[SpArK]

Cash in hand for the poor - a Good move or a blunder?​

Some people who might have read the newspapers must have seen the news of Governments plan to give direct cash to people instead of subsidies in their own bank account . Its been learned 4 lakh crore rupees has been allocated towards it. There are 32 schemes including LPG, rice wheat and essentials, school education, kerosene, scholarships,pensions , health schemes, unemployment allowance etc etc.

The direct transfer to beneficiaries will begin across 51 districts in 16 states effective January 2013. FM chidambaram said, the direct transfer of subsidies would be carried out through electronic benefit transfer (EBT). EBT is a system that allows the government to provide and track benefits to households or citizens directly through their bank accounts.

I want to ask Indian members whether this scheme will prove to be successful like the rural employment scheme which did pretty well or will it be a blunder paying the money to people. or is it just electoral politics.


Ref:

Subsidies to be routed through EBT: FM | mydigitalfc.com

 

[Chinese-Dragon]

Simply "giving out cash" doesn't work. It is much better to get them to earn it somehow, even if it is only a symbolic way of earning it.

Look at all the unemployed people living on welfare payments in the West and other regions. Or people who win the lottery (they usually end up back where they started within five years).

Giving out free cash is like giving out free aid, it leads to a "crutch" mentality, where they assume more money is coming that they don't have to work for.

 

[SpArK]

Soon, LPG subsidy will land in your bank account

Six nationalised banks in the State have recently informed the oil marketing companies (OMCs) their willingness to implement the proposed pilot project for Aadhar-based direct transfer of subsidy to LPG consumers.

The OMCs are awaiting clearance from the Centre to launch the pilot project.

The much-awaited launch of the pilot was delayed as the banks had sought more time in making their own preparations.

Some of the banks were averse to opening zero-balance Aadhar accounts for the project. Hence, the pilot, which was planned to be launched last month, was delayed.

Now, banks have started coming forward to take up the project. Other nationalised banks are expected to fall in line soon.

The six banks are: Syndicate bank, Canara bank, State Bank of Mysore, Punjab National Bank, Allahabad Bank and Indian Overseas Bank. The oil companies — Indian Oil Corporation, Bharat Petroleum Corporation Limited and Hindustan Petroleum Corporation Limited — are planning to directly transfer the subsidy amount of a domestic LPG cylinder to the Aadhar account of the customers.

The measure is aimed at preventing the misuse of cylinders. The customers will be charged the market price for the refill. Subsidy will be given to only six cylinders a year.


Official sources said the oil companies have completed all other preparations for the launch. The companies are now waiting for the Union Petroleum Ministry to issue a formal notification, making Aadhar numbers mandatory for obtaining refill cylinders in the notified areas.

​Identification, verification

As soon as the notification is issued, officials said, domestic LPG consumers in the notified areas will have to personally visit their respective LPG dealers and identify themselves by submitting their biometric details. The dealer will also verify the Aadhar number of
the customers.

The dealer will issue a letter to the consumer confirming that she/he is an LPG consumer. The consumer should open an Aadhar bank account using the letter in any of the nationalised banks.

A cut-off date will be fixed for the consumers to complete these processes. Only those who complete these processes will get LPG refill and the subsidy amount, officials pointed out.

The oil companies, sources said, have already given a detailed instruction to the LPG distributors in Mysore, Tumkur and Dharwad districts where the pilot will be launched in the State.

The Unique Identification Authority of India (UIDAI) will open a counter near all LPG distributors’ offices for on-the-spot enrolment of those who do not have Aadhar numbers. The distributors have been instructed to educate the consumers about the system over phone, sources said.

Soon, LPG subsidy will land in your bank account

 

[SpArK]

One step closer to greener city


Pollution levels in the city are seeing a new high and to keep a check on it, the State Transport Department is taking steps to ensure that that the city’s transport system is environment friendly. Department officials held a meeting with representatives of various banks and asked them to finance autorickshaw drivers, who want to convert their two-stroke vehicles into four-stroke ones. The department is extending subsidy for the conversion.

Last year, the state government came out with a scheme to provide Rs 15,000 subsidy to auto drivers opting for conversion. But the scheme was put on hold as many banks refused to extend loans to auto drivers, saying it is difficult to recover loan amount from auto drivers.

“The bank representatives told us that they are yet to recover the money given to auto drivers a few years ago to buy new three-wheelers. But autorickshaw associations have given an undertaking that they would ensure repayment. Convinced with this, the banks have agreed to sanction loans. The auto drivers have to deposit the Rs 15,000 subsidy amount with the banks to get loans. It is necessary to have four-stroke autos, as two-stroke autos pollute the city,” said the State Transport Commissioner K.R. Shrinivas.

There are over 80,000 autos in the city, and of them, 30,000 are two-stroke. These autos contribute majorly to air and noise pollution as their silencers can easily be tampered with.

“Each new auto costs around Rs1.42 lakh. The subsidy amount to be extended by the transport department will be of great help to auto drivers. Auto unions have promised the banks that they will ensure Rs 16 crore in outstanding loans would be recovered fast. We will ensure that all two-stroke autos will be off the city roads,” said Mr Somashekara, a representative of a city auto union.

One step closer to greener city | Deccan Chronicle

 

[SpArK]

Direct transfer of food subsidy: Centre to conduct pilot study from Jan

NEW DELHI, OCT 30:


In an effort to curb leakages of food-grains meant for ration shops, the Centre today said it is considering direct transfer of food subsidy to ration card holders and will launch a pilot project in 6 Union Territories (UTs) from January, 2013.

“To check leakages and diversion, an alternate model of direct transfer of food subsidy is being considered,” the Food Minister, K V Thomas said after the two-day meet of state food ministers and food secretaries, here.

A pilot scheme would be launched in the next two months in six Union Territories — Chandigarh, Puduchery, Andaman and Nicobar, Lakshadweep, Dadra and Nagar Haveli and Daman and Diu — to assess the efficacy of the proposed alternative model, before its implementation in other states, he said.

The Centre has sought views of state governments and UTs on the alternate model. In the meantime, a pilot scheme will be implemented, he added.

The alternative model involves distribution of food-grains at the rate closer to the market prices through PDS and transfer of food subsidy to the beneficiaries’ bank accounts. This is aimed at ensuring food subsidy reaches the intended beneficiaries and is not cornered by vested interests.

Thomas said states favoured the alternative model after Planning Commission Deputy Chairman, Montek Singh Ahluwalia assured them direct transfer of food subsidy would not lead to dismantling of current system of procuring grains at minimum support price (MSP) and distribution through PDS.

Citing apprehensions expressed by some states on the alternative model, the Food Secretary, Sudhir Kumar said, “Some states were concerned about availability of bank branches and opening of bank accounts among others.”

The Government’s food subsidy given to run the public distribution system (PDS) is likely to be Rs 91,000 crore in the current fiscal, against Rs 72,823 crore in 2011-12.

The government covers 18-crore households under the PDS.

Business Line : News : Direct transfer of food subsidy: Centre to conduct pilot study from Jan

 

[SpArK]

Indian Govt To Launch Aadhaar Based Cash Transfers On 1st Jan 2013

The Indian Government plans to roll out an Aadhaar based Direct Cash Transfer initiative from January 1, 2013. This decision was taken in a meeting by an executive committee set up by the government to roll out the cash transfer programme across the country.

According to a statement from the Prime Minister’s office, the meeting was conducted by the Prime Minister’s Principal secretary and the Cabinet Secretary and was attended by Secretaries and representatives of the Departments of Financial Services, UIDAI (Aadhaar), IT, Planning Commission, Expenditure, Posts, Rural Development, Social Justice & Empowerment, Tribal Affairs, Minority Affairs, Higher Education, School Education, Health & Family Welfare, Women & Child Development, Labour & Employment, Petroleum & Natural Gas, Fertilizers, and Food & Public Distribution.

Services To Be Offered: The committee stated that all government departments who are currently transferring cash to individual beneficiaries, will transition to this electronic transfer system based on Aadhaar Payment Platform. This includes all subsidy transfers like education loans, scholarships, MNREGA payments, old age pension, PDS subsidies, LPG subsidies, Indira Awaas Yojna subsidies and fertilizer subsidies, as indicated by a Business Standard report. The committee also mentioned that it will identify additional government schemes which can be transitioned to the new system and prepare a roadmap for faster and smoother transition.

Rollout Timeline: The committee stated that it plans to initially roll out the programme to 51 districts in the country, and hopes to cover 18 states & union territories by April 1, 2013 and 16 states & union territories by April 1, 2014. However, it noted that this timeline is currently tentative and is subject to the approval of the Prime Minister on November 26, in the first National Committee meeting on Direct Cash Transfers, where the committee plans to present the programme roadmap and timelines.

The committee stated that Unique Identification Authority of India (UIDAI) will set up a dedicated team of technical experts who will work with individual ministries and help roll out this cash transfer system while Department of Financial services will formulate a universal financial inclusion through individual bank accounts.

Additionally, it also stated that various government departments, particularly state government departments, will work towards digitizing their databases while Department of Electronics and Information Technology (DeITY) and National Informatics Centre (NIC) will ensure convergence of these databases.

Setting up additional committees: As indicated by the statement from the Prime Minister’s office, the government had recently setup a National committee and an executive committee to formulate and launch this Aadhaar-based cash transfer system. However, the executive committee noted that there is a need to setup additional committees including a Technology Committee, a Financial Inclusion Committee and Implementation Committees within each ministry to ensure better co-ordination between ministries and quicker implementation of the system.

System Not Fool-Proof: Following the announcement, several states have pointed out that this cash transfer system is currently not fool-proof, as indicated by a Business Standard report. The report also cites Delhi Chief Minister Sheila Dikshit claiming that people were getting harassed while opening an Aadhaar-based bank account, which was also admitted by the Finance Ministry, which stated to the publication that they were currently looking for a solution to this problem. Financial Services Secretary D K Mittal stated that they are currently planning to open special camps to be organised by the state government, the Finance Ministry and banks, to open bank accounts in regions with large population.

Aadhaar enabled service delivery platform: Last month, the Indian Prime Minister had launched an Aadhaar enabled service delivery platform, enabling citizens to use the Aadhaar identity platform to identify and authenticate themselves for delivery of benefits/services by various government or private agencies. It also announced that currently 23 crore residents have enrolled for an Aadhaar number, while 21 crore Aadhaar numbers have been issued, in a span of two years.

Aadhaar e-KYC based Instant Prepaid Cards: Speaking at the #NAMA conference, Nandan Nilekani, Chairman of UIDAI, had recently announced the launch of Aadhar E-KYC powered instant prepaid accounts, for which a pilot project was to be conducted in New Delhi. He had stated that UIDAI had already partnered with 20 banks, and had tied-up with the NPCI (National Payments Corporation of India) and Visa for payments powered by Aadhaar enabled E-KYC (Electronic- Know Your Customer).

State governments and agencies have also been conducting pilots for selected services through Aadhaar while banks are already accepting Aadhar number as a valid KYC (Know your Customer) document. DTH operator Dish TV (pdf) and mobile operator Vodafone have also started accepting Aadhaar for customer verification.


Indian Govt To Launch Aadhaar Based Cash Transfers On 1st Jan 2013 - MediaNama

 

[Imran Khan]

cash in hands is biggest problem gov should give them jobs make factories plants not like our benazeer income support ATM cards and waste billions

 

[MilSpec]

Simply "giving out cash" doesn't work. It is much better to get them to earn it somehow, even if it is only a symbolic way of earning it.

Look at all the unemployed people living on welfare payments in the West and other regions. Or people who win the lottery (they usually end up back where they started within five years).

Giving out free cash is like giving out free aid, it leads to a "crutch" mentality, where they assume more money is coming that they don't have to work for.

absolutely true.... this sort of attitude will inculcate a culture of entitlement

 

[SpArK]

cash in hands is biggest problem gov should give them jobs make factories plants not like out benazeer income support ATM cards and waste billions

National Rural Employment Guarantee Act (MGNREGA) is an Indian job guarantee scheme, enacted by legislation on August 25, 2005. The scheme provides a legal guarantee for one hundred days of employment in every financial year to adult members of any rural household willing to do public work-related unskilled manual work at the statutory minimum wage of 120 (US$2.18) per day in 2009 prices.If they fail to do so the govt. has to pay the salary at their homes. The Central government outlay for scheme is 40,000 crore (US$7.28 billion) in FY 2010–11.


Indian Minister of State for Rural Development Pradeep Jain said in a written reply to a question in Rajya Sabha on Tuesday that As of 30 June, a total of 17,943,189 families in the country have been provided employment under MGNREGS


Rural News Update | India Provides Employment to 18 Million Households Under MGNREGS in 2010 by Jatinder Kaur - Im4change

 

[Imran Khan]

look at this messs they can make hundreds of small factories with this amount
Benazir Income Support Programme (BISP) is the Government of Pakistan

In the year 2007-08, the sharp rise in oil prices and primary products in the international as well as domestic market resulted in double digit inflation, which almost halved the purchasing power of the people. Hence, there was an urgent need for direct and speedy relief to the underprivileged sections of the society. Benazir Income Support Programme (BISP) is the Government of Pakistan’s response to the said compulsions.

BISP was initiated in October 2008 with an initial allocation of Rs.34 billion (US $ 425 million approximately) for the financial year 2008-09.

The Programme aimed at covering 3.5 million families in the financial year 2008-2009.

The allocation for the financial year 2012-13 is Rs. 70 billion to provide cash assistance to 5.5 million families, which constitutes almost 18% of the entire population. Thus the Programme aims at covering almost 40% of the population below the poverty line.

The enrolled families are paid cash assistance @ Rs.1000 per month on quarterly basis; apart from benefits provided under graduation strategy like: long term interest free returnable financial assistance, vocational & technical training, health & life insurance coverage.

BISP is being implemented all across Pakistan including: all four provinces (Punjab, Sindh, Baluchistan, and Khyber-Pakhtoonkhwa), Federally Administered Tribal Areas (FATA), Azad Jammu and Kashmir (AJK),Gilgit Baltistan (GB) and Islamabad Capital Territory(ICT).

 

[livingdead]

^^^ I think BISP is a very good initiative. Whats wrong ?

 

[Contrarian]

Well, its subsidy for the poor. Instead of getting the articles at a cheaper rate, like subsidized cooking gas, they get the amount of subsidy in their accounts, and they can buy it off the market directly.

Kind of eliminates pilferage in the government network. Its not an income support program. Its just converting the subsidies from kind to cash.