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| Cash Subsidies Transfer in 51 Districts From Jan 1: FM | | | Er. Jitender Kohli | 11/24/2012 10:58:36 PM |
| Agencies
PUNE, Nov 24: Government payouts towards pensions, scholarships and subsidies worth thousands of crores of rupees will be directly transferred to bank accounts of beneficiaries in 51 districts spread over 15 states from January 1, Finance Minister P Chidambaram said today.
Aimed at checking pilferage, the ambitious government scheme based on Aadhaar-enabled mechanism will cover the entire country by end of 2013.
"We have only five weeks to roll out and once roll-out begins, we want roll-out to be completed in 600 odd districts in India...Larger number of districts will be added every quarter", he said while speaking at the annual banking 'Bancon' conference here.
Addressing chairman and managing directors of several leading banks, Chidambaram said that Prime Minister Manmohan Singh has called a meeting on Monday to discuss issues related to direct cash transfer of subsidy.
The government's major subsidy bill, which include payments towards food, fertiliser and petroleum, in the current fiscal was pegged at Rs 1.8 lakh crore. The outgo is expected to increase in view of the high prices of crude oil in the international market.
"Beginning January 1, 2013, (in) 51 districts of India, we wish to transfer all payments of Government of India directly to beneficiary through Aadhaar enabled bank accounts", the Minister said.
On growth, he said India is facing a difficult situation because the pace of economic expansion has declined to about 5.5 per cent in the first quarter of 2012-13. The growth in the second quarter is likely to be 5.5 per cent, he said. The economy was growing by over 8 per cent in the two financial years before slowing to nine-year low of 6.
The Finance Minister said that to overcome the difficult economic situation, there is a need to find innovative ways to increase output of goods and services.
"We have to overcome this difficult situation through innovation, through finding ways of increasing the production of goods and services," he said adding that finding new ways to help the poor depends on high economic growth both for jobs and income.
He called upon the banks to play an active role in reviving the economy.
"I genuinely and sincerely believe that banks represent the heart of the financial system and it is banks that will drive the revival of India's economy and putting India's economy on high growth path," the minister added.
He further said that India needs to have at least two or three world size banks . The Minister said consolidation in the banking system was inevitable. "Finding new business models will inevitably lead to some cosolidation... We must create at least 2 or 3 world size banks. China has done it. And if India wants to be and as it will be the third largest economy in the world...We must also have one or two world size banks and some consolidation is inevitable," he said.
Country's largest lender State Bank of India (SBI) has acquired board approval for merger of its remaining five associates with itself. It has already amalgamated two of its subsidiaries.
Later talking to reporters, Chidambaram said RBI has the powers to issue new bank licences and expressed the hope it will take the process forward, "appreciating" government's position.
Aadhaar, a 12-digit number, serves as a proof of identity and address anywhere in the country. The UIDAI has already issued 21 crore Aadhaar cards.
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