DBT being considered for disbursal of food, fertiliser subsidies: Rajiv Kumar

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The PoS system helped the Centre save Rs 10,000 crore in fertiliser subsidy by plugging leakages up to FY20, the official data showed.

The Centre is actively considering implementing direct benefit transfer (DBT) in cash to eligible beneficiaries to bring in more efficiency in the key subsidy programmes, Niti Aayog vice-chairman Rajiv Kumar said on Thursday.

“That’s of course very much a possibility (DBT in food and fertiliser subsidies). We have been looking at (the option) to try and improve the delivery and reduce the leakages in both these schemes,” Kumar said at the Indian Express Idea exchange. “It’s a far more complex thing to handle both of them. When and how DBT will be implemented is something I can’t talk about at the moment. One cannot adopt a cavalier approach to this because it concerns both food security and consumption level of the vulnerable section,” he said.

Unlike domestic cooking gas (LPG-Pahal), where beneficiaries are defined and cash given directly to the beneficiary, subsidised food grains are largely given through Aadhar-authentication mechanism while fertiliser subsidy is universal in nature and subsidy amount is paid to the manufacturer.

Harnessing the power of Jan Dhan, Aadhaar and Mobile (JAM), DBT cash in LPG-Pahal has led to a saving of Rs 71,301 crore between FY15 and FY20 while DBT in food has cumulatively saved the exchequer Rs 66,897 crore (largely DBT-in-kind as cash transfer not rolled out due to the National Food Security Act and concerns that it could lead to deprivation). The PoS system helped the Centre save Rs 10,000 crore in fertiliser subsidy by plugging leakages up to FY20, the official data showed.

With the Centre deciding to clear a big chunk of arrears, the Centre’s food subsidies are estimated to be a whopping Rs 4.2 lakh crore in FY21RE while fertiliser subsidy is projected to be Rs 1.3 lakh crore. DBT will also will eliminate costs related to Food Corporation of India’s inefficiency. The department of fertilisers and the ministry of agriculture are working out the details of the DBT scheme.

On improving private investment in the country to revive economic growth, Kumar said there is a lot to be done to improve investor sentiment. “The government will do the lifting as far as the infrastructure and construction sector is concerned. We feel that these have sufficient multiplier effects, to encourage the private sector to come forth into their own investments,” he said. Production-linked incentive (PLI) schemes worth Rs 1.97 lakh crore will help generate private investment, he added.