Government may extend direct benefit transfer to more subsidy schemes

24 April 2015

The centre proposes to extend the direct benefit transfer (DBT) of subsidies to more central schemes and also include food distribution under the scheme, finance minister Arun Jaitley informed the Lok Sabha today.

The finance minister also emphasised that the existing subsidies on commodities like food and fertiliser to support the weaker sections of the society will be continued.

"As far as the products that are entirely used by the weaker sections of society are concerned, what is to be provided to them as food or fertilizer in certain cases, these are subsidies in order to protect the weaker sections of society, which will ordinarily remain," he said.

At present LPG subsidy for domestic users is being credited to bank accounts of beneficiaries through DBT.

"We will definitely consider (extending DBT to other schemes). This is an alternative method. In the coming days, we will move towards it. Till the time we are fully ready with the IT backbone, it is not possible," Jaitly said in reply to a question.

He said so far only 11 states and union territories have implemented the food law and the scheme of transfer of food subsidy through DBT. "If other states implement, then only we can think on this suggestion," he said.

On petrol and diesel, Jaitley said the deregulation of prices was based on the "collective wisdom of various successive governments, representing different political parties."

"The only mechanism that the governments have, both at the centre as well as in the states, is the fiscal power of taxation. It is only that power of taxation through which the governments can vary it in order to make sure as to what price addition or alteration can take place. Beyond that, at the moment, there is no other fiscal device that the governments have," he said.

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