Inter-ministerial Task Force Formed to evolve Direct Subsidies Mechanism

To foster focussed targeting of subsidies for the country's poor, the Indian Finance Ministry on 14 February 2011 announced the setting up of an inter-ministerial task force under Unique Identification Authority of India (UIDAI) chairman Nandan Nilekani. The task force was set up to evolve a suitable mechanism for direct subsidies to individuals/families that are entitled to kerosene, LPG and fertilizer. The task force also has to evolve a model of direct transfer of subsidies on these items by re-engineering existing systems, processes and procedures in the implementation process. The task force is expected to work out a suitable mechanism to provide direct subsidies on kerosene, cooking gas (LPG) and fertilizers for the intended beneficiaries. The task force would also undertake designing of appropriate IT systems and their alignment with the issuance of UID numbers as well as bringing about changes in the administration and supply chain management.

The task force was constituted in the wake of the overwhelming evidence which proved that the current policy of providing subsidy on kerosene was resulting in waste, leakage, adulteration and inefficiency. The urgent need for reforming the system of delivering the subsidised kerosene was felt.

The task force will submit its interim report within four months of its constitution. The recommendations of the interim report will be implemented on a pilot basis by the Ministries concerned under the supervision of the task force in the six months following the date of submission of the interim report.