Finance ministry for direct cash transfer into post office accounts

The directive follows a letter from rural development minister Jairam Ramesh to finance minister P. Chidambaram
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First Published: Wed, Jan 16 2013. 11 59 PM IST
Rural development minister Jairam Ramesh. Photo: Pradeep Gaur/Mint
Rural development minister Jairam Ramesh. Photo: Pradeep Gaur/Mint
New Delhi: Ahead of the launch of the next phase of the direct benefits transfer scheme next month, the ministry of finance has issued a directive that will enable cash subsidies under various government welfare schemes to be deposited in post office accounts previously used only for the deposit of wages under the flagship national rural employment guarantee scheme.
The directive follows a letter from rural development minister Jairam Ramesh to finance minister P. Chidambaram, which said a 2008 government circular states that accounts opened in post offices for the deposit of wages under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) cannot be used for any other purpose.
Chidamabaram informed Ramesh that the necessary notification to amend the above rule had been issued in his 11 January reply.
“There are 36 million MGNREGS post office accounts which constitute 43% of all accounts and these can now be used for pensions, welfare payments, scholarships,” a rural development ministry official said.
The Congress-led United Progressive Alliance Government announced the direct benefits transfer scheme last year under which cash subsidies for government welfare schemes such as scholarships and pensions would be delivered directly to the accounts of beneficiaries. The money was to be transferred into accounts linked to the Unique Identity or Aadhaar number—thereby increasing the efficiency of and reducing leakages in government schemes.
The scheme was to be launched in 51 districts of the country on 1 January, but was later scaled down to 20 districts. The number of schemes were also scaled down to 26 from 34.
The next phase of the direct benefits transfer scheme will be rolled out in 11 districts from 1 February and in 12 districts from 1 March. The programme is seen as the government’s key electoral plank for the 2014 polls, but it has come under fire for setting very ambitious timelines.
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First Published: Wed, Jan 16 2013. 11 59 PM IST
More Topics: DBT | Ramesh | Chidambaram | MGNREGS | Aadhar |
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