Direct cash transfer aims to eliminate subsidies: say opponents

Direct cash transfer aims to eliminate subsidies: say opponentsWhile the Government is portraying its ambitious direct cash transfer scheme as "game-changer", the Opposition is of the view that the day of launch of the scheme would be a doomsday for subsidies.

CPM leader Sitaram Yechuri believes that the direct cash transfer scheme is the government's first step towards eliminating subsidies being given to the poor. He said the amount of subsidy would remain the same while prices of commodities for which the subsidy would be given would keep on increasing.

Nikhil Dey of Mazdoor Kisan Sangathan argued that the scheme would not be capable of arresting leakages and corruption in the system, as being claimed by the government.

Criticizing the scheme, Dey cited the case of NREGA and said, "It is a massive cash transfer programme and we have seen that leakages and corruption have not disappeared as a result of wages being credited into the workers' bank accounts".

Opponents of the scheme also believe that cash transfers would push more poor people out of subsidies. They also argue that a similar has scheme has already failed in Tamil Nadu, where rural banks do not have enough deposits to make payments to large number of labourers. Besides, labourers lose their wages for the day they visit the banks to get subsidies.

Meanwhile, sources said that the government expects the direct cash transfer scheme to save at least Rs 20,000 crore in 2013-14 alone and help the cash-strapped government improve its financial condition.