Moving towards a direct cash transfer route can help the government cut its food and fertiliser subsidies combined by nearly Rs 60,000 crore in the financial year 2013-14 alone, according to CACP (chairman of the Commission for Agricultural Costs & Prices) Chairman Ashok Gulati.

In a discussion paper, Mr. Gulati said that a direct cash transfer route using the Aadhaar platform would reduce leakages in the Public Distribution System (PDS).

Making the suggestion, Mr. Gulati said, "Our calculations show the food and fertiliser subsidies combined can be pruned by almost Rs 60,000 crore . if the government moves towards a direct cash transfer route by using the Aadhaar platform in the case of food and fertilisers to direct beneficiaries."

He added that plugging leakages in the PDS and avoiding the high cost of storage and movement of grain using a direct cash transfer route would save Rs 40,000 crore in food subsidy.

Carrying and storing of food grains will cost the government an estimated of more than Rs 10,000 crore each year. India's food-grain stocks are expected to surpass 90 million tones by July this year.

In its previous discussion paper on food subsidy, the CACP had said that, as of 2009-10, more than 40 per cent of all food-grains lifted by state governments for PDS didn't reach those actually entitled.