Indian government set to help poor with direct bank deposits

NEW DELHI // The Indian government is preparing to directly transfer cash to the bank accounts of millions of poor people who often become victims of fraud and theft in the government distribution system covering social welfare programs.

Yesterday, Manmohan Singh, the prime minister, handed over the government's unique identity number card for the purpose to a villager at a symbolic function in the western Indian state of Rajasthan.

Although no time limit has been set for covering all the 28 Indian States, the government has started pilot projects for the electronic transfer of money in eight states.

Mr Singh said nearly 240 million Indians have received the government identity cards in the past two years. The new policy will cover programmes such as grain supply, employment wages, scholarships, pensions and health insurance.

At present, the poor beneficiaries have to visit government offices repeatedly to get benefits. They also are dependent on government-approved shops to get grain, sugar and kerosene and are often cheated by shop owners.

"It will help the government in ensuring that subsidy reaches its intended beneficiaries directly and the poor will not have to run from pillar to post to claim their rights," said Sonia Gandhi, the governing Congress party's leader.

The annual federal government spending on subsidies run into 3,000 billion rupees (Dh210bn), according to the prime minister's office.