<div>The government plans to phase in cash transfers of food and kerosene subsidies from September, saving 10-15 per cent of the $21 billion in annual outlays on the benefits by eliminating fraud, a senior finance ministry official said on Thursday (03 July).</div><div> </div><div>Three so-called union territories, directly administered by the central government, would become a testbed for the measures, said Peeyush Kumar, the senior finance ministry official in charge of the cash transfer scheme.</div><div> </div><div>Under the programme, each family will get a monthly subsidy of about Rs 500-700 ($19), which would be linked to a state-set procurement price of grains.</div><div> </div><div>Prime Minister Narendra Modi, who has completed one year in power, wants to improve targeting of food and fuel subsidies to reach the poor - monetising benefits previously paid in kind that often went to waste or were stolen.</div><div> </div><div>He launched a 'Digital India' drive on Wednesday to offer public services by linking bank accounts, identity cards and mobile phones in a national database.</div><div> </div><div>Indian plans to reduce its subsidy bill by about 10 per cent to $38.4 billion this fiscal year, about 14 per cent of federal spending on programmes offering subsidised food, fertiliser and fuel, helped by reforms and lower crude oil prices.</div><div> </div><div>The Union government has set a deadline of December for states to computerise all data on households now receiving subsidised food and fuel - to remove 'ghost', or fake, beneficiaries, Kumar told a seminar on benefit reforms.</div><div> </div><div>Crisil, the Indian arm of Standard & Poor's, estimates that the federal subsidy bill could fall by 20 per cent, or Rs 25,000 crore ($3.94 billion) a year, if the direct benefit transfer scheme is fully implemented.</div><div> </div><div>Direct payments for cooking gas into people's bank accounts, launched earlier this year, have reduced sales of subsidised fuel by about one-fourth, mainly by eliminating ghost beneficiaries, said finance ministry adviser Arvind Subramanian.</div><div> </div><div>(Reuters)</div>
