UPA laid modalities for direct benefits transfer

I saw a report in THI dated 8th February 2017 with heading “PM: Saved Rs 49,500 cr going to middlemen.” This is a false claim by Prime Minister Narendra Modi in his address to Parliament on 7th February 2017 [which I watched].

The facts are different, which are as follows:

I am one of the few advocates of giving input subsidies to farmers directly instead of giving it to the industry based on my experience with the agriculture system functioning in India and more particularly in Andhra Pradesh. I submitted to Hon’ble Prime Minister as well Planning Commission on few occasions.

In fact, I sent my suggestions to the Planning Commission for inclusion in the 12th Plan in which I proposed the direct transfer of cash subsidy to the beneficiary in the case of fertilisers, PDS items like gas & kerosene as around 30% of it is going in to black market. Fertilisers are used in aqua farms, alcohol preparations; gas is used in commercial activities; and kerosene is going for adulterating fuel.

Two IIM Professors prepared a report on fertilisers subsidy and recommended the subsidy be given to industry [W.P.No.2009-07-01]. This report was submitted to Prime Minister Dr Manmohan Sigh. I sent my observations on this report to the authors of the report with a copy to Prime Minister Dr Manmohan Singh. I also included this in my talk on All India Radio, National Network in 2011 [recorded on 18th February 2011 in Hyderabad and telecast from Delhi on 11th March 2011 at 10 PM].

The Union Finance Minister in his budget presentation on February 28, 2011 for the year 2011-12 stated that, “To ensure greater efficiency, cost effectiveness and better delivery for both kerosene and fertilizers, the Government will move towards direct transfer of cash subsidy to people living below poverty line in a phased manner.

A task force headed by Shri Nandan Nilekani has been set up to work out the modalities for the proposed system of direct transfer of subsidy for kerosene, LPG and fertilisers. After looking at the Union Finance Minister’s budget presentation, I sent my views to Dr Manmohan Singh saying that “the author was happy that some of the issues the author was advocating for the past several years now find a place in the Union Budget presented on 28th February 2011 for the period 2011-2012 by Union Finance Minister Shri Pranab Mukherjee and as well it is seen in some other reports.

For example, the author mentioned that around 50% of our food produced is going as waste. In the current budget, the finance minister mentioned that the waste is around 40%. Unfortunately, MPs from Andhra Pradesh approached PM and recommended giving cash transfer directly to retailers. On this, I again sent a letter to PM countering the MPs request seeking fertilisers subsidy to farmers only and not to either industry or retailers.

I received a letter from the Deputy Director in Government of India, Ministry of Chemicals and Fertilizers, Department of Fertilizers, dated 28th December, 2011, with the subject heading “Representation from Dr S. Jeevananda Reddy, Hyderabad, on Rice Export-permission and Fertilizer subsidy to local dealers.” It stated that “This is with reference to your representation dated 23-05-2011 addressed to Hon’ble Prime Minister of India and President, AICC and subsequently forwarded to this office by the Under Secretary, Ministry of Chemicals & Fertilizers, New Delhi ---- on the subject cited above.

In this context as regards the issue of granting subsidy to farmers is concerned, it is submitted that:
A Task force on direct subsidy in respect of Kerosene, LPG & Fertilizer has been set up under -- In addition, the Task Force mandate has also been extended to include an implementable solution for targeted PDS system also.

In respect of fertilisers, the Task Force has recommended a three stage approach to the issue of direct subsidy. – The rollout of Phase-I will be in December 2011 and the rollout of Phase-II in June 2012. Phase-III will take place after Aadhaar numbers are given to all the eligible beneficiaries.”

UPA government finally started issuing Aadhaar cards and direct cash transfer in gas. The NDA government continued the implementation. Regarding rice export in my letter, A Deputy Minister in Agriculture Department visited Hyderabad and advised the Chief Minister to pay through cheques the MSP as I proposed in my letter. It all means, the claim of credit by Prime Minister Narendra Modi must go to the UPA government.

By Dr S Jeevananda Reddy