Direct cash through Aadhaar to save 0.5% of GDP for India: IMF

International Monetary Fund  quoted that integration of direct cash transfer with Aadhaar will take time but the scheme will help Indian government save 0.5 per cent of the GDP.

  • Better targeting of spending on the poor
  • Indian government save 0.5 per cent of the GDP
  • The combination of schemes will eliminate the estimated 15 per cent leakage cited above for the programmes.
  • Direct cash transfers can bring down costs and diversion by phasing out middlemen and complex bureaucracies present in current subsidy programs.


  • Timeframe for bringing India’s population of 1.2 billion into the Aadhaar programme could extend beyond 2014
  • Integrating this database with information on individuals eligible for subsidised fuel will take time

Current Subsidy programs

  • Food & kerosene- Available from Government Stores at below market prices
  • Fertilizers-  All fertilizers sales are at subsidized Prices
  • LPG Cylinders- distributed directly, with a limit on each household’s subsidised purchase

Pilot Projects

  • Pilot programmes delivering subsidised kerosene using Aadhaar-based identification have been set up in Rajasthan
  • Pilot scheme replacing subsidised LPG with direct cash transfers was also launched in Mysore, Karnataka



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