Union Budget: Direct cash subsidy on fuel, fertilizers to BPL families

The government, which has set up a task force under Nandan Nilekani, presently the chairman of the Unique Identification Authority of India (UIDAI) to work out the modalities, is expected to present its interim report by June this year

New Delhi: Concerned over the misuse of subsidies provided under various schemes, finance minister Pranab Mukherjee today said the government will provide a direct cash subsidy on kerosene and fertilisers to the poor from March next year, reports PTI.

"... To ensure greater cost efficiency and better delivery for both kerosene and fertilisers, the government will move toward direct transfer of cash subsidy for people below poverty line (BPL) in a phased manner," Mr Mukherjee said during his presentation of the Budget 2011-12.

The system will be in place by March, 2012, he said.

A task force headed by Nandan Nilekani is working out the modalities for the proposed system of direct transfer of subsidy for kerosene, LPG and fertilisers, he said.

"The interim report of this task force is expected by June this year," he said.

At present, the government provides kerosene at subsidised rates to families living below the poverty line through the public distribution system (PDS). Furthermore, LPG is provided at a subsidised rate to households.

As regards fertilisers, the government provides subsidy to companies so that farm inputs, which include urea and imported fertilisers, can be provided to farmers at cheaper rates.

Earlier this month, the government set up a task force under the former chief of Infosys, Mr Nilekani, who at present is Unique Identification Authority of India (UIDAI) chairman. The panel also included secretaries from the ministries of finance, chemicals and fertilisers, agriculture, food, petroleum and rural development.

The need to set up the task force arose in view of "overwhelming evidence that this (current) policy is resulting in waste, leakage, adulteration and inefficiency. Therefore, it is imperative that the system of delivering the subsidised kerosene be reformed urgently," the government had said.

Besides designing an IT framework, the task force will align the systems with the issuance of the UID numbers and suggest changes in the administration and supply chain management.

The recommendations of the task force will be implemented on a pilot basis by the concerned ministries and the final report would include the results of such projects.


Union Budget: Highlights 2

Here are some more announcements made by the finance minister during the presentation of the Union Budget in Parliament today.

  • Public Debt Management Agency Bill in the next fiscal.
  •  Indian mutual funds to get direct access to foreign markets; FIIs to be allowed to invest in MFs.
  •  Investment limit for FIIs in corporate bonds to be raised.
  • Government to put in place framework to safeguard small borrowers in the micro finance sector.
  •  Current account deficit and average inflation in 2011-12 likely to be lower than in the current year.
  • Total food inflation down from 20.2% last year to 9.3% in January; continues to be matter of concern.
  •  RBI measures to help further moderate inflation in coming months; high current account deficit also poses concern.
  •  Economy estimated to have grown 8.6% in 2010-11; growth expected at 9% in next fiscal.
  •  Corruption identified as a problem that needs to be fought collectively.
  • Union Budget 2011-12 a transition towards more transparent and result-oriented economic management.


AI’s chief operating officer Capt Baldauf resigns

Gustav Baldauf, an Austrian national was served a show-cause notice last week, seeking explanation of his statements that it was a difficult environment to work as the government played "too prominent a role in the (airline's) operations"

New Delhi: Air India's chief operating officer Captain Gustav Baldauf resigned today, days after being served a show-cause notice over his reported remarks about political interference in the airline's day-to-day affairs, reports PTI.

Mr Baldauf, who was served the notice on Wednesday, put in his papers this morning, an airline spokesperson told PTI.

The Austrian national, who earlier worked in senior capacities in several airlines including Jet Airways and Austrian Airlines, was asked to explain his statements that it was a difficult environment to work as the government played "too prominent a role in the (airline's) operations".

"When you call someone from outside, let him work. The government should control but let him work. It should not be involved in day-to-day operations", Mr Baldauf was quoted as saying.

Following the remarks which the airline had taken serious note of, he had a meeting with civil aviation minister Vayalar Ravi where the issue was understood to have figured.

Mr Baldauf had also expressed annoyance at the removal of Captain Pawan Arora as the COO of Air India Express, saying it would affect the turnaround plan of the ailing national carrier.

After Mr Baldauf's appointment last April, the Air India Board had appointed Mr Arora as also Stefan Sukumar as the chief training officer on a hefty pay package. Mr Sukumar put in his papers recently after the Directorate General of Civil Aviation had raised objections to the status of license as CTO.

Mr Baldauf was appointed at an annual salary package of Rs3 crore with the mandate to implement Air India's turnaround plan.

Taking a tough line, the civil aviation minister has made it clear that the ministry would evaluate the performance of Air India's top management by carrying out their performance review on a regular basis.

With a market share of 15.8% in January this year, down from 18% in the same period last year, the flag carrier today stands at the fourth position after Jet Airways, Kingfisher and budget carrier IndiGo.


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