In order to evolve a suitable mechanism for direct subsidies to individuals/families who are entitled to Kerosene, LPG and Fertilizer and to evolve a model of direct transfer of subsidies on these items by re-engineering existing systems, processes and procedures in the implementation process, the Government of India has constituted a Task Force under the Chairmanship of Shri Nandan Nilekani, Chairman, Unique Identification Authority of India (UIDAI). This Task Force would also undertake designing appropriate IT systems and aligning these with the issuance of UID numbers, and bringing about changes in the administration and supply chain management.

Beside Chairman of the Task Force, it will also consist of Secretaries from Department/Ministry of Expenditure, Financial Services, Chemicals & Fertilizers, Agriculture, Food & Public Distribution, Petroleum & Natural Gas and Rural Development along with D.G., UID Authority. The Task Force would submit its Interim Report within four months of its constitution. The recommendations of the Interim Report would be implemented on a pilot basis by the concerned Ministries under the supervision of the Task Force in the following six months from the date of submission of the Interim Report. The Final Report would be submitted thereafter which would include the results of the implementation of the solution on the field.

The need for constitution of the aforesaid task force arose as the Government of India provides Kerosene at subsidized prices to BPL families under the Public Distribution System (PDS) and there is overwhelming evidence that this policy is resulting in waste, leakage, adulteration and inefficiency. Therefore, it is imperative that the system of delivering the subsidized Kerosene be reformed urgently.

The system of provision and delivery of subsidized LPG to intended beneficiaries needs to be similarly reformed.

Fertilizer subsidy, as it exists today, is available to all farmers. It is not possible to differentiate the segments for which the subsidy should be given in this sector. There is a need to evolve a suitable mechanism for direct subsidies to individuals who are entitled to them.

In order to evolve and implement a solution to the above mentioned issues, the Government has constituted this Task Force.

Direct transfer of subsidies aims to replace leak prone in kind delivery with UID linked IT disbursement pilots and reforms. The Task Force will design and recommend a direct transfer of subsidies mechanism for kerosene, LPG and fertilizer by re engineering delivery systems, creating UID aligned IT systems, and proposing administrative and supply chain changes; it will submit an interim report within a defined period, oversee pilot implementation of interim recommendations by concerned ministries, and later submit a final report including field results.