‘Opening bank a/c for cash for subsidies a harassment’

Finance minister P Chidambaram's plan to directly transfer cash for subsidies to poor from January 1, 2013, through unique identification card, Aadhaar, may have run into trouble. Several states, including Delhi have told the finance ministry that the system is not efficient enough and it will be a "harassment" for common man trying to open a bank account.

The finance ministry officials have also admitted to the problem and are working on removing the obstacles.

"It's not easy for a person to open a bank account. There was a little bit of harassment. It is difficult," Delhi chief minister Sheila Dikshit told reporters after meeting Chidambaram.

The Union finance minister today held a meeting of chief ministers of northern region along with a few public sector banks to address the issues faced by states.

Dikshit said poor people have been finding it difficult to open bank accounts as banks have been insisting on documentary proof of residence despite presentation of Aadhaar card. Many people are asked to provide ration card and voters ID even when they have a UID card.

The "obstacles" should be removed so that Delhi government can provide cash subsidies and grants through direct transfer in banks, Dikshit said.

Financial services secretary DK Mittal admitted to the problem and said, "States' concerns were very valid that account opening is difficult and we admit that there is difficulty. So the idea would be to admit the problem and then find a solution. We are going ahead with that."

He said the finance ministry will now work towards organising camps in areas with large concentration of people to facilitate opening of accounts. The direct cash transfer of subsidies is aimed at plugging leakage, diversion and corruption.

The meeting was attended by chief ministers of Delhi, Himachal Pradesh, Jammu & Kashmir, Haryana and Uttarakhand while Punjab and Uttar Pradesh chief ministers sent their representatives.

... contd.

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