Direct cash transfer with Aadhaar will save 0.5% of GDP for India: IMF

Aadhaar and direct cash transfer scheme, said International Monetary Fund (IMF), will together help save 0.5 per cent of the GDP for India.

In a report, IMF said, "... the total savings could be substantial: if the combination of direct cash transfer and Aadhaar eliminates the estimated 15 per cent leakage cited above for the programmes being integrated, savings could total 0.5 per cent of GDP in addition to the gains from the better targeting of spending on the poor."

Direct cash transfers, which entail direct payments from the government to recipients, can bring down costs and diversion by phasing out middlemen and complex bureaucracies, it added.

The Indian government has started transfering cash directly into the bank accounts of beneficiaries of selected schemes using the Aadhaar payment gateway in a phased manner. The first phase started in January covering 43 districts and 78 more would be brought covered from July 1.

Read more about: aadhar
Story first published: Tuesday, April 30, 2013, 13:30 [IST]
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