The government would operationalise a phase-wise shift from subsidy-based system to direct cash transfers for several of its schemes from January 1 next year.

The cash transfer system is expected to curb corruption, cut down on administrative costs and minimise the leakages because of which the huge amount of subsidies that the government offers to poor people have not been able to have the desired impact. To be operationlised through the Aadhaar platform — a unique identification number scheme — the system will be introduced in 51 districts from January 1 and extended to cover the targeted households in 18 states and Union Territories by April 1. Before April 1, 2014, all the remaining states and Union Territories are envisaged to be covered.

A meeting chaired by Principal Secretary to the Prime Minister was held in the PMO on Friday to chart out the roadmap for the direct cash transfers and the government schemes to which it can be applied immediately. The government intends to cover 1.4 crore scholarship holders, 2.1 crore pensioners, 87 lakh BPL families who get free electricity and about eight crore NREGA workers in the cash transfer scheme within the next year and a half.

All ministries and departments that transfer benefits to beneficiaries through subsidies have been asked to quickly move to an electronic direct cash transfer system based on Aadhaar platform, a government statement said.