New Delhi: With a view to maintain transparency in the government subsides given to consumers of fertilizers, kerosene and cooking gas, the Finance Ministry is all set to start e-payment facility for direct credit of subsidies in the bank account of the consumers.

As per the information provided by the Ministry, the e-payment services will be launched by Union Finance Minister Pranab Mukherjee on Monday. Under this, the consumers will have to pay the total cost of LPG cylinders and Kersone but the monthly subsidy will be directly transferred to their respective bank accounts.

The 'Government e-payment system' for direct credit of dues from the Union government into the account of beneficiaries through the 'Government e-Payment Gateway' (GePG) has been developed by the Department of Expenditure.

In the wake of large scale diversion of subsidies, the government had announced it will move towards direct transfer of cash subsidy for kerosene, LPG and fertilisers.

A task force, under Nandan Nilekani, set up to work out the modalities for the proposed system of direct transfer of subsidy for kerosene, LPG and fertilisers has submitted its interim report to the government.

By March 2012, Centre is likely to kick start the project in selected parts of the country.

GePG is a portal which enables the delivery of payment services from Pay & Accounts Offices (PAOs) for online payment into beneficiaries' accounts in a "seamless manner under a secured environment".

It serves as middleware between COMPACT (Computerised Payment and Accounts) application at PAOs and the Core Banking Solution (CBS) of banks and the Reserve Bank of India to facilitate paperless transaction, reducing overall transaction cost and promoting green banking.

The e-payment system will not only save time and efforts but will facilitate elimination of physical cheques and their manual processing.

"The system will also have online reconciliation of transactions and efficient compilation of payment accounts," the statement added.

At present, cheque, cash, demand draft or in few ministries ECS for payments to employees and vendors are used.

According to the sources, the new mode providing subsidy will soon be adopted by other government departments.

Presently, 140 centre sponsored schemes are running all across the country. In the current fiscal year, centre has already spent Rs 400,000 crores. Besides, several state specific schemes are also in continuance. As per the plans the e-payment services for all these state and centre schemes will be implemented by 2013.