New Delhi, Aug 2 (IANS): The government will soon introduce a new system for distribution of liquefied petroleum gas (LPG), under which it will provide direct cash subsidy to the poor, said Finance Minister Pranab Mukherjee.

"A pilot project will soon be launched on a new system of LPG distribution," Mukherjee said in a meeting with the country's top industrialists at his North Block office here Monday evening.

The finance minister said the new distribution system would be based on the recommendations of the task force for direct transfer of subsidies on kerosene, LPG and fertilizer.

The task force headed by Unique Identification Authority of India Chairman Nandan Nilekani submitted its report to the finance minister last month.

The committee recommended transfer of cash subsidy through banks and ATMs directly to the beneficiaries.

The new system would be introduced as a pilot project in seven states - Maharashtra, Haryana, Rajasthan, Orissa, Assam, Tamil Nadu and Delhi.

Depending on the experiences from the pilot project, the new distribution system would be introduced across the country after six months.