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PDS cash transfer from April 1

Ajith Athrady, New Delhi, Nov 28, 2012, DHNS:

The Union Ministry of Food and Consumer Affairs has decided to introduce cash transfer for public distribution system ration cardholders through pilot projects in six Union Territories from April 1, 2013.

As per the road map prepared by the Ministry, the scheme will be initially rolled out in  Andaman and Nicobar, Chandigarh, Dadra Nagar Haveli, Daman and Diu, Lakshadweep and Puducherry.

Explaining the process, sources in the ministry told Deccan Herald that first money will be transferred to a beneficiary’s bank account after which he/she has to go to a designated PDS shop for purchase of foodgrains at market price. Though a beneficiary may default two or three times by not purchasing foodgrains, regular defaulters would be struck off the list. There will be a mechanism to check whether the beneficiary is purchasing foodgrains every month to match the money transferred to his account.


“This is to ensure that beneficiaries purchase foodgrains instead of diverting the money for some other purpose”, an official said.

The beneficiaries would not have the option to purchase the food grains from elsewhere other than PDS shops and this has been proposed mainly to ensure that the existing PDS system would continue and there is no change in the government’s role in procurement of wheat and rice from farmers.

 Even the Food Corporation of India (FCI) will continue to lift and transport food grains to different states, said the official. Instead of using Aadhaar number issued by the Unique Identification Authority of India (UIDAI) for cash transfer in PDS system, the Ministry has decided to rely on National Population Registry (NPR) prepared by the Registrar General of India (RGI).

As the NPR data has been prepared after a household survey conducted by government employees, the Ministry prefers this data.

Under PDS, the entire family will be treated as one unit for purchase of food grains. However, the government is still working on removing some glitches in implementation such as in whose name the bank account should be opened - male or female head of the family. 

Though 29 welfare schemes, including pension and scholarships, will come under the ambit of the cash transfer in 51 districts from January 1, 2013, schemes such as PDS, subsidised LPG and kerosene have been left out for the time being in order to fine-tune the process of transfer, Finance Minister P Chidambaram has said.

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