Cash transfer in PDS put on hold

Centre to wait till 90 pc of beneficiaries get bank a/cs

The Centre has decided to put on hold the proposal of introducing cash transfer in public distribution system (PDS) till 90 per cent of its beneficiaries in the country get bank accounts and Aadhaar numbers.

Though the Centre will conduct a pilot study in six Union Territories, including Delhi, on cash transfer in public distribution system, it will not be implemented in the country till 90 per cent of the PDS beneficiaries get bank accounts and Aadhaar numbers, Union Minister for Food and Consumer Affairs K V Thomas told Deccan Herald.

In the pilot project, likely to be rolled out from April, beneficiaries will receive the subsidy amount in their bank accounts and will buy rice and wheat from the fair price shops.
Though food subsidy has not been included in the national rollout for the Aadhaar-enabled direct benefit transfer in 20 districts across the country, the Centre was keen to
introduce this system in a phased manner.

Before introducing cash transfer, the government priority is modernisation of the PDS to plug the loopholes in the delivery system, he added.

Earlier, the Parliamentary Standing Committee on Food and Consumer Affairs, headed by Congress Lok Sabha member Vilas Muttemwar, which vetted the National Food Security Bill, has recommended against introducing cash subsidy saying that it would be against the spirit of the scheme.

In its report submitted to Lok Sabha Speaker Meira Kumar, Muttemwar suggested that the government should first ensure that banking infrastructure and accessibility to banking are available across the country, including rural, hilly tribal areas and remote locations before introducing cash transfers against foodgrain.

Not fool-proof: Left

Left parties and activists also opposed the cash transfer saying there was no guarantee that it would be free from leakages and pilferage for individual beneficiaries.
With the parliamentary panel making several recommendations on the Food Security Bill, the Prime Minister’s Office (PMO) has convened a high level meeting next week to discuss on how to incorporate them.

As the panel suggested to providing guaranteed foodgrain to 67 per cent of the population of the country which would burden the exchequer by Rs 1.20 lakh crore as against the current estimation of Rs 1.5 lakh crore per annum, the government wanted to deliberate on this issue in detail, sources said.

The standing committee had also suggested that the issue of price under the Food Security Bill should be reviewed once in five years and transport and handling should be borne by the beneficiaries, which was not in the original bill. The PMO meeting will discuss how to address these issues.