Centre allows states to decide on using DBT

The Centre has decided to make the direct benefit transfer (DBT) for the public distribution system (PDS) optional for states as the pilot initiatives have failed to yield the desired results.

The Centre had launched pilot projects for cash transfers in three Union Territories — Chandigarh, Puducherry and Dadra & Nagar Haveli — to PDS beneficiaries, who had to then purchase foodgrains from the open market.

Food and Public Distribution Minister Ram Vilas Paswan said the DBT initiative did not deliver the intended results as there were complaints of diversion of subsidies by the beneficiaries for purposes other than buying foodgrains.

Besides, PDS beneficiaries in a Maharashtra village were also given the option of either opting for DBT or buying foodgrains from a fair price shop.

It was observed that the beneficiaries preferred to make purchases at the fair price shop.

Puducherry Chief Minister V Narayanasamy too had complained to Paswan about the misuse of foodgrain subsidies and demanded to scrap of the pilot project.

Paswan said Puducherry Lt Governor Kiran Bedi too had written to him demanding to scrap of the cash transfer scheme following which a decision was taken to make it optional for state governments.

According to a study by Niti Aayog, it was found that the beneficiaries of the cash transfer initiative had trouble accessing funds deposited in their bank accounts.

It was also found that most beneficiaries had to spend extra money on making single-purpose visits to banks to withdraw the subsidy amount and hence preferred to redeem their PDS entitlements at fair price shops.