Govt may start direct cash transfer for food subsidies

Buoyed by the success of direct cash transfer in LPG, the Union government is thinking about extending the scheme to hand out food subsidies under the food security law.

Minister of Food and Public Affairs Ram Vilas Paswan, has suggested that the direct cash transfer for food subsidies be implemented on a pilot basis in Chandigarh and Puducherry. A high-level committee chaired by BJP leader Shanta Kumar had recommended directly handing over cash to beneficiaries of the food security law as part of its suggestions to restructure the Food Corporation of India (FCI).

Prime Minister Narendra Modi had earlier rejected the committee’s controversial suggestion to slash the number of beneficiaries under the food security law from the current 67 per cent of the population to 40 per cent.

On Thursday, Paswan said other recommendations made by the committee were being reviewed by the Food Ministry and the final decision would be taken by the prime minister after consulting all stakeholders.

He added that the ministry had favoured suggestions such as the procurement of pulses and oilseeds from farmers at minimum support price, outsourcing quality testing of FCI foodgrain and private sector management of new warehouses. “This suggestion is good for curbing leakages in the Public Distribution System. We are in support of this on principle but there are 3-4 problems,” Paswan said when asked about direct cash transfer to roll out food subsidies.