States say no to cash-for-grain

Vibha Sharma

Tribune News Service

New Delhi, February 6

It appears there are no takers for the Direct Benefit Transfer (DBT) scheme for foodgrain. The government had notified the Cash Transfer of Food Subsidy Rules in August last year under the National Food Security Act (NFSA). The aim was to check leakage and facilitate cash transfer of food subsidy directly into the bank account of beneficiaries.

Rules say the scheme is to be implemented with the consent of states and UTs. 

Sources in the Consumer Affairs Ministry said most states, including union territories, had shown no interest in giving cash in lieu of foodgrain distributed by ration shops under the public distribution system (PDS). 

Chandigarh and Puducherry were the only UTs to have implemented the scheme “per force”, sources said. Chandigarh, Puducherry and Daman and Diu had been selected for the pilot project last year.

“Cash in lieu of foodgrain may be an answer to problems like poor quality grain, storage and long queues outside ration shops, but it  also defeats the very purpose of the National Food Security Act,” the government functionaries argue. However, there are those who believe that the “highly porous PDS is not the way forward”. An activist of SEWA, an organisation actively involved in implementing a similar scheme by the Sheila Dixit government in Delhi, said: “There are bottlenecks, but the scheme must be given more time before it is written off. It is a good initiative as long as it is ensured that benefits reach the last person in the queue.”

The activist pointed out that studies had shown that a mere 20 per cent of benefits reached the end-user under the PDS. Many believe that the correct way out would be to improve the PDS by plugging the lacunae and weeding out fake ration cards.

 However, states are reluctant to opt for the scheme for their own reasons. Ration shops operations, for instance, help the ruling parties retain influence over a sizeable section of voters.

‘PDS faulty, must go’ 

"Let us not write off the scheme so soon... Delhi experiment showed that people who opted for cash were eating better. Do you want to keep continuing with a faulty PDS system or switch over to last-mile coverage?"— SEWA activist