1. Puducherry first to implement DBT for food subsidy

Puducherry first to implement DBT for food subsidy

Puducherry will be the first Union territory/state to implement direct benefit transfer (DBT) scheme for disbursal of food subsidy to the beneficiaries.

By: | New Delhi | Published: May 23, 2015 1:18 AM

Puducherry will be the first Union territory/state  to implement direct benefit transfer (DBT) scheme for disbursal of food subsidy to the beneficiaries.

Sources told FE that the Puducherry administraton has told the Union food ministry about its preparedness on two key prerequisites for the roll out — online availability of beneficiaries list and end-to-end computerisation of grain storage and distribution system.

Sources say the National Informatics Centre and the Public Financial Management System, two IT arms of the government, are validating the beneficiaries list submitted by the Puducherry government. “Puducherry has told us they are ready to roll out DBT in PDS by July,” said an official. More than 6 lakh people would benefit from DBT-PDS in Puducherry.

Under DBT, instead of subsidied grain, the identified beneficiaries will get cash transferred to their accounts allowing them to purchase grain from any shops.

However, Chandigarh,  which was also chosen for piloting DBT in PDS along with Puducherry, is yet to prepare the beneficiary list.

Meanwhile, PDS shop owners have been opposing the implementation of DBT both in Puducherry and Chandigarh as beneficiaries have the freedom to buy grain from any outlet. In March, the food ministry had decided to roll out DBT in PDS on a ‘pilot basis’ in only two Union territories.

A high-level committee (HLC) on restructuring of Food Corporation of India (FCI) had earlier recommended a gradual introduction of cash transfers in PDS, starting with large cities with over 1 million population and then extending it to grain surplus states and then giving option to deficit states to opt for cash or physical grain distribution.

“This will be a cost-effective way to help poor, without much distortion in the production basket and in line with best international practices,” the HLC stated. HLC’s calculations revealed that through DBT, the government could save more than R30,000 crore annually, and still give a better deal to consumers.

Food minister Ram Vilas Paswan, in response to the HLC report recently, had said, “We favour DBT for PDS, but the issue has to be discussed extensively before arriving at a concrete proposal on it.”

“If we transfer cash, beneficiary can buy grain from the open market. Then what will happen to our procurement operation and what will we do with procured grain and our storage facilities. We need to seriously think about this before implementing it on larger scale,” Paswan had said.

“Cash transfers can be indexed with overall price level to protect the amount of real income transfers, given in the name of lady of the house, and routed through the Prime Minister’s Jan-Dhan Yojana (PMJDY) and dovetailing Aadhaar and unique identification (UID) number,” HLC had noted.

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