1. Why Modi government must replace FCI-MSP-PDS system with DBT

Why Modi government must replace FCI-MSP-PDS system with DBT

A NITI Aayog report points out that leakages and poor-quality food supplements plague the Integrated Child Development Service (ICDS) scheme, eroding it efficacy.

By: | Published: September 23, 2017 5:11 AM
NITI Aayog, Integrated Child Development Service, ICDS Scheme A NITI Aayog report points out that leakages and poor-quality food supplements plague the Integrated Child Development Service (ICDS) scheme, eroding it efficacy.(Image: Reuters)

A NITI Aayog report points out that leakages and poor-quality food supplements plague the Integrated Child Development Service (ICDS) scheme, eroding it efficacy. Against such a backdrop, the Union women and child development ministry’s proposal that take-home rations distributed at anganwadi centres be replaced with direct cash transfers makes eminent sense. Under ICDS, some 4.6 children below the age of three years and 1.9 crore pregnant/lactating women get rations to curb child and maternal mortality, child malnutrition and stunting. As per The Indian Express, the ministry will mount the pilot in 300 most-backward districts. Replacing the rations with cash transfers will not only weed out leakages, it will let beneficiaries pick better supplements from the market.

It remains to be seen, though, if the daily entitlement— Rs 8 for a child, Rs 9.30 for a pregnant/lactating woman and Rs 12 for a severely malnourished child—proves adequate.  The bigger issue, though, is that of expanding direct benefit transfer (DBT) to public procurement and subsidised distribution of food grains. It has to replace the FCI–minimum support price (MSP) based model, focused mainly on wheat and rice procurement, and that too from largely just Punjab and Haryana. While there is a need to shift to a composite per hectare cash transfer for farm subsidy, the government must also do away with the PDS and give transfers to beneficiaries.

Madhya Pradesh’s experiment, of transferring cash to farmers to offset the gap between MSP and market prices realised can be eventually direct policy towards shutting down the inefficient FCI-PDS model. Shifting to DBT will save more than Rs 40,000 crore a year; that should prod the government to take this political risk.

  1. No Comments.

Go to Top