Defending the government's direct cash transfer initiative, plan panel deputy chairperson Montek Singh Ahluwalia on Thursday said subsidy to be transferred into bank accounts of beneficiaries would be indexed with inflation.
"The purpose of the cash transfer is to provide more purchasing power and choice to the beneficiaries," he told Karan Thapar in a show on CNN-IBN.
He allayed the apprehension raised by the CPM and civil society groups that cash transfer would lead to the shutdown of public distribution system.
"PDS shops would remain, so would be subsidised ration. The difference would be that subsidy would be transferred into people's bank accounts and they would purchase food grains at market rate," he said, adding cash transfer will provide an option to buy commodities other than wheat and rice.