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HindustanTimes Fri,25 Apr 2014

PDS reform: Don’t give grains, transfer subsidy to poor, says panel

Chetan Chauhan, Hindustan Times  New Delhi, March 24, 2011
First Published: 23:15 IST(24/3/2011) | Last Updated: 02:47 IST(25/3/2011)

A government committee on reforming the public distribution system has decided that rather than foodgrains, the poor in India should get money in an electronic account every month and should have freedom to buy food of their choice from fair-price shops.

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The panel, headed by plan panel deputy chairperson Montek Singh Ahluwalia, is expected to recommend a methodology and  roadmap for direct transfer of food subsidy to the government next week.

The committee has recommended that in the first week of every month, the government directly transfer the subsidy amount to a unique identification (UID) or Aadhaar number-linked smart card, to be in the name of a woman family member above 18 years of age.

The subsidy would be the difference between the minimum support price (MSP) for the foodgrain and the PDS shop issue price. This would mean a BPL family would get Rs. 280-R300 under the existing PDS of 35 kg of foodgrain per family per month at Rs. 5.50 for a kg of rice or Rs. 4.15 for a kg of wheat.

If the National Advisory Council’s formulation of 35 kg at R1 for millets, Rs. 2 for wheat and Rs. 3 for rice is considered, the monthly subsidy would range between Rs. 300-Rs 350.

“A BPL cardholder can either lift his or her quota of subsidised foodgrains or will have the choice to buy any other food stuff...” said a panel member.

The card will function only at fair-price shops, thus preventing withdrawal of  money.

Ahluwalia said, “...Giving choice to beneficiaries will empower them. It will also help plug leakages”. The Centre paid Rs. 60,600 crore as food subsidy in 2010-11 for PDS.

The committee has suggested the proposed National Food Security Act allow electronic transfer of food subsidy with a provision for food subsidy to be a percentage of MSP.

The committee is silent on who should be covered under the regime though plan panel member Abhijit Sen wants universalisation of PDS.

“The NAC and government are deliberating on the issue,” the source said.

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