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HindustanTimes Fri,19 Sep 2014

Poverty-ridden opt for cash transfer over PDS

Prasad Nichenametla, Hindustan Times  New Delhi, October 07, 2012
First Published: 23:03 IST(7/10/2012) | Last Updated: 09:38 IST(8/10/2012)

Sunita (42), a mother of five at Raghubir Nagar slum in West Delhi, manages her household with a monthly income of Rs. 3,000. However, she benefited from supplementary income through 2011, with Rs. 1,000 being credited to her account under the cash transfer scheme every month.

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The government had, on an experimental basis, replaced her entitlements under the Public Distribution System (PDS).

The scheme allows her to buy everything she wants from the open market, instead of the fair price shop under the PDS. And what’s more, the cash transfer scheme also provides the beneficiary with a bank account. 

Sunita’s household is one among the 100 in the area, which were part of a 2011 pilot project to assess whether the government could offer cash instead of subsidised commodities as a welfare measure for people below poverty line.

Last week, the PM had put in place a mechanism — overseen by a ministerial committee under his leadership — for moving to electronic cash transfer mode, leveraging Aadhar.

The cost of procurement and grain distribution under PDS this fiscal is likely to cross R92,000 crore. The food security bill, when it kicks in, will take the bill up by another R28,000 crore.

Before the pilot project, Sunita used to spend around Rs. 300 on buying rice, wheat, sugar, kerosene and oil from the PDS shop. It would last for 20 days a month, following which she would have to spend R1,000 on grocery from the open market.

However, the R1,000 she gets under the cash transfer scheme goes a long way in helping her buy groceries for the entire month, says Sunita.

“Earlier, we had to wait for weeks for the supplies. And when they finally arrived, the quantity would be less than our entitlement. Moreover, a substantial part of our grain supply would consist of chaff. This is why we had to shell out R1,000 to make up for the rest of the month,” says Sunita.

But now, the family was able to buy more nutritious food, such as eggs and meat, through the cash transfer scheme. “This allowed us buy supplies from the wholesale market. And, with money in hand, we were not at mercy of the dealer and the supplies,” she gushes.

Cash transfer also helped out when Sunita's son met with an accident, and she had to spend heavily on private medical treatment. The best thing about cash transfer is the flexibility it gives to people for choosing what to use it for, she says.

Sunita’s neighbours agree, and some of them rue not being chosen for the pilot project.

“People under the cash transfer scheme do not have to make the rounds of the ration shop and eat substandard food. Given a choice, we would opt for cash transfer,” says 35-year-old Saroj Devi, who was not selected for the pilot project despite living in a nearby lane.

However, the day is not far when she would become a beneficiary too.

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