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Direct transfer of food subsidy: Centre to conduct pilot study from Jan

PTI New Delhi | Updated on October 30, 2012 Published on October 30, 2012

The alternative model involves distribution of food-grains at the rate closer to the market prices through PDS and transfer of food subsidy to the beneficiaries’ bank accounts.

In an effort to curb leakages of food-grains meant for ration shops, the Centre today said it is considering direct transfer of food subsidy to ration card holders and will launch a pilot project in 6 Union Territories (UTs) from January, 2013.

“To check leakages and diversion, an alternate model of direct transfer of food subsidy is being considered,” the Food Minister, K V Thomas said after the two-day meet of state food ministers and food secretaries, here.

A pilot scheme would be launched in the next two months in six Union Territories — Chandigarh, Puduchery, Andaman and Nicobar, Lakshadweep, Dadra and Nagar Haveli and Daman and Diu — to assess the efficacy of the proposed alternative model, before its implementation in other states, he said.

The Centre has sought views of state governments and UTs on the alternate model. In the meantime, a pilot scheme will be implemented, he added.

The alternative model involves distribution of food-grains at the rate closer to the market prices through PDS and transfer of food subsidy to the beneficiaries’ bank accounts. This is aimed at ensuring food subsidy reaches the intended beneficiaries and is not cornered by vested interests.

Thomas said states favoured the alternative model after Planning Commission Deputy Chairman, Montek Singh Ahluwalia assured them direct transfer of food subsidy would not lead to dismantling of current system of procuring grains at minimum support price (MSP) and distribution through PDS.

Citing apprehensions expressed by some states on the alternative model, the Food Secretary, Sudhir Kumar said, “Some states were concerned about availability of bank branches and opening of bank accounts among others.”

The Government’s food subsidy given to run the public distribution system (PDS) is likely to be Rs 91,000 crore in the current fiscal, against Rs 72,823 crore in 2011-12.

The government covers 18-crore households under the PDS.

Published on October 30, 2012
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