Government plans to introduce direct cash transfer for food subsidy in 6 UTs and ‘willing states’

The government plans to introduce direct cash transfer for food subsidy in six Union Territories and 'willing states' for PDS scheme, taking a key step to plug leakages in welfare schemes. In the pilot project, expected to be rolled out from April, beneficiaries will receive the subsidy amount in their bank accounts, and will buy rice and wheat from the fair price shops.

The fair price shops will sell rice and wheat at a price, which is the 'economic cost', determined by the Food Corporation of India, plus handling and transportation and a commission for the fair price shop dealer. The food and civil supplies ministry has asked the UT administrations to ensure that all beneficiaries have a bank account, which will be linked with the ration card number in the database.

While the food and civil supplies ministry's direct cash transfer pilot is linked to the ration card number, the Andhra Pradesh government has begun a pilot in the East Godavari district of using the Aadhar or unique identification number enabled direct cash transfer for the public distribution system. Food subsidy has not been included in the national roll out for the Aadhar-enabled direct benefit transfer in 20 districts across the country.