PDS foodgrains subsidy to have LPG-like transfer model

25 Jul 2017 | By Roma Das
Soon LPG-like subsidy transfer for PDS foodgrains

Soon, public distribution system (PDS) of subsidized foodgrains will get a new transfer scheme model as that of LPG.

Apparently, the food ministry is working on a pilot to follow the same.

Reportedly, the beneficiaries will get the subsidy amount in advance in their bank accounts and will have to buy the foodgrains from any ration shop with the help of e-PoS devices.

In context: Soon LPG-like subsidy transfer for PDS foodgrains

25 Jul 2017PDS foodgrains subsidy to have LPG-like transfer model

AdvantagesNew system will ensure zero leakage of subsidy and foodgrain

The initiative being mulled over by government will apparently ensure zero leakage of subsidy and foodgrains.

A government source was also quoted saying that transfer of subsidy for next month wouldn't be allowed if the beneficiary fails to purchase ration from e-POS enabled shops.

Beneficiaries under National Food Security Act will not be able to use subsidy amount for anything else.

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e-POS to ensure transparency in PDS subsidy system

Functioninge-POS to ensure transparency in PDS subsidy system

As already explained that PDS subsidy of foodgrains will follow the transfer model of LPG but in case of cooking gas subsidy, the consumer has a specific connection and government transfers the subsidy through the supplier concerned which wouldn't be the case here.

Hence, beneficiaries will buy foodgrains from ration shops and e-POS which would allow transparency and ensure the authenticity.

ImplementationNew model of PDS under consideration: Sources

The new PDS model is being taken into account by the government as an alternative to the nationwide roll-out of Direct Benefit Transfers (DBT).

The other provisions being taken into consideration is that of direct cash transfer for subsidized foodgrains but it is being implemented only in Chandigarh, Puducherry and Dadra & Nagar Haveli.

Preventive measuresState government to display subsidy of foodgrains: Centre

As per a directive by the Centre, State governments have been asked to display the foodgrain subsidy at PDS shops which will help prevent the states from hijacking the credit for selling highly-subsidized grains to the poor.

Also, more public awareness is required on this issue, considering the central government's annual food subsidy bill is over Rs. 1 lakh crore.

ConclusionAadhaar mandatory for PDS of foodgrains

Following on the lines of LPG-like subsidy for PDS of foodgrains, the government issued a notification earlier this year and made it clear that subsidized foodgrains will not be sold to anyone not having Aadhaar after June 30.

The notification came into effect from February 8 in all states except Assam, Meghalaya and J&K. This would be applicable to all the new beneficiaries.