Centre asks states to implement Direct Benefit Transfer for food subsidy

Union Minister of Consumer Affairs, Food and Public Distribution, Ram Vilas Paswan (Source: PTI/FILE)

Pitching for direct transfer of food subsidy, Union Food Minister Ram Vilas Paswan on Saturday asked states to initiate a pilot programme in at least some districts to pay cash directly to ration card holders.

The government is implementing Direct Benefit Transfer (DBT) scheme for LPG subsidy. We wish DBT should be implemented for food subsidy as well,” Paswan said, addressing a state food ministers conference on price rise.

The direct transfer of food subsidy would enable ration card holders to purchase their choice of foodgrain from the market and also reduce the subsidy bill with reduction in cost of transportation and handling of foodgrains.

Under the food security law, the Centre is supplying foodgrains at a highly subsidised rate of Rs 1-3/kg to 72.46 crore beneficiaries in 33 states and union territories. Three states are yet to roll out the law.

Already, DBT for food subsidy is being implemented fully in Chandigarh and Puducherry and in some areas of Dadra and Nagar Haveli, Paswan said.

I urge all other states and union territories to implement DBT on a pilot basis in some selective districts if not in the entire state,” he added.

Highlighting the benefits of DBT, the minister said, “Implementation of cash transfer of food subsidy will reduce transportation cost of foodgrains from Punjab and Haryana. There will not be complaints from poor people that quality grains is not being supplied in ration shops.”

He said the government provides about Rs 1.30 lakh crore food subsidy annually and it should reach the right beneficiaries.

He also said that foodgrains worth Rs 10,000 crore have been better targeted because of elimination of ineligible ration cards.

Under the National Food Security Act (NFSA), which came into force from July 5, 2013, over 81 crore beneficiaries will be legally entitled to get cheaper foodgrains from ration shops when the law is implemented across the country.