The YS Jagan Mohan Reddy government in Andhra Pradesh has introduced a direct cash transfer scheme for consumers who do not want to purchase rice under the public distribution system from fair price shops.
According to the state’s Minister of Civil Supplies and Consumption, Karumuri Venkata Nageswara Rao, the program would be implemented on a pilot basis in parts of the state from May. “An investigation would be conducted into the implementation of the program and, based on the feedback, steps would be taken to expand the program statewide,” he said.
In the first phase, the program will be implemented in parts of Visakhapatnam, Anakapalle, Narasapuram, Kakinada and Nandyal districts. Under this system, the government would pay the amount in cash to people in lieu of their rice ration quota provided by fair price shops under the public distribution system.
Beneficiaries should sign a letter of consent to this effect. In the areas identified for the pilot project, village volunteers have already started collecting consent from beneficiaries, and it will end this weekend.
Applications would be reviewed by the village revenue officer, who would send them to the tehsildar for approval on April 25. Once the tehsildar is approved, the money would be credited to the accounts of beneficiaries who do not want rice, starting May 1.
“It is only optional and there is no obligation. Beneficiaries are free to decide whether to take cash or ration rice. Even if a beneficiary takes cash instead of rationing rice, he can change the option as early as the following month, if necessary,” the minister said.
The government has not yet decided how much money the beneficiaries will be paid in place of the rice. “It can range from ₹15 to ₹16 for one kg of rice,” an official from the civil supplies department said on condition of anonymity.
The program of direct cash transfer to the bank accounts of PDS beneficiaries instead of providing food grains is already being implemented on a pilot basis in the three union territories of Chandigarh, Pondicherry and the urban areas of Dadra and Nagar Haveli.
A statement made by Union Minister of State for Consumer Affairs Danve Rao Saheb Dadarao to Rajya Sabha last year said the food subsidy cash transfer scheme was being implemented in accordance with the provisions of the Food Subsidy Cash Transfer Rules, 2015, notified under the National Food Safety Act 2013 (NFSA).
Retired IAS officer and former Union Secretary (Finance) EAS Sarma says cash transfer scheme instead of rationing rice to consumers is not appropriate in states like Andhra Pradesh , where the PDS was actually implemented.
“We have a strong network of ration shop dealers, and lately PDS rice is delivered directly to consumers’ doorsteps at the subsidized price. They will not be able to buy the same quantity at the same price on the open market,” he said.
Moreover, it is quite possible that consumers will spend the money on other purposes – men on alcohol and women on other small household things. “It will ultimately affect people’s food security,” he said.
Telugu Desam party’s chief legislator, Gorantla Buchaiah Chowdary, said the decision to transfer cash instead of PDS rice would give a serious setback to the concept of food security. “TDP founder and former NT Chief Minister Rama Rao brought ₹Program of 2 kg of rice to ensure food security for the poor. Now people will be forced to buy rice at a very high price on the open market,” he said.
BJP state chairman Somu Veerraju said there was a large-scale conspiracy in the decision to transfer money to consumer accounts instead of rice. The government planned to phase out ration cards and export rice overseas to earn a lot of money, he claimed.
The State’s Minister for Civil Supplies and Consumer Affairs, however, refuted the allegations and said no one would lose the ration cards if he or she opted for the cash transfer. “We will continue to issue ration cards to eligible recipients,” he said.