Pilot scheme in six union territories for direct food subsidy transfer on anvil

NEW DELHI: The Centre proposes to introduce a pilot scheme in six union territories for direct transfer of food subsidy to the beneficiaries in order to check diversion of foodgrains under the PDS and test feasibility of the new system, the Parliament was informed today.

In a written reply to Rajya Sabha, Food Minister K V Thomas assured that the public distribution system would not be dismantled and under the proposed scheme, the foodgrains would be issued to the ration card holders at the economic cost and food subsidy would be credited to the bank account.

"The Department proposes to introduce a pilot scheme in six union territories ( UTs), namely Andaman & Nicobar Islands, Chandigarh, Dadra & Nagar Haveli, Daman & Diu, Lakshadweep and Puducherry for direct transfer of food subsidy under Targeted Public Distribution System (TDPS)," Thomas said.

"Under the proposed scheme, foodgrains will be issued by the Food Corporation of India at the economic cost. The cash subsidy equal to the difference in the economic cost and the present issue price will be credited to the bank account of the beneficiary in advance," he added.

The Minister categorically said the proposal "does not involve dismantling the TPDS" as foodgrains would continue to be distributed to people through ration shops.

"The scheme, details of which will be finalised in consultation with UTs, is expected to check leakages/diversion of foodgrains under TDPS and test the feasibility of launch of the scheme in other states," Thomas said.

The proposed scheme would not lead to any change in quantum of food subsidy presently being paid to six UTs, he added.

The food subsidy stood at Rs 72,370.9 crore in 2011-12 fiscal. Till December 3 in the current fiscal, Rs 61,243 crore has been released as food subsidy.

The Centre provides subsidised foodgrains to around 18 crore households through PDS, of which 6.52 crore families are under below poverty line (BPL) category.