Govt treads cautiously on cash transfers -Governance Now

Govt treads cautiously on cash transfers

Forty-three officials, including secretaries to the government of India, have been deputed to visit as many districts across the country to assess the viability of the scheme

Bhavdeep Kang | December 21, 2012

The government is adopting a cautious, step-by-step approach to cash transfer of subsidies. Forty-three officials, including secretaries to the government of India, have been deputed to visit as many districts across the country to assess the viability of the scheme. Their recommendations will determine the time-frame and modalities of implementing cash transfers.

The decision was taken at a top-level meeting called earlier this week by the cabinet secretary, sources said. UID chairman Nandan Nilekani is one of those who will undertake the tour to get a first hand idea of how cash transfers will work, the sources added. The tours are to be undertaken immediately and the results reviewed in the next fortnight.

Cash transfer for food subsidy – the most controversial part of the scheme and the hardest to implement – will be launched in six Union Territories on March 31, 2013. Delhi has already started the programme under the title “annashree yojana”. An amount of Rs 600 is being given to the seniormost woman in every below poverty line household in the UT of Delhi. Depending on the success of the scheme in the UTs, it will be extended to the rest of the country.

It may be recalled that Union Food & Consumer Affairs minister KV Thomas had told Governance Now in October this year that the pilot schemes on cash transfer of food subsidy had not been very successful. He had said that it was still experimental and had its “plus and minus points”. Hence, the tentative approach.

Currently, there is little clarity on implementation of cash transfer of food subsidy, which is bound to have wide-ranging political impact. It would call for an overhaul of the existing Public Distribution System (PDS) and presupposes aadhaar-based identification documents for all beneficiaries.

Also, the government has yet to assess how it will affect the implementation of the National Food Security Bill. Parliament's Standing Committee on the highly controversial Bill has yet to submit its recommendations, which has delayed its introduction. However, UPA chairperson Sonia Gandhi reiterated her commitment to the NFSA while inaugurating Delhi's “annashree” experiment on December 5.

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