A pilot project towards the central policy of cash transfer in lieu of kerosene is in the offing in the Ranga Reddy district. Commotion prevailed recently in the district, after a central team visited the Fair Price Shops in Maheshwaram mandal in order to assess the conduciveness for pilot implementation.

Further, those who went to collect their kerosene quota this month were asked to leave their bank account numbers. Those who didn’t have accounts were advised to open one soon, which left enough room for speculation about the cash transfer. Quite a few protests were lodged with the central team against such decision.

The cash transfer policy envisages direct transfer of subsidy amount to the accounts of the respective beneficiaries, instead of providing the commodity at reduced price at the Fair Price Shops. It was first suggested by a task force headed by Nandan Nilekani, as a remedy to pilferages in the public distribution system.

While the policy is aimed to curb unscrupulous practices by the FPS dealers who allegedly divert the commodities for sale in black market, there are two obvious roadblocks, which, unless cleared, will leave the beneficiaries high and dry, say experts.

“The project will ensure that subsidy amount is transferred to the beneficiary’s account soon after kerosene is bought from open market. But this presupposes the beneficiary’s capability to buy it in the first place, which is not always true,” says a senior official from the Civil Supplies department.

Secondly, the cash transfer scheme will give much scope for profiteering if kerosene is not sold in FPS, albeit at open market prices. Current price of kerosene hovers around Rs.35 per litre in open market, while it is being sold at Rs.15 in FPS. However, if the beneficiary is forced to buy it in open market at higher price, say at Rs.50, the subsidy amount deposited in the account will lose its purpose.

Notwithstanding all these objections, officials say that cash transfer scheme could sooner or later be extended to other subsidised commodities such as LPG and even rice.

However, the Director, Civil Supplies, K.R.B.H.N.Chakravarthi, says implementation of the policy is not anywhere in the horizon as Aadhaar enumeration is yet to be completed in the district. Unless each cardholder’s number is linked up with the Aadhaar card, and Point-of-Sale biometric devices are installed, the implementation stage will not have arrived, he says.

Aadhaar enrolment has hit a roadblock in the entire country due to a software glitch, and hence the implementation of the cash transfer policy will take time, he assures.

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