Uttar Pradesh and Madhya Pradesh are likely to be the next States to start implementing cash transfer for food subsidies in certain areas, but Food Minister Ram Vilas Paswan on Thursday emphasised that banking systems and infrastructure must be in place before any such scheme can begin.
About 2.4 lakh households in Puducherry, Chandigarh and the urban areas of Dadra and Nagar Haveli currently receive a direct transfer of money — amounting to a total of ₹12 crore per month — instead of foodgrains through the local ration shop.
Talking about the lessons learnt from the experience in these three relatively urban areas, Mr. Paswan said the biggest potential hurdles were in the banking system and in last mile infrastructure. He pointed out that when a beneficiary is forced to spend money and lose working hours due to repeated trips to a bank branch as far as 20 km away, which may be closed or may not have received the money in time, then he or she would not be in favour of the cash transfer.
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“99% of transactions are now timely, with money in accounts by the first of the month,” said Ravikant, Secretary, Food and Public Distribution department.
Several pre-requisites
States such as M.P. and U.P., which have also expressed interest in implementing the scheme in certain districts, must meet several pre-requisites, including complete digitisation of the beneficiary database, seeding with account details, Aadhaar and mobile numbers, extensive awareness campaigns and post-distribution monitoring and grievance redressal mechanisms.
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The requirements, timelines and best practices have now been laid out in a handbook prepared in collaboration with the World Food Programme (WFP), which acted as advisers to the government for the pilot scheme in the three union territories.