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To scrap PDS, govt begins 2 pilot projects

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Beneficiaries who get grains, sugar & kerosene, can now consider Direct Benefit Transfer in cash or kind

Mumbai : The Maharashtra government has embarked on a project to shut down the Public Distribution System (PDS) of food for people Below Poverty Line (BPL). The government will substitute the PDS with direct cash subsidies, where a fixed amount will be transferred into the bank accounts of the beneficiaries. Going a step further, the state government has also announced Aadhaar-linked welfare delivery of services based on direct cash transfers. These will be done in Mumbai and Thane district. Two pilots projects have already been started at Azad Maidan and Mahalaxmi.

This pilot project has been handed over to the Abdul Latif Jameel Poverty Action Lab (J-Pal), which is affiliated to Massachusetts Institute of Technology and a Memorandum of Understanding has also been signed, as mentioned in the Government Resolution (GR) issues in August. The proposal stated, “The beneficiary who gets grains, sugar and kerosene, can now consider the Direct Benefit Transfer (cash) and Direct Benefit Transfer (kind). The beneficiary has to opt for either of the DBTs, cash or kind.”


The government of Maharashtra then wrote and later issued a GR, which stated two pilot projects have been undertaken for DBT cash. “This project will begin with ‘1/A/106/Azad Maidan FPS ID – 164104500022 and 11/A/61/Mahalaxmi FPS ID – 164105000035’ from September 2018.”

The note further states, “The representatives of J-Pal were present on August 28 and signed MoU,” signed Satish Shridhar Supe, deputy secretary, Government of Maharashtra. The organisation Anna Adhikar Abhiyan, Maharashtra (AAA) has opposed this move. They have alleged this is a conspiracy of outside forces, mainly the World Bank, and the ultimate aim is to dissolve the  Food Corporation of India.

“This policy of cash transfers is by design a flawed policy which is being pushed by the World Bank. It had recommended a move towards more consolidated and more cash-based social assistance programmes for chronically poor,” said Ulka Mahajan, a founder of AAA and activist.  Mahajan further stated, “We reject the policy of direct cash transfer in PDS. We strongly feel PDS should not be dismantled as it plays an important role in improving access to food and moreover revitalising agriculture in promoting food production.”

AAA has cited examples of some studies which have shown Indian growth experience as lopsided — benefitting few while the vast majority is still deprived and has little access to food, thereby facing continuous poverty and deprivation.

The Arjun Sengupta Committee identified 77 per cent of the population as being vulnerable, since it lives on less than Rs 20 per day. According to the Socio-Economic Caste Census, around 56 per cent of rural households lack agricultural land.

Another factor to be considered is the fact that there is weak or no adequate banking network in the poor and remote rural areas of this state. The beneficiaries will have to make multiple trips to collect the cash. Worse still, as leaders of the opposition say, the main earning male member is then made vulnerable to many addictions.

“The reason PDS was started, was the likelihood of earning male member of the poor families and in rural areas being most susceptible to addictions. They will misuse that money and it then becomes a big hurdle for the women of the household to get any money to purchase food for their survival. By getting subsidised food, there is a guarantee, the women and children at least get small meals each day,” said Nawab Malik, the spokesperson of Nationalist Congress Party. Malik further said, “There were attempts by this government to introduce a similar system before, which we struck down.”