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Troubles with Cash Food Subsidy
A pilot project of cash food subsidy to replace the public distribution system in Nagri block of Ranchi district in Jharkhand is analysed to highlight the problems experienced by Jharkhand in implementation of cash food subsidy through the direct benefit transfer system in the PDS. Further, the limitations of cash transfer as a means to replace the PDS are highlighted as also the infrastructural and institutional constraints to impose digitalisation in rural Indian conditions.
The authors would like to thank Jean Drèze, Alex M Thomas, and EPW’s anonymous referee for their valuable comments.
Barun Kumar Barnwal (talkvarun2008@gmail.com) is a PhD scholar at Central University of Jharkhand. Mrityunjay Pandey (mrityunjaypandey79@gmail.com) is a PhD scholar at University of Hyderabad.
Direct benefit transfer is an odd term for the new system, whereby the food subsidy is provided in a very roundabout way. (Drèze 2018)
Several states in India have launched pilot projects to give cash food subsidy through the direct benefit transfer (DBT) system directly to the public distribution system (PDS) beneficiaries’ bank accounts to address the problem of leakages in the PDS. In October 2017, the Government of Jharkhand launched a pilot project of replacing the grain distribution system through fair price shops (FPSs) with the transfer of subsidy amounts to PDS beneficiaries’ accounts.
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