Food Min suggests cash transfer of food subsidy on pilot basis

To plug leakages in the PDS, the Food Ministry today favoured direct cash transfer of food subsidy to beneficiaries and suggested implementing it on a pilot basis in Chandigarh and Pondicherry.
Announcing his ministry's views on the Shanta Kumar panel report, Food Minister Ram Vilas Paswan agreed to procure pulses and oilseeds from farmers at support price besides rice and wheat, as recommended by the panel.
The ministry, that submitted its views on the report to the Prime Minister's Office yesterday, is also in favour of outsourcing testing of FCI foodgrains to private sector and is ready to try on a pilot basis in 25 depots in Chhattisgarh.

It is also open to outsourcing of foodgrains management in new godowns to private sector and focusing on procurement of foodgrains in states where MSP operation is weak.
The panel on restructuring of state-run Food Corporation of India (FCI), set up in August 2014, submitted its report to the Prime Minister in January this year. The Food Ministry was asked to submit its views on the report at the earliest.
"We have outrightly rejected the panel's recommendation to reduce the coverage of beneficiary to 40 per cent of the population from the existing 67 per cent under the food law," Paswan told reporters while sharing the ministry's views.

On direct cash transfer, Paswan said, "This suggestion is good for curbing leakages in PDS. We are in support of this on principle but there are 3-4 problems."

"If we transfer cash, beneficiary can buy foodgrains from open market. Then what will happen to our procurement operation and what will we do with procured foodgrains and our storage facilities. We need to seriously think about this before implementing it on larger scale," he said.
The Ministry has suggested to implement the cash transfer on a pilot basis in Chandigarh and Pondicherry, he added.
"However a final decision on our views on the panel report will be taken by the Prime Minister," he added.

The government has earmarked Rs 1,24,419 crore for food subsidy in the next fiscal.
Stating that some of the suggestions are already being implemented, the Minister said that state-run Food Corporation of India (FCI) will stop procurement in Haryana from April this year, while in Punjab next year.