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LATEST NEWS UPDATES | BPL families pitch for subsidized PDS: Study

BPL families pitch for subsidized PDS: Study

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published Published on Sep 26, 2012   modified Modified on Sep 26, 2012
-The Times of India

With finance minister P Chidambaram recently declaring at a full Planning Commission meeting that cash transfers may replace subsidies for food, fertilizers and fuel by the end of the 12th five-year Plan, the controversial proposal has again taken centre stage. A recently concluded pilot project which substituted ration cards with Rs 1,000 transferred monthly to families throws light on the pros and cons of the scheme.

The study involved 450 below poverty line households living in Raghubir Nagar, a colony in west Delhi. Of these, 100 households (called the transfer group) received the cash through a bank account opened in the women's name.

 The remaining 350 (called control group) continued getting wheat, rice and sugar from the local 'ration shops' on their 'ration cards'.

The final report of the study reveals that there was no difference between the amount of wheat, rice and sugar consumed by the transfer group and the control group. However, those getting cash transfers bought more pulses and eggs/fish/meat. Another significant finding was that those getting cash appeared to divert some of it at least to spending on medical attention from private hospitals. Earlier, when they were not getting the cash, only 2.4% households of this group used to go to a private hospital but after getting the monthly cash installments, this proportion shot up to almost 21%.

Those not getting cash transfers continued to either go to government hospitals or seek alternative medicine which involved less spending.

Besides these two changes in lifestyle, cash transfers did not affect any other habits. There was no difference in fuel usage — cash receiving families did not switch to less hazardous fuels like LPG. Their children's attendance or performance at school did not improve. They did not invest in income or skill enhancing measures. They did not spend more on sanitary improvements to their homes. Their savings did not improve. And, importantly, the men of the family did not increase spending on alcohol.

So, what is the bottom-line? Although 96% of those included in the year-long study said at the end that they would like to continue with receiving cash, the report observes that "among the poor there is a strong public opinion in favor of the PDS system of subsidized food and fuel, in spite of its many defects".

The Times of India, 25 September, 2012, http://articles.timesofindia.indiatimes.com/2012-09-25/indore/34081406_1_cash-transfers-pds-system-control-group


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