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Resource centre on India's rural distress
 
 

NSS-Higher PDS Buys May Make Direct Cash Transfers Tough

-The Times of India

Indian households purchased much more food items through the public distribution system (PDS) in 2009-10 than they did five years ago, the 66th National Sample Survey has indicated, raising doubts over the effectiveness of the government’s new direct cash transfer system over a large base.

Greater penetration and higher use of the PDS will make it difficult for the government to eventually deliver the Rs 75,000-crore food subsidy to its eligible beneficiaries.

“Cash transfers are very limited in nature. I am not sure if they can replace PDS”, said SR Hashim, former member of Planning Commission.
 
The latest survey showed the share of PDS buys in total purchase went up substantially in both rural and urban areas between 2004-05 and 2009-10 for all categories of goods.

Rice consumption, for instance, rose 23.5% in the rural areas and 18% in urban areas during 2009-10. The corresponding rise in 2004-05 was lower at 13% and 11% respectively.

Experts attributed the rise in usage to a shift to the better universal PDS system in a few states and improvement in the distribution system.

The relative rise of consumption through PDS was a result of states like Tamil Nadu, Chhattisgarh, Karnataka, and Andhra Pradesh opting for universal PDS, said Ravi Srivastava, JNU professor. “So people accessing PDS went up substantially after 2004-05,” he said, adding, Madhya Pradesh and Chhattisgarh worked on their distribution system using information technology.
 
In Tamil Nadu, 91% of the rural households went for PDS purchase of rice, followed by Andhra Pradesh at 84%, Karnataka 75% and Chhattisgarh 67%.