Deprecated (16384): The ArrayAccess methods will be removed in 4.0.0.Use getParam(), getData() and getQuery() instead. - /home/brlfuser/public_html/src/Controller/ArtileDetailController.php, line: 73
 You can disable deprecation warnings by setting `Error.errorLevel` to `E_ALL & ~E_USER_DEPRECATED` in your config/app.php. [CORE/src/Core/functions.php, line 311]
Code Context


        trigger_error($message, E_USER_DEPRECATED);

    }
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 You can disable deprecation warnings by setting `Error.errorLevel` to `E_ALL & ~E_USER_DEPRECATED` in your config/app.php.'
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deprecationWarning - CORE/src/Core/functions.php, line 311
Cake\Http\ServerRequest::offsetGet() - CORE/src/Http/ServerRequest.php, line 2421
App\Controller\ArtileDetailController::printArticle() - APP/Controller/ArtileDetailController.php, line 73
Cake\Controller\Controller::invokeAction() - CORE/src/Controller/Controller.php, line 610
Cake\Http\ActionDispatcher::_invoke() - CORE/src/Http/ActionDispatcher.php, line 120
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Cake\Http\Runner::__invoke() - CORE/src/Http/Runner.php, line 65
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Cake\Http\Runner::__invoke() - CORE/src/Http/Runner.php, line 65
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Cake\Http\Runner::__invoke() - CORE/src/Http/Runner.php, line 65
Cake\Http\Runner::run() - CORE/src/Http/Runner.php, line 51
Cake\Http\Server::run() - CORE/src/Http/Server.php, line 98

Deprecated (16384): The ArrayAccess methods will be removed in 4.0.0.Use getParam(), getData() and getQuery() instead. - /home/brlfuser/public_html/src/Controller/ArtileDetailController.php, line: 74
 You can disable deprecation warnings by setting `Error.errorLevel` to `E_ALL & ~E_USER_DEPRECATED` in your config/app.php. [CORE/src/Core/functions.php, line 311]
Code Context


        trigger_error($message, E_USER_DEPRECATED);

    }
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 You can disable deprecation warnings by setting `Error.errorLevel` to `E_ALL & ~E_USER_DEPRECATED` in your config/app.php.'
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deprecationWarning - CORE/src/Core/functions.php, line 311
Cake\Http\ServerRequest::offsetGet() - CORE/src/Http/ServerRequest.php, line 2421
App\Controller\ArtileDetailController::printArticle() - APP/Controller/ArtileDetailController.php, line 74
Cake\Controller\Controller::invokeAction() - CORE/src/Controller/Controller.php, line 610
Cake\Http\ActionDispatcher::_invoke() - CORE/src/Http/ActionDispatcher.php, line 120
Cake\Http\ActionDispatcher::dispatch() - CORE/src/Http/ActionDispatcher.php, line 94
Cake\Http\BaseApplication::__invoke() - CORE/src/Http/BaseApplication.php, line 235
Cake\Http\Runner::__invoke() - CORE/src/Http/Runner.php, line 65
Cake\Routing\Middleware\RoutingMiddleware::__invoke() - CORE/src/Routing/Middleware/RoutingMiddleware.php, line 162
Cake\Http\Runner::__invoke() - CORE/src/Http/Runner.php, line 65
Cake\Routing\Middleware\AssetMiddleware::__invoke() - CORE/src/Routing/Middleware/AssetMiddleware.php, line 88
Cake\Http\Runner::__invoke() - CORE/src/Http/Runner.php, line 65
Cake\Error\Middleware\ErrorHandlerMiddleware::__invoke() - CORE/src/Error/Middleware/ErrorHandlerMiddleware.php, line 96
Cake\Http\Runner::__invoke() - CORE/src/Http/Runner.php, line 65
Cake\Http\Runner::run() - CORE/src/Http/Runner.php, line 51
Cake\Http\Server::run() - CORE/src/Http/Server.php, line 98

Warning (512): Unable to emit headers. Headers sent in file=/home/brlfuser/public_html/vendor/cakephp/cakephp/src/Error/Debugger.php line=853 [CORE/src/Http/ResponseEmitter.php, line 48]
Code Context
            if (Configure::read('debug')) {

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		&#039;title&#039; =&gt; &#039;Is the Govt doing away with PDS?&#039;,
		&#039;subheading&#039; =&gt; &#039;&#039;,
		&#039;description&#039; =&gt; &#039;&lt;br /&gt;
&lt;div align=&quot;justify&quot;&gt;
Following the recommendations of the Shanta Kumar Committee report on restructuring of the Food Corporation of India (FCI), there are signs that the Central Government is in a hurry to replace the &lt;a href=&quot;../hunger-hdi/pds-ration-food-security-42.html&quot;&gt;Public Distribution System&lt;/a&gt; (PDS) with cash transfers. &lt;br /&gt;
&lt;br /&gt;
The Government&#039;s intention has been revealed in two official letters (one dated &lt;a href=&quot;tinymce/uploaded/GoI%20Letter%20on%20DBT%20dated%2010%20Feb%202015.pdf&quot; title=&quot;10 Feb&quot;&gt;10 February 2015&lt;/a&gt; and another dated &lt;a href=&quot;tinymce/uploaded/GoI%20letter%20on%20DBT%20dated%2011%20Feb%202015.pdf&quot; title=&quot;11 Feb&quot;&gt;11 February 2015&lt;/a&gt;) that were sent from the Joint Secretary at Department of Food and Public Distribution to the Principal Secretary/ Secretary at Department of Food &amp;amp; Civil Supplies of various states/ UTs. &amp;nbsp;&lt;br /&gt;
&lt;br /&gt;
In the letter dated 10 February 2015, it has been clearly said that the &lt;em&gt;&amp;quot;Government is looking forward to implement DBT for foodgrains initially in the UTs and few districts of the states on pilot basis&amp;quot;&lt;/em&gt;.&lt;br /&gt;
&lt;br /&gt;
Despite various arguments and evidence put against cash transfers vis-a-vis PDS to ensure food security (by development economists in the past), the recent official correspondences show that the Ministry of Consumer Affairs is willing to rope in officials from Unique Identification Authority of India (UIDAI)/ National Population Register (NPR) so as to implement the appropriate model of cash transfer by complete digitization of beneficiary data and Aadhaar seeding. &lt;br /&gt;
&lt;br /&gt;
As per the official letter dated 10 February, any of the 3 models/ options (as shown below) can be adopted by states/ UTs for cash transfers: &lt;br /&gt;
&lt;br /&gt;
a. Under the first model, cash transfer of food subsidy can be submitted to bank account of beneficiaries every month. There is complete freedom given to beneficiaries to purchase foodgrains from anywhere in the market. However, for undertaking this model, there has to be adequate supply of foodgrains in the market around the year.&lt;br /&gt;
&lt;br /&gt;
b. Under the second model, fair price shops (FPS) dealers will be supplied foodgrains at minimum support price (MSP) or near market prices. Beneficiaries have to purchase foodgrains from the FPS at designated prices and all transactions are recorded on point-of-sale (PoS) device. The difference of MSP/ designated price and Central Issue Price (CIP) will be credited to the beneficiaries&#039; bank account in advance against actual purchase from FPS. &lt;br /&gt;
&lt;br /&gt;
c. Under the third model, the existing manual process of issuance of foodgrains will be followed, with or without PoS, aided by digitized database seeded with Aadhaar. &amp;nbsp;&lt;br /&gt;
&lt;br /&gt;
It is not clear from the above-mentioned official correspondences whether cash transfers will be indexed with the overall price level to protect the amount of real income transfers, as was actually recommended by the High Level Committee report on FCI restructuring. It has been argued earlier by Right to Food activists that cash transfer cannot ensure food security in the face of price rise, unless it is indexed to inflation. &lt;br /&gt;
&lt;br /&gt;
If the first option of cash transfer is adopted, then public procurement of foodgrains from farmers will be adversely affected, as has been cautioned by the Right to Food Campaign in its press note dated 25 January 2015.&lt;br /&gt;
&lt;br /&gt;
Riding on the claim that 13.2 crore new bank accounts have been opened under the Pradhan Mantri Jan Dhan Yojana in the last six months with coverage of 100% target, the Government seems to be confident of implementing the direct benefits transfer (DBT) of consumer food subsidy.&lt;br /&gt;
&lt;br /&gt;
However, in a &lt;a href=&quot;tinymce/uploaded/Reetika%20PDS.pdf&quot;&gt;study of PDS&lt;/a&gt; undertaken in 9 states during May-June 2011, it was shown that more than two-thirds of the respondents expressed a clear preference for food over cash; less than one-fifth (18 percent) were in favour of cash over food. In states where PDS was running well, majority of the respondents preferred food over cash transfer. &amp;nbsp;&lt;br /&gt;
&lt;br /&gt;
A group of &lt;a href=&quot;../latest-news-updates/reforming-food-corporation-of-india-himanshu-4675364.html&quot;&gt;economists&lt;/a&gt; have recently shown that replacing the PDS with cash transfer will be like throwing out the baby with the bathwater since it has been revealed that PDS, which directly impacts rural poverty, could be revived even in poor states like Odisha, Chhattisgarh and Bihar thanks to the reforms undertaken by the respective state governments. For example, &lt;a href=&quot;../latest-news-updates/understanding-leakages-in-the-public-distribution-system-jean-dreze-and-reetika-khera-4675312.html&quot;&gt;PDS leakage&lt;/a&gt; in Bihar reduced to 24% in 2011-12 from 91% in 2004-05 due to introduction of coupon system, while diversions declined in Chhattisgarh to 3.3% in 2011-12 from 52.0% in 2004-05 as a result of transparency measures adopted plus complete overhauling of PDS. &amp;nbsp;&lt;br /&gt;
&lt;br /&gt;
&lt;strong&gt;&lt;em&gt;References:&lt;br /&gt;
&lt;/em&gt;&lt;/strong&gt;&lt;br /&gt;
Report of the High level Committee on Reorienting the Role and Restructuring of Food Corporation of India, January 2015 (Please &lt;a href=&quot;http://fciweb.nic.in/app/webroot/upload/News/Report%20of%20the%20High%20Level%20Committee%20on%20Reorienting%20the%20Role%20and%20Restructuring%20of%20FCI_English_1.pdf&quot;&gt;click here&lt;/a&gt; to access)&amp;nbsp; &lt;br /&gt;
&lt;br /&gt;
Leakages from the Public Distribution System (PDS) and the way forward - Ashok Gulati and Shweta Saini (2015), ICRIER (Please &lt;a href=&quot;http://icrier.org/pdf/Working_Paper_294.pdf&quot;&gt;click here&lt;/a&gt; to access)&amp;nbsp; &lt;br /&gt;
&lt;br /&gt;
The National Food Security Act 2013 (Please &lt;a href=&quot;tinymce/uploaded/NFSA%202013.pdf&quot;&gt;click here&lt;/a&gt; to access)&lt;br /&gt;
&lt;br /&gt;
The National Food Security Ordinance 2013 (Please &lt;a href=&quot;tinymce/uploaded/NationalFoodSecurityOrdinance2013.pdf&quot;&gt;click here&lt;/a&gt; to access)&lt;br /&gt;
&lt;br /&gt;
Address by the President of India, Shri Pranab Mukherjee to the Joint Session of both houses of Parliament , Press Information Bureau, 23 February 2015, &lt;a href=&quot;http://www.pib.nic.in&quot;&gt;www.pib.nic.in&lt;/a&gt; &lt;br /&gt;
&lt;br /&gt;
&lt;a href=&quot;../latest-news-updates/centre-takes-steps-to-convert-pds-to-cash-transfers-nitin-sethi-surabhi-agarwal-4675398.html&quot;&gt;Centre takes steps to convert PDS to cash transfers&lt;/a&gt; -Nitin Sethi &amp;amp; Surabhi Agarwal, Business Standard, 24 February, 2015 &lt;br /&gt;
&lt;br /&gt;
&lt;a href=&quot;../interviews/prof-jean-dreze-noted-economist-and-former-member-of-the-national-advisory-council-interviewed-by-mayank-mishra-4675390.html&quot;&gt;Prof. Jean Dreze, noted economist and former member of the National Advisory Council&lt;/a&gt;, interviewed by Mayank Mishra, Business Standard, 23 February, 2015&amp;nbsp; 
&lt;/div&gt;
&lt;div align=&quot;justify&quot;&gt;
&amp;nbsp;
&lt;/div&gt;
&lt;div align=&quot;justify&quot;&gt;
&lt;a href=&quot;../latest-news-updates/understanding-leakages-in-the-public-distribution-system-jean-dreze-and-reetika-khera-4675312.html&quot;&gt;Understanding Leakages in the Public Distribution System&lt;/a&gt; -Jean Dreze and Reetika Khera, Economic and Political Weekly, Vol-L, No. 7, February 14, 2015&amp;nbsp; &lt;br /&gt;
&lt;/div&gt;
&lt;div align=&quot;justify&quot;&gt;
&lt;br /&gt;
&lt;a href=&quot;../latest-news-updates/food-insecurity-tk-rajalakshmi-4675382.html&quot;&gt;Food insecurity&lt;/a&gt; -TK Rajalakshmi, Frontline, 6 March, 2015&amp;nbsp; &lt;br /&gt;
&lt;br /&gt;
&#039;&lt;a href=&quot;../news-alerts/039changes-in-pds-may-affect-food-security-of-half-of-indians039-4675318.html&quot;&gt;Changes in PDS may affect food security of half of Indians&lt;/a&gt;&#039;&amp;nbsp; &lt;br /&gt;
&lt;br /&gt;
&lt;a href=&quot;../latest-news-updates/fci-reforms-prescription-to-cure-or-kill-roshan-kishore-4675181.html&quot;&gt;FCI reforms: prescription to cure or kill?&lt;/a&gt; -Roshan Kishore, Livemint.com, 27 January, 2015&amp;nbsp; &lt;br /&gt;
&lt;br /&gt;
&lt;a href=&quot;../latest-news-updates/water-for-the-leeward-india-jean-dreze-and-reetika-khera-24521.html&quot;&gt;Water For The Leeward India&lt;/a&gt; -Jean Dreze and Reetika Khera, Outlook, 24 March, 2014 &lt;br /&gt;
&lt;br /&gt;
&lt;a href=&quot;../latest-news-updates/public-distribution-system-reforms-and-consumption-in-chhattisgarh-prasad-krishnamurthy-vikram-pathania-and-sharad-tandon-24265.html&quot;&gt;Public Distribution System Reforms and Consumption in Chhattisgarh&lt;/a&gt; -Prasad Krishnamurthy, Vikram Pathania, and Sharad Tandon, Economic and Political Weekly, Vol-XLIX, No. 8, February 22, 2014&amp;nbsp; &lt;br /&gt;
&lt;br /&gt;
&lt;a href=&quot;http://www.business-standard.com/article/economy-policy/there-seems-to-be-at-least-40-leakage-in-our-targeted-pds-system-ajay-chhibber-114020200447_1.html&quot;&gt;Ajay Chhibber, Director General of the IEO&lt;/a&gt;, a former assistant secretary general of the UN Development Programme, interviewed by Sanjeeb Mukherjee, Business Standard, 3 February, 2014&amp;nbsp;&amp;nbsp;&amp;nbsp; &lt;br /&gt;
&lt;br /&gt;
&lt;a href=&quot;../latest-news-updates/rural-poverty-and-the-public-distribution-system-jean-dreze-and-reetika-khera-23277.html&quot;&gt;Rural Poverty and the Public Distribution System&lt;/a&gt;-Jean Dreze and Reetika Khera, Economic and Political Weekly, Vol-XLVIII, No. 45-46, November 16, 2013&amp;nbsp;&amp;nbsp; &lt;br /&gt;
&lt;br /&gt;
&lt;a href=&quot;../docs/335reforming-the-pds-lessons-from-chhattisgarh.pdf&quot;&gt;Reforming the Public Distribution System&lt;/a&gt;: Lessons from Chhattisgarh by Raghav Puri, Economic and Political Weekly, February 4, 2012&amp;nbsp; &lt;br /&gt;
&lt;br /&gt;
&lt;a href=&quot;tinymce/uploaded/Reetika%20PDS.pdf&quot;&gt;Revival of the Public Distribution System&lt;/a&gt; -Reetika Khera, Economic and Political Weekly, November 5, 2011, Vol xlvi, No. 44 &amp;amp; 45&amp;nbsp; &lt;br /&gt;
&lt;br /&gt;
&lt;a href=&quot;http://www.cdedse.org/pdf/work198.pdf&quot;&gt;Trends in diversion of PDS grain&lt;/a&gt; -Reetika Khera (2011), Working Paper No. 198, Centre for Development Economics, Department of Economics, Delhi School of Economics &lt;br /&gt;
&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp; &lt;br /&gt;
&lt;a href=&quot;http://web.iitd.ac.in/~reetika/projects.html&quot;&gt;PEEP survey 2013 and PDS Survey 2011&lt;/a&gt;&amp;nbsp;&amp;nbsp; &lt;br /&gt;
&lt;br /&gt;
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Following the recommendations of the Shanta Kumar Committee report on restructuring of the Food Corporation of India (FCI), there are signs that the Central Government is in a hurry to replace the Public Distribution System (PDS) with cash transfers. 

The...&#039;,
	&#039;disp&#039; =&gt; &#039;&lt;br /&gt;&lt;div align=&quot;justify&quot;&gt;Following the recommendations of the Shanta Kumar Committee report on restructuring of the Food Corporation of India (FCI), there are signs that the Central Government is in a hurry to replace the &lt;a href=&quot;https://im4change.in/hunger-hdi/pds-ration-food-security-42.html&quot; title=&quot;https://im4change.in/hunger-hdi/pds-ration-food-security-42.html&quot;&gt;Public Distribution System&lt;/a&gt; (PDS) with cash transfers. &lt;br /&gt;&lt;br /&gt;The Government&#039;s intention has been revealed in two official letters (one dated &lt;a href=&quot;https://im4change.in/siteadmin/tinymce/uploaded/GoI%20Letter%20on%20DBT%20dated%2010%20Feb%202015.pdf&quot; title=&quot;10 Feb&quot; title=&quot;https://im4change.in/siteadmin/tinymce/uploaded/GoI%20Letter%20on%20DBT%20dated%2010%20Feb%202015.pdf&quot; title=&quot;10 Feb&quot;&gt;10 February 2015&lt;/a&gt; and another dated &lt;a href=&quot;https://im4change.in/siteadmin/tinymce/uploaded/GoI%20letter%20on%20DBT%20dated%2011%20Feb%202015.pdf&quot; title=&quot;11 Feb&quot; title=&quot;https://im4change.in/siteadmin/tinymce/uploaded/GoI%20letter%20on%20DBT%20dated%2011%20Feb%202015.pdf&quot; title=&quot;11 Feb&quot;&gt;11 February 2015&lt;/a&gt;) that were sent from the Joint Secretary at Department of Food and Public Distribution to the Principal Secretary/ Secretary at Department of Food &amp;amp; Civil Supplies of various states/ UTs. &amp;nbsp;&lt;br /&gt;&lt;br /&gt;In the letter dated 10 February 2015, it has been clearly said that the &lt;em&gt;&amp;quot;Government is looking forward to implement DBT for foodgrains initially in the UTs and few districts of the states on pilot basis&amp;quot;&lt;/em&gt;.&lt;br /&gt;&lt;br /&gt;Despite various arguments and evidence put against cash transfers vis-a-vis PDS to ensure food security (by development economists in the past), the recent official correspondences show that the Ministry of Consumer Affairs is willing to rope in officials from Unique Identification Authority of India (UIDAI)/ National Population Register (NPR) so as to implement the appropriate model of cash transfer by complete digitization of beneficiary data and Aadhaar seeding. &lt;br /&gt;&lt;br /&gt;As per the official letter dated 10 February, any of the 3 models/ options (as shown below) can be adopted by states/ UTs for cash transfers: &lt;br /&gt;&lt;br /&gt;a. Under the first model, cash transfer of food subsidy can be submitted to bank account of beneficiaries every month. There is complete freedom given to beneficiaries to purchase foodgrains from anywhere in the market. However, for undertaking this model, there has to be adequate supply of foodgrains in the market around the year.&lt;br /&gt;&lt;br /&gt;b. Under the second model, fair price shops (FPS) dealers will be supplied foodgrains at minimum support price (MSP) or near market prices. Beneficiaries have to purchase foodgrains from the FPS at designated prices and all transactions are recorded on point-of-sale (PoS) device. The difference of MSP/ designated price and Central Issue Price (CIP) will be credited to the beneficiaries&#039; bank account in advance against actual purchase from FPS. &lt;br /&gt;&lt;br /&gt;c. Under the third model, the existing manual process of issuance of foodgrains will be followed, with or without PoS, aided by digitized database seeded with Aadhaar. &amp;nbsp;&lt;br /&gt;&lt;br /&gt;It is not clear from the above-mentioned official correspondences whether cash transfers will be indexed with the overall price level to protect the amount of real income transfers, as was actually recommended by the High Level Committee report on FCI restructuring. It has been argued earlier by Right to Food activists that cash transfer cannot ensure food security in the face of price rise, unless it is indexed to inflation. &lt;br /&gt;&lt;br /&gt;If the first option of cash transfer is adopted, then public procurement of foodgrains from farmers will be adversely affected, as has been cautioned by the Right to Food Campaign in its press note dated 25 January 2015.&lt;br /&gt;&lt;br /&gt;Riding on the claim that 13.2 crore new bank accounts have been opened under the Pradhan Mantri Jan Dhan Yojana in the last six months with coverage of 100% target, the Government seems to be confident of implementing the direct benefits transfer (DBT) of consumer food subsidy.&lt;br /&gt;&lt;br /&gt;However, in a &lt;a href=&quot;https://im4change.in/siteadmin/tinymce/uploaded/Reetika%20PDS.pdf&quot; title=&quot;https://im4change.in/siteadmin/tinymce/uploaded/Reetika%20PDS.pdf&quot;&gt;study of PDS&lt;/a&gt; undertaken in 9 states during May-June 2011, it was shown that more than two-thirds of the respondents expressed a clear preference for food over cash; less than one-fifth (18 percent) were in favour of cash over food. In states where PDS was running well, majority of the respondents preferred food over cash transfer. &amp;nbsp;&lt;br /&gt;&lt;br /&gt;A group of &lt;a href=&quot;https://im4change.in/latest-news-updates/reforming-food-corporation-of-india-himanshu-4675364.html&quot; title=&quot;https://im4change.in/latest-news-updates/reforming-food-corporation-of-india-himanshu-4675364.html&quot;&gt;economists&lt;/a&gt; have recently shown that replacing the PDS with cash transfer will be like throwing out the baby with the bathwater since it has been revealed that PDS, which directly impacts rural poverty, could be revived even in poor states like Odisha, Chhattisgarh and Bihar thanks to the reforms undertaken by the respective state governments. For example, &lt;a href=&quot;https://im4change.in/latest-news-updates/understanding-leakages-in-the-public-distribution-system-jean-dreze-and-reetika-khera-4675312.html&quot; title=&quot;https://im4change.in/latest-news-updates/understanding-leakages-in-the-public-distribution-system-jean-dreze-and-reetika-khera-4675312.html&quot;&gt;PDS leakage&lt;/a&gt; in Bihar reduced to 24% in 2011-12 from 91% in 2004-05 due to introduction of coupon system, while diversions declined in Chhattisgarh to 3.3% in 2011-12 from 52.0% in 2004-05 as a result of transparency measures adopted plus complete overhauling of PDS. &amp;nbsp;&lt;br /&gt;&lt;br /&gt;&lt;strong&gt;&lt;em&gt;References:&lt;br /&gt;&lt;/em&gt;&lt;/strong&gt;&lt;br /&gt;Report of the High level Committee on Reorienting the Role and Restructuring of Food Corporation of India, January 2015 (Please &lt;a href=&quot;http://fciweb.nic.in/app/webroot/upload/News/Report%20of%20the%20High%20Level%20Committee%20on%20Reorienting%20the%20Role%20and%20Restructuring%20of%20FCI_English_1.pdf&quot; title=&quot;http://fciweb.nic.in/app/webroot/upload/News/Report%20of%20the%20High%20Level%20Committee%20on%20Reorienting%20the%20Role%20and%20Restructuring%20of%20FCI_English_1.pdf&quot;&gt;click here&lt;/a&gt; to access)&amp;nbsp; &lt;br /&gt;&lt;br /&gt;Leakages from the Public Distribution System (PDS) and the way forward - Ashok Gulati and Shweta Saini (2015), ICRIER (Please &lt;a href=&quot;http://icrier.org/pdf/Working_Paper_294.pdf&quot; title=&quot;http://icrier.org/pdf/Working_Paper_294.pdf&quot;&gt;click here&lt;/a&gt; to access)&amp;nbsp; &lt;br /&gt;&lt;br /&gt;The National Food Security Act 2013 (Please &lt;a href=&quot;https://im4change.in/siteadmin/tinymce/uploaded/NFSA%202013.pdf&quot; title=&quot;https://im4change.in/siteadmin/tinymce/uploaded/NFSA%202013.pdf&quot;&gt;click here&lt;/a&gt; to access)&lt;br /&gt;&lt;br /&gt;The National Food Security Ordinance 2013 (Please &lt;a href=&quot;https://im4change.in/siteadmin/tinymce/uploaded/NationalFoodSecurityOrdinance2013.pdf&quot; title=&quot;https://im4change.in/siteadmin/tinymce/uploaded/NationalFoodSecurityOrdinance2013.pdf&quot;&gt;click here&lt;/a&gt; to access)&lt;br /&gt;&lt;br /&gt;Address by the President of India, Shri Pranab Mukherjee to the Joint Session of both houses of Parliament , Press Information Bureau, 23 February 2015, &lt;a href=&quot;http://www.pib.nic.in&quot; title=&quot;http://www.pib.nic.in&quot;&gt;www.pib.nic.in&lt;/a&gt; &lt;br /&gt;&lt;br /&gt;&lt;a href=&quot;https://im4change.in/latest-news-updates/centre-takes-steps-to-convert-pds-to-cash-transfers-nitin-sethi-surabhi-agarwal-4675398.html&quot; title=&quot;https://im4change.in/latest-news-updates/centre-takes-steps-to-convert-pds-to-cash-transfers-nitin-sethi-surabhi-agarwal-4675398.html&quot;&gt;Centre takes steps to convert PDS to cash transfers&lt;/a&gt; -Nitin Sethi &amp;amp; Surabhi Agarwal, Business Standard, 24 February, 2015 &lt;br /&gt;&lt;br /&gt;&lt;a href=&quot;https://im4change.in/interviews/prof-jean-dreze-noted-economist-and-former-member-of-the-national-advisory-council-interviewed-by-mayank-mishra-4675390.html&quot; title=&quot;https://im4change.in/interviews/prof-jean-dreze-noted-economist-and-former-member-of-the-national-advisory-council-interviewed-by-mayank-mishra-4675390.html&quot;&gt;Prof. Jean Dreze, noted economist and former member of the&lt;br /&gt; National Advisory Council&lt;/a&gt;, interviewed by Mayank Mishra, Business Standard, 23 February, 2015&amp;nbsp; &lt;/div&gt;&lt;div align=&quot;justify&quot;&gt;&amp;nbsp;&lt;/div&gt;&lt;div align=&quot;justify&quot;&gt;&lt;a href=&quot;https://im4change.in/latest-news-updates/understanding-leakages-in-the-public-distribution-system-jean-dreze-and-reetika-khera-4675312.html&quot; title=&quot;https://im4change.in/latest-news-updates/understanding-leakages-in-the-public-distribution-system-jean-dreze-and-reetika-khera-4675312.html&quot;&gt;Understanding Leakages in the Public Distribution System&lt;/a&gt; -Jean Dreze and Reetika Khera, Economic and Political Weekly, Vol-L, No. 7, February 14, 2015&amp;nbsp; &lt;br /&gt;&lt;/div&gt;&lt;div align=&quot;justify&quot;&gt;&lt;br /&gt;&lt;a href=&quot;https://im4change.in/latest-news-updates/food-insecurity-tk-rajalakshmi-4675382.html&quot; title=&quot;https://im4change.in/latest-news-updates/food-insecurity-tk-rajalakshmi-4675382.html&quot;&gt;Food insecurity&lt;/a&gt; -TK Rajalakshmi, Frontline, 6 March, 2015&amp;nbsp; &lt;br /&gt;&lt;br /&gt;&#039;&lt;a href=&quot;https://im4change.in/news-alerts/039changes-in-pds-may-affect-food-security-of-half-of-indians039-4675318.html&quot; title=&quot;https://im4change.in/news-alerts/039changes-in-pds-may-affect-food-security-of-half-of-indians039-4675318.html&quot;&gt;Changes in PDS may affect food security of half of Indians&lt;/a&gt;&#039;&amp;nbsp; &lt;br /&gt;&lt;br /&gt;&lt;a href=&quot;https://im4change.in/latest-news-updates/fci-reforms-prescription-to-cure-or-kill-roshan-kishore-4675181.html&quot; title=&quot;https://im4change.in/latest-news-updates/fci-reforms-prescription-to-cure-or-kill-roshan-kishore-4675181.html&quot;&gt;FCI reforms: prescription to cure or kill?&lt;/a&gt; -Roshan Kishore, Livemint.com, 27 January, 2015&amp;nbsp; &lt;br /&gt;&lt;br /&gt;&lt;a href=&quot;https://im4change.in/latest-news-updates/water-for-the-leeward-india-jean-dreze-and-reetika-khera-24521.html&quot; title=&quot;https://im4change.in/latest-news-updates/water-for-the-leeward-india-jean-dreze-and-reetika-khera-24521.html&quot;&gt;Water For The Leeward India&lt;/a&gt; -Jean Dreze and Reetika Khera, Outlook, 24 March, 2014 &lt;br /&gt;&lt;br /&gt;&lt;a href=&quot;https://im4change.in/latest-news-updates/public-distribution-system-reforms-and-consumption-in-chhattisgarh-prasad-krishnamurthy-vikram-pathania-and-sharad-tandon-24265.html&quot; title=&quot;https://im4change.in/latest-news-updates/public-distribution-system-reforms-and-consumption-in-chhattisgarh-prasad-krishnamurthy-vikram-pathania-and-sharad-tandon-24265.html&quot;&gt;Public Distribution System Reforms and Consumption in Chha&lt;br /&gt;ttisgarh&lt;/a&gt; -Prasad Krishnamurthy, Vikram Pathania, and Sharad Tandon, Economic and Political Weekly, Vol-XLIX, No. 8, February 22, 2014&amp;nbsp; &lt;br /&gt;&lt;br /&gt;&lt;a href=&quot;http://www.business-standard.com/article/economy-policy/there-seems-to-be-at-least-40-leakage-in-our-targeted-pds-system-ajay-chhibber-114020200447_1.html&quot; title=&quot;http://www.business-standard.com/article/economy-policy/there-seems-to-be-at-least-40-leakage-in-our-targeted-pds-system-ajay-chhibber-114020200447_1.html&quot;&gt;Ajay Chhibber, Director General of the IEO&lt;/a&gt;, a former assistant secretary general of the UN Development Programme, interviewed by Sanjeeb Mukherjee, Business Standard, 3 February, 2014&amp;nbsp;&amp;nbsp;&amp;nbsp; &lt;br /&gt;&lt;br /&gt;&lt;a href=&quot;https://im4change.in/latest-news-updates/rural-poverty-and-the-public-distribution-system-jean-dreze-and-reetika-khera-23277.html&quot; title=&quot;https://im4change.in/latest-news-updates/rural-poverty-and-the-public-distribution-system-jean-dreze-and-reetika-khera-23277.html&quot;&gt;Rural Poverty and the Public Distribution System&lt;/a&gt;-Jean Dreze and Reetika Khera, Economic and Political Weekly, Vol-XLVIII, No. 45-46, November 16, 2013&amp;nbsp;&amp;nbsp; &lt;br /&gt;&lt;br /&gt;&lt;a href=&quot;https://im4change.in/docs/335reforming-the-pds-lessons-from-chhattisgarh.pdf&quot; title=&quot;https://im4change.in/docs/335reforming-the-pds-lessons-from-chhattisgarh.pdf&quot;&gt;Reforming the Public Distribution System&lt;/a&gt;: Lessons from Chhattisgarh by Raghav Puri, Economic and Political Weekly, February 4, 2012&amp;nbsp; &lt;br /&gt;&lt;br /&gt;&lt;a href=&quot;https://im4change.in/siteadmin/tinymce/uploaded/Reetika%20PDS.pdf&quot; title=&quot;https://im4change.in/siteadmin/tinymce/uploaded/Reetika%20PDS.pdf&quot;&gt;Revival of the Public Distribution System&lt;/a&gt; -Reetika Khera, Economic and Political Weekly, November 5, 2011, Vol xlvi, No. 44 &amp;amp; 45&amp;nbsp; &lt;br /&gt;&lt;br /&gt;&lt;a href=&quot;http://www.cdedse.org/pdf/work198.pdf&quot; title=&quot;http://www.cdedse.org/pdf/work198.pdf&quot;&gt;Trends in diversion of PDS grain&lt;/a&gt; -Reetika Khera (2011), Working Paper No. 198, Centre for Development Economics, Department of Economics, Delhi School of Economics &lt;br /&gt;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp; &lt;br /&gt;&lt;a href=&quot;http://web.iitd.ac.in/~reetika/projects.html&quot; title=&quot;http://web.iitd.ac.in/~reetika/projects.html&quot;&gt;PEEP survey 2013 and PDS Survey 2011&lt;/a&gt;&amp;nbsp;&amp;nbsp; &lt;br /&gt;&lt;br /&gt;&lt;/div&gt;&#039;,
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	&#039;id&#039; =&gt; (int) 27350,
	&#039;title&#039; =&gt; &#039;Is the Govt doing away with PDS?&#039;,
	&#039;subheading&#039; =&gt; &#039;&#039;,
	&#039;description&#039; =&gt; &#039;&lt;br /&gt;
&lt;div align=&quot;justify&quot;&gt;
Following the recommendations of the Shanta Kumar Committee report on restructuring of the Food Corporation of India (FCI), there are signs that the Central Government is in a hurry to replace the &lt;a href=&quot;../hunger-hdi/pds-ration-food-security-42.html&quot;&gt;Public Distribution System&lt;/a&gt; (PDS) with cash transfers. &lt;br /&gt;
&lt;br /&gt;
The Government&#039;s intention has been revealed in two official letters (one dated &lt;a href=&quot;tinymce/uploaded/GoI%20Letter%20on%20DBT%20dated%2010%20Feb%202015.pdf&quot; title=&quot;10 Feb&quot;&gt;10 February 2015&lt;/a&gt; and another dated &lt;a href=&quot;tinymce/uploaded/GoI%20letter%20on%20DBT%20dated%2011%20Feb%202015.pdf&quot; title=&quot;11 Feb&quot;&gt;11 February 2015&lt;/a&gt;) that were sent from the Joint Secretary at Department of Food and Public Distribution to the Principal Secretary/ Secretary at Department of Food &amp;amp; Civil Supplies of various states/ UTs. &amp;nbsp;&lt;br /&gt;
&lt;br /&gt;
In the letter dated 10 February 2015, it has been clearly said that the &lt;em&gt;&amp;quot;Government is looking forward to implement DBT for foodgrains initially in the UTs and few districts of the states on pilot basis&amp;quot;&lt;/em&gt;.&lt;br /&gt;
&lt;br /&gt;
Despite various arguments and evidence put against cash transfers vis-a-vis PDS to ensure food security (by development economists in the past), the recent official correspondences show that the Ministry of Consumer Affairs is willing to rope in officials from Unique Identification Authority of India (UIDAI)/ National Population Register (NPR) so as to implement the appropriate model of cash transfer by complete digitization of beneficiary data and Aadhaar seeding. &lt;br /&gt;
&lt;br /&gt;
As per the official letter dated 10 February, any of the 3 models/ options (as shown below) can be adopted by states/ UTs for cash transfers: &lt;br /&gt;
&lt;br /&gt;
a. Under the first model, cash transfer of food subsidy can be submitted to bank account of beneficiaries every month. There is complete freedom given to beneficiaries to purchase foodgrains from anywhere in the market. However, for undertaking this model, there has to be adequate supply of foodgrains in the market around the year.&lt;br /&gt;
&lt;br /&gt;
b. Under the second model, fair price shops (FPS) dealers will be supplied foodgrains at minimum support price (MSP) or near market prices. Beneficiaries have to purchase foodgrains from the FPS at designated prices and all transactions are recorded on point-of-sale (PoS) device. The difference of MSP/ designated price and Central Issue Price (CIP) will be credited to the beneficiaries&#039; bank account in advance against actual purchase from FPS. &lt;br /&gt;
&lt;br /&gt;
c. Under the third model, the existing manual process of issuance of foodgrains will be followed, with or without PoS, aided by digitized database seeded with Aadhaar. &amp;nbsp;&lt;br /&gt;
&lt;br /&gt;
It is not clear from the above-mentioned official correspondences whether cash transfers will be indexed with the overall price level to protect the amount of real income transfers, as was actually recommended by the High Level Committee report on FCI restructuring. It has been argued earlier by Right to Food activists that cash transfer cannot ensure food security in the face of price rise, unless it is indexed to inflation. &lt;br /&gt;
&lt;br /&gt;
If the first option of cash transfer is adopted, then public procurement of foodgrains from farmers will be adversely affected, as has been cautioned by the Right to Food Campaign in its press note dated 25 January 2015.&lt;br /&gt;
&lt;br /&gt;
Riding on the claim that 13.2 crore new bank accounts have been opened under the Pradhan Mantri Jan Dhan Yojana in the last six months with coverage of 100% target, the Government seems to be confident of implementing the direct benefits transfer (DBT) of consumer food subsidy.&lt;br /&gt;
&lt;br /&gt;
However, in a &lt;a href=&quot;tinymce/uploaded/Reetika%20PDS.pdf&quot;&gt;study of PDS&lt;/a&gt; undertaken in 9 states during May-June 2011, it was shown that more than two-thirds of the respondents expressed a clear preference for food over cash; less than one-fifth (18 percent) were in favour of cash over food. In states where PDS was running well, majority of the respondents preferred food over cash transfer. &amp;nbsp;&lt;br /&gt;
&lt;br /&gt;
A group of &lt;a href=&quot;../latest-news-updates/reforming-food-corporation-of-india-himanshu-4675364.html&quot;&gt;economists&lt;/a&gt; have recently shown that replacing the PDS with cash transfer will be like throwing out the baby with the bathwater since it has been revealed that PDS, which directly impacts rural poverty, could be revived even in poor states like Odisha, Chhattisgarh and Bihar thanks to the reforms undertaken by the respective state governments. For example, &lt;a href=&quot;../latest-news-updates/understanding-leakages-in-the-public-distribution-system-jean-dreze-and-reetika-khera-4675312.html&quot;&gt;PDS leakage&lt;/a&gt; in Bihar reduced to 24% in 2011-12 from 91% in 2004-05 due to introduction of coupon system, while diversions declined in Chhattisgarh to 3.3% in 2011-12 from 52.0% in 2004-05 as a result of transparency measures adopted plus complete overhauling of PDS. &amp;nbsp;&lt;br /&gt;
&lt;br /&gt;
&lt;strong&gt;&lt;em&gt;References:&lt;br /&gt;
&lt;/em&gt;&lt;/strong&gt;&lt;br /&gt;
Report of the High level Committee on Reorienting the Role and Restructuring of Food Corporation of India, January 2015 (Please &lt;a href=&quot;http://fciweb.nic.in/app/webroot/upload/News/Report%20of%20the%20High%20Level%20Committee%20on%20Reorienting%20the%20Role%20and%20Restructuring%20of%20FCI_English_1.pdf&quot;&gt;click here&lt;/a&gt; to access)&amp;nbsp; &lt;br /&gt;
&lt;br /&gt;
Leakages from the Public Distribution System (PDS) and the way forward - Ashok Gulati and Shweta Saini (2015), ICRIER (Please &lt;a href=&quot;http://icrier.org/pdf/Working_Paper_294.pdf&quot;&gt;click here&lt;/a&gt; to access)&amp;nbsp; &lt;br /&gt;
&lt;br /&gt;
The National Food Security Act 2013 (Please &lt;a href=&quot;tinymce/uploaded/NFSA%202013.pdf&quot;&gt;click here&lt;/a&gt; to access)&lt;br /&gt;
&lt;br /&gt;
The National Food Security Ordinance 2013 (Please &lt;a href=&quot;tinymce/uploaded/NationalFoodSecurityOrdinance2013.pdf&quot;&gt;click here&lt;/a&gt; to access)&lt;br /&gt;
&lt;br /&gt;
Address by the President of India, Shri Pranab Mukherjee to the Joint Session of both houses of Parliament , Press Information Bureau, 23 February 2015, &lt;a href=&quot;http://www.pib.nic.in&quot;&gt;www.pib.nic.in&lt;/a&gt; &lt;br /&gt;
&lt;br /&gt;
&lt;a href=&quot;../latest-news-updates/centre-takes-steps-to-convert-pds-to-cash-transfers-nitin-sethi-surabhi-agarwal-4675398.html&quot;&gt;Centre takes steps to convert PDS to cash transfers&lt;/a&gt; -Nitin Sethi &amp;amp; Surabhi Agarwal, Business Standard, 24 February, 2015 &lt;br /&gt;
&lt;br /&gt;
&lt;a href=&quot;../interviews/prof-jean-dreze-noted-economist-and-former-member-of-the-national-advisory-council-interviewed-by-mayank-mishra-4675390.html&quot;&gt;Prof. Jean Dreze, noted economist and former member of the National Advisory Council&lt;/a&gt;, interviewed by Mayank Mishra, Business Standard, 23 February, 2015&amp;nbsp; 
&lt;/div&gt;
&lt;div align=&quot;justify&quot;&gt;
&amp;nbsp;
&lt;/div&gt;
&lt;div align=&quot;justify&quot;&gt;
&lt;a href=&quot;../latest-news-updates/understanding-leakages-in-the-public-distribution-system-jean-dreze-and-reetika-khera-4675312.html&quot;&gt;Understanding Leakages in the Public Distribution System&lt;/a&gt; -Jean Dreze and Reetika Khera, Economic and Political Weekly, Vol-L, No. 7, February 14, 2015&amp;nbsp; &lt;br /&gt;
&lt;/div&gt;
&lt;div align=&quot;justify&quot;&gt;
&lt;br /&gt;
&lt;a href=&quot;../latest-news-updates/food-insecurity-tk-rajalakshmi-4675382.html&quot;&gt;Food insecurity&lt;/a&gt; -TK Rajalakshmi, Frontline, 6 March, 2015&amp;nbsp; &lt;br /&gt;
&lt;br /&gt;
&#039;&lt;a href=&quot;../news-alerts/039changes-in-pds-may-affect-food-security-of-half-of-indians039-4675318.html&quot;&gt;Changes in PDS may affect food security of half of Indians&lt;/a&gt;&#039;&amp;nbsp; &lt;br /&gt;
&lt;br /&gt;
&lt;a href=&quot;../latest-news-updates/fci-reforms-prescription-to-cure-or-kill-roshan-kishore-4675181.html&quot;&gt;FCI reforms: prescription to cure or kill?&lt;/a&gt; -Roshan Kishore, Livemint.com, 27 January, 2015&amp;nbsp; &lt;br /&gt;
&lt;br /&gt;
&lt;a href=&quot;../latest-news-updates/water-for-the-leeward-india-jean-dreze-and-reetika-khera-24521.html&quot;&gt;Water For The Leeward India&lt;/a&gt; -Jean Dreze and Reetika Khera, Outlook, 24 March, 2014 &lt;br /&gt;
&lt;br /&gt;
&lt;a href=&quot;../latest-news-updates/public-distribution-system-reforms-and-consumption-in-chhattisgarh-prasad-krishnamurthy-vikram-pathania-and-sharad-tandon-24265.html&quot;&gt;Public Distribution System Reforms and Consumption in Chhattisgarh&lt;/a&gt; -Prasad Krishnamurthy, Vikram Pathania, and Sharad Tandon, Economic and Political Weekly, Vol-XLIX, No. 8, February 22, 2014&amp;nbsp; &lt;br /&gt;
&lt;br /&gt;
&lt;a href=&quot;http://www.business-standard.com/article/economy-policy/there-seems-to-be-at-least-40-leakage-in-our-targeted-pds-system-ajay-chhibber-114020200447_1.html&quot;&gt;Ajay Chhibber, Director General of the IEO&lt;/a&gt;, a former assistant secretary general of the UN Development Programme, interviewed by Sanjeeb Mukherjee, Business Standard, 3 February, 2014&amp;nbsp;&amp;nbsp;&amp;nbsp; &lt;br /&gt;
&lt;br /&gt;
&lt;a href=&quot;../latest-news-updates/rural-poverty-and-the-public-distribution-system-jean-dreze-and-reetika-khera-23277.html&quot;&gt;Rural Poverty and the Public Distribution System&lt;/a&gt;-Jean Dreze and Reetika Khera, Economic and Political Weekly, Vol-XLVIII, No. 45-46, November 16, 2013&amp;nbsp;&amp;nbsp; &lt;br /&gt;
&lt;br /&gt;
&lt;a href=&quot;../docs/335reforming-the-pds-lessons-from-chhattisgarh.pdf&quot;&gt;Reforming the Public Distribution System&lt;/a&gt;: Lessons from Chhattisgarh by Raghav Puri, Economic and Political Weekly, February 4, 2012&amp;nbsp; &lt;br /&gt;
&lt;br /&gt;
&lt;a href=&quot;tinymce/uploaded/Reetika%20PDS.pdf&quot;&gt;Revival of the Public Distribution System&lt;/a&gt; -Reetika Khera, Economic and Political Weekly, November 5, 2011, Vol xlvi, No. 44 &amp;amp; 45&amp;nbsp; &lt;br /&gt;
&lt;br /&gt;
&lt;a href=&quot;http://www.cdedse.org/pdf/work198.pdf&quot;&gt;Trends in diversion of PDS grain&lt;/a&gt; -Reetika Khera (2011), Working Paper No. 198, Centre for Development Economics, Department of Economics, Delhi School of Economics &lt;br /&gt;
&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp; &lt;br /&gt;
&lt;a href=&quot;http://web.iitd.ac.in/~reetika/projects.html&quot;&gt;PEEP survey 2013 and PDS Survey 2011&lt;/a&gt;&amp;nbsp;&amp;nbsp; &lt;br /&gt;
&lt;br /&gt;
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$metaTitle = &#039;NEWS ALERTS | Is the Govt doing away with PDS?&#039;
$metaKeywords = &#039;PDS,Public Distribution System,cash transfers,cash transfer,Right to Food,Food Security,Direct Benefit Transfer&#039;
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Following the recommendations of the Shanta Kumar Committee report on restructuring of the Food Corporation of India (FCI), there are signs that the Central Government is in a hurry to replace the Public Distribution System (PDS) with cash transfers. 

The...&#039;
$disp = &#039;&lt;br /&gt;&lt;div align=&quot;justify&quot;&gt;Following the recommendations of the Shanta Kumar Committee report on restructuring of the Food Corporation of India (FCI), there are signs that the Central Government is in a hurry to replace the &lt;a href=&quot;https://im4change.in/hunger-hdi/pds-ration-food-security-42.html&quot; title=&quot;https://im4change.in/hunger-hdi/pds-ration-food-security-42.html&quot;&gt;Public Distribution System&lt;/a&gt; (PDS) with cash transfers. &lt;br /&gt;&lt;br /&gt;The Government&#039;s intention has been revealed in two official letters (one dated &lt;a href=&quot;https://im4change.in/siteadmin/tinymce/uploaded/GoI%20Letter%20on%20DBT%20dated%2010%20Feb%202015.pdf&quot; title=&quot;10 Feb&quot; title=&quot;https://im4change.in/siteadmin/tinymce/uploaded/GoI%20Letter%20on%20DBT%20dated%2010%20Feb%202015.pdf&quot; title=&quot;10 Feb&quot;&gt;10 February 2015&lt;/a&gt; and another dated &lt;a href=&quot;https://im4change.in/siteadmin/tinymce/uploaded/GoI%20letter%20on%20DBT%20dated%2011%20Feb%202015.pdf&quot; title=&quot;11 Feb&quot; title=&quot;https://im4change.in/siteadmin/tinymce/uploaded/GoI%20letter%20on%20DBT%20dated%2011%20Feb%202015.pdf&quot; title=&quot;11 Feb&quot;&gt;11 February 2015&lt;/a&gt;) that were sent from the Joint Secretary at Department of Food and Public Distribution to the Principal Secretary/ Secretary at Department of Food &amp;amp; Civil Supplies of various states/ UTs. &amp;nbsp;&lt;br /&gt;&lt;br /&gt;In the letter dated 10 February 2015, it has been clearly said that the &lt;em&gt;&amp;quot;Government is looking forward to implement DBT for foodgrains initially in the UTs and few districts of the states on pilot basis&amp;quot;&lt;/em&gt;.&lt;br /&gt;&lt;br /&gt;Despite various arguments and evidence put against cash transfers vis-a-vis PDS to ensure food security (by development economists in the past), the recent official correspondences show that the Ministry of Consumer Affairs is willing to rope in officials from Unique Identification Authority of India (UIDAI)/ National Population Register (NPR) so as to implement the appropriate model of cash transfer by complete digitization of beneficiary data and Aadhaar seeding. &lt;br /&gt;&lt;br /&gt;As per the official letter dated 10 February, any of the 3 models/ options (as shown below) can be adopted by states/ UTs for cash transfers: &lt;br /&gt;&lt;br /&gt;a. Under the first model, cash transfer of food subsidy can be submitted to bank account of beneficiaries every month. There is complete freedom given to beneficiaries to purchase foodgrains from anywhere in the market. However, for undertaking this model, there has to be adequate supply of foodgrains in the market around the year.&lt;br /&gt;&lt;br /&gt;b. Under the second model, fair price shops (FPS) dealers will be supplied foodgrains at minimum support price (MSP) or near market prices. Beneficiaries have to purchase foodgrains from the FPS at designated prices and all transactions are recorded on point-of-sale (PoS) device. The difference of MSP/ designated price and Central Issue Price (CIP) will be credited to the beneficiaries&#039; bank account in advance against actual purchase from FPS. &lt;br /&gt;&lt;br /&gt;c. Under the third model, the existing manual process of issuance of foodgrains will be followed, with or without PoS, aided by digitized database seeded with Aadhaar. &amp;nbsp;&lt;br /&gt;&lt;br /&gt;It is not clear from the above-mentioned official correspondences whether cash transfers will be indexed with the overall price level to protect the amount of real income transfers, as was actually recommended by the High Level Committee report on FCI restructuring. It has been argued earlier by Right to Food activists that cash transfer cannot ensure food security in the face of price rise, unless it is indexed to inflation. &lt;br /&gt;&lt;br /&gt;If the first option of cash transfer is adopted, then public procurement of foodgrains from farmers will be adversely affected, as has been cautioned by the Right to Food Campaign in its press note dated 25 January 2015.&lt;br /&gt;&lt;br /&gt;Riding on the claim that 13.2 crore new bank accounts have been opened under the Pradhan Mantri Jan Dhan Yojana in the last six months with coverage of 100% target, the Government seems to be confident of implementing the direct benefits transfer (DBT) of consumer food subsidy.&lt;br /&gt;&lt;br /&gt;However, in a &lt;a href=&quot;https://im4change.in/siteadmin/tinymce/uploaded/Reetika%20PDS.pdf&quot; title=&quot;https://im4change.in/siteadmin/tinymce/uploaded/Reetika%20PDS.pdf&quot;&gt;study of PDS&lt;/a&gt; undertaken in 9 states during May-June 2011, it was shown that more than two-thirds of the respondents expressed a clear preference for food over cash; less than one-fifth (18 percent) were in favour of cash over food. In states where PDS was running well, majority of the respondents preferred food over cash transfer. &amp;nbsp;&lt;br /&gt;&lt;br /&gt;A group of &lt;a href=&quot;https://im4change.in/latest-news-updates/reforming-food-corporation-of-india-himanshu-4675364.html&quot; title=&quot;https://im4change.in/latest-news-updates/reforming-food-corporation-of-india-himanshu-4675364.html&quot;&gt;economists&lt;/a&gt; have recently shown that replacing the PDS with cash transfer will be like throwing out the baby with the bathwater since it has been revealed that PDS, which directly impacts rural poverty, could be revived even in poor states like Odisha, Chhattisgarh and Bihar thanks to the reforms undertaken by the respective state governments. For example, &lt;a href=&quot;https://im4change.in/latest-news-updates/understanding-leakages-in-the-public-distribution-system-jean-dreze-and-reetika-khera-4675312.html&quot; title=&quot;https://im4change.in/latest-news-updates/understanding-leakages-in-the-public-distribution-system-jean-dreze-and-reetika-khera-4675312.html&quot;&gt;PDS leakage&lt;/a&gt; in Bihar reduced to 24% in 2011-12 from 91% in 2004-05 due to introduction of coupon system, while diversions declined in Chhattisgarh to 3.3% in 2011-12 from 52.0% in 2004-05 as a result of transparency measures adopted plus complete overhauling of PDS. &amp;nbsp;&lt;br /&gt;&lt;br /&gt;&lt;strong&gt;&lt;em&gt;References:&lt;br /&gt;&lt;/em&gt;&lt;/strong&gt;&lt;br /&gt;Report of the High level Committee on Reorienting the Role and Restructuring of Food Corporation of India, January 2015 (Please &lt;a href=&quot;http://fciweb.nic.in/app/webroot/upload/News/Report%20of%20the%20High%20Level%20Committee%20on%20Reorienting%20the%20Role%20and%20Restructuring%20of%20FCI_English_1.pdf&quot; title=&quot;http://fciweb.nic.in/app/webroot/upload/News/Report%20of%20the%20High%20Level%20Committee%20on%20Reorienting%20the%20Role%20and%20Restructuring%20of%20FCI_English_1.pdf&quot;&gt;click here&lt;/a&gt; to access)&amp;nbsp; &lt;br /&gt;&lt;br /&gt;Leakages from the Public Distribution System (PDS) and the way forward - Ashok Gulati and Shweta Saini (2015), ICRIER (Please &lt;a href=&quot;http://icrier.org/pdf/Working_Paper_294.pdf&quot; title=&quot;http://icrier.org/pdf/Working_Paper_294.pdf&quot;&gt;click here&lt;/a&gt; to access)&amp;nbsp; &lt;br /&gt;&lt;br /&gt;The National Food Security Act 2013 (Please &lt;a href=&quot;https://im4change.in/siteadmin/tinymce/uploaded/NFSA%202013.pdf&quot; title=&quot;https://im4change.in/siteadmin/tinymce/uploaded/NFSA%202013.pdf&quot;&gt;click here&lt;/a&gt; to access)&lt;br /&gt;&lt;br /&gt;The National Food Security Ordinance 2013 (Please &lt;a href=&quot;https://im4change.in/siteadmin/tinymce/uploaded/NationalFoodSecurityOrdinance2013.pdf&quot; title=&quot;https://im4change.in/siteadmin/tinymce/uploaded/NationalFoodSecurityOrdinance2013.pdf&quot;&gt;click here&lt;/a&gt; to access)&lt;br /&gt;&lt;br /&gt;Address by the President of India, Shri Pranab Mukherjee to the Joint Session of both houses of Parliament , Press Information Bureau, 23 February 2015, &lt;a href=&quot;http://www.pib.nic.in&quot; title=&quot;http://www.pib.nic.in&quot;&gt;www.pib.nic.in&lt;/a&gt; &lt;br /&gt;&lt;br /&gt;&lt;a href=&quot;https://im4change.in/latest-news-updates/centre-takes-steps-to-convert-pds-to-cash-transfers-nitin-sethi-surabhi-agarwal-4675398.html&quot; title=&quot;https://im4change.in/latest-news-updates/centre-takes-steps-to-convert-pds-to-cash-transfers-nitin-sethi-surabhi-agarwal-4675398.html&quot;&gt;Centre takes steps to convert PDS to cash transfers&lt;/a&gt; -Nitin Sethi &amp;amp; Surabhi Agarwal, Business Standard, 24 February, 2015 &lt;br /&gt;&lt;br /&gt;&lt;a href=&quot;https://im4change.in/interviews/prof-jean-dreze-noted-economist-and-former-member-of-the-national-advisory-council-interviewed-by-mayank-mishra-4675390.html&quot; title=&quot;https://im4change.in/interviews/prof-jean-dreze-noted-economist-and-former-member-of-the-national-advisory-council-interviewed-by-mayank-mishra-4675390.html&quot;&gt;Prof. Jean Dreze, noted economist and former member of the&lt;br /&gt; National Advisory Council&lt;/a&gt;, interviewed by Mayank Mishra, Business Standard, 23 February, 2015&amp;nbsp; &lt;/div&gt;&lt;div align=&quot;justify&quot;&gt;&amp;nbsp;&lt;/div&gt;&lt;div align=&quot;justify&quot;&gt;&lt;a href=&quot;https://im4change.in/latest-news-updates/understanding-leakages-in-the-public-distribution-system-jean-dreze-and-reetika-khera-4675312.html&quot; title=&quot;https://im4change.in/latest-news-updates/understanding-leakages-in-the-public-distribution-system-jean-dreze-and-reetika-khera-4675312.html&quot;&gt;Understanding Leakages in the Public Distribution System&lt;/a&gt; -Jean Dreze and Reetika Khera, Economic and Political Weekly, Vol-L, No. 7, February 14, 2015&amp;nbsp; &lt;br /&gt;&lt;/div&gt;&lt;div align=&quot;justify&quot;&gt;&lt;br /&gt;&lt;a href=&quot;https://im4change.in/latest-news-updates/food-insecurity-tk-rajalakshmi-4675382.html&quot; title=&quot;https://im4change.in/latest-news-updates/food-insecurity-tk-rajalakshmi-4675382.html&quot;&gt;Food insecurity&lt;/a&gt; -TK Rajalakshmi, Frontline, 6 March, 2015&amp;nbsp; &lt;br /&gt;&lt;br /&gt;&#039;&lt;a href=&quot;https://im4change.in/news-alerts/039changes-in-pds-may-affect-food-security-of-half-of-indians039-4675318.html&quot; title=&quot;https://im4change.in/news-alerts/039changes-in-pds-may-affect-food-security-of-half-of-indians039-4675318.html&quot;&gt;Changes in PDS may affect food security of half of Indians&lt;/a&gt;&#039;&amp;nbsp; &lt;br /&gt;&lt;br /&gt;&lt;a href=&quot;https://im4change.in/latest-news-updates/fci-reforms-prescription-to-cure-or-kill-roshan-kishore-4675181.html&quot; title=&quot;https://im4change.in/latest-news-updates/fci-reforms-prescription-to-cure-or-kill-roshan-kishore-4675181.html&quot;&gt;FCI reforms: prescription to cure or kill?&lt;/a&gt; -Roshan Kishore, Livemint.com, 27 January, 2015&amp;nbsp; &lt;br /&gt;&lt;br /&gt;&lt;a href=&quot;https://im4change.in/latest-news-updates/water-for-the-leeward-india-jean-dreze-and-reetika-khera-24521.html&quot; title=&quot;https://im4change.in/latest-news-updates/water-for-the-leeward-india-jean-dreze-and-reetika-khera-24521.html&quot;&gt;Water For The Leeward India&lt;/a&gt; -Jean Dreze and Reetika Khera, Outlook, 24 March, 2014 &lt;br /&gt;&lt;br /&gt;&lt;a href=&quot;https://im4change.in/latest-news-updates/public-distribution-system-reforms-and-consumption-in-chhattisgarh-prasad-krishnamurthy-vikram-pathania-and-sharad-tandon-24265.html&quot; title=&quot;https://im4change.in/latest-news-updates/public-distribution-system-reforms-and-consumption-in-chhattisgarh-prasad-krishnamurthy-vikram-pathania-and-sharad-tandon-24265.html&quot;&gt;Public Distribution System Reforms and Consumption in Chha&lt;br /&gt;ttisgarh&lt;/a&gt; -Prasad Krishnamurthy, Vikram Pathania, and Sharad Tandon, Economic and Political Weekly, Vol-XLIX, No. 8, February 22, 2014&amp;nbsp; &lt;br /&gt;&lt;br /&gt;&lt;a href=&quot;http://www.business-standard.com/article/economy-policy/there-seems-to-be-at-least-40-leakage-in-our-targeted-pds-system-ajay-chhibber-114020200447_1.html&quot; title=&quot;http://www.business-standard.com/article/economy-policy/there-seems-to-be-at-least-40-leakage-in-our-targeted-pds-system-ajay-chhibber-114020200447_1.html&quot;&gt;Ajay Chhibber, Director General of the IEO&lt;/a&gt;, a former assistant secretary general of the UN Development Programme, interviewed by Sanjeeb Mukherjee, Business Standard, 3 February, 2014&amp;nbsp;&amp;nbsp;&amp;nbsp; &lt;br /&gt;&lt;br /&gt;&lt;a href=&quot;https://im4change.in/latest-news-updates/rural-poverty-and-the-public-distribution-system-jean-dreze-and-reetika-khera-23277.html&quot; title=&quot;https://im4change.in/latest-news-updates/rural-poverty-and-the-public-distribution-system-jean-dreze-and-reetika-khera-23277.html&quot;&gt;Rural Poverty and the Public Distribution System&lt;/a&gt;-Jean Dreze and Reetika Khera, Economic and Political Weekly, Vol-XLVIII, No. 45-46, November 16, 2013&amp;nbsp;&amp;nbsp; &lt;br /&gt;&lt;br /&gt;&lt;a href=&quot;https://im4change.in/docs/335reforming-the-pds-lessons-from-chhattisgarh.pdf&quot; title=&quot;https://im4change.in/docs/335reforming-the-pds-lessons-from-chhattisgarh.pdf&quot;&gt;Reforming the Public Distribution System&lt;/a&gt;: Lessons from Chhattisgarh by Raghav Puri, Economic and Political Weekly, February 4, 2012&amp;nbsp; &lt;br /&gt;&lt;br /&gt;&lt;a href=&quot;https://im4change.in/siteadmin/tinymce/uploaded/Reetika%20PDS.pdf&quot; title=&quot;https://im4change.in/siteadmin/tinymce/uploaded/Reetika%20PDS.pdf&quot;&gt;Revival of the Public Distribution System&lt;/a&gt; -Reetika Khera, Economic and Political Weekly, November 5, 2011, Vol xlvi, No. 44 &amp;amp; 45&amp;nbsp; &lt;br /&gt;&lt;br /&gt;&lt;a href=&quot;http://www.cdedse.org/pdf/work198.pdf&quot; title=&quot;http://www.cdedse.org/pdf/work198.pdf&quot;&gt;Trends in diversion of PDS grain&lt;/a&gt; -Reetika Khera (2011), Working Paper No. 198, Centre for Development Economics, Department of Economics, Delhi School of Economics &lt;br /&gt;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp; &lt;br /&gt;&lt;a href=&quot;http://web.iitd.ac.in/~reetika/projects.html&quot; title=&quot;http://web.iitd.ac.in/~reetika/projects.html&quot;&gt;PEEP survey 2013 and PDS Survey 2011&lt;/a&gt;&amp;nbsp;&amp;nbsp; &lt;br /&gt;&lt;br /&gt;&lt;/div&gt;&#039;
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                <strong>Is the Govt doing away with PDS?</strong></h1>
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                <br /><div align="justify">Following the recommendations of the Shanta Kumar Committee report on restructuring of the Food Corporation of India (FCI), there are signs that the Central Government is in a hurry to replace the <a href="https://im4change.in/hunger-hdi/pds-ration-food-security-42.html" title="https://im4change.in/hunger-hdi/pds-ration-food-security-42.html">Public Distribution System</a> (PDS) with cash transfers. <br /><br />The Government's intention has been revealed in two official letters (one dated <a href="https://im4change.in/siteadmin/tinymce/uploaded/GoI%20Letter%20on%20DBT%20dated%2010%20Feb%202015.pdf" title="10 Feb" title="https://im4change.in/siteadmin/tinymce/uploaded/GoI%20Letter%20on%20DBT%20dated%2010%20Feb%202015.pdf" title="10 Feb">10 February 2015</a> and another dated <a href="https://im4change.in/siteadmin/tinymce/uploaded/GoI%20letter%20on%20DBT%20dated%2011%20Feb%202015.pdf" title="11 Feb" title="https://im4change.in/siteadmin/tinymce/uploaded/GoI%20letter%20on%20DBT%20dated%2011%20Feb%202015.pdf" title="11 Feb">11 February 2015</a>) that were sent from the Joint Secretary at Department of Food and Public Distribution to the Principal Secretary/ Secretary at Department of Food &amp; Civil Supplies of various states/ UTs. &nbsp;<br /><br />In the letter dated 10 February 2015, it has been clearly said that the <em>&quot;Government is looking forward to implement DBT for foodgrains initially in the UTs and few districts of the states on pilot basis&quot;</em>.<br /><br />Despite various arguments and evidence put against cash transfers vis-a-vis PDS to ensure food security (by development economists in the past), the recent official correspondences show that the Ministry of Consumer Affairs is willing to rope in officials from Unique Identification Authority of India (UIDAI)/ National Population Register (NPR) so as to implement the appropriate model of cash transfer by complete digitization of beneficiary data and Aadhaar seeding. <br /><br />As per the official letter dated 10 February, any of the 3 models/ options (as shown below) can be adopted by states/ UTs for cash transfers: <br /><br />a. Under the first model, cash transfer of food subsidy can be submitted to bank account of beneficiaries every month. There is complete freedom given to beneficiaries to purchase foodgrains from anywhere in the market. However, for undertaking this model, there has to be adequate supply of foodgrains in the market around the year.<br /><br />b. Under the second model, fair price shops (FPS) dealers will be supplied foodgrains at minimum support price (MSP) or near market prices. Beneficiaries have to purchase foodgrains from the FPS at designated prices and all transactions are recorded on point-of-sale (PoS) device. The difference of MSP/ designated price and Central Issue Price (CIP) will be credited to the beneficiaries' bank account in advance against actual purchase from FPS. <br /><br />c. Under the third model, the existing manual process of issuance of foodgrains will be followed, with or without PoS, aided by digitized database seeded with Aadhaar. &nbsp;<br /><br />It is not clear from the above-mentioned official correspondences whether cash transfers will be indexed with the overall price level to protect the amount of real income transfers, as was actually recommended by the High Level Committee report on FCI restructuring. It has been argued earlier by Right to Food activists that cash transfer cannot ensure food security in the face of price rise, unless it is indexed to inflation. <br /><br />If the first option of cash transfer is adopted, then public procurement of foodgrains from farmers will be adversely affected, as has been cautioned by the Right to Food Campaign in its press note dated 25 January 2015.<br /><br />Riding on the claim that 13.2 crore new bank accounts have been opened under the Pradhan Mantri Jan Dhan Yojana in the last six months with coverage of 100% target, the Government seems to be confident of implementing the direct benefits transfer (DBT) of consumer food subsidy.<br /><br />However, in a <a href="https://im4change.in/siteadmin/tinymce/uploaded/Reetika%20PDS.pdf" title="https://im4change.in/siteadmin/tinymce/uploaded/Reetika%20PDS.pdf">study of PDS</a> undertaken in 9 states during May-June 2011, it was shown that more than two-thirds of the respondents expressed a clear preference for food over cash; less than one-fifth (18 percent) were in favour of cash over food. In states where PDS was running well, majority of the respondents preferred food over cash transfer. &nbsp;<br /><br />A group of <a href="https://im4change.in/latest-news-updates/reforming-food-corporation-of-india-himanshu-4675364.html" title="https://im4change.in/latest-news-updates/reforming-food-corporation-of-india-himanshu-4675364.html">economists</a> have recently shown that replacing the PDS with cash transfer will be like throwing out the baby with the bathwater since it has been revealed that PDS, which directly impacts rural poverty, could be revived even in poor states like Odisha, Chhattisgarh and Bihar thanks to the reforms undertaken by the respective state governments. For example, <a href="https://im4change.in/latest-news-updates/understanding-leakages-in-the-public-distribution-system-jean-dreze-and-reetika-khera-4675312.html" title="https://im4change.in/latest-news-updates/understanding-leakages-in-the-public-distribution-system-jean-dreze-and-reetika-khera-4675312.html">PDS leakage</a> in Bihar reduced to 24% in 2011-12 from 91% in 2004-05 due to introduction of coupon system, while diversions declined in Chhattisgarh to 3.3% in 2011-12 from 52.0% in 2004-05 as a result of transparency measures adopted plus complete overhauling of PDS. &nbsp;<br /><br /><strong><em>References:<br /></em></strong><br />Report of the High level Committee on Reorienting the Role and Restructuring of Food Corporation of India, January 2015 (Please <a href="http://fciweb.nic.in/app/webroot/upload/News/Report%20of%20the%20High%20Level%20Committee%20on%20Reorienting%20the%20Role%20and%20Restructuring%20of%20FCI_English_1.pdf" title="http://fciweb.nic.in/app/webroot/upload/News/Report%20of%20the%20High%20Level%20Committee%20on%20Reorienting%20the%20Role%20and%20Restructuring%20of%20FCI_English_1.pdf">click here</a> to access)&nbsp; <br /><br />Leakages from the Public Distribution System (PDS) and the way forward - Ashok Gulati and Shweta Saini (2015), ICRIER (Please <a href="http://icrier.org/pdf/Working_Paper_294.pdf" title="http://icrier.org/pdf/Working_Paper_294.pdf">click here</a> to access)&nbsp; <br /><br />The National Food Security Act 2013 (Please <a href="https://im4change.in/siteadmin/tinymce/uploaded/NFSA%202013.pdf" title="https://im4change.in/siteadmin/tinymce/uploaded/NFSA%202013.pdf">click here</a> to access)<br /><br />The National Food Security Ordinance 2013 (Please <a href="https://im4change.in/siteadmin/tinymce/uploaded/NationalFoodSecurityOrdinance2013.pdf" title="https://im4change.in/siteadmin/tinymce/uploaded/NationalFoodSecurityOrdinance2013.pdf">click here</a> to access)<br /><br />Address by the President of India, Shri Pranab Mukherjee to the Joint Session of both houses of Parliament , Press Information Bureau, 23 February 2015, <a href="http://www.pib.nic.in" title="http://www.pib.nic.in">www.pib.nic.in</a> <br /><br /><a href="https://im4change.in/latest-news-updates/centre-takes-steps-to-convert-pds-to-cash-transfers-nitin-sethi-surabhi-agarwal-4675398.html" title="https://im4change.in/latest-news-updates/centre-takes-steps-to-convert-pds-to-cash-transfers-nitin-sethi-surabhi-agarwal-4675398.html">Centre takes steps to convert PDS to cash transfers</a> -Nitin Sethi &amp; Surabhi Agarwal, Business Standard, 24 February, 2015 <br /><br /><a href="https://im4change.in/interviews/prof-jean-dreze-noted-economist-and-former-member-of-the-national-advisory-council-interviewed-by-mayank-mishra-4675390.html" title="https://im4change.in/interviews/prof-jean-dreze-noted-economist-and-former-member-of-the-national-advisory-council-interviewed-by-mayank-mishra-4675390.html">Prof. Jean Dreze, noted economist and former member of the<br /> National Advisory Council</a>, interviewed by Mayank Mishra, Business Standard, 23 February, 2015&nbsp; </div><div align="justify">&nbsp;</div><div align="justify"><a href="https://im4change.in/latest-news-updates/understanding-leakages-in-the-public-distribution-system-jean-dreze-and-reetika-khera-4675312.html" title="https://im4change.in/latest-news-updates/understanding-leakages-in-the-public-distribution-system-jean-dreze-and-reetika-khera-4675312.html">Understanding Leakages in the Public Distribution System</a> -Jean Dreze and Reetika Khera, Economic and Political Weekly, Vol-L, No. 7, February 14, 2015&nbsp; <br /></div><div align="justify"><br /><a href="https://im4change.in/latest-news-updates/food-insecurity-tk-rajalakshmi-4675382.html" title="https://im4change.in/latest-news-updates/food-insecurity-tk-rajalakshmi-4675382.html">Food insecurity</a> -TK Rajalakshmi, Frontline, 6 March, 2015&nbsp; <br /><br />'<a href="https://im4change.in/news-alerts/039changes-in-pds-may-affect-food-security-of-half-of-indians039-4675318.html" title="https://im4change.in/news-alerts/039changes-in-pds-may-affect-food-security-of-half-of-indians039-4675318.html">Changes in PDS may affect food security of half of Indians</a>'&nbsp; <br /><br /><a href="https://im4change.in/latest-news-updates/fci-reforms-prescription-to-cure-or-kill-roshan-kishore-4675181.html" title="https://im4change.in/latest-news-updates/fci-reforms-prescription-to-cure-or-kill-roshan-kishore-4675181.html">FCI reforms: prescription to cure or kill?</a> -Roshan Kishore, Livemint.com, 27 January, 2015&nbsp; <br /><br /><a href="https://im4change.in/latest-news-updates/water-for-the-leeward-india-jean-dreze-and-reetika-khera-24521.html" title="https://im4change.in/latest-news-updates/water-for-the-leeward-india-jean-dreze-and-reetika-khera-24521.html">Water For The Leeward India</a> -Jean Dreze and Reetika Khera, Outlook, 24 March, 2014 <br /><br /><a href="https://im4change.in/latest-news-updates/public-distribution-system-reforms-and-consumption-in-chhattisgarh-prasad-krishnamurthy-vikram-pathania-and-sharad-tandon-24265.html" title="https://im4change.in/latest-news-updates/public-distribution-system-reforms-and-consumption-in-chhattisgarh-prasad-krishnamurthy-vikram-pathania-and-sharad-tandon-24265.html">Public Distribution System Reforms and Consumption in Chha<br />ttisgarh</a> -Prasad Krishnamurthy, Vikram Pathania, and Sharad Tandon, Economic and Political Weekly, Vol-XLIX, No. 8, February 22, 2014&nbsp; <br /><br /><a href="http://www.business-standard.com/article/economy-policy/there-seems-to-be-at-least-40-leakage-in-our-targeted-pds-system-ajay-chhibber-114020200447_1.html" title="http://www.business-standard.com/article/economy-policy/there-seems-to-be-at-least-40-leakage-in-our-targeted-pds-system-ajay-chhibber-114020200447_1.html">Ajay Chhibber, Director General of the IEO</a>, a former assistant secretary general of the UN Development Programme, interviewed by Sanjeeb Mukherjee, Business Standard, 3 February, 2014&nbsp;&nbsp;&nbsp; <br /><br /><a href="https://im4change.in/latest-news-updates/rural-poverty-and-the-public-distribution-system-jean-dreze-and-reetika-khera-23277.html" title="https://im4change.in/latest-news-updates/rural-poverty-and-the-public-distribution-system-jean-dreze-and-reetika-khera-23277.html">Rural Poverty and the Public Distribution System</a>-Jean Dreze and Reetika Khera, Economic and Political Weekly, Vol-XLVIII, No. 45-46, November 16, 2013&nbsp;&nbsp; <br /><br /><a href="https://im4change.in/docs/335reforming-the-pds-lessons-from-chhattisgarh.pdf" title="https://im4change.in/docs/335reforming-the-pds-lessons-from-chhattisgarh.pdf">Reforming the Public Distribution System</a>: Lessons from Chhattisgarh by Raghav Puri, Economic and Political Weekly, February 4, 2012&nbsp; <br /><br /><a href="https://im4change.in/siteadmin/tinymce/uploaded/Reetika%20PDS.pdf" title="https://im4change.in/siteadmin/tinymce/uploaded/Reetika%20PDS.pdf">Revival of the Public Distribution System</a> -Reetika Khera, Economic and Political Weekly, November 5, 2011, Vol xlvi, No. 44 &amp; 45&nbsp; <br /><br /><a href="http://www.cdedse.org/pdf/work198.pdf" title="http://www.cdedse.org/pdf/work198.pdf">Trends in diversion of PDS grain</a> -Reetika Khera (2011), Working Paper No. 198, Centre for Development Economics, Department of Economics, Delhi School of Economics <br />&nbsp;&nbsp;&nbsp;&nbsp; <br /><a href="http://web.iitd.ac.in/~reetika/projects.html" title="http://web.iitd.ac.in/~reetika/projects.html">PEEP survey 2013 and PDS Survey 2011</a>&nbsp;&nbsp; <br /><br /></div>               </font>
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    <link rel="canonical" href="https://im4change.in/<pre class="cake-error"><a href="javascript:void(0);" onclick="document.getElementById('cakeErr67f85ae9bad06-trace').style.display = (document.getElementById('cakeErr67f85ae9bad06-trace').style.display == 'none' ? '' : 'none');"><b>Notice</b> (8)</a>: Undefined variable: urlPrefix [<b>APP/Template/Layout/printlayout.ctp</b>, line <b>8</b>]<div id="cakeErr67f85ae9bad06-trace" class="cake-stack-trace" style="display: none;"><a href="javascript:void(0);" onclick="document.getElementById('cakeErr67f85ae9bad06-code').style.display = (document.getElementById('cakeErr67f85ae9bad06-code').style.display == 'none' ? '' : 'none')">Code</a> <a href="javascript:void(0);" onclick="document.getElementById('cakeErr67f85ae9bad06-context').style.display = (document.getElementById('cakeErr67f85ae9bad06-context').style.display == 'none' ? '' : 'none')">Context</a><pre id="cakeErr67f85ae9bad06-code" class="cake-code-dump" style="display: none;"><code><span style="color: #000000"><span style="color: #0000BB"></span><span style="color: #007700">&lt;</span><span style="color: #0000BB">head</span><span style="color: #007700">&gt;
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		&#039;id&#039; =&gt; (int) 27350,
		&#039;title&#039; =&gt; &#039;Is the Govt doing away with PDS?&#039;,
		&#039;subheading&#039; =&gt; &#039;&#039;,
		&#039;description&#039; =&gt; &#039;&lt;br /&gt;
&lt;div align=&quot;justify&quot;&gt;
Following the recommendations of the Shanta Kumar Committee report on restructuring of the Food Corporation of India (FCI), there are signs that the Central Government is in a hurry to replace the &lt;a href=&quot;../hunger-hdi/pds-ration-food-security-42.html&quot;&gt;Public Distribution System&lt;/a&gt; (PDS) with cash transfers. &lt;br /&gt;
&lt;br /&gt;
The Government&#039;s intention has been revealed in two official letters (one dated &lt;a href=&quot;tinymce/uploaded/GoI%20Letter%20on%20DBT%20dated%2010%20Feb%202015.pdf&quot; title=&quot;10 Feb&quot;&gt;10 February 2015&lt;/a&gt; and another dated &lt;a href=&quot;tinymce/uploaded/GoI%20letter%20on%20DBT%20dated%2011%20Feb%202015.pdf&quot; title=&quot;11 Feb&quot;&gt;11 February 2015&lt;/a&gt;) that were sent from the Joint Secretary at Department of Food and Public Distribution to the Principal Secretary/ Secretary at Department of Food &amp;amp; Civil Supplies of various states/ UTs. &amp;nbsp;&lt;br /&gt;
&lt;br /&gt;
In the letter dated 10 February 2015, it has been clearly said that the &lt;em&gt;&amp;quot;Government is looking forward to implement DBT for foodgrains initially in the UTs and few districts of the states on pilot basis&amp;quot;&lt;/em&gt;.&lt;br /&gt;
&lt;br /&gt;
Despite various arguments and evidence put against cash transfers vis-a-vis PDS to ensure food security (by development economists in the past), the recent official correspondences show that the Ministry of Consumer Affairs is willing to rope in officials from Unique Identification Authority of India (UIDAI)/ National Population Register (NPR) so as to implement the appropriate model of cash transfer by complete digitization of beneficiary data and Aadhaar seeding. &lt;br /&gt;
&lt;br /&gt;
As per the official letter dated 10 February, any of the 3 models/ options (as shown below) can be adopted by states/ UTs for cash transfers: &lt;br /&gt;
&lt;br /&gt;
a. Under the first model, cash transfer of food subsidy can be submitted to bank account of beneficiaries every month. There is complete freedom given to beneficiaries to purchase foodgrains from anywhere in the market. However, for undertaking this model, there has to be adequate supply of foodgrains in the market around the year.&lt;br /&gt;
&lt;br /&gt;
b. Under the second model, fair price shops (FPS) dealers will be supplied foodgrains at minimum support price (MSP) or near market prices. Beneficiaries have to purchase foodgrains from the FPS at designated prices and all transactions are recorded on point-of-sale (PoS) device. The difference of MSP/ designated price and Central Issue Price (CIP) will be credited to the beneficiaries&#039; bank account in advance against actual purchase from FPS. &lt;br /&gt;
&lt;br /&gt;
c. Under the third model, the existing manual process of issuance of foodgrains will be followed, with or without PoS, aided by digitized database seeded with Aadhaar. &amp;nbsp;&lt;br /&gt;
&lt;br /&gt;
It is not clear from the above-mentioned official correspondences whether cash transfers will be indexed with the overall price level to protect the amount of real income transfers, as was actually recommended by the High Level Committee report on FCI restructuring. It has been argued earlier by Right to Food activists that cash transfer cannot ensure food security in the face of price rise, unless it is indexed to inflation. &lt;br /&gt;
&lt;br /&gt;
If the first option of cash transfer is adopted, then public procurement of foodgrains from farmers will be adversely affected, as has been cautioned by the Right to Food Campaign in its press note dated 25 January 2015.&lt;br /&gt;
&lt;br /&gt;
Riding on the claim that 13.2 crore new bank accounts have been opened under the Pradhan Mantri Jan Dhan Yojana in the last six months with coverage of 100% target, the Government seems to be confident of implementing the direct benefits transfer (DBT) of consumer food subsidy.&lt;br /&gt;
&lt;br /&gt;
However, in a &lt;a href=&quot;tinymce/uploaded/Reetika%20PDS.pdf&quot;&gt;study of PDS&lt;/a&gt; undertaken in 9 states during May-June 2011, it was shown that more than two-thirds of the respondents expressed a clear preference for food over cash; less than one-fifth (18 percent) were in favour of cash over food. In states where PDS was running well, majority of the respondents preferred food over cash transfer. &amp;nbsp;&lt;br /&gt;
&lt;br /&gt;
A group of &lt;a href=&quot;../latest-news-updates/reforming-food-corporation-of-india-himanshu-4675364.html&quot;&gt;economists&lt;/a&gt; have recently shown that replacing the PDS with cash transfer will be like throwing out the baby with the bathwater since it has been revealed that PDS, which directly impacts rural poverty, could be revived even in poor states like Odisha, Chhattisgarh and Bihar thanks to the reforms undertaken by the respective state governments. For example, &lt;a href=&quot;../latest-news-updates/understanding-leakages-in-the-public-distribution-system-jean-dreze-and-reetika-khera-4675312.html&quot;&gt;PDS leakage&lt;/a&gt; in Bihar reduced to 24% in 2011-12 from 91% in 2004-05 due to introduction of coupon system, while diversions declined in Chhattisgarh to 3.3% in 2011-12 from 52.0% in 2004-05 as a result of transparency measures adopted plus complete overhauling of PDS. &amp;nbsp;&lt;br /&gt;
&lt;br /&gt;
&lt;strong&gt;&lt;em&gt;References:&lt;br /&gt;
&lt;/em&gt;&lt;/strong&gt;&lt;br /&gt;
Report of the High level Committee on Reorienting the Role and Restructuring of Food Corporation of India, January 2015 (Please &lt;a href=&quot;http://fciweb.nic.in/app/webroot/upload/News/Report%20of%20the%20High%20Level%20Committee%20on%20Reorienting%20the%20Role%20and%20Restructuring%20of%20FCI_English_1.pdf&quot;&gt;click here&lt;/a&gt; to access)&amp;nbsp; &lt;br /&gt;
&lt;br /&gt;
Leakages from the Public Distribution System (PDS) and the way forward - Ashok Gulati and Shweta Saini (2015), ICRIER (Please &lt;a href=&quot;http://icrier.org/pdf/Working_Paper_294.pdf&quot;&gt;click here&lt;/a&gt; to access)&amp;nbsp; &lt;br /&gt;
&lt;br /&gt;
The National Food Security Act 2013 (Please &lt;a href=&quot;tinymce/uploaded/NFSA%202013.pdf&quot;&gt;click here&lt;/a&gt; to access)&lt;br /&gt;
&lt;br /&gt;
The National Food Security Ordinance 2013 (Please &lt;a href=&quot;tinymce/uploaded/NationalFoodSecurityOrdinance2013.pdf&quot;&gt;click here&lt;/a&gt; to access)&lt;br /&gt;
&lt;br /&gt;
Address by the President of India, Shri Pranab Mukherjee to the Joint Session of both houses of Parliament , Press Information Bureau, 23 February 2015, &lt;a href=&quot;http://www.pib.nic.in&quot;&gt;www.pib.nic.in&lt;/a&gt; &lt;br /&gt;
&lt;br /&gt;
&lt;a href=&quot;../latest-news-updates/centre-takes-steps-to-convert-pds-to-cash-transfers-nitin-sethi-surabhi-agarwal-4675398.html&quot;&gt;Centre takes steps to convert PDS to cash transfers&lt;/a&gt; -Nitin Sethi &amp;amp; Surabhi Agarwal, Business Standard, 24 February, 2015 &lt;br /&gt;
&lt;br /&gt;
&lt;a href=&quot;../interviews/prof-jean-dreze-noted-economist-and-former-member-of-the-national-advisory-council-interviewed-by-mayank-mishra-4675390.html&quot;&gt;Prof. Jean Dreze, noted economist and former member of the National Advisory Council&lt;/a&gt;, interviewed by Mayank Mishra, Business Standard, 23 February, 2015&amp;nbsp; 
&lt;/div&gt;
&lt;div align=&quot;justify&quot;&gt;
&amp;nbsp;
&lt;/div&gt;
&lt;div align=&quot;justify&quot;&gt;
&lt;a href=&quot;../latest-news-updates/understanding-leakages-in-the-public-distribution-system-jean-dreze-and-reetika-khera-4675312.html&quot;&gt;Understanding Leakages in the Public Distribution System&lt;/a&gt; -Jean Dreze and Reetika Khera, Economic and Political Weekly, Vol-L, No. 7, February 14, 2015&amp;nbsp; &lt;br /&gt;
&lt;/div&gt;
&lt;div align=&quot;justify&quot;&gt;
&lt;br /&gt;
&lt;a href=&quot;../latest-news-updates/food-insecurity-tk-rajalakshmi-4675382.html&quot;&gt;Food insecurity&lt;/a&gt; -TK Rajalakshmi, Frontline, 6 March, 2015&amp;nbsp; &lt;br /&gt;
&lt;br /&gt;
&#039;&lt;a href=&quot;../news-alerts/039changes-in-pds-may-affect-food-security-of-half-of-indians039-4675318.html&quot;&gt;Changes in PDS may affect food security of half of Indians&lt;/a&gt;&#039;&amp;nbsp; &lt;br /&gt;
&lt;br /&gt;
&lt;a href=&quot;../latest-news-updates/fci-reforms-prescription-to-cure-or-kill-roshan-kishore-4675181.html&quot;&gt;FCI reforms: prescription to cure or kill?&lt;/a&gt; -Roshan Kishore, Livemint.com, 27 January, 2015&amp;nbsp; &lt;br /&gt;
&lt;br /&gt;
&lt;a href=&quot;../latest-news-updates/water-for-the-leeward-india-jean-dreze-and-reetika-khera-24521.html&quot;&gt;Water For The Leeward India&lt;/a&gt; -Jean Dreze and Reetika Khera, Outlook, 24 March, 2014 &lt;br /&gt;
&lt;br /&gt;
&lt;a href=&quot;../latest-news-updates/public-distribution-system-reforms-and-consumption-in-chhattisgarh-prasad-krishnamurthy-vikram-pathania-and-sharad-tandon-24265.html&quot;&gt;Public Distribution System Reforms and Consumption in Chhattisgarh&lt;/a&gt; -Prasad Krishnamurthy, Vikram Pathania, and Sharad Tandon, Economic and Political Weekly, Vol-XLIX, No. 8, February 22, 2014&amp;nbsp; &lt;br /&gt;
&lt;br /&gt;
&lt;a href=&quot;http://www.business-standard.com/article/economy-policy/there-seems-to-be-at-least-40-leakage-in-our-targeted-pds-system-ajay-chhibber-114020200447_1.html&quot;&gt;Ajay Chhibber, Director General of the IEO&lt;/a&gt;, a former assistant secretary general of the UN Development Programme, interviewed by Sanjeeb Mukherjee, Business Standard, 3 February, 2014&amp;nbsp;&amp;nbsp;&amp;nbsp; &lt;br /&gt;
&lt;br /&gt;
&lt;a href=&quot;../latest-news-updates/rural-poverty-and-the-public-distribution-system-jean-dreze-and-reetika-khera-23277.html&quot;&gt;Rural Poverty and the Public Distribution System&lt;/a&gt;-Jean Dreze and Reetika Khera, Economic and Political Weekly, Vol-XLVIII, No. 45-46, November 16, 2013&amp;nbsp;&amp;nbsp; &lt;br /&gt;
&lt;br /&gt;
&lt;a href=&quot;../docs/335reforming-the-pds-lessons-from-chhattisgarh.pdf&quot;&gt;Reforming the Public Distribution System&lt;/a&gt;: Lessons from Chhattisgarh by Raghav Puri, Economic and Political Weekly, February 4, 2012&amp;nbsp; &lt;br /&gt;
&lt;br /&gt;
&lt;a href=&quot;tinymce/uploaded/Reetika%20PDS.pdf&quot;&gt;Revival of the Public Distribution System&lt;/a&gt; -Reetika Khera, Economic and Political Weekly, November 5, 2011, Vol xlvi, No. 44 &amp;amp; 45&amp;nbsp; &lt;br /&gt;
&lt;br /&gt;
&lt;a href=&quot;http://www.cdedse.org/pdf/work198.pdf&quot;&gt;Trends in diversion of PDS grain&lt;/a&gt; -Reetika Khera (2011), Working Paper No. 198, Centre for Development Economics, Department of Economics, Delhi School of Economics &lt;br /&gt;
&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp; &lt;br /&gt;
&lt;a href=&quot;http://web.iitd.ac.in/~reetika/projects.html&quot;&gt;PEEP survey 2013 and PDS Survey 2011&lt;/a&gt;&amp;nbsp;&amp;nbsp; &lt;br /&gt;
&lt;br /&gt;
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Following the recommendations of the Shanta Kumar Committee report on restructuring of the Food Corporation of India (FCI), there are signs that the Central Government is in a hurry to replace the Public Distribution System (PDS) with cash transfers. 

The...&#039;,
	&#039;disp&#039; =&gt; &#039;&lt;br /&gt;&lt;div align=&quot;justify&quot;&gt;Following the recommendations of the Shanta Kumar Committee report on restructuring of the Food Corporation of India (FCI), there are signs that the Central Government is in a hurry to replace the &lt;a href=&quot;https://im4change.in/hunger-hdi/pds-ration-food-security-42.html&quot; title=&quot;https://im4change.in/hunger-hdi/pds-ration-food-security-42.html&quot;&gt;Public Distribution System&lt;/a&gt; (PDS) with cash transfers. &lt;br /&gt;&lt;br /&gt;The Government&#039;s intention has been revealed in two official letters (one dated &lt;a href=&quot;https://im4change.in/siteadmin/tinymce/uploaded/GoI%20Letter%20on%20DBT%20dated%2010%20Feb%202015.pdf&quot; title=&quot;10 Feb&quot; title=&quot;https://im4change.in/siteadmin/tinymce/uploaded/GoI%20Letter%20on%20DBT%20dated%2010%20Feb%202015.pdf&quot; title=&quot;10 Feb&quot;&gt;10 February 2015&lt;/a&gt; and another dated &lt;a href=&quot;https://im4change.in/siteadmin/tinymce/uploaded/GoI%20letter%20on%20DBT%20dated%2011%20Feb%202015.pdf&quot; title=&quot;11 Feb&quot; title=&quot;https://im4change.in/siteadmin/tinymce/uploaded/GoI%20letter%20on%20DBT%20dated%2011%20Feb%202015.pdf&quot; title=&quot;11 Feb&quot;&gt;11 February 2015&lt;/a&gt;) that were sent from the Joint Secretary at Department of Food and Public Distribution to the Principal Secretary/ Secretary at Department of Food &amp;amp; Civil Supplies of various states/ UTs. &amp;nbsp;&lt;br /&gt;&lt;br /&gt;In the letter dated 10 February 2015, it has been clearly said that the &lt;em&gt;&amp;quot;Government is looking forward to implement DBT for foodgrains initially in the UTs and few districts of the states on pilot basis&amp;quot;&lt;/em&gt;.&lt;br /&gt;&lt;br /&gt;Despite various arguments and evidence put against cash transfers vis-a-vis PDS to ensure food security (by development economists in the past), the recent official correspondences show that the Ministry of Consumer Affairs is willing to rope in officials from Unique Identification Authority of India (UIDAI)/ National Population Register (NPR) so as to implement the appropriate model of cash transfer by complete digitization of beneficiary data and Aadhaar seeding. &lt;br /&gt;&lt;br /&gt;As per the official letter dated 10 February, any of the 3 models/ options (as shown below) can be adopted by states/ UTs for cash transfers: &lt;br /&gt;&lt;br /&gt;a. Under the first model, cash transfer of food subsidy can be submitted to bank account of beneficiaries every month. There is complete freedom given to beneficiaries to purchase foodgrains from anywhere in the market. However, for undertaking this model, there has to be adequate supply of foodgrains in the market around the year.&lt;br /&gt;&lt;br /&gt;b. Under the second model, fair price shops (FPS) dealers will be supplied foodgrains at minimum support price (MSP) or near market prices. Beneficiaries have to purchase foodgrains from the FPS at designated prices and all transactions are recorded on point-of-sale (PoS) device. The difference of MSP/ designated price and Central Issue Price (CIP) will be credited to the beneficiaries&#039; bank account in advance against actual purchase from FPS. &lt;br /&gt;&lt;br /&gt;c. Under the third model, the existing manual process of issuance of foodgrains will be followed, with or without PoS, aided by digitized database seeded with Aadhaar. &amp;nbsp;&lt;br /&gt;&lt;br /&gt;It is not clear from the above-mentioned official correspondences whether cash transfers will be indexed with the overall price level to protect the amount of real income transfers, as was actually recommended by the High Level Committee report on FCI restructuring. It has been argued earlier by Right to Food activists that cash transfer cannot ensure food security in the face of price rise, unless it is indexed to inflation. &lt;br /&gt;&lt;br /&gt;If the first option of cash transfer is adopted, then public procurement of foodgrains from farmers will be adversely affected, as has been cautioned by the Right to Food Campaign in its press note dated 25 January 2015.&lt;br /&gt;&lt;br /&gt;Riding on the claim that 13.2 crore new bank accounts have been opened under the Pradhan Mantri Jan Dhan Yojana in the last six months with coverage of 100% target, the Government seems to be confident of implementing the direct benefits transfer (DBT) of consumer food subsidy.&lt;br /&gt;&lt;br /&gt;However, in a &lt;a href=&quot;https://im4change.in/siteadmin/tinymce/uploaded/Reetika%20PDS.pdf&quot; title=&quot;https://im4change.in/siteadmin/tinymce/uploaded/Reetika%20PDS.pdf&quot;&gt;study of PDS&lt;/a&gt; undertaken in 9 states during May-June 2011, it was shown that more than two-thirds of the respondents expressed a clear preference for food over cash; less than one-fifth (18 percent) were in favour of cash over food. In states where PDS was running well, majority of the respondents preferred food over cash transfer. &amp;nbsp;&lt;br /&gt;&lt;br /&gt;A group of &lt;a href=&quot;https://im4change.in/latest-news-updates/reforming-food-corporation-of-india-himanshu-4675364.html&quot; title=&quot;https://im4change.in/latest-news-updates/reforming-food-corporation-of-india-himanshu-4675364.html&quot;&gt;economists&lt;/a&gt; have recently shown that replacing the PDS with cash transfer will be like throwing out the baby with the bathwater since it has been revealed that PDS, which directly impacts rural poverty, could be revived even in poor states like Odisha, Chhattisgarh and Bihar thanks to the reforms undertaken by the respective state governments. For example, &lt;a href=&quot;https://im4change.in/latest-news-updates/understanding-leakages-in-the-public-distribution-system-jean-dreze-and-reetika-khera-4675312.html&quot; title=&quot;https://im4change.in/latest-news-updates/understanding-leakages-in-the-public-distribution-system-jean-dreze-and-reetika-khera-4675312.html&quot;&gt;PDS leakage&lt;/a&gt; in Bihar reduced to 24% in 2011-12 from 91% in 2004-05 due to introduction of coupon system, while diversions declined in Chhattisgarh to 3.3% in 2011-12 from 52.0% in 2004-05 as a result of transparency measures adopted plus complete overhauling of PDS. &amp;nbsp;&lt;br /&gt;&lt;br /&gt;&lt;strong&gt;&lt;em&gt;References:&lt;br /&gt;&lt;/em&gt;&lt;/strong&gt;&lt;br /&gt;Report of the High level Committee on Reorienting the Role and Restructuring of Food Corporation of India, January 2015 (Please &lt;a href=&quot;http://fciweb.nic.in/app/webroot/upload/News/Report%20of%20the%20High%20Level%20Committee%20on%20Reorienting%20the%20Role%20and%20Restructuring%20of%20FCI_English_1.pdf&quot; title=&quot;http://fciweb.nic.in/app/webroot/upload/News/Report%20of%20the%20High%20Level%20Committee%20on%20Reorienting%20the%20Role%20and%20Restructuring%20of%20FCI_English_1.pdf&quot;&gt;click here&lt;/a&gt; to access)&amp;nbsp; &lt;br /&gt;&lt;br /&gt;Leakages from the Public Distribution System (PDS) and the way forward - Ashok Gulati and Shweta Saini (2015), ICRIER (Please &lt;a href=&quot;http://icrier.org/pdf/Working_Paper_294.pdf&quot; title=&quot;http://icrier.org/pdf/Working_Paper_294.pdf&quot;&gt;click here&lt;/a&gt; to access)&amp;nbsp; &lt;br /&gt;&lt;br /&gt;The National Food Security Act 2013 (Please &lt;a href=&quot;https://im4change.in/siteadmin/tinymce/uploaded/NFSA%202013.pdf&quot; title=&quot;https://im4change.in/siteadmin/tinymce/uploaded/NFSA%202013.pdf&quot;&gt;click here&lt;/a&gt; to access)&lt;br /&gt;&lt;br /&gt;The National Food Security Ordinance 2013 (Please &lt;a href=&quot;https://im4change.in/siteadmin/tinymce/uploaded/NationalFoodSecurityOrdinance2013.pdf&quot; title=&quot;https://im4change.in/siteadmin/tinymce/uploaded/NationalFoodSecurityOrdinance2013.pdf&quot;&gt;click here&lt;/a&gt; to access)&lt;br /&gt;&lt;br /&gt;Address by the President of India, Shri Pranab Mukherjee to the Joint Session of both houses of Parliament , Press Information Bureau, 23 February 2015, &lt;a href=&quot;http://www.pib.nic.in&quot; title=&quot;http://www.pib.nic.in&quot;&gt;www.pib.nic.in&lt;/a&gt; &lt;br /&gt;&lt;br /&gt;&lt;a href=&quot;https://im4change.in/latest-news-updates/centre-takes-steps-to-convert-pds-to-cash-transfers-nitin-sethi-surabhi-agarwal-4675398.html&quot; title=&quot;https://im4change.in/latest-news-updates/centre-takes-steps-to-convert-pds-to-cash-transfers-nitin-sethi-surabhi-agarwal-4675398.html&quot;&gt;Centre takes steps to convert PDS to cash transfers&lt;/a&gt; -Nitin Sethi &amp;amp; Surabhi Agarwal, Business Standard, 24 February, 2015 &lt;br /&gt;&lt;br /&gt;&lt;a href=&quot;https://im4change.in/interviews/prof-jean-dreze-noted-economist-and-former-member-of-the-national-advisory-council-interviewed-by-mayank-mishra-4675390.html&quot; title=&quot;https://im4change.in/interviews/prof-jean-dreze-noted-economist-and-former-member-of-the-national-advisory-council-interviewed-by-mayank-mishra-4675390.html&quot;&gt;Prof. Jean Dreze, noted economist and former member of the&lt;br /&gt; National Advisory Council&lt;/a&gt;, interviewed by Mayank Mishra, Business Standard, 23 February, 2015&amp;nbsp; &lt;/div&gt;&lt;div align=&quot;justify&quot;&gt;&amp;nbsp;&lt;/div&gt;&lt;div align=&quot;justify&quot;&gt;&lt;a href=&quot;https://im4change.in/latest-news-updates/understanding-leakages-in-the-public-distribution-system-jean-dreze-and-reetika-khera-4675312.html&quot; title=&quot;https://im4change.in/latest-news-updates/understanding-leakages-in-the-public-distribution-system-jean-dreze-and-reetika-khera-4675312.html&quot;&gt;Understanding Leakages in the Public Distribution System&lt;/a&gt; -Jean Dreze and Reetika Khera, Economic and Political Weekly, Vol-L, No. 7, February 14, 2015&amp;nbsp; &lt;br /&gt;&lt;/div&gt;&lt;div align=&quot;justify&quot;&gt;&lt;br /&gt;&lt;a href=&quot;https://im4change.in/latest-news-updates/food-insecurity-tk-rajalakshmi-4675382.html&quot; title=&quot;https://im4change.in/latest-news-updates/food-insecurity-tk-rajalakshmi-4675382.html&quot;&gt;Food insecurity&lt;/a&gt; -TK Rajalakshmi, Frontline, 6 March, 2015&amp;nbsp; &lt;br /&gt;&lt;br /&gt;&#039;&lt;a href=&quot;https://im4change.in/news-alerts/039changes-in-pds-may-affect-food-security-of-half-of-indians039-4675318.html&quot; title=&quot;https://im4change.in/news-alerts/039changes-in-pds-may-affect-food-security-of-half-of-indians039-4675318.html&quot;&gt;Changes in PDS may affect food security of half of Indians&lt;/a&gt;&#039;&amp;nbsp; &lt;br /&gt;&lt;br /&gt;&lt;a href=&quot;https://im4change.in/latest-news-updates/fci-reforms-prescription-to-cure-or-kill-roshan-kishore-4675181.html&quot; title=&quot;https://im4change.in/latest-news-updates/fci-reforms-prescription-to-cure-or-kill-roshan-kishore-4675181.html&quot;&gt;FCI reforms: prescription to cure or kill?&lt;/a&gt; -Roshan Kishore, Livemint.com, 27 January, 2015&amp;nbsp; &lt;br /&gt;&lt;br /&gt;&lt;a href=&quot;https://im4change.in/latest-news-updates/water-for-the-leeward-india-jean-dreze-and-reetika-khera-24521.html&quot; title=&quot;https://im4change.in/latest-news-updates/water-for-the-leeward-india-jean-dreze-and-reetika-khera-24521.html&quot;&gt;Water For The Leeward India&lt;/a&gt; -Jean Dreze and Reetika Khera, Outlook, 24 March, 2014 &lt;br /&gt;&lt;br /&gt;&lt;a href=&quot;https://im4change.in/latest-news-updates/public-distribution-system-reforms-and-consumption-in-chhattisgarh-prasad-krishnamurthy-vikram-pathania-and-sharad-tandon-24265.html&quot; title=&quot;https://im4change.in/latest-news-updates/public-distribution-system-reforms-and-consumption-in-chhattisgarh-prasad-krishnamurthy-vikram-pathania-and-sharad-tandon-24265.html&quot;&gt;Public Distribution System Reforms and Consumption in Chha&lt;br /&gt;ttisgarh&lt;/a&gt; -Prasad Krishnamurthy, Vikram Pathania, and Sharad Tandon, Economic and Political Weekly, Vol-XLIX, No. 8, February 22, 2014&amp;nbsp; &lt;br /&gt;&lt;br /&gt;&lt;a href=&quot;http://www.business-standard.com/article/economy-policy/there-seems-to-be-at-least-40-leakage-in-our-targeted-pds-system-ajay-chhibber-114020200447_1.html&quot; title=&quot;http://www.business-standard.com/article/economy-policy/there-seems-to-be-at-least-40-leakage-in-our-targeted-pds-system-ajay-chhibber-114020200447_1.html&quot;&gt;Ajay Chhibber, Director General of the IEO&lt;/a&gt;, a former assistant secretary general of the UN Development Programme, interviewed by Sanjeeb Mukherjee, Business Standard, 3 February, 2014&amp;nbsp;&amp;nbsp;&amp;nbsp; &lt;br /&gt;&lt;br /&gt;&lt;a href=&quot;https://im4change.in/latest-news-updates/rural-poverty-and-the-public-distribution-system-jean-dreze-and-reetika-khera-23277.html&quot; title=&quot;https://im4change.in/latest-news-updates/rural-poverty-and-the-public-distribution-system-jean-dreze-and-reetika-khera-23277.html&quot;&gt;Rural Poverty and the Public Distribution System&lt;/a&gt;-Jean Dreze and Reetika Khera, Economic and Political Weekly, Vol-XLVIII, No. 45-46, November 16, 2013&amp;nbsp;&amp;nbsp; &lt;br /&gt;&lt;br /&gt;&lt;a href=&quot;https://im4change.in/docs/335reforming-the-pds-lessons-from-chhattisgarh.pdf&quot; title=&quot;https://im4change.in/docs/335reforming-the-pds-lessons-from-chhattisgarh.pdf&quot;&gt;Reforming the Public Distribution System&lt;/a&gt;: Lessons from Chhattisgarh by Raghav Puri, Economic and Political Weekly, February 4, 2012&amp;nbsp; &lt;br /&gt;&lt;br /&gt;&lt;a href=&quot;https://im4change.in/siteadmin/tinymce/uploaded/Reetika%20PDS.pdf&quot; title=&quot;https://im4change.in/siteadmin/tinymce/uploaded/Reetika%20PDS.pdf&quot;&gt;Revival of the Public Distribution System&lt;/a&gt; -Reetika Khera, Economic and Political Weekly, November 5, 2011, Vol xlvi, No. 44 &amp;amp; 45&amp;nbsp; &lt;br /&gt;&lt;br /&gt;&lt;a href=&quot;http://www.cdedse.org/pdf/work198.pdf&quot; title=&quot;http://www.cdedse.org/pdf/work198.pdf&quot;&gt;Trends in diversion of PDS grain&lt;/a&gt; -Reetika Khera (2011), Working Paper No. 198, Centre for Development Economics, Department of Economics, Delhi School of Economics &lt;br /&gt;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp; &lt;br /&gt;&lt;a href=&quot;http://web.iitd.ac.in/~reetika/projects.html&quot; title=&quot;http://web.iitd.ac.in/~reetika/projects.html&quot;&gt;PEEP survey 2013 and PDS Survey 2011&lt;/a&gt;&amp;nbsp;&amp;nbsp; &lt;br /&gt;&lt;br /&gt;&lt;/div&gt;&#039;,
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	&#039;title&#039; =&gt; &#039;Is the Govt doing away with PDS?&#039;,
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&lt;div align=&quot;justify&quot;&gt;
Following the recommendations of the Shanta Kumar Committee report on restructuring of the Food Corporation of India (FCI), there are signs that the Central Government is in a hurry to replace the &lt;a href=&quot;../hunger-hdi/pds-ration-food-security-42.html&quot;&gt;Public Distribution System&lt;/a&gt; (PDS) with cash transfers. &lt;br /&gt;
&lt;br /&gt;
The Government&#039;s intention has been revealed in two official letters (one dated &lt;a href=&quot;tinymce/uploaded/GoI%20Letter%20on%20DBT%20dated%2010%20Feb%202015.pdf&quot; title=&quot;10 Feb&quot;&gt;10 February 2015&lt;/a&gt; and another dated &lt;a href=&quot;tinymce/uploaded/GoI%20letter%20on%20DBT%20dated%2011%20Feb%202015.pdf&quot; title=&quot;11 Feb&quot;&gt;11 February 2015&lt;/a&gt;) that were sent from the Joint Secretary at Department of Food and Public Distribution to the Principal Secretary/ Secretary at Department of Food &amp;amp; Civil Supplies of various states/ UTs. &amp;nbsp;&lt;br /&gt;
&lt;br /&gt;
In the letter dated 10 February 2015, it has been clearly said that the &lt;em&gt;&amp;quot;Government is looking forward to implement DBT for foodgrains initially in the UTs and few districts of the states on pilot basis&amp;quot;&lt;/em&gt;.&lt;br /&gt;
&lt;br /&gt;
Despite various arguments and evidence put against cash transfers vis-a-vis PDS to ensure food security (by development economists in the past), the recent official correspondences show that the Ministry of Consumer Affairs is willing to rope in officials from Unique Identification Authority of India (UIDAI)/ National Population Register (NPR) so as to implement the appropriate model of cash transfer by complete digitization of beneficiary data and Aadhaar seeding. &lt;br /&gt;
&lt;br /&gt;
As per the official letter dated 10 February, any of the 3 models/ options (as shown below) can be adopted by states/ UTs for cash transfers: &lt;br /&gt;
&lt;br /&gt;
a. Under the first model, cash transfer of food subsidy can be submitted to bank account of beneficiaries every month. There is complete freedom given to beneficiaries to purchase foodgrains from anywhere in the market. However, for undertaking this model, there has to be adequate supply of foodgrains in the market around the year.&lt;br /&gt;
&lt;br /&gt;
b. Under the second model, fair price shops (FPS) dealers will be supplied foodgrains at minimum support price (MSP) or near market prices. Beneficiaries have to purchase foodgrains from the FPS at designated prices and all transactions are recorded on point-of-sale (PoS) device. The difference of MSP/ designated price and Central Issue Price (CIP) will be credited to the beneficiaries&#039; bank account in advance against actual purchase from FPS. &lt;br /&gt;
&lt;br /&gt;
c. Under the third model, the existing manual process of issuance of foodgrains will be followed, with or without PoS, aided by digitized database seeded with Aadhaar. &amp;nbsp;&lt;br /&gt;
&lt;br /&gt;
It is not clear from the above-mentioned official correspondences whether cash transfers will be indexed with the overall price level to protect the amount of real income transfers, as was actually recommended by the High Level Committee report on FCI restructuring. It has been argued earlier by Right to Food activists that cash transfer cannot ensure food security in the face of price rise, unless it is indexed to inflation. &lt;br /&gt;
&lt;br /&gt;
If the first option of cash transfer is adopted, then public procurement of foodgrains from farmers will be adversely affected, as has been cautioned by the Right to Food Campaign in its press note dated 25 January 2015.&lt;br /&gt;
&lt;br /&gt;
Riding on the claim that 13.2 crore new bank accounts have been opened under the Pradhan Mantri Jan Dhan Yojana in the last six months with coverage of 100% target, the Government seems to be confident of implementing the direct benefits transfer (DBT) of consumer food subsidy.&lt;br /&gt;
&lt;br /&gt;
However, in a &lt;a href=&quot;tinymce/uploaded/Reetika%20PDS.pdf&quot;&gt;study of PDS&lt;/a&gt; undertaken in 9 states during May-June 2011, it was shown that more than two-thirds of the respondents expressed a clear preference for food over cash; less than one-fifth (18 percent) were in favour of cash over food. In states where PDS was running well, majority of the respondents preferred food over cash transfer. &amp;nbsp;&lt;br /&gt;
&lt;br /&gt;
A group of &lt;a href=&quot;../latest-news-updates/reforming-food-corporation-of-india-himanshu-4675364.html&quot;&gt;economists&lt;/a&gt; have recently shown that replacing the PDS with cash transfer will be like throwing out the baby with the bathwater since it has been revealed that PDS, which directly impacts rural poverty, could be revived even in poor states like Odisha, Chhattisgarh and Bihar thanks to the reforms undertaken by the respective state governments. For example, &lt;a href=&quot;../latest-news-updates/understanding-leakages-in-the-public-distribution-system-jean-dreze-and-reetika-khera-4675312.html&quot;&gt;PDS leakage&lt;/a&gt; in Bihar reduced to 24% in 2011-12 from 91% in 2004-05 due to introduction of coupon system, while diversions declined in Chhattisgarh to 3.3% in 2011-12 from 52.0% in 2004-05 as a result of transparency measures adopted plus complete overhauling of PDS. &amp;nbsp;&lt;br /&gt;
&lt;br /&gt;
&lt;strong&gt;&lt;em&gt;References:&lt;br /&gt;
&lt;/em&gt;&lt;/strong&gt;&lt;br /&gt;
Report of the High level Committee on Reorienting the Role and Restructuring of Food Corporation of India, January 2015 (Please &lt;a href=&quot;http://fciweb.nic.in/app/webroot/upload/News/Report%20of%20the%20High%20Level%20Committee%20on%20Reorienting%20the%20Role%20and%20Restructuring%20of%20FCI_English_1.pdf&quot;&gt;click here&lt;/a&gt; to access)&amp;nbsp; &lt;br /&gt;
&lt;br /&gt;
Leakages from the Public Distribution System (PDS) and the way forward - Ashok Gulati and Shweta Saini (2015), ICRIER (Please &lt;a href=&quot;http://icrier.org/pdf/Working_Paper_294.pdf&quot;&gt;click here&lt;/a&gt; to access)&amp;nbsp; &lt;br /&gt;
&lt;br /&gt;
The National Food Security Act 2013 (Please &lt;a href=&quot;tinymce/uploaded/NFSA%202013.pdf&quot;&gt;click here&lt;/a&gt; to access)&lt;br /&gt;
&lt;br /&gt;
The National Food Security Ordinance 2013 (Please &lt;a href=&quot;tinymce/uploaded/NationalFoodSecurityOrdinance2013.pdf&quot;&gt;click here&lt;/a&gt; to access)&lt;br /&gt;
&lt;br /&gt;
Address by the President of India, Shri Pranab Mukherjee to the Joint Session of both houses of Parliament , Press Information Bureau, 23 February 2015, &lt;a href=&quot;http://www.pib.nic.in&quot;&gt;www.pib.nic.in&lt;/a&gt; &lt;br /&gt;
&lt;br /&gt;
&lt;a href=&quot;../latest-news-updates/centre-takes-steps-to-convert-pds-to-cash-transfers-nitin-sethi-surabhi-agarwal-4675398.html&quot;&gt;Centre takes steps to convert PDS to cash transfers&lt;/a&gt; -Nitin Sethi &amp;amp; Surabhi Agarwal, Business Standard, 24 February, 2015 &lt;br /&gt;
&lt;br /&gt;
&lt;a href=&quot;../interviews/prof-jean-dreze-noted-economist-and-former-member-of-the-national-advisory-council-interviewed-by-mayank-mishra-4675390.html&quot;&gt;Prof. Jean Dreze, noted economist and former member of the National Advisory Council&lt;/a&gt;, interviewed by Mayank Mishra, Business Standard, 23 February, 2015&amp;nbsp; 
&lt;/div&gt;
&lt;div align=&quot;justify&quot;&gt;
&amp;nbsp;
&lt;/div&gt;
&lt;div align=&quot;justify&quot;&gt;
&lt;a href=&quot;../latest-news-updates/understanding-leakages-in-the-public-distribution-system-jean-dreze-and-reetika-khera-4675312.html&quot;&gt;Understanding Leakages in the Public Distribution System&lt;/a&gt; -Jean Dreze and Reetika Khera, Economic and Political Weekly, Vol-L, No. 7, February 14, 2015&amp;nbsp; &lt;br /&gt;
&lt;/div&gt;
&lt;div align=&quot;justify&quot;&gt;
&lt;br /&gt;
&lt;a href=&quot;../latest-news-updates/food-insecurity-tk-rajalakshmi-4675382.html&quot;&gt;Food insecurity&lt;/a&gt; -TK Rajalakshmi, Frontline, 6 March, 2015&amp;nbsp; &lt;br /&gt;
&lt;br /&gt;
&#039;&lt;a href=&quot;../news-alerts/039changes-in-pds-may-affect-food-security-of-half-of-indians039-4675318.html&quot;&gt;Changes in PDS may affect food security of half of Indians&lt;/a&gt;&#039;&amp;nbsp; &lt;br /&gt;
&lt;br /&gt;
&lt;a href=&quot;../latest-news-updates/fci-reforms-prescription-to-cure-or-kill-roshan-kishore-4675181.html&quot;&gt;FCI reforms: prescription to cure or kill?&lt;/a&gt; -Roshan Kishore, Livemint.com, 27 January, 2015&amp;nbsp; &lt;br /&gt;
&lt;br /&gt;
&lt;a href=&quot;../latest-news-updates/water-for-the-leeward-india-jean-dreze-and-reetika-khera-24521.html&quot;&gt;Water For The Leeward India&lt;/a&gt; -Jean Dreze and Reetika Khera, Outlook, 24 March, 2014 &lt;br /&gt;
&lt;br /&gt;
&lt;a href=&quot;../latest-news-updates/public-distribution-system-reforms-and-consumption-in-chhattisgarh-prasad-krishnamurthy-vikram-pathania-and-sharad-tandon-24265.html&quot;&gt;Public Distribution System Reforms and Consumption in Chhattisgarh&lt;/a&gt; -Prasad Krishnamurthy, Vikram Pathania, and Sharad Tandon, Economic and Political Weekly, Vol-XLIX, No. 8, February 22, 2014&amp;nbsp; &lt;br /&gt;
&lt;br /&gt;
&lt;a href=&quot;http://www.business-standard.com/article/economy-policy/there-seems-to-be-at-least-40-leakage-in-our-targeted-pds-system-ajay-chhibber-114020200447_1.html&quot;&gt;Ajay Chhibber, Director General of the IEO&lt;/a&gt;, a former assistant secretary general of the UN Development Programme, interviewed by Sanjeeb Mukherjee, Business Standard, 3 February, 2014&amp;nbsp;&amp;nbsp;&amp;nbsp; &lt;br /&gt;
&lt;br /&gt;
&lt;a href=&quot;../latest-news-updates/rural-poverty-and-the-public-distribution-system-jean-dreze-and-reetika-khera-23277.html&quot;&gt;Rural Poverty and the Public Distribution System&lt;/a&gt;-Jean Dreze and Reetika Khera, Economic and Political Weekly, Vol-XLVIII, No. 45-46, November 16, 2013&amp;nbsp;&amp;nbsp; &lt;br /&gt;
&lt;br /&gt;
&lt;a href=&quot;../docs/335reforming-the-pds-lessons-from-chhattisgarh.pdf&quot;&gt;Reforming the Public Distribution System&lt;/a&gt;: Lessons from Chhattisgarh by Raghav Puri, Economic and Political Weekly, February 4, 2012&amp;nbsp; &lt;br /&gt;
&lt;br /&gt;
&lt;a href=&quot;tinymce/uploaded/Reetika%20PDS.pdf&quot;&gt;Revival of the Public Distribution System&lt;/a&gt; -Reetika Khera, Economic and Political Weekly, November 5, 2011, Vol xlvi, No. 44 &amp;amp; 45&amp;nbsp; &lt;br /&gt;
&lt;br /&gt;
&lt;a href=&quot;http://www.cdedse.org/pdf/work198.pdf&quot;&gt;Trends in diversion of PDS grain&lt;/a&gt; -Reetika Khera (2011), Working Paper No. 198, Centre for Development Economics, Department of Economics, Delhi School of Economics &lt;br /&gt;
&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp; &lt;br /&gt;
&lt;a href=&quot;http://web.iitd.ac.in/~reetika/projects.html&quot;&gt;PEEP survey 2013 and PDS Survey 2011&lt;/a&gt;&amp;nbsp;&amp;nbsp; &lt;br /&gt;
&lt;br /&gt;
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$articleid = (int) 27350
$metaTitle = &#039;NEWS ALERTS | Is the Govt doing away with PDS?&#039;
$metaKeywords = &#039;PDS,Public Distribution System,cash transfers,cash transfer,Right to Food,Food Security,Direct Benefit Transfer&#039;
$metaDesc = &#039;

Following the recommendations of the Shanta Kumar Committee report on restructuring of the Food Corporation of India (FCI), there are signs that the Central Government is in a hurry to replace the Public Distribution System (PDS) with cash transfers. 

The...&#039;
$disp = &#039;&lt;br /&gt;&lt;div align=&quot;justify&quot;&gt;Following the recommendations of the Shanta Kumar Committee report on restructuring of the Food Corporation of India (FCI), there are signs that the Central Government is in a hurry to replace the &lt;a href=&quot;https://im4change.in/hunger-hdi/pds-ration-food-security-42.html&quot; title=&quot;https://im4change.in/hunger-hdi/pds-ration-food-security-42.html&quot;&gt;Public Distribution System&lt;/a&gt; (PDS) with cash transfers. &lt;br /&gt;&lt;br /&gt;The Government&#039;s intention has been revealed in two official letters (one dated &lt;a href=&quot;https://im4change.in/siteadmin/tinymce/uploaded/GoI%20Letter%20on%20DBT%20dated%2010%20Feb%202015.pdf&quot; title=&quot;10 Feb&quot; title=&quot;https://im4change.in/siteadmin/tinymce/uploaded/GoI%20Letter%20on%20DBT%20dated%2010%20Feb%202015.pdf&quot; title=&quot;10 Feb&quot;&gt;10 February 2015&lt;/a&gt; and another dated &lt;a href=&quot;https://im4change.in/siteadmin/tinymce/uploaded/GoI%20letter%20on%20DBT%20dated%2011%20Feb%202015.pdf&quot; title=&quot;11 Feb&quot; title=&quot;https://im4change.in/siteadmin/tinymce/uploaded/GoI%20letter%20on%20DBT%20dated%2011%20Feb%202015.pdf&quot; title=&quot;11 Feb&quot;&gt;11 February 2015&lt;/a&gt;) that were sent from the Joint Secretary at Department of Food and Public Distribution to the Principal Secretary/ Secretary at Department of Food &amp;amp; Civil Supplies of various states/ UTs. &amp;nbsp;&lt;br /&gt;&lt;br /&gt;In the letter dated 10 February 2015, it has been clearly said that the &lt;em&gt;&amp;quot;Government is looking forward to implement DBT for foodgrains initially in the UTs and few districts of the states on pilot basis&amp;quot;&lt;/em&gt;.&lt;br /&gt;&lt;br /&gt;Despite various arguments and evidence put against cash transfers vis-a-vis PDS to ensure food security (by development economists in the past), the recent official correspondences show that the Ministry of Consumer Affairs is willing to rope in officials from Unique Identification Authority of India (UIDAI)/ National Population Register (NPR) so as to implement the appropriate model of cash transfer by complete digitization of beneficiary data and Aadhaar seeding. &lt;br /&gt;&lt;br /&gt;As per the official letter dated 10 February, any of the 3 models/ options (as shown below) can be adopted by states/ UTs for cash transfers: &lt;br /&gt;&lt;br /&gt;a. Under the first model, cash transfer of food subsidy can be submitted to bank account of beneficiaries every month. There is complete freedom given to beneficiaries to purchase foodgrains from anywhere in the market. However, for undertaking this model, there has to be adequate supply of foodgrains in the market around the year.&lt;br /&gt;&lt;br /&gt;b. Under the second model, fair price shops (FPS) dealers will be supplied foodgrains at minimum support price (MSP) or near market prices. Beneficiaries have to purchase foodgrains from the FPS at designated prices and all transactions are recorded on point-of-sale (PoS) device. The difference of MSP/ designated price and Central Issue Price (CIP) will be credited to the beneficiaries&#039; bank account in advance against actual purchase from FPS. &lt;br /&gt;&lt;br /&gt;c. Under the third model, the existing manual process of issuance of foodgrains will be followed, with or without PoS, aided by digitized database seeded with Aadhaar. &amp;nbsp;&lt;br /&gt;&lt;br /&gt;It is not clear from the above-mentioned official correspondences whether cash transfers will be indexed with the overall price level to protect the amount of real income transfers, as was actually recommended by the High Level Committee report on FCI restructuring. It has been argued earlier by Right to Food activists that cash transfer cannot ensure food security in the face of price rise, unless it is indexed to inflation. &lt;br /&gt;&lt;br /&gt;If the first option of cash transfer is adopted, then public procurement of foodgrains from farmers will be adversely affected, as has been cautioned by the Right to Food Campaign in its press note dated 25 January 2015.&lt;br /&gt;&lt;br /&gt;Riding on the claim that 13.2 crore new bank accounts have been opened under the Pradhan Mantri Jan Dhan Yojana in the last six months with coverage of 100% target, the Government seems to be confident of implementing the direct benefits transfer (DBT) of consumer food subsidy.&lt;br /&gt;&lt;br /&gt;However, in a &lt;a href=&quot;https://im4change.in/siteadmin/tinymce/uploaded/Reetika%20PDS.pdf&quot; title=&quot;https://im4change.in/siteadmin/tinymce/uploaded/Reetika%20PDS.pdf&quot;&gt;study of PDS&lt;/a&gt; undertaken in 9 states during May-June 2011, it was shown that more than two-thirds of the respondents expressed a clear preference for food over cash; less than one-fifth (18 percent) were in favour of cash over food. In states where PDS was running well, majority of the respondents preferred food over cash transfer. &amp;nbsp;&lt;br /&gt;&lt;br /&gt;A group of &lt;a href=&quot;https://im4change.in/latest-news-updates/reforming-food-corporation-of-india-himanshu-4675364.html&quot; title=&quot;https://im4change.in/latest-news-updates/reforming-food-corporation-of-india-himanshu-4675364.html&quot;&gt;economists&lt;/a&gt; have recently shown that replacing the PDS with cash transfer will be like throwing out the baby with the bathwater since it has been revealed that PDS, which directly impacts rural poverty, could be revived even in poor states like Odisha, Chhattisgarh and Bihar thanks to the reforms undertaken by the respective state governments. For example, &lt;a href=&quot;https://im4change.in/latest-news-updates/understanding-leakages-in-the-public-distribution-system-jean-dreze-and-reetika-khera-4675312.html&quot; title=&quot;https://im4change.in/latest-news-updates/understanding-leakages-in-the-public-distribution-system-jean-dreze-and-reetika-khera-4675312.html&quot;&gt;PDS leakage&lt;/a&gt; in Bihar reduced to 24% in 2011-12 from 91% in 2004-05 due to introduction of coupon system, while diversions declined in Chhattisgarh to 3.3% in 2011-12 from 52.0% in 2004-05 as a result of transparency measures adopted plus complete overhauling of PDS. &amp;nbsp;&lt;br /&gt;&lt;br /&gt;&lt;strong&gt;&lt;em&gt;References:&lt;br /&gt;&lt;/em&gt;&lt;/strong&gt;&lt;br /&gt;Report of the High level Committee on Reorienting the Role and Restructuring of Food Corporation of India, January 2015 (Please &lt;a href=&quot;http://fciweb.nic.in/app/webroot/upload/News/Report%20of%20the%20High%20Level%20Committee%20on%20Reorienting%20the%20Role%20and%20Restructuring%20of%20FCI_English_1.pdf&quot; title=&quot;http://fciweb.nic.in/app/webroot/upload/News/Report%20of%20the%20High%20Level%20Committee%20on%20Reorienting%20the%20Role%20and%20Restructuring%20of%20FCI_English_1.pdf&quot;&gt;click here&lt;/a&gt; to access)&amp;nbsp; &lt;br /&gt;&lt;br /&gt;Leakages from the Public Distribution System (PDS) and the way forward - Ashok Gulati and Shweta Saini (2015), ICRIER (Please &lt;a href=&quot;http://icrier.org/pdf/Working_Paper_294.pdf&quot; title=&quot;http://icrier.org/pdf/Working_Paper_294.pdf&quot;&gt;click here&lt;/a&gt; to access)&amp;nbsp; &lt;br /&gt;&lt;br /&gt;The National Food Security Act 2013 (Please &lt;a href=&quot;https://im4change.in/siteadmin/tinymce/uploaded/NFSA%202013.pdf&quot; title=&quot;https://im4change.in/siteadmin/tinymce/uploaded/NFSA%202013.pdf&quot;&gt;click here&lt;/a&gt; to access)&lt;br /&gt;&lt;br /&gt;The National Food Security Ordinance 2013 (Please &lt;a href=&quot;https://im4change.in/siteadmin/tinymce/uploaded/NationalFoodSecurityOrdinance2013.pdf&quot; title=&quot;https://im4change.in/siteadmin/tinymce/uploaded/NationalFoodSecurityOrdinance2013.pdf&quot;&gt;click here&lt;/a&gt; to access)&lt;br /&gt;&lt;br /&gt;Address by the President of India, Shri Pranab Mukherjee to the Joint Session of both houses of Parliament , Press Information Bureau, 23 February 2015, &lt;a href=&quot;http://www.pib.nic.in&quot; title=&quot;http://www.pib.nic.in&quot;&gt;www.pib.nic.in&lt;/a&gt; &lt;br /&gt;&lt;br /&gt;&lt;a href=&quot;https://im4change.in/latest-news-updates/centre-takes-steps-to-convert-pds-to-cash-transfers-nitin-sethi-surabhi-agarwal-4675398.html&quot; title=&quot;https://im4change.in/latest-news-updates/centre-takes-steps-to-convert-pds-to-cash-transfers-nitin-sethi-surabhi-agarwal-4675398.html&quot;&gt;Centre takes steps to convert PDS to cash transfers&lt;/a&gt; -Nitin Sethi &amp;amp; Surabhi Agarwal, Business Standard, 24 February, 2015 &lt;br /&gt;&lt;br /&gt;&lt;a href=&quot;https://im4change.in/interviews/prof-jean-dreze-noted-economist-and-former-member-of-the-national-advisory-council-interviewed-by-mayank-mishra-4675390.html&quot; title=&quot;https://im4change.in/interviews/prof-jean-dreze-noted-economist-and-former-member-of-the-national-advisory-council-interviewed-by-mayank-mishra-4675390.html&quot;&gt;Prof. Jean Dreze, noted economist and former member of the&lt;br /&gt; National Advisory Council&lt;/a&gt;, interviewed by Mayank Mishra, Business Standard, 23 February, 2015&amp;nbsp; &lt;/div&gt;&lt;div align=&quot;justify&quot;&gt;&amp;nbsp;&lt;/div&gt;&lt;div align=&quot;justify&quot;&gt;&lt;a href=&quot;https://im4change.in/latest-news-updates/understanding-leakages-in-the-public-distribution-system-jean-dreze-and-reetika-khera-4675312.html&quot; title=&quot;https://im4change.in/latest-news-updates/understanding-leakages-in-the-public-distribution-system-jean-dreze-and-reetika-khera-4675312.html&quot;&gt;Understanding Leakages in the Public Distribution System&lt;/a&gt; -Jean Dreze and Reetika Khera, Economic and Political Weekly, Vol-L, No. 7, February 14, 2015&amp;nbsp; &lt;br /&gt;&lt;/div&gt;&lt;div align=&quot;justify&quot;&gt;&lt;br /&gt;&lt;a href=&quot;https://im4change.in/latest-news-updates/food-insecurity-tk-rajalakshmi-4675382.html&quot; title=&quot;https://im4change.in/latest-news-updates/food-insecurity-tk-rajalakshmi-4675382.html&quot;&gt;Food insecurity&lt;/a&gt; -TK Rajalakshmi, Frontline, 6 March, 2015&amp;nbsp; &lt;br /&gt;&lt;br /&gt;&#039;&lt;a href=&quot;https://im4change.in/news-alerts/039changes-in-pds-may-affect-food-security-of-half-of-indians039-4675318.html&quot; title=&quot;https://im4change.in/news-alerts/039changes-in-pds-may-affect-food-security-of-half-of-indians039-4675318.html&quot;&gt;Changes in PDS may affect food security of half of Indians&lt;/a&gt;&#039;&amp;nbsp; &lt;br /&gt;&lt;br /&gt;&lt;a href=&quot;https://im4change.in/latest-news-updates/fci-reforms-prescription-to-cure-or-kill-roshan-kishore-4675181.html&quot; title=&quot;https://im4change.in/latest-news-updates/fci-reforms-prescription-to-cure-or-kill-roshan-kishore-4675181.html&quot;&gt;FCI reforms: prescription to cure or kill?&lt;/a&gt; -Roshan Kishore, Livemint.com, 27 January, 2015&amp;nbsp; &lt;br /&gt;&lt;br /&gt;&lt;a href=&quot;https://im4change.in/latest-news-updates/water-for-the-leeward-india-jean-dreze-and-reetika-khera-24521.html&quot; title=&quot;https://im4change.in/latest-news-updates/water-for-the-leeward-india-jean-dreze-and-reetika-khera-24521.html&quot;&gt;Water For The Leeward India&lt;/a&gt; -Jean Dreze and Reetika Khera, Outlook, 24 March, 2014 &lt;br /&gt;&lt;br /&gt;&lt;a href=&quot;https://im4change.in/latest-news-updates/public-distribution-system-reforms-and-consumption-in-chhattisgarh-prasad-krishnamurthy-vikram-pathania-and-sharad-tandon-24265.html&quot; title=&quot;https://im4change.in/latest-news-updates/public-distribution-system-reforms-and-consumption-in-chhattisgarh-prasad-krishnamurthy-vikram-pathania-and-sharad-tandon-24265.html&quot;&gt;Public Distribution System Reforms and Consumption in Chha&lt;br /&gt;ttisgarh&lt;/a&gt; -Prasad Krishnamurthy, Vikram Pathania, and Sharad Tandon, Economic and Political Weekly, Vol-XLIX, No. 8, February 22, 2014&amp;nbsp; &lt;br /&gt;&lt;br /&gt;&lt;a href=&quot;http://www.business-standard.com/article/economy-policy/there-seems-to-be-at-least-40-leakage-in-our-targeted-pds-system-ajay-chhibber-114020200447_1.html&quot; title=&quot;http://www.business-standard.com/article/economy-policy/there-seems-to-be-at-least-40-leakage-in-our-targeted-pds-system-ajay-chhibber-114020200447_1.html&quot;&gt;Ajay Chhibber, Director General of the IEO&lt;/a&gt;, a former assistant secretary general of the UN Development Programme, interviewed by Sanjeeb Mukherjee, Business Standard, 3 February, 2014&amp;nbsp;&amp;nbsp;&amp;nbsp; &lt;br /&gt;&lt;br /&gt;&lt;a href=&quot;https://im4change.in/latest-news-updates/rural-poverty-and-the-public-distribution-system-jean-dreze-and-reetika-khera-23277.html&quot; title=&quot;https://im4change.in/latest-news-updates/rural-poverty-and-the-public-distribution-system-jean-dreze-and-reetika-khera-23277.html&quot;&gt;Rural Poverty and the Public Distribution System&lt;/a&gt;-Jean Dreze and Reetika Khera, Economic and Political Weekly, Vol-XLVIII, No. 45-46, November 16, 2013&amp;nbsp;&amp;nbsp; &lt;br /&gt;&lt;br /&gt;&lt;a href=&quot;https://im4change.in/docs/335reforming-the-pds-lessons-from-chhattisgarh.pdf&quot; title=&quot;https://im4change.in/docs/335reforming-the-pds-lessons-from-chhattisgarh.pdf&quot;&gt;Reforming the Public Distribution System&lt;/a&gt;: Lessons from Chhattisgarh by Raghav Puri, Economic and Political Weekly, February 4, 2012&amp;nbsp; &lt;br /&gt;&lt;br /&gt;&lt;a href=&quot;https://im4change.in/siteadmin/tinymce/uploaded/Reetika%20PDS.pdf&quot; title=&quot;https://im4change.in/siteadmin/tinymce/uploaded/Reetika%20PDS.pdf&quot;&gt;Revival of the Public Distribution System&lt;/a&gt; -Reetika Khera, Economic and Political Weekly, November 5, 2011, Vol xlvi, No. 44 &amp;amp; 45&amp;nbsp; &lt;br /&gt;&lt;br /&gt;&lt;a href=&quot;http://www.cdedse.org/pdf/work198.pdf&quot; title=&quot;http://www.cdedse.org/pdf/work198.pdf&quot;&gt;Trends in diversion of PDS grain&lt;/a&gt; -Reetika Khera (2011), Working Paper No. 198, Centre for Development Economics, Department of Economics, Delhi School of Economics &lt;br /&gt;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp; &lt;br /&gt;&lt;a href=&quot;http://web.iitd.ac.in/~reetika/projects.html&quot; title=&quot;http://web.iitd.ac.in/~reetika/projects.html&quot;&gt;PEEP survey 2013 and PDS Survey 2011&lt;/a&gt;&amp;nbsp;&amp;nbsp; &lt;br /&gt;&lt;br /&gt;&lt;/div&gt;&#039;
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Following the recommendations of the Shanta Kumar Committee report on restructuring of the Food Corporation of India (FCI), there are signs that the Central Government is in a hurry to replace the Public Distribution System (PDS) with cash transfers. 

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                <strong>Is the Govt doing away with PDS?</strong></h1>
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                <br /><div align="justify">Following the recommendations of the Shanta Kumar Committee report on restructuring of the Food Corporation of India (FCI), there are signs that the Central Government is in a hurry to replace the <a href="https://im4change.in/hunger-hdi/pds-ration-food-security-42.html" title="https://im4change.in/hunger-hdi/pds-ration-food-security-42.html">Public Distribution System</a> (PDS) with cash transfers. <br /><br />The Government's intention has been revealed in two official letters (one dated <a href="https://im4change.in/siteadmin/tinymce/uploaded/GoI%20Letter%20on%20DBT%20dated%2010%20Feb%202015.pdf" title="10 Feb" title="https://im4change.in/siteadmin/tinymce/uploaded/GoI%20Letter%20on%20DBT%20dated%2010%20Feb%202015.pdf" title="10 Feb">10 February 2015</a> and another dated <a href="https://im4change.in/siteadmin/tinymce/uploaded/GoI%20letter%20on%20DBT%20dated%2011%20Feb%202015.pdf" title="11 Feb" title="https://im4change.in/siteadmin/tinymce/uploaded/GoI%20letter%20on%20DBT%20dated%2011%20Feb%202015.pdf" title="11 Feb">11 February 2015</a>) that were sent from the Joint Secretary at Department of Food and Public Distribution to the Principal Secretary/ Secretary at Department of Food &amp; Civil Supplies of various states/ UTs. &nbsp;<br /><br />In the letter dated 10 February 2015, it has been clearly said that the <em>&quot;Government is looking forward to implement DBT for foodgrains initially in the UTs and few districts of the states on pilot basis&quot;</em>.<br /><br />Despite various arguments and evidence put against cash transfers vis-a-vis PDS to ensure food security (by development economists in the past), the recent official correspondences show that the Ministry of Consumer Affairs is willing to rope in officials from Unique Identification Authority of India (UIDAI)/ National Population Register (NPR) so as to implement the appropriate model of cash transfer by complete digitization of beneficiary data and Aadhaar seeding. <br /><br />As per the official letter dated 10 February, any of the 3 models/ options (as shown below) can be adopted by states/ UTs for cash transfers: <br /><br />a. Under the first model, cash transfer of food subsidy can be submitted to bank account of beneficiaries every month. There is complete freedom given to beneficiaries to purchase foodgrains from anywhere in the market. However, for undertaking this model, there has to be adequate supply of foodgrains in the market around the year.<br /><br />b. Under the second model, fair price shops (FPS) dealers will be supplied foodgrains at minimum support price (MSP) or near market prices. Beneficiaries have to purchase foodgrains from the FPS at designated prices and all transactions are recorded on point-of-sale (PoS) device. The difference of MSP/ designated price and Central Issue Price (CIP) will be credited to the beneficiaries' bank account in advance against actual purchase from FPS. <br /><br />c. Under the third model, the existing manual process of issuance of foodgrains will be followed, with or without PoS, aided by digitized database seeded with Aadhaar. &nbsp;<br /><br />It is not clear from the above-mentioned official correspondences whether cash transfers will be indexed with the overall price level to protect the amount of real income transfers, as was actually recommended by the High Level Committee report on FCI restructuring. It has been argued earlier by Right to Food activists that cash transfer cannot ensure food security in the face of price rise, unless it is indexed to inflation. <br /><br />If the first option of cash transfer is adopted, then public procurement of foodgrains from farmers will be adversely affected, as has been cautioned by the Right to Food Campaign in its press note dated 25 January 2015.<br /><br />Riding on the claim that 13.2 crore new bank accounts have been opened under the Pradhan Mantri Jan Dhan Yojana in the last six months with coverage of 100% target, the Government seems to be confident of implementing the direct benefits transfer (DBT) of consumer food subsidy.<br /><br />However, in a <a href="https://im4change.in/siteadmin/tinymce/uploaded/Reetika%20PDS.pdf" title="https://im4change.in/siteadmin/tinymce/uploaded/Reetika%20PDS.pdf">study of PDS</a> undertaken in 9 states during May-June 2011, it was shown that more than two-thirds of the respondents expressed a clear preference for food over cash; less than one-fifth (18 percent) were in favour of cash over food. In states where PDS was running well, majority of the respondents preferred food over cash transfer. &nbsp;<br /><br />A group of <a href="https://im4change.in/latest-news-updates/reforming-food-corporation-of-india-himanshu-4675364.html" title="https://im4change.in/latest-news-updates/reforming-food-corporation-of-india-himanshu-4675364.html">economists</a> have recently shown that replacing the PDS with cash transfer will be like throwing out the baby with the bathwater since it has been revealed that PDS, which directly impacts rural poverty, could be revived even in poor states like Odisha, Chhattisgarh and Bihar thanks to the reforms undertaken by the respective state governments. For example, <a href="https://im4change.in/latest-news-updates/understanding-leakages-in-the-public-distribution-system-jean-dreze-and-reetika-khera-4675312.html" title="https://im4change.in/latest-news-updates/understanding-leakages-in-the-public-distribution-system-jean-dreze-and-reetika-khera-4675312.html">PDS leakage</a> in Bihar reduced to 24% in 2011-12 from 91% in 2004-05 due to introduction of coupon system, while diversions declined in Chhattisgarh to 3.3% in 2011-12 from 52.0% in 2004-05 as a result of transparency measures adopted plus complete overhauling of PDS. &nbsp;<br /><br /><strong><em>References:<br /></em></strong><br />Report of the High level Committee on Reorienting the Role and Restructuring of Food Corporation of India, January 2015 (Please <a href="http://fciweb.nic.in/app/webroot/upload/News/Report%20of%20the%20High%20Level%20Committee%20on%20Reorienting%20the%20Role%20and%20Restructuring%20of%20FCI_English_1.pdf" title="http://fciweb.nic.in/app/webroot/upload/News/Report%20of%20the%20High%20Level%20Committee%20on%20Reorienting%20the%20Role%20and%20Restructuring%20of%20FCI_English_1.pdf">click here</a> to access)&nbsp; <br /><br />Leakages from the Public Distribution System (PDS) and the way forward - Ashok Gulati and Shweta Saini (2015), ICRIER (Please <a href="http://icrier.org/pdf/Working_Paper_294.pdf" title="http://icrier.org/pdf/Working_Paper_294.pdf">click here</a> to access)&nbsp; <br /><br />The National Food Security Act 2013 (Please <a href="https://im4change.in/siteadmin/tinymce/uploaded/NFSA%202013.pdf" title="https://im4change.in/siteadmin/tinymce/uploaded/NFSA%202013.pdf">click here</a> to access)<br /><br />The National Food Security Ordinance 2013 (Please <a href="https://im4change.in/siteadmin/tinymce/uploaded/NationalFoodSecurityOrdinance2013.pdf" title="https://im4change.in/siteadmin/tinymce/uploaded/NationalFoodSecurityOrdinance2013.pdf">click here</a> to access)<br /><br />Address by the President of India, Shri Pranab Mukherjee to the Joint Session of both houses of Parliament , Press Information Bureau, 23 February 2015, <a href="http://www.pib.nic.in" title="http://www.pib.nic.in">www.pib.nic.in</a> <br /><br /><a href="https://im4change.in/latest-news-updates/centre-takes-steps-to-convert-pds-to-cash-transfers-nitin-sethi-surabhi-agarwal-4675398.html" title="https://im4change.in/latest-news-updates/centre-takes-steps-to-convert-pds-to-cash-transfers-nitin-sethi-surabhi-agarwal-4675398.html">Centre takes steps to convert PDS to cash transfers</a> -Nitin Sethi &amp; Surabhi Agarwal, Business Standard, 24 February, 2015 <br /><br /><a href="https://im4change.in/interviews/prof-jean-dreze-noted-economist-and-former-member-of-the-national-advisory-council-interviewed-by-mayank-mishra-4675390.html" title="https://im4change.in/interviews/prof-jean-dreze-noted-economist-and-former-member-of-the-national-advisory-council-interviewed-by-mayank-mishra-4675390.html">Prof. Jean Dreze, noted economist and former member of the<br /> National Advisory Council</a>, interviewed by Mayank Mishra, Business Standard, 23 February, 2015&nbsp; </div><div align="justify">&nbsp;</div><div align="justify"><a href="https://im4change.in/latest-news-updates/understanding-leakages-in-the-public-distribution-system-jean-dreze-and-reetika-khera-4675312.html" title="https://im4change.in/latest-news-updates/understanding-leakages-in-the-public-distribution-system-jean-dreze-and-reetika-khera-4675312.html">Understanding Leakages in the Public Distribution System</a> -Jean Dreze and Reetika Khera, Economic and Political Weekly, Vol-L, No. 7, February 14, 2015&nbsp; <br /></div><div align="justify"><br /><a href="https://im4change.in/latest-news-updates/food-insecurity-tk-rajalakshmi-4675382.html" title="https://im4change.in/latest-news-updates/food-insecurity-tk-rajalakshmi-4675382.html">Food insecurity</a> -TK Rajalakshmi, Frontline, 6 March, 2015&nbsp; <br /><br />'<a href="https://im4change.in/news-alerts/039changes-in-pds-may-affect-food-security-of-half-of-indians039-4675318.html" title="https://im4change.in/news-alerts/039changes-in-pds-may-affect-food-security-of-half-of-indians039-4675318.html">Changes in PDS may affect food security of half of Indians</a>'&nbsp; <br /><br /><a href="https://im4change.in/latest-news-updates/fci-reforms-prescription-to-cure-or-kill-roshan-kishore-4675181.html" title="https://im4change.in/latest-news-updates/fci-reforms-prescription-to-cure-or-kill-roshan-kishore-4675181.html">FCI reforms: prescription to cure or kill?</a> -Roshan Kishore, Livemint.com, 27 January, 2015&nbsp; <br /><br /><a href="https://im4change.in/latest-news-updates/water-for-the-leeward-india-jean-dreze-and-reetika-khera-24521.html" title="https://im4change.in/latest-news-updates/water-for-the-leeward-india-jean-dreze-and-reetika-khera-24521.html">Water For The Leeward India</a> -Jean Dreze and Reetika Khera, Outlook, 24 March, 2014 <br /><br /><a href="https://im4change.in/latest-news-updates/public-distribution-system-reforms-and-consumption-in-chhattisgarh-prasad-krishnamurthy-vikram-pathania-and-sharad-tandon-24265.html" title="https://im4change.in/latest-news-updates/public-distribution-system-reforms-and-consumption-in-chhattisgarh-prasad-krishnamurthy-vikram-pathania-and-sharad-tandon-24265.html">Public Distribution System Reforms and Consumption in Chha<br />ttisgarh</a> -Prasad Krishnamurthy, Vikram Pathania, and Sharad Tandon, Economic and Political Weekly, Vol-XLIX, No. 8, February 22, 2014&nbsp; <br /><br /><a href="http://www.business-standard.com/article/economy-policy/there-seems-to-be-at-least-40-leakage-in-our-targeted-pds-system-ajay-chhibber-114020200447_1.html" title="http://www.business-standard.com/article/economy-policy/there-seems-to-be-at-least-40-leakage-in-our-targeted-pds-system-ajay-chhibber-114020200447_1.html">Ajay Chhibber, Director General of the IEO</a>, a former assistant secretary general of the UN Development Programme, interviewed by Sanjeeb Mukherjee, Business Standard, 3 February, 2014&nbsp;&nbsp;&nbsp; <br /><br /><a href="https://im4change.in/latest-news-updates/rural-poverty-and-the-public-distribution-system-jean-dreze-and-reetika-khera-23277.html" title="https://im4change.in/latest-news-updates/rural-poverty-and-the-public-distribution-system-jean-dreze-and-reetika-khera-23277.html">Rural Poverty and the Public Distribution System</a>-Jean Dreze and Reetika Khera, Economic and Political Weekly, Vol-XLVIII, No. 45-46, November 16, 2013&nbsp;&nbsp; <br /><br /><a href="https://im4change.in/docs/335reforming-the-pds-lessons-from-chhattisgarh.pdf" title="https://im4change.in/docs/335reforming-the-pds-lessons-from-chhattisgarh.pdf">Reforming the Public Distribution System</a>: Lessons from Chhattisgarh by Raghav Puri, Economic and Political Weekly, February 4, 2012&nbsp; <br /><br /><a href="https://im4change.in/siteadmin/tinymce/uploaded/Reetika%20PDS.pdf" title="https://im4change.in/siteadmin/tinymce/uploaded/Reetika%20PDS.pdf">Revival of the Public Distribution System</a> -Reetika Khera, Economic and Political Weekly, November 5, 2011, Vol xlvi, No. 44 &amp; 45&nbsp; <br /><br /><a href="http://www.cdedse.org/pdf/work198.pdf" title="http://www.cdedse.org/pdf/work198.pdf">Trends in diversion of PDS grain</a> -Reetika Khera (2011), Working Paper No. 198, Centre for Development Economics, Department of Economics, Delhi School of Economics <br />&nbsp;&nbsp;&nbsp;&nbsp; <br /><a href="http://web.iitd.ac.in/~reetika/projects.html" title="http://web.iitd.ac.in/~reetika/projects.html">PEEP survey 2013 and PDS Survey 2011</a>&nbsp;&nbsp; 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		&#039;title&#039; =&gt; &#039;Is the Govt doing away with PDS?&#039;,
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&lt;div align=&quot;justify&quot;&gt;
Following the recommendations of the Shanta Kumar Committee report on restructuring of the Food Corporation of India (FCI), there are signs that the Central Government is in a hurry to replace the &lt;a href=&quot;../hunger-hdi/pds-ration-food-security-42.html&quot;&gt;Public Distribution System&lt;/a&gt; (PDS) with cash transfers. &lt;br /&gt;
&lt;br /&gt;
The Government&#039;s intention has been revealed in two official letters (one dated &lt;a href=&quot;tinymce/uploaded/GoI%20Letter%20on%20DBT%20dated%2010%20Feb%202015.pdf&quot; title=&quot;10 Feb&quot;&gt;10 February 2015&lt;/a&gt; and another dated &lt;a href=&quot;tinymce/uploaded/GoI%20letter%20on%20DBT%20dated%2011%20Feb%202015.pdf&quot; title=&quot;11 Feb&quot;&gt;11 February 2015&lt;/a&gt;) that were sent from the Joint Secretary at Department of Food and Public Distribution to the Principal Secretary/ Secretary at Department of Food &amp;amp; Civil Supplies of various states/ UTs. &amp;nbsp;&lt;br /&gt;
&lt;br /&gt;
In the letter dated 10 February 2015, it has been clearly said that the &lt;em&gt;&amp;quot;Government is looking forward to implement DBT for foodgrains initially in the UTs and few districts of the states on pilot basis&amp;quot;&lt;/em&gt;.&lt;br /&gt;
&lt;br /&gt;
Despite various arguments and evidence put against cash transfers vis-a-vis PDS to ensure food security (by development economists in the past), the recent official correspondences show that the Ministry of Consumer Affairs is willing to rope in officials from Unique Identification Authority of India (UIDAI)/ National Population Register (NPR) so as to implement the appropriate model of cash transfer by complete digitization of beneficiary data and Aadhaar seeding. &lt;br /&gt;
&lt;br /&gt;
As per the official letter dated 10 February, any of the 3 models/ options (as shown below) can be adopted by states/ UTs for cash transfers: &lt;br /&gt;
&lt;br /&gt;
a. Under the first model, cash transfer of food subsidy can be submitted to bank account of beneficiaries every month. There is complete freedom given to beneficiaries to purchase foodgrains from anywhere in the market. However, for undertaking this model, there has to be adequate supply of foodgrains in the market around the year.&lt;br /&gt;
&lt;br /&gt;
b. Under the second model, fair price shops (FPS) dealers will be supplied foodgrains at minimum support price (MSP) or near market prices. Beneficiaries have to purchase foodgrains from the FPS at designated prices and all transactions are recorded on point-of-sale (PoS) device. The difference of MSP/ designated price and Central Issue Price (CIP) will be credited to the beneficiaries&#039; bank account in advance against actual purchase from FPS. &lt;br /&gt;
&lt;br /&gt;
c. Under the third model, the existing manual process of issuance of foodgrains will be followed, with or without PoS, aided by digitized database seeded with Aadhaar. &amp;nbsp;&lt;br /&gt;
&lt;br /&gt;
It is not clear from the above-mentioned official correspondences whether cash transfers will be indexed with the overall price level to protect the amount of real income transfers, as was actually recommended by the High Level Committee report on FCI restructuring. It has been argued earlier by Right to Food activists that cash transfer cannot ensure food security in the face of price rise, unless it is indexed to inflation. &lt;br /&gt;
&lt;br /&gt;
If the first option of cash transfer is adopted, then public procurement of foodgrains from farmers will be adversely affected, as has been cautioned by the Right to Food Campaign in its press note dated 25 January 2015.&lt;br /&gt;
&lt;br /&gt;
Riding on the claim that 13.2 crore new bank accounts have been opened under the Pradhan Mantri Jan Dhan Yojana in the last six months with coverage of 100% target, the Government seems to be confident of implementing the direct benefits transfer (DBT) of consumer food subsidy.&lt;br /&gt;
&lt;br /&gt;
However, in a &lt;a href=&quot;tinymce/uploaded/Reetika%20PDS.pdf&quot;&gt;study of PDS&lt;/a&gt; undertaken in 9 states during May-June 2011, it was shown that more than two-thirds of the respondents expressed a clear preference for food over cash; less than one-fifth (18 percent) were in favour of cash over food. In states where PDS was running well, majority of the respondents preferred food over cash transfer. &amp;nbsp;&lt;br /&gt;
&lt;br /&gt;
A group of &lt;a href=&quot;../latest-news-updates/reforming-food-corporation-of-india-himanshu-4675364.html&quot;&gt;economists&lt;/a&gt; have recently shown that replacing the PDS with cash transfer will be like throwing out the baby with the bathwater since it has been revealed that PDS, which directly impacts rural poverty, could be revived even in poor states like Odisha, Chhattisgarh and Bihar thanks to the reforms undertaken by the respective state governments. For example, &lt;a href=&quot;../latest-news-updates/understanding-leakages-in-the-public-distribution-system-jean-dreze-and-reetika-khera-4675312.html&quot;&gt;PDS leakage&lt;/a&gt; in Bihar reduced to 24% in 2011-12 from 91% in 2004-05 due to introduction of coupon system, while diversions declined in Chhattisgarh to 3.3% in 2011-12 from 52.0% in 2004-05 as a result of transparency measures adopted plus complete overhauling of PDS. &amp;nbsp;&lt;br /&gt;
&lt;br /&gt;
&lt;strong&gt;&lt;em&gt;References:&lt;br /&gt;
&lt;/em&gt;&lt;/strong&gt;&lt;br /&gt;
Report of the High level Committee on Reorienting the Role and Restructuring of Food Corporation of India, January 2015 (Please &lt;a href=&quot;http://fciweb.nic.in/app/webroot/upload/News/Report%20of%20the%20High%20Level%20Committee%20on%20Reorienting%20the%20Role%20and%20Restructuring%20of%20FCI_English_1.pdf&quot;&gt;click here&lt;/a&gt; to access)&amp;nbsp; &lt;br /&gt;
&lt;br /&gt;
Leakages from the Public Distribution System (PDS) and the way forward - Ashok Gulati and Shweta Saini (2015), ICRIER (Please &lt;a href=&quot;http://icrier.org/pdf/Working_Paper_294.pdf&quot;&gt;click here&lt;/a&gt; to access)&amp;nbsp; &lt;br /&gt;
&lt;br /&gt;
The National Food Security Act 2013 (Please &lt;a href=&quot;tinymce/uploaded/NFSA%202013.pdf&quot;&gt;click here&lt;/a&gt; to access)&lt;br /&gt;
&lt;br /&gt;
The National Food Security Ordinance 2013 (Please &lt;a href=&quot;tinymce/uploaded/NationalFoodSecurityOrdinance2013.pdf&quot;&gt;click here&lt;/a&gt; to access)&lt;br /&gt;
&lt;br /&gt;
Address by the President of India, Shri Pranab Mukherjee to the Joint Session of both houses of Parliament , Press Information Bureau, 23 February 2015, &lt;a href=&quot;http://www.pib.nic.in&quot;&gt;www.pib.nic.in&lt;/a&gt; &lt;br /&gt;
&lt;br /&gt;
&lt;a href=&quot;../latest-news-updates/centre-takes-steps-to-convert-pds-to-cash-transfers-nitin-sethi-surabhi-agarwal-4675398.html&quot;&gt;Centre takes steps to convert PDS to cash transfers&lt;/a&gt; -Nitin Sethi &amp;amp; Surabhi Agarwal, Business Standard, 24 February, 2015 &lt;br /&gt;
&lt;br /&gt;
&lt;a href=&quot;../interviews/prof-jean-dreze-noted-economist-and-former-member-of-the-national-advisory-council-interviewed-by-mayank-mishra-4675390.html&quot;&gt;Prof. Jean Dreze, noted economist and former member of the National Advisory Council&lt;/a&gt;, interviewed by Mayank Mishra, Business Standard, 23 February, 2015&amp;nbsp; 
&lt;/div&gt;
&lt;div align=&quot;justify&quot;&gt;
&amp;nbsp;
&lt;/div&gt;
&lt;div align=&quot;justify&quot;&gt;
&lt;a href=&quot;../latest-news-updates/understanding-leakages-in-the-public-distribution-system-jean-dreze-and-reetika-khera-4675312.html&quot;&gt;Understanding Leakages in the Public Distribution System&lt;/a&gt; -Jean Dreze and Reetika Khera, Economic and Political Weekly, Vol-L, No. 7, February 14, 2015&amp;nbsp; &lt;br /&gt;
&lt;/div&gt;
&lt;div align=&quot;justify&quot;&gt;
&lt;br /&gt;
&lt;a href=&quot;../latest-news-updates/food-insecurity-tk-rajalakshmi-4675382.html&quot;&gt;Food insecurity&lt;/a&gt; -TK Rajalakshmi, Frontline, 6 March, 2015&amp;nbsp; &lt;br /&gt;
&lt;br /&gt;
&#039;&lt;a href=&quot;../news-alerts/039changes-in-pds-may-affect-food-security-of-half-of-indians039-4675318.html&quot;&gt;Changes in PDS may affect food security of half of Indians&lt;/a&gt;&#039;&amp;nbsp; &lt;br /&gt;
&lt;br /&gt;
&lt;a href=&quot;../latest-news-updates/fci-reforms-prescription-to-cure-or-kill-roshan-kishore-4675181.html&quot;&gt;FCI reforms: prescription to cure or kill?&lt;/a&gt; -Roshan Kishore, Livemint.com, 27 January, 2015&amp;nbsp; &lt;br /&gt;
&lt;br /&gt;
&lt;a href=&quot;../latest-news-updates/water-for-the-leeward-india-jean-dreze-and-reetika-khera-24521.html&quot;&gt;Water For The Leeward India&lt;/a&gt; -Jean Dreze and Reetika Khera, Outlook, 24 March, 2014 &lt;br /&gt;
&lt;br /&gt;
&lt;a href=&quot;../latest-news-updates/public-distribution-system-reforms-and-consumption-in-chhattisgarh-prasad-krishnamurthy-vikram-pathania-and-sharad-tandon-24265.html&quot;&gt;Public Distribution System Reforms and Consumption in Chhattisgarh&lt;/a&gt; -Prasad Krishnamurthy, Vikram Pathania, and Sharad Tandon, Economic and Political Weekly, Vol-XLIX, No. 8, February 22, 2014&amp;nbsp; &lt;br /&gt;
&lt;br /&gt;
&lt;a href=&quot;http://www.business-standard.com/article/economy-policy/there-seems-to-be-at-least-40-leakage-in-our-targeted-pds-system-ajay-chhibber-114020200447_1.html&quot;&gt;Ajay Chhibber, Director General of the IEO&lt;/a&gt;, a former assistant secretary general of the UN Development Programme, interviewed by Sanjeeb Mukherjee, Business Standard, 3 February, 2014&amp;nbsp;&amp;nbsp;&amp;nbsp; &lt;br /&gt;
&lt;br /&gt;
&lt;a href=&quot;../latest-news-updates/rural-poverty-and-the-public-distribution-system-jean-dreze-and-reetika-khera-23277.html&quot;&gt;Rural Poverty and the Public Distribution System&lt;/a&gt;-Jean Dreze and Reetika Khera, Economic and Political Weekly, Vol-XLVIII, No. 45-46, November 16, 2013&amp;nbsp;&amp;nbsp; &lt;br /&gt;
&lt;br /&gt;
&lt;a href=&quot;../docs/335reforming-the-pds-lessons-from-chhattisgarh.pdf&quot;&gt;Reforming the Public Distribution System&lt;/a&gt;: Lessons from Chhattisgarh by Raghav Puri, Economic and Political Weekly, February 4, 2012&amp;nbsp; &lt;br /&gt;
&lt;br /&gt;
&lt;a href=&quot;tinymce/uploaded/Reetika%20PDS.pdf&quot;&gt;Revival of the Public Distribution System&lt;/a&gt; -Reetika Khera, Economic and Political Weekly, November 5, 2011, Vol xlvi, No. 44 &amp;amp; 45&amp;nbsp; &lt;br /&gt;
&lt;br /&gt;
&lt;a href=&quot;http://www.cdedse.org/pdf/work198.pdf&quot;&gt;Trends in diversion of PDS grain&lt;/a&gt; -Reetika Khera (2011), Working Paper No. 198, Centre for Development Economics, Department of Economics, Delhi School of Economics &lt;br /&gt;
&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp; &lt;br /&gt;
&lt;a href=&quot;http://web.iitd.ac.in/~reetika/projects.html&quot;&gt;PEEP survey 2013 and PDS Survey 2011&lt;/a&gt;&amp;nbsp;&amp;nbsp; &lt;br /&gt;
&lt;br /&gt;
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Following the recommendations of the Shanta Kumar Committee report on restructuring of the Food Corporation of India (FCI), there are signs that the Central Government is in a hurry to replace the Public Distribution System (PDS) with cash transfers. 

The...&#039;,
	&#039;disp&#039; =&gt; &#039;&lt;br /&gt;&lt;div align=&quot;justify&quot;&gt;Following the recommendations of the Shanta Kumar Committee report on restructuring of the Food Corporation of India (FCI), there are signs that the Central Government is in a hurry to replace the &lt;a href=&quot;https://im4change.in/hunger-hdi/pds-ration-food-security-42.html&quot; title=&quot;https://im4change.in/hunger-hdi/pds-ration-food-security-42.html&quot;&gt;Public Distribution System&lt;/a&gt; (PDS) with cash transfers. &lt;br /&gt;&lt;br /&gt;The Government&#039;s intention has been revealed in two official letters (one dated &lt;a href=&quot;https://im4change.in/siteadmin/tinymce/uploaded/GoI%20Letter%20on%20DBT%20dated%2010%20Feb%202015.pdf&quot; title=&quot;10 Feb&quot; title=&quot;https://im4change.in/siteadmin/tinymce/uploaded/GoI%20Letter%20on%20DBT%20dated%2010%20Feb%202015.pdf&quot; title=&quot;10 Feb&quot;&gt;10 February 2015&lt;/a&gt; and another dated &lt;a href=&quot;https://im4change.in/siteadmin/tinymce/uploaded/GoI%20letter%20on%20DBT%20dated%2011%20Feb%202015.pdf&quot; title=&quot;11 Feb&quot; title=&quot;https://im4change.in/siteadmin/tinymce/uploaded/GoI%20letter%20on%20DBT%20dated%2011%20Feb%202015.pdf&quot; title=&quot;11 Feb&quot;&gt;11 February 2015&lt;/a&gt;) that were sent from the Joint Secretary at Department of Food and Public Distribution to the Principal Secretary/ Secretary at Department of Food &amp;amp; Civil Supplies of various states/ UTs. &amp;nbsp;&lt;br /&gt;&lt;br /&gt;In the letter dated 10 February 2015, it has been clearly said that the &lt;em&gt;&amp;quot;Government is looking forward to implement DBT for foodgrains initially in the UTs and few districts of the states on pilot basis&amp;quot;&lt;/em&gt;.&lt;br /&gt;&lt;br /&gt;Despite various arguments and evidence put against cash transfers vis-a-vis PDS to ensure food security (by development economists in the past), the recent official correspondences show that the Ministry of Consumer Affairs is willing to rope in officials from Unique Identification Authority of India (UIDAI)/ National Population Register (NPR) so as to implement the appropriate model of cash transfer by complete digitization of beneficiary data and Aadhaar seeding. &lt;br /&gt;&lt;br /&gt;As per the official letter dated 10 February, any of the 3 models/ options (as shown below) can be adopted by states/ UTs for cash transfers: &lt;br /&gt;&lt;br /&gt;a. Under the first model, cash transfer of food subsidy can be submitted to bank account of beneficiaries every month. There is complete freedom given to beneficiaries to purchase foodgrains from anywhere in the market. However, for undertaking this model, there has to be adequate supply of foodgrains in the market around the year.&lt;br /&gt;&lt;br /&gt;b. Under the second model, fair price shops (FPS) dealers will be supplied foodgrains at minimum support price (MSP) or near market prices. Beneficiaries have to purchase foodgrains from the FPS at designated prices and all transactions are recorded on point-of-sale (PoS) device. The difference of MSP/ designated price and Central Issue Price (CIP) will be credited to the beneficiaries&#039; bank account in advance against actual purchase from FPS. &lt;br /&gt;&lt;br /&gt;c. Under the third model, the existing manual process of issuance of foodgrains will be followed, with or without PoS, aided by digitized database seeded with Aadhaar. &amp;nbsp;&lt;br /&gt;&lt;br /&gt;It is not clear from the above-mentioned official correspondences whether cash transfers will be indexed with the overall price level to protect the amount of real income transfers, as was actually recommended by the High Level Committee report on FCI restructuring. It has been argued earlier by Right to Food activists that cash transfer cannot ensure food security in the face of price rise, unless it is indexed to inflation. &lt;br /&gt;&lt;br /&gt;If the first option of cash transfer is adopted, then public procurement of foodgrains from farmers will be adversely affected, as has been cautioned by the Right to Food Campaign in its press note dated 25 January 2015.&lt;br /&gt;&lt;br /&gt;Riding on the claim that 13.2 crore new bank accounts have been opened under the Pradhan Mantri Jan Dhan Yojana in the last six months with coverage of 100% target, the Government seems to be confident of implementing the direct benefits transfer (DBT) of consumer food subsidy.&lt;br /&gt;&lt;br /&gt;However, in a &lt;a href=&quot;https://im4change.in/siteadmin/tinymce/uploaded/Reetika%20PDS.pdf&quot; title=&quot;https://im4change.in/siteadmin/tinymce/uploaded/Reetika%20PDS.pdf&quot;&gt;study of PDS&lt;/a&gt; undertaken in 9 states during May-June 2011, it was shown that more than two-thirds of the respondents expressed a clear preference for food over cash; less than one-fifth (18 percent) were in favour of cash over food. In states where PDS was running well, majority of the respondents preferred food over cash transfer. &amp;nbsp;&lt;br /&gt;&lt;br /&gt;A group of &lt;a href=&quot;https://im4change.in/latest-news-updates/reforming-food-corporation-of-india-himanshu-4675364.html&quot; title=&quot;https://im4change.in/latest-news-updates/reforming-food-corporation-of-india-himanshu-4675364.html&quot;&gt;economists&lt;/a&gt; have recently shown that replacing the PDS with cash transfer will be like throwing out the baby with the bathwater since it has been revealed that PDS, which directly impacts rural poverty, could be revived even in poor states like Odisha, Chhattisgarh and Bihar thanks to the reforms undertaken by the respective state governments. For example, &lt;a href=&quot;https://im4change.in/latest-news-updates/understanding-leakages-in-the-public-distribution-system-jean-dreze-and-reetika-khera-4675312.html&quot; title=&quot;https://im4change.in/latest-news-updates/understanding-leakages-in-the-public-distribution-system-jean-dreze-and-reetika-khera-4675312.html&quot;&gt;PDS leakage&lt;/a&gt; in Bihar reduced to 24% in 2011-12 from 91% in 2004-05 due to introduction of coupon system, while diversions declined in Chhattisgarh to 3.3% in 2011-12 from 52.0% in 2004-05 as a result of transparency measures adopted plus complete overhauling of PDS. &amp;nbsp;&lt;br /&gt;&lt;br /&gt;&lt;strong&gt;&lt;em&gt;References:&lt;br /&gt;&lt;/em&gt;&lt;/strong&gt;&lt;br /&gt;Report of the High level Committee on Reorienting the Role and Restructuring of Food Corporation of India, January 2015 (Please &lt;a href=&quot;http://fciweb.nic.in/app/webroot/upload/News/Report%20of%20the%20High%20Level%20Committee%20on%20Reorienting%20the%20Role%20and%20Restructuring%20of%20FCI_English_1.pdf&quot; title=&quot;http://fciweb.nic.in/app/webroot/upload/News/Report%20of%20the%20High%20Level%20Committee%20on%20Reorienting%20the%20Role%20and%20Restructuring%20of%20FCI_English_1.pdf&quot;&gt;click here&lt;/a&gt; to access)&amp;nbsp; &lt;br /&gt;&lt;br /&gt;Leakages from the Public Distribution System (PDS) and the way forward - Ashok Gulati and Shweta Saini (2015), ICRIER (Please &lt;a href=&quot;http://icrier.org/pdf/Working_Paper_294.pdf&quot; title=&quot;http://icrier.org/pdf/Working_Paper_294.pdf&quot;&gt;click here&lt;/a&gt; to access)&amp;nbsp; &lt;br /&gt;&lt;br /&gt;The National Food Security Act 2013 (Please &lt;a href=&quot;https://im4change.in/siteadmin/tinymce/uploaded/NFSA%202013.pdf&quot; title=&quot;https://im4change.in/siteadmin/tinymce/uploaded/NFSA%202013.pdf&quot;&gt;click here&lt;/a&gt; to access)&lt;br /&gt;&lt;br /&gt;The National Food Security Ordinance 2013 (Please &lt;a href=&quot;https://im4change.in/siteadmin/tinymce/uploaded/NationalFoodSecurityOrdinance2013.pdf&quot; title=&quot;https://im4change.in/siteadmin/tinymce/uploaded/NationalFoodSecurityOrdinance2013.pdf&quot;&gt;click here&lt;/a&gt; to access)&lt;br /&gt;&lt;br /&gt;Address by the President of India, Shri Pranab Mukherjee to the Joint Session of both houses of Parliament , Press Information Bureau, 23 February 2015, &lt;a href=&quot;http://www.pib.nic.in&quot; title=&quot;http://www.pib.nic.in&quot;&gt;www.pib.nic.in&lt;/a&gt; &lt;br /&gt;&lt;br /&gt;&lt;a href=&quot;https://im4change.in/latest-news-updates/centre-takes-steps-to-convert-pds-to-cash-transfers-nitin-sethi-surabhi-agarwal-4675398.html&quot; title=&quot;https://im4change.in/latest-news-updates/centre-takes-steps-to-convert-pds-to-cash-transfers-nitin-sethi-surabhi-agarwal-4675398.html&quot;&gt;Centre takes steps to convert PDS to cash transfers&lt;/a&gt; -Nitin Sethi &amp;amp; Surabhi Agarwal, Business Standard, 24 February, 2015 &lt;br /&gt;&lt;br /&gt;&lt;a href=&quot;https://im4change.in/interviews/prof-jean-dreze-noted-economist-and-former-member-of-the-national-advisory-council-interviewed-by-mayank-mishra-4675390.html&quot; title=&quot;https://im4change.in/interviews/prof-jean-dreze-noted-economist-and-former-member-of-the-national-advisory-council-interviewed-by-mayank-mishra-4675390.html&quot;&gt;Prof. Jean Dreze, noted economist and former member of the&lt;br /&gt; National Advisory Council&lt;/a&gt;, interviewed by Mayank Mishra, Business Standard, 23 February, 2015&amp;nbsp; &lt;/div&gt;&lt;div align=&quot;justify&quot;&gt;&amp;nbsp;&lt;/div&gt;&lt;div align=&quot;justify&quot;&gt;&lt;a href=&quot;https://im4change.in/latest-news-updates/understanding-leakages-in-the-public-distribution-system-jean-dreze-and-reetika-khera-4675312.html&quot; title=&quot;https://im4change.in/latest-news-updates/understanding-leakages-in-the-public-distribution-system-jean-dreze-and-reetika-khera-4675312.html&quot;&gt;Understanding Leakages in the Public Distribution System&lt;/a&gt; -Jean Dreze and Reetika Khera, Economic and Political Weekly, Vol-L, No. 7, February 14, 2015&amp;nbsp; &lt;br /&gt;&lt;/div&gt;&lt;div align=&quot;justify&quot;&gt;&lt;br /&gt;&lt;a href=&quot;https://im4change.in/latest-news-updates/food-insecurity-tk-rajalakshmi-4675382.html&quot; title=&quot;https://im4change.in/latest-news-updates/food-insecurity-tk-rajalakshmi-4675382.html&quot;&gt;Food insecurity&lt;/a&gt; -TK Rajalakshmi, Frontline, 6 March, 2015&amp;nbsp; &lt;br /&gt;&lt;br /&gt;&#039;&lt;a href=&quot;https://im4change.in/news-alerts/039changes-in-pds-may-affect-food-security-of-half-of-indians039-4675318.html&quot; title=&quot;https://im4change.in/news-alerts/039changes-in-pds-may-affect-food-security-of-half-of-indians039-4675318.html&quot;&gt;Changes in PDS may affect food security of half of Indians&lt;/a&gt;&#039;&amp;nbsp; &lt;br /&gt;&lt;br /&gt;&lt;a href=&quot;https://im4change.in/latest-news-updates/fci-reforms-prescription-to-cure-or-kill-roshan-kishore-4675181.html&quot; title=&quot;https://im4change.in/latest-news-updates/fci-reforms-prescription-to-cure-or-kill-roshan-kishore-4675181.html&quot;&gt;FCI reforms: prescription to cure or kill?&lt;/a&gt; -Roshan Kishore, Livemint.com, 27 January, 2015&amp;nbsp; &lt;br /&gt;&lt;br /&gt;&lt;a href=&quot;https://im4change.in/latest-news-updates/water-for-the-leeward-india-jean-dreze-and-reetika-khera-24521.html&quot; title=&quot;https://im4change.in/latest-news-updates/water-for-the-leeward-india-jean-dreze-and-reetika-khera-24521.html&quot;&gt;Water For The Leeward India&lt;/a&gt; -Jean Dreze and Reetika Khera, Outlook, 24 March, 2014 &lt;br /&gt;&lt;br /&gt;&lt;a href=&quot;https://im4change.in/latest-news-updates/public-distribution-system-reforms-and-consumption-in-chhattisgarh-prasad-krishnamurthy-vikram-pathania-and-sharad-tandon-24265.html&quot; title=&quot;https://im4change.in/latest-news-updates/public-distribution-system-reforms-and-consumption-in-chhattisgarh-prasad-krishnamurthy-vikram-pathania-and-sharad-tandon-24265.html&quot;&gt;Public Distribution System Reforms and Consumption in Chha&lt;br /&gt;ttisgarh&lt;/a&gt; -Prasad Krishnamurthy, Vikram Pathania, and Sharad Tandon, Economic and Political Weekly, Vol-XLIX, No. 8, February 22, 2014&amp;nbsp; &lt;br /&gt;&lt;br /&gt;&lt;a href=&quot;http://www.business-standard.com/article/economy-policy/there-seems-to-be-at-least-40-leakage-in-our-targeted-pds-system-ajay-chhibber-114020200447_1.html&quot; title=&quot;http://www.business-standard.com/article/economy-policy/there-seems-to-be-at-least-40-leakage-in-our-targeted-pds-system-ajay-chhibber-114020200447_1.html&quot;&gt;Ajay Chhibber, Director General of the IEO&lt;/a&gt;, a former assistant secretary general of the UN Development Programme, interviewed by Sanjeeb Mukherjee, Business Standard, 3 February, 2014&amp;nbsp;&amp;nbsp;&amp;nbsp; &lt;br /&gt;&lt;br /&gt;&lt;a href=&quot;https://im4change.in/latest-news-updates/rural-poverty-and-the-public-distribution-system-jean-dreze-and-reetika-khera-23277.html&quot; title=&quot;https://im4change.in/latest-news-updates/rural-poverty-and-the-public-distribution-system-jean-dreze-and-reetika-khera-23277.html&quot;&gt;Rural Poverty and the Public Distribution System&lt;/a&gt;-Jean Dreze and Reetika Khera, Economic and Political Weekly, Vol-XLVIII, No. 45-46, November 16, 2013&amp;nbsp;&amp;nbsp; &lt;br /&gt;&lt;br /&gt;&lt;a href=&quot;https://im4change.in/docs/335reforming-the-pds-lessons-from-chhattisgarh.pdf&quot; title=&quot;https://im4change.in/docs/335reforming-the-pds-lessons-from-chhattisgarh.pdf&quot;&gt;Reforming the Public Distribution System&lt;/a&gt;: Lessons from Chhattisgarh by Raghav Puri, Economic and Political Weekly, February 4, 2012&amp;nbsp; &lt;br /&gt;&lt;br /&gt;&lt;a href=&quot;https://im4change.in/siteadmin/tinymce/uploaded/Reetika%20PDS.pdf&quot; title=&quot;https://im4change.in/siteadmin/tinymce/uploaded/Reetika%20PDS.pdf&quot;&gt;Revival of the Public Distribution System&lt;/a&gt; -Reetika Khera, Economic and Political Weekly, November 5, 2011, Vol xlvi, No. 44 &amp;amp; 45&amp;nbsp; &lt;br /&gt;&lt;br /&gt;&lt;a href=&quot;http://www.cdedse.org/pdf/work198.pdf&quot; title=&quot;http://www.cdedse.org/pdf/work198.pdf&quot;&gt;Trends in diversion of PDS grain&lt;/a&gt; -Reetika Khera (2011), Working Paper No. 198, Centre for Development Economics, Department of Economics, Delhi School of Economics &lt;br /&gt;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp; &lt;br /&gt;&lt;a href=&quot;http://web.iitd.ac.in/~reetika/projects.html&quot; title=&quot;http://web.iitd.ac.in/~reetika/projects.html&quot;&gt;PEEP survey 2013 and PDS Survey 2011&lt;/a&gt;&amp;nbsp;&amp;nbsp; &lt;br /&gt;&lt;br /&gt;&lt;/div&gt;&#039;,
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	&#039;id&#039; =&gt; (int) 27350,
	&#039;title&#039; =&gt; &#039;Is the Govt doing away with PDS?&#039;,
	&#039;subheading&#039; =&gt; &#039;&#039;,
	&#039;description&#039; =&gt; &#039;&lt;br /&gt;
&lt;div align=&quot;justify&quot;&gt;
Following the recommendations of the Shanta Kumar Committee report on restructuring of the Food Corporation of India (FCI), there are signs that the Central Government is in a hurry to replace the &lt;a href=&quot;../hunger-hdi/pds-ration-food-security-42.html&quot;&gt;Public Distribution System&lt;/a&gt; (PDS) with cash transfers. &lt;br /&gt;
&lt;br /&gt;
The Government&#039;s intention has been revealed in two official letters (one dated &lt;a href=&quot;tinymce/uploaded/GoI%20Letter%20on%20DBT%20dated%2010%20Feb%202015.pdf&quot; title=&quot;10 Feb&quot;&gt;10 February 2015&lt;/a&gt; and another dated &lt;a href=&quot;tinymce/uploaded/GoI%20letter%20on%20DBT%20dated%2011%20Feb%202015.pdf&quot; title=&quot;11 Feb&quot;&gt;11 February 2015&lt;/a&gt;) that were sent from the Joint Secretary at Department of Food and Public Distribution to the Principal Secretary/ Secretary at Department of Food &amp;amp; Civil Supplies of various states/ UTs. &amp;nbsp;&lt;br /&gt;
&lt;br /&gt;
In the letter dated 10 February 2015, it has been clearly said that the &lt;em&gt;&amp;quot;Government is looking forward to implement DBT for foodgrains initially in the UTs and few districts of the states on pilot basis&amp;quot;&lt;/em&gt;.&lt;br /&gt;
&lt;br /&gt;
Despite various arguments and evidence put against cash transfers vis-a-vis PDS to ensure food security (by development economists in the past), the recent official correspondences show that the Ministry of Consumer Affairs is willing to rope in officials from Unique Identification Authority of India (UIDAI)/ National Population Register (NPR) so as to implement the appropriate model of cash transfer by complete digitization of beneficiary data and Aadhaar seeding. &lt;br /&gt;
&lt;br /&gt;
As per the official letter dated 10 February, any of the 3 models/ options (as shown below) can be adopted by states/ UTs for cash transfers: &lt;br /&gt;
&lt;br /&gt;
a. Under the first model, cash transfer of food subsidy can be submitted to bank account of beneficiaries every month. There is complete freedom given to beneficiaries to purchase foodgrains from anywhere in the market. However, for undertaking this model, there has to be adequate supply of foodgrains in the market around the year.&lt;br /&gt;
&lt;br /&gt;
b. Under the second model, fair price shops (FPS) dealers will be supplied foodgrains at minimum support price (MSP) or near market prices. Beneficiaries have to purchase foodgrains from the FPS at designated prices and all transactions are recorded on point-of-sale (PoS) device. The difference of MSP/ designated price and Central Issue Price (CIP) will be credited to the beneficiaries&#039; bank account in advance against actual purchase from FPS. &lt;br /&gt;
&lt;br /&gt;
c. Under the third model, the existing manual process of issuance of foodgrains will be followed, with or without PoS, aided by digitized database seeded with Aadhaar. &amp;nbsp;&lt;br /&gt;
&lt;br /&gt;
It is not clear from the above-mentioned official correspondences whether cash transfers will be indexed with the overall price level to protect the amount of real income transfers, as was actually recommended by the High Level Committee report on FCI restructuring. It has been argued earlier by Right to Food activists that cash transfer cannot ensure food security in the face of price rise, unless it is indexed to inflation. &lt;br /&gt;
&lt;br /&gt;
If the first option of cash transfer is adopted, then public procurement of foodgrains from farmers will be adversely affected, as has been cautioned by the Right to Food Campaign in its press note dated 25 January 2015.&lt;br /&gt;
&lt;br /&gt;
Riding on the claim that 13.2 crore new bank accounts have been opened under the Pradhan Mantri Jan Dhan Yojana in the last six months with coverage of 100% target, the Government seems to be confident of implementing the direct benefits transfer (DBT) of consumer food subsidy.&lt;br /&gt;
&lt;br /&gt;
However, in a &lt;a href=&quot;tinymce/uploaded/Reetika%20PDS.pdf&quot;&gt;study of PDS&lt;/a&gt; undertaken in 9 states during May-June 2011, it was shown that more than two-thirds of the respondents expressed a clear preference for food over cash; less than one-fifth (18 percent) were in favour of cash over food. In states where PDS was running well, majority of the respondents preferred food over cash transfer. &amp;nbsp;&lt;br /&gt;
&lt;br /&gt;
A group of &lt;a href=&quot;../latest-news-updates/reforming-food-corporation-of-india-himanshu-4675364.html&quot;&gt;economists&lt;/a&gt; have recently shown that replacing the PDS with cash transfer will be like throwing out the baby with the bathwater since it has been revealed that PDS, which directly impacts rural poverty, could be revived even in poor states like Odisha, Chhattisgarh and Bihar thanks to the reforms undertaken by the respective state governments. For example, &lt;a href=&quot;../latest-news-updates/understanding-leakages-in-the-public-distribution-system-jean-dreze-and-reetika-khera-4675312.html&quot;&gt;PDS leakage&lt;/a&gt; in Bihar reduced to 24% in 2011-12 from 91% in 2004-05 due to introduction of coupon system, while diversions declined in Chhattisgarh to 3.3% in 2011-12 from 52.0% in 2004-05 as a result of transparency measures adopted plus complete overhauling of PDS. &amp;nbsp;&lt;br /&gt;
&lt;br /&gt;
&lt;strong&gt;&lt;em&gt;References:&lt;br /&gt;
&lt;/em&gt;&lt;/strong&gt;&lt;br /&gt;
Report of the High level Committee on Reorienting the Role and Restructuring of Food Corporation of India, January 2015 (Please &lt;a href=&quot;http://fciweb.nic.in/app/webroot/upload/News/Report%20of%20the%20High%20Level%20Committee%20on%20Reorienting%20the%20Role%20and%20Restructuring%20of%20FCI_English_1.pdf&quot;&gt;click here&lt;/a&gt; to access)&amp;nbsp; &lt;br /&gt;
&lt;br /&gt;
Leakages from the Public Distribution System (PDS) and the way forward - Ashok Gulati and Shweta Saini (2015), ICRIER (Please &lt;a href=&quot;http://icrier.org/pdf/Working_Paper_294.pdf&quot;&gt;click here&lt;/a&gt; to access)&amp;nbsp; &lt;br /&gt;
&lt;br /&gt;
The National Food Security Act 2013 (Please &lt;a href=&quot;tinymce/uploaded/NFSA%202013.pdf&quot;&gt;click here&lt;/a&gt; to access)&lt;br /&gt;
&lt;br /&gt;
The National Food Security Ordinance 2013 (Please &lt;a href=&quot;tinymce/uploaded/NationalFoodSecurityOrdinance2013.pdf&quot;&gt;click here&lt;/a&gt; to access)&lt;br /&gt;
&lt;br /&gt;
Address by the President of India, Shri Pranab Mukherjee to the Joint Session of both houses of Parliament , Press Information Bureau, 23 February 2015, &lt;a href=&quot;http://www.pib.nic.in&quot;&gt;www.pib.nic.in&lt;/a&gt; &lt;br /&gt;
&lt;br /&gt;
&lt;a href=&quot;../latest-news-updates/centre-takes-steps-to-convert-pds-to-cash-transfers-nitin-sethi-surabhi-agarwal-4675398.html&quot;&gt;Centre takes steps to convert PDS to cash transfers&lt;/a&gt; -Nitin Sethi &amp;amp; Surabhi Agarwal, Business Standard, 24 February, 2015 &lt;br /&gt;
&lt;br /&gt;
&lt;a href=&quot;../interviews/prof-jean-dreze-noted-economist-and-former-member-of-the-national-advisory-council-interviewed-by-mayank-mishra-4675390.html&quot;&gt;Prof. Jean Dreze, noted economist and former member of the National Advisory Council&lt;/a&gt;, interviewed by Mayank Mishra, Business Standard, 23 February, 2015&amp;nbsp; 
&lt;/div&gt;
&lt;div align=&quot;justify&quot;&gt;
&amp;nbsp;
&lt;/div&gt;
&lt;div align=&quot;justify&quot;&gt;
&lt;a href=&quot;../latest-news-updates/understanding-leakages-in-the-public-distribution-system-jean-dreze-and-reetika-khera-4675312.html&quot;&gt;Understanding Leakages in the Public Distribution System&lt;/a&gt; -Jean Dreze and Reetika Khera, Economic and Political Weekly, Vol-L, No. 7, February 14, 2015&amp;nbsp; &lt;br /&gt;
&lt;/div&gt;
&lt;div align=&quot;justify&quot;&gt;
&lt;br /&gt;
&lt;a href=&quot;../latest-news-updates/food-insecurity-tk-rajalakshmi-4675382.html&quot;&gt;Food insecurity&lt;/a&gt; -TK Rajalakshmi, Frontline, 6 March, 2015&amp;nbsp; &lt;br /&gt;
&lt;br /&gt;
&#039;&lt;a href=&quot;../news-alerts/039changes-in-pds-may-affect-food-security-of-half-of-indians039-4675318.html&quot;&gt;Changes in PDS may affect food security of half of Indians&lt;/a&gt;&#039;&amp;nbsp; &lt;br /&gt;
&lt;br /&gt;
&lt;a href=&quot;../latest-news-updates/fci-reforms-prescription-to-cure-or-kill-roshan-kishore-4675181.html&quot;&gt;FCI reforms: prescription to cure or kill?&lt;/a&gt; -Roshan Kishore, Livemint.com, 27 January, 2015&amp;nbsp; &lt;br /&gt;
&lt;br /&gt;
&lt;a href=&quot;../latest-news-updates/water-for-the-leeward-india-jean-dreze-and-reetika-khera-24521.html&quot;&gt;Water For The Leeward India&lt;/a&gt; -Jean Dreze and Reetika Khera, Outlook, 24 March, 2014 &lt;br /&gt;
&lt;br /&gt;
&lt;a href=&quot;../latest-news-updates/public-distribution-system-reforms-and-consumption-in-chhattisgarh-prasad-krishnamurthy-vikram-pathania-and-sharad-tandon-24265.html&quot;&gt;Public Distribution System Reforms and Consumption in Chhattisgarh&lt;/a&gt; -Prasad Krishnamurthy, Vikram Pathania, and Sharad Tandon, Economic and Political Weekly, Vol-XLIX, No. 8, February 22, 2014&amp;nbsp; &lt;br /&gt;
&lt;br /&gt;
&lt;a href=&quot;http://www.business-standard.com/article/economy-policy/there-seems-to-be-at-least-40-leakage-in-our-targeted-pds-system-ajay-chhibber-114020200447_1.html&quot;&gt;Ajay Chhibber, Director General of the IEO&lt;/a&gt;, a former assistant secretary general of the UN Development Programme, interviewed by Sanjeeb Mukherjee, Business Standard, 3 February, 2014&amp;nbsp;&amp;nbsp;&amp;nbsp; &lt;br /&gt;
&lt;br /&gt;
&lt;a href=&quot;../latest-news-updates/rural-poverty-and-the-public-distribution-system-jean-dreze-and-reetika-khera-23277.html&quot;&gt;Rural Poverty and the Public Distribution System&lt;/a&gt;-Jean Dreze and Reetika Khera, Economic and Political Weekly, Vol-XLVIII, No. 45-46, November 16, 2013&amp;nbsp;&amp;nbsp; &lt;br /&gt;
&lt;br /&gt;
&lt;a href=&quot;../docs/335reforming-the-pds-lessons-from-chhattisgarh.pdf&quot;&gt;Reforming the Public Distribution System&lt;/a&gt;: Lessons from Chhattisgarh by Raghav Puri, Economic and Political Weekly, February 4, 2012&amp;nbsp; &lt;br /&gt;
&lt;br /&gt;
&lt;a href=&quot;tinymce/uploaded/Reetika%20PDS.pdf&quot;&gt;Revival of the Public Distribution System&lt;/a&gt; -Reetika Khera, Economic and Political Weekly, November 5, 2011, Vol xlvi, No. 44 &amp;amp; 45&amp;nbsp; &lt;br /&gt;
&lt;br /&gt;
&lt;a href=&quot;http://www.cdedse.org/pdf/work198.pdf&quot;&gt;Trends in diversion of PDS grain&lt;/a&gt; -Reetika Khera (2011), Working Paper No. 198, Centre for Development Economics, Department of Economics, Delhi School of Economics &lt;br /&gt;
&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp; &lt;br /&gt;
&lt;a href=&quot;http://web.iitd.ac.in/~reetika/projects.html&quot;&gt;PEEP survey 2013 and PDS Survey 2011&lt;/a&gt;&amp;nbsp;&amp;nbsp; &lt;br /&gt;
&lt;br /&gt;
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$metaTitle = &#039;NEWS ALERTS | Is the Govt doing away with PDS?&#039;
$metaKeywords = &#039;PDS,Public Distribution System,cash transfers,cash transfer,Right to Food,Food Security,Direct Benefit Transfer&#039;
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Following the recommendations of the Shanta Kumar Committee report on restructuring of the Food Corporation of India (FCI), there are signs that the Central Government is in a hurry to replace the Public Distribution System (PDS) with cash transfers. 

The...&#039;
$disp = &#039;&lt;br /&gt;&lt;div align=&quot;justify&quot;&gt;Following the recommendations of the Shanta Kumar Committee report on restructuring of the Food Corporation of India (FCI), there are signs that the Central Government is in a hurry to replace the &lt;a href=&quot;https://im4change.in/hunger-hdi/pds-ration-food-security-42.html&quot; title=&quot;https://im4change.in/hunger-hdi/pds-ration-food-security-42.html&quot;&gt;Public Distribution System&lt;/a&gt; (PDS) with cash transfers. &lt;br /&gt;&lt;br /&gt;The Government&#039;s intention has been revealed in two official letters (one dated &lt;a href=&quot;https://im4change.in/siteadmin/tinymce/uploaded/GoI%20Letter%20on%20DBT%20dated%2010%20Feb%202015.pdf&quot; title=&quot;10 Feb&quot; title=&quot;https://im4change.in/siteadmin/tinymce/uploaded/GoI%20Letter%20on%20DBT%20dated%2010%20Feb%202015.pdf&quot; title=&quot;10 Feb&quot;&gt;10 February 2015&lt;/a&gt; and another dated &lt;a href=&quot;https://im4change.in/siteadmin/tinymce/uploaded/GoI%20letter%20on%20DBT%20dated%2011%20Feb%202015.pdf&quot; title=&quot;11 Feb&quot; title=&quot;https://im4change.in/siteadmin/tinymce/uploaded/GoI%20letter%20on%20DBT%20dated%2011%20Feb%202015.pdf&quot; title=&quot;11 Feb&quot;&gt;11 February 2015&lt;/a&gt;) that were sent from the Joint Secretary at Department of Food and Public Distribution to the Principal Secretary/ Secretary at Department of Food &amp;amp; Civil Supplies of various states/ UTs. &amp;nbsp;&lt;br /&gt;&lt;br /&gt;In the letter dated 10 February 2015, it has been clearly said that the &lt;em&gt;&amp;quot;Government is looking forward to implement DBT for foodgrains initially in the UTs and few districts of the states on pilot basis&amp;quot;&lt;/em&gt;.&lt;br /&gt;&lt;br /&gt;Despite various arguments and evidence put against cash transfers vis-a-vis PDS to ensure food security (by development economists in the past), the recent official correspondences show that the Ministry of Consumer Affairs is willing to rope in officials from Unique Identification Authority of India (UIDAI)/ National Population Register (NPR) so as to implement the appropriate model of cash transfer by complete digitization of beneficiary data and Aadhaar seeding. &lt;br /&gt;&lt;br /&gt;As per the official letter dated 10 February, any of the 3 models/ options (as shown below) can be adopted by states/ UTs for cash transfers: &lt;br /&gt;&lt;br /&gt;a. Under the first model, cash transfer of food subsidy can be submitted to bank account of beneficiaries every month. There is complete freedom given to beneficiaries to purchase foodgrains from anywhere in the market. However, for undertaking this model, there has to be adequate supply of foodgrains in the market around the year.&lt;br /&gt;&lt;br /&gt;b. Under the second model, fair price shops (FPS) dealers will be supplied foodgrains at minimum support price (MSP) or near market prices. Beneficiaries have to purchase foodgrains from the FPS at designated prices and all transactions are recorded on point-of-sale (PoS) device. The difference of MSP/ designated price and Central Issue Price (CIP) will be credited to the beneficiaries&#039; bank account in advance against actual purchase from FPS. &lt;br /&gt;&lt;br /&gt;c. Under the third model, the existing manual process of issuance of foodgrains will be followed, with or without PoS, aided by digitized database seeded with Aadhaar. &amp;nbsp;&lt;br /&gt;&lt;br /&gt;It is not clear from the above-mentioned official correspondences whether cash transfers will be indexed with the overall price level to protect the amount of real income transfers, as was actually recommended by the High Level Committee report on FCI restructuring. It has been argued earlier by Right to Food activists that cash transfer cannot ensure food security in the face of price rise, unless it is indexed to inflation. &lt;br /&gt;&lt;br /&gt;If the first option of cash transfer is adopted, then public procurement of foodgrains from farmers will be adversely affected, as has been cautioned by the Right to Food Campaign in its press note dated 25 January 2015.&lt;br /&gt;&lt;br /&gt;Riding on the claim that 13.2 crore new bank accounts have been opened under the Pradhan Mantri Jan Dhan Yojana in the last six months with coverage of 100% target, the Government seems to be confident of implementing the direct benefits transfer (DBT) of consumer food subsidy.&lt;br /&gt;&lt;br /&gt;However, in a &lt;a href=&quot;https://im4change.in/siteadmin/tinymce/uploaded/Reetika%20PDS.pdf&quot; title=&quot;https://im4change.in/siteadmin/tinymce/uploaded/Reetika%20PDS.pdf&quot;&gt;study of PDS&lt;/a&gt; undertaken in 9 states during May-June 2011, it was shown that more than two-thirds of the respondents expressed a clear preference for food over cash; less than one-fifth (18 percent) were in favour of cash over food. In states where PDS was running well, majority of the respondents preferred food over cash transfer. &amp;nbsp;&lt;br /&gt;&lt;br /&gt;A group of &lt;a href=&quot;https://im4change.in/latest-news-updates/reforming-food-corporation-of-india-himanshu-4675364.html&quot; title=&quot;https://im4change.in/latest-news-updates/reforming-food-corporation-of-india-himanshu-4675364.html&quot;&gt;economists&lt;/a&gt; have recently shown that replacing the PDS with cash transfer will be like throwing out the baby with the bathwater since it has been revealed that PDS, which directly impacts rural poverty, could be revived even in poor states like Odisha, Chhattisgarh and Bihar thanks to the reforms undertaken by the respective state governments. For example, &lt;a href=&quot;https://im4change.in/latest-news-updates/understanding-leakages-in-the-public-distribution-system-jean-dreze-and-reetika-khera-4675312.html&quot; title=&quot;https://im4change.in/latest-news-updates/understanding-leakages-in-the-public-distribution-system-jean-dreze-and-reetika-khera-4675312.html&quot;&gt;PDS leakage&lt;/a&gt; in Bihar reduced to 24% in 2011-12 from 91% in 2004-05 due to introduction of coupon system, while diversions declined in Chhattisgarh to 3.3% in 2011-12 from 52.0% in 2004-05 as a result of transparency measures adopted plus complete overhauling of PDS. &amp;nbsp;&lt;br /&gt;&lt;br /&gt;&lt;strong&gt;&lt;em&gt;References:&lt;br /&gt;&lt;/em&gt;&lt;/strong&gt;&lt;br /&gt;Report of the High level Committee on Reorienting the Role and Restructuring of Food Corporation of India, January 2015 (Please &lt;a href=&quot;http://fciweb.nic.in/app/webroot/upload/News/Report%20of%20the%20High%20Level%20Committee%20on%20Reorienting%20the%20Role%20and%20Restructuring%20of%20FCI_English_1.pdf&quot; title=&quot;http://fciweb.nic.in/app/webroot/upload/News/Report%20of%20the%20High%20Level%20Committee%20on%20Reorienting%20the%20Role%20and%20Restructuring%20of%20FCI_English_1.pdf&quot;&gt;click here&lt;/a&gt; to access)&amp;nbsp; &lt;br /&gt;&lt;br /&gt;Leakages from the Public Distribution System (PDS) and the way forward - Ashok Gulati and Shweta Saini (2015), ICRIER (Please &lt;a href=&quot;http://icrier.org/pdf/Working_Paper_294.pdf&quot; title=&quot;http://icrier.org/pdf/Working_Paper_294.pdf&quot;&gt;click here&lt;/a&gt; to access)&amp;nbsp; &lt;br /&gt;&lt;br /&gt;The National Food Security Act 2013 (Please &lt;a href=&quot;https://im4change.in/siteadmin/tinymce/uploaded/NFSA%202013.pdf&quot; title=&quot;https://im4change.in/siteadmin/tinymce/uploaded/NFSA%202013.pdf&quot;&gt;click here&lt;/a&gt; to access)&lt;br /&gt;&lt;br /&gt;The National Food Security Ordinance 2013 (Please &lt;a href=&quot;https://im4change.in/siteadmin/tinymce/uploaded/NationalFoodSecurityOrdinance2013.pdf&quot; title=&quot;https://im4change.in/siteadmin/tinymce/uploaded/NationalFoodSecurityOrdinance2013.pdf&quot;&gt;click here&lt;/a&gt; to access)&lt;br /&gt;&lt;br /&gt;Address by the President of India, Shri Pranab Mukherjee to the Joint Session of both houses of Parliament , Press Information Bureau, 23 February 2015, &lt;a href=&quot;http://www.pib.nic.in&quot; title=&quot;http://www.pib.nic.in&quot;&gt;www.pib.nic.in&lt;/a&gt; &lt;br /&gt;&lt;br /&gt;&lt;a href=&quot;https://im4change.in/latest-news-updates/centre-takes-steps-to-convert-pds-to-cash-transfers-nitin-sethi-surabhi-agarwal-4675398.html&quot; title=&quot;https://im4change.in/latest-news-updates/centre-takes-steps-to-convert-pds-to-cash-transfers-nitin-sethi-surabhi-agarwal-4675398.html&quot;&gt;Centre takes steps to convert PDS to cash transfers&lt;/a&gt; -Nitin Sethi &amp;amp; Surabhi Agarwal, Business Standard, 24 February, 2015 &lt;br /&gt;&lt;br /&gt;&lt;a href=&quot;https://im4change.in/interviews/prof-jean-dreze-noted-economist-and-former-member-of-the-national-advisory-council-interviewed-by-mayank-mishra-4675390.html&quot; title=&quot;https://im4change.in/interviews/prof-jean-dreze-noted-economist-and-former-member-of-the-national-advisory-council-interviewed-by-mayank-mishra-4675390.html&quot;&gt;Prof. Jean Dreze, noted economist and former member of the&lt;br /&gt; National Advisory Council&lt;/a&gt;, interviewed by Mayank Mishra, Business Standard, 23 February, 2015&amp;nbsp; &lt;/div&gt;&lt;div align=&quot;justify&quot;&gt;&amp;nbsp;&lt;/div&gt;&lt;div align=&quot;justify&quot;&gt;&lt;a href=&quot;https://im4change.in/latest-news-updates/understanding-leakages-in-the-public-distribution-system-jean-dreze-and-reetika-khera-4675312.html&quot; title=&quot;https://im4change.in/latest-news-updates/understanding-leakages-in-the-public-distribution-system-jean-dreze-and-reetika-khera-4675312.html&quot;&gt;Understanding Leakages in the Public Distribution System&lt;/a&gt; -Jean Dreze and Reetika Khera, Economic and Political Weekly, Vol-L, No. 7, February 14, 2015&amp;nbsp; &lt;br /&gt;&lt;/div&gt;&lt;div align=&quot;justify&quot;&gt;&lt;br /&gt;&lt;a href=&quot;https://im4change.in/latest-news-updates/food-insecurity-tk-rajalakshmi-4675382.html&quot; title=&quot;https://im4change.in/latest-news-updates/food-insecurity-tk-rajalakshmi-4675382.html&quot;&gt;Food insecurity&lt;/a&gt; -TK Rajalakshmi, Frontline, 6 March, 2015&amp;nbsp; &lt;br /&gt;&lt;br /&gt;&#039;&lt;a href=&quot;https://im4change.in/news-alerts/039changes-in-pds-may-affect-food-security-of-half-of-indians039-4675318.html&quot; title=&quot;https://im4change.in/news-alerts/039changes-in-pds-may-affect-food-security-of-half-of-indians039-4675318.html&quot;&gt;Changes in PDS may affect food security of half of Indians&lt;/a&gt;&#039;&amp;nbsp; &lt;br /&gt;&lt;br /&gt;&lt;a href=&quot;https://im4change.in/latest-news-updates/fci-reforms-prescription-to-cure-or-kill-roshan-kishore-4675181.html&quot; title=&quot;https://im4change.in/latest-news-updates/fci-reforms-prescription-to-cure-or-kill-roshan-kishore-4675181.html&quot;&gt;FCI reforms: prescription to cure or kill?&lt;/a&gt; -Roshan Kishore, Livemint.com, 27 January, 2015&amp;nbsp; &lt;br /&gt;&lt;br /&gt;&lt;a href=&quot;https://im4change.in/latest-news-updates/water-for-the-leeward-india-jean-dreze-and-reetika-khera-24521.html&quot; title=&quot;https://im4change.in/latest-news-updates/water-for-the-leeward-india-jean-dreze-and-reetika-khera-24521.html&quot;&gt;Water For The Leeward India&lt;/a&gt; -Jean Dreze and Reetika Khera, Outlook, 24 March, 2014 &lt;br /&gt;&lt;br /&gt;&lt;a href=&quot;https://im4change.in/latest-news-updates/public-distribution-system-reforms-and-consumption-in-chhattisgarh-prasad-krishnamurthy-vikram-pathania-and-sharad-tandon-24265.html&quot; title=&quot;https://im4change.in/latest-news-updates/public-distribution-system-reforms-and-consumption-in-chhattisgarh-prasad-krishnamurthy-vikram-pathania-and-sharad-tandon-24265.html&quot;&gt;Public Distribution System Reforms and Consumption in Chha&lt;br /&gt;ttisgarh&lt;/a&gt; -Prasad Krishnamurthy, Vikram Pathania, and Sharad Tandon, Economic and Political Weekly, Vol-XLIX, No. 8, February 22, 2014&amp;nbsp; &lt;br /&gt;&lt;br /&gt;&lt;a href=&quot;http://www.business-standard.com/article/economy-policy/there-seems-to-be-at-least-40-leakage-in-our-targeted-pds-system-ajay-chhibber-114020200447_1.html&quot; title=&quot;http://www.business-standard.com/article/economy-policy/there-seems-to-be-at-least-40-leakage-in-our-targeted-pds-system-ajay-chhibber-114020200447_1.html&quot;&gt;Ajay Chhibber, Director General of the IEO&lt;/a&gt;, a former assistant secretary general of the UN Development Programme, interviewed by Sanjeeb Mukherjee, Business Standard, 3 February, 2014&amp;nbsp;&amp;nbsp;&amp;nbsp; &lt;br /&gt;&lt;br /&gt;&lt;a href=&quot;https://im4change.in/latest-news-updates/rural-poverty-and-the-public-distribution-system-jean-dreze-and-reetika-khera-23277.html&quot; title=&quot;https://im4change.in/latest-news-updates/rural-poverty-and-the-public-distribution-system-jean-dreze-and-reetika-khera-23277.html&quot;&gt;Rural Poverty and the Public Distribution System&lt;/a&gt;-Jean Dreze and Reetika Khera, Economic and Political Weekly, Vol-XLVIII, No. 45-46, November 16, 2013&amp;nbsp;&amp;nbsp; &lt;br /&gt;&lt;br /&gt;&lt;a href=&quot;https://im4change.in/docs/335reforming-the-pds-lessons-from-chhattisgarh.pdf&quot; title=&quot;https://im4change.in/docs/335reforming-the-pds-lessons-from-chhattisgarh.pdf&quot;&gt;Reforming the Public Distribution System&lt;/a&gt;: Lessons from Chhattisgarh by Raghav Puri, Economic and Political Weekly, February 4, 2012&amp;nbsp; &lt;br /&gt;&lt;br /&gt;&lt;a href=&quot;https://im4change.in/siteadmin/tinymce/uploaded/Reetika%20PDS.pdf&quot; title=&quot;https://im4change.in/siteadmin/tinymce/uploaded/Reetika%20PDS.pdf&quot;&gt;Revival of the Public Distribution System&lt;/a&gt; -Reetika Khera, Economic and Political Weekly, November 5, 2011, Vol xlvi, No. 44 &amp;amp; 45&amp;nbsp; &lt;br /&gt;&lt;br /&gt;&lt;a href=&quot;http://www.cdedse.org/pdf/work198.pdf&quot; title=&quot;http://www.cdedse.org/pdf/work198.pdf&quot;&gt;Trends in diversion of PDS grain&lt;/a&gt; -Reetika Khera (2011), Working Paper No. 198, Centre for Development Economics, Department of Economics, Delhi School of Economics &lt;br /&gt;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp; &lt;br /&gt;&lt;a href=&quot;http://web.iitd.ac.in/~reetika/projects.html&quot; title=&quot;http://web.iitd.ac.in/~reetika/projects.html&quot;&gt;PEEP survey 2013 and PDS Survey 2011&lt;/a&gt;&amp;nbsp;&amp;nbsp; &lt;br /&gt;&lt;br /&gt;&lt;/div&gt;&#039;
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                <strong>Is the Govt doing away with PDS?</strong></h1>
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                <br /><div align="justify">Following the recommendations of the Shanta Kumar Committee report on restructuring of the Food Corporation of India (FCI), there are signs that the Central Government is in a hurry to replace the <a href="https://im4change.in/hunger-hdi/pds-ration-food-security-42.html" title="https://im4change.in/hunger-hdi/pds-ration-food-security-42.html">Public Distribution System</a> (PDS) with cash transfers. <br /><br />The Government's intention has been revealed in two official letters (one dated <a href="https://im4change.in/siteadmin/tinymce/uploaded/GoI%20Letter%20on%20DBT%20dated%2010%20Feb%202015.pdf" title="10 Feb" title="https://im4change.in/siteadmin/tinymce/uploaded/GoI%20Letter%20on%20DBT%20dated%2010%20Feb%202015.pdf" title="10 Feb">10 February 2015</a> and another dated <a href="https://im4change.in/siteadmin/tinymce/uploaded/GoI%20letter%20on%20DBT%20dated%2011%20Feb%202015.pdf" title="11 Feb" title="https://im4change.in/siteadmin/tinymce/uploaded/GoI%20letter%20on%20DBT%20dated%2011%20Feb%202015.pdf" title="11 Feb">11 February 2015</a>) that were sent from the Joint Secretary at Department of Food and Public Distribution to the Principal Secretary/ Secretary at Department of Food &amp; Civil Supplies of various states/ UTs. &nbsp;<br /><br />In the letter dated 10 February 2015, it has been clearly said that the <em>&quot;Government is looking forward to implement DBT for foodgrains initially in the UTs and few districts of the states on pilot basis&quot;</em>.<br /><br />Despite various arguments and evidence put against cash transfers vis-a-vis PDS to ensure food security (by development economists in the past), the recent official correspondences show that the Ministry of Consumer Affairs is willing to rope in officials from Unique Identification Authority of India (UIDAI)/ National Population Register (NPR) so as to implement the appropriate model of cash transfer by complete digitization of beneficiary data and Aadhaar seeding. <br /><br />As per the official letter dated 10 February, any of the 3 models/ options (as shown below) can be adopted by states/ UTs for cash transfers: <br /><br />a. Under the first model, cash transfer of food subsidy can be submitted to bank account of beneficiaries every month. There is complete freedom given to beneficiaries to purchase foodgrains from anywhere in the market. However, for undertaking this model, there has to be adequate supply of foodgrains in the market around the year.<br /><br />b. Under the second model, fair price shops (FPS) dealers will be supplied foodgrains at minimum support price (MSP) or near market prices. Beneficiaries have to purchase foodgrains from the FPS at designated prices and all transactions are recorded on point-of-sale (PoS) device. The difference of MSP/ designated price and Central Issue Price (CIP) will be credited to the beneficiaries' bank account in advance against actual purchase from FPS. <br /><br />c. Under the third model, the existing manual process of issuance of foodgrains will be followed, with or without PoS, aided by digitized database seeded with Aadhaar. &nbsp;<br /><br />It is not clear from the above-mentioned official correspondences whether cash transfers will be indexed with the overall price level to protect the amount of real income transfers, as was actually recommended by the High Level Committee report on FCI restructuring. It has been argued earlier by Right to Food activists that cash transfer cannot ensure food security in the face of price rise, unless it is indexed to inflation. <br /><br />If the first option of cash transfer is adopted, then public procurement of foodgrains from farmers will be adversely affected, as has been cautioned by the Right to Food Campaign in its press note dated 25 January 2015.<br /><br />Riding on the claim that 13.2 crore new bank accounts have been opened under the Pradhan Mantri Jan Dhan Yojana in the last six months with coverage of 100% target, the Government seems to be confident of implementing the direct benefits transfer (DBT) of consumer food subsidy.<br /><br />However, in a <a href="https://im4change.in/siteadmin/tinymce/uploaded/Reetika%20PDS.pdf" title="https://im4change.in/siteadmin/tinymce/uploaded/Reetika%20PDS.pdf">study of PDS</a> undertaken in 9 states during May-June 2011, it was shown that more than two-thirds of the respondents expressed a clear preference for food over cash; less than one-fifth (18 percent) were in favour of cash over food. In states where PDS was running well, majority of the respondents preferred food over cash transfer. &nbsp;<br /><br />A group of <a href="https://im4change.in/latest-news-updates/reforming-food-corporation-of-india-himanshu-4675364.html" title="https://im4change.in/latest-news-updates/reforming-food-corporation-of-india-himanshu-4675364.html">economists</a> have recently shown that replacing the PDS with cash transfer will be like throwing out the baby with the bathwater since it has been revealed that PDS, which directly impacts rural poverty, could be revived even in poor states like Odisha, Chhattisgarh and Bihar thanks to the reforms undertaken by the respective state governments. For example, <a href="https://im4change.in/latest-news-updates/understanding-leakages-in-the-public-distribution-system-jean-dreze-and-reetika-khera-4675312.html" title="https://im4change.in/latest-news-updates/understanding-leakages-in-the-public-distribution-system-jean-dreze-and-reetika-khera-4675312.html">PDS leakage</a> in Bihar reduced to 24% in 2011-12 from 91% in 2004-05 due to introduction of coupon system, while diversions declined in Chhattisgarh to 3.3% in 2011-12 from 52.0% in 2004-05 as a result of transparency measures adopted plus complete overhauling of PDS. &nbsp;<br /><br /><strong><em>References:<br /></em></strong><br />Report of the High level Committee on Reorienting the Role and Restructuring of Food Corporation of India, January 2015 (Please <a href="http://fciweb.nic.in/app/webroot/upload/News/Report%20of%20the%20High%20Level%20Committee%20on%20Reorienting%20the%20Role%20and%20Restructuring%20of%20FCI_English_1.pdf" title="http://fciweb.nic.in/app/webroot/upload/News/Report%20of%20the%20High%20Level%20Committee%20on%20Reorienting%20the%20Role%20and%20Restructuring%20of%20FCI_English_1.pdf">click here</a> to access)&nbsp; <br /><br />Leakages from the Public Distribution System (PDS) and the way forward - Ashok Gulati and Shweta Saini (2015), ICRIER (Please <a href="http://icrier.org/pdf/Working_Paper_294.pdf" title="http://icrier.org/pdf/Working_Paper_294.pdf">click here</a> to access)&nbsp; <br /><br />The National Food Security Act 2013 (Please <a href="https://im4change.in/siteadmin/tinymce/uploaded/NFSA%202013.pdf" title="https://im4change.in/siteadmin/tinymce/uploaded/NFSA%202013.pdf">click here</a> to access)<br /><br />The National Food Security Ordinance 2013 (Please <a href="https://im4change.in/siteadmin/tinymce/uploaded/NationalFoodSecurityOrdinance2013.pdf" title="https://im4change.in/siteadmin/tinymce/uploaded/NationalFoodSecurityOrdinance2013.pdf">click here</a> to access)<br /><br />Address by the President of India, Shri Pranab Mukherjee to the Joint Session of both houses of Parliament , Press Information Bureau, 23 February 2015, <a href="http://www.pib.nic.in" title="http://www.pib.nic.in">www.pib.nic.in</a> <br /><br /><a href="https://im4change.in/latest-news-updates/centre-takes-steps-to-convert-pds-to-cash-transfers-nitin-sethi-surabhi-agarwal-4675398.html" title="https://im4change.in/latest-news-updates/centre-takes-steps-to-convert-pds-to-cash-transfers-nitin-sethi-surabhi-agarwal-4675398.html">Centre takes steps to convert PDS to cash transfers</a> -Nitin Sethi &amp; Surabhi Agarwal, Business Standard, 24 February, 2015 <br /><br /><a href="https://im4change.in/interviews/prof-jean-dreze-noted-economist-and-former-member-of-the-national-advisory-council-interviewed-by-mayank-mishra-4675390.html" title="https://im4change.in/interviews/prof-jean-dreze-noted-economist-and-former-member-of-the-national-advisory-council-interviewed-by-mayank-mishra-4675390.html">Prof. Jean Dreze, noted economist and former member of the<br /> National Advisory Council</a>, interviewed by Mayank Mishra, Business Standard, 23 February, 2015&nbsp; </div><div align="justify">&nbsp;</div><div align="justify"><a href="https://im4change.in/latest-news-updates/understanding-leakages-in-the-public-distribution-system-jean-dreze-and-reetika-khera-4675312.html" title="https://im4change.in/latest-news-updates/understanding-leakages-in-the-public-distribution-system-jean-dreze-and-reetika-khera-4675312.html">Understanding Leakages in the Public Distribution System</a> -Jean Dreze and Reetika Khera, Economic and Political Weekly, Vol-L, No. 7, February 14, 2015&nbsp; <br /></div><div align="justify"><br /><a href="https://im4change.in/latest-news-updates/food-insecurity-tk-rajalakshmi-4675382.html" title="https://im4change.in/latest-news-updates/food-insecurity-tk-rajalakshmi-4675382.html">Food insecurity</a> -TK Rajalakshmi, Frontline, 6 March, 2015&nbsp; <br /><br />'<a href="https://im4change.in/news-alerts/039changes-in-pds-may-affect-food-security-of-half-of-indians039-4675318.html" title="https://im4change.in/news-alerts/039changes-in-pds-may-affect-food-security-of-half-of-indians039-4675318.html">Changes in PDS may affect food security of half of Indians</a>'&nbsp; <br /><br /><a href="https://im4change.in/latest-news-updates/fci-reforms-prescription-to-cure-or-kill-roshan-kishore-4675181.html" title="https://im4change.in/latest-news-updates/fci-reforms-prescription-to-cure-or-kill-roshan-kishore-4675181.html">FCI reforms: prescription to cure or kill?</a> -Roshan Kishore, Livemint.com, 27 January, 2015&nbsp; <br /><br /><a href="https://im4change.in/latest-news-updates/water-for-the-leeward-india-jean-dreze-and-reetika-khera-24521.html" title="https://im4change.in/latest-news-updates/water-for-the-leeward-india-jean-dreze-and-reetika-khera-24521.html">Water For The Leeward India</a> -Jean Dreze and Reetika Khera, Outlook, 24 March, 2014 <br /><br /><a href="https://im4change.in/latest-news-updates/public-distribution-system-reforms-and-consumption-in-chhattisgarh-prasad-krishnamurthy-vikram-pathania-and-sharad-tandon-24265.html" title="https://im4change.in/latest-news-updates/public-distribution-system-reforms-and-consumption-in-chhattisgarh-prasad-krishnamurthy-vikram-pathania-and-sharad-tandon-24265.html">Public Distribution System Reforms and Consumption in Chha<br />ttisgarh</a> -Prasad Krishnamurthy, Vikram Pathania, and Sharad Tandon, Economic and Political Weekly, Vol-XLIX, No. 8, February 22, 2014&nbsp; <br /><br /><a href="http://www.business-standard.com/article/economy-policy/there-seems-to-be-at-least-40-leakage-in-our-targeted-pds-system-ajay-chhibber-114020200447_1.html" title="http://www.business-standard.com/article/economy-policy/there-seems-to-be-at-least-40-leakage-in-our-targeted-pds-system-ajay-chhibber-114020200447_1.html">Ajay Chhibber, Director General of the IEO</a>, a former assistant secretary general of the UN Development Programme, interviewed by Sanjeeb Mukherjee, Business Standard, 3 February, 2014&nbsp;&nbsp;&nbsp; <br /><br /><a href="https://im4change.in/latest-news-updates/rural-poverty-and-the-public-distribution-system-jean-dreze-and-reetika-khera-23277.html" title="https://im4change.in/latest-news-updates/rural-poverty-and-the-public-distribution-system-jean-dreze-and-reetika-khera-23277.html">Rural Poverty and the Public Distribution System</a>-Jean Dreze and Reetika Khera, Economic and Political Weekly, Vol-XLVIII, No. 45-46, November 16, 2013&nbsp;&nbsp; <br /><br /><a href="https://im4change.in/docs/335reforming-the-pds-lessons-from-chhattisgarh.pdf" title="https://im4change.in/docs/335reforming-the-pds-lessons-from-chhattisgarh.pdf">Reforming the Public Distribution System</a>: Lessons from Chhattisgarh by Raghav Puri, Economic and Political Weekly, February 4, 2012&nbsp; <br /><br /><a href="https://im4change.in/siteadmin/tinymce/uploaded/Reetika%20PDS.pdf" title="https://im4change.in/siteadmin/tinymce/uploaded/Reetika%20PDS.pdf">Revival of the Public Distribution System</a> -Reetika Khera, Economic and Political Weekly, November 5, 2011, Vol xlvi, No. 44 &amp; 45&nbsp; <br /><br /><a href="http://www.cdedse.org/pdf/work198.pdf" title="http://www.cdedse.org/pdf/work198.pdf">Trends in diversion of PDS grain</a> -Reetika Khera (2011), Working Paper No. 198, Centre for Development Economics, Department of Economics, Delhi School of Economics <br />&nbsp;&nbsp;&nbsp;&nbsp; <br /><a href="http://web.iitd.ac.in/~reetika/projects.html" title="http://web.iitd.ac.in/~reetika/projects.html">PEEP survey 2013 and PDS Survey 2011</a>&nbsp;&nbsp; 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<div align="justify">
Following the recommendations of the Shanta Kumar Committee report on restructuring of the Food Corporation of India (FCI), there are signs that the Central Government is in a hurry to replace the <a href="../hunger-hdi/pds-ration-food-security-42.html">Public Distribution System</a> (PDS) with cash transfers. <br />
<br />
The Government's intention has been revealed in two official letters (one dated <a href="tinymce/uploaded/GoI%20Letter%20on%20DBT%20dated%2010%20Feb%202015.pdf" title="10 Feb">10 February 2015</a> and another dated <a href="tinymce/uploaded/GoI%20letter%20on%20DBT%20dated%2011%20Feb%202015.pdf" title="11 Feb">11 February 2015</a>) that were sent from the Joint Secretary at Department of Food and Public Distribution to the Principal Secretary/ Secretary at Department of Food &amp; Civil Supplies of various states/ UTs. &nbsp;<br />
<br />
In the letter dated 10 February 2015, it has been clearly said that the <em>&quot;Government is looking forward to implement DBT for foodgrains initially in the UTs and few districts of the states on pilot basis&quot;</em>.<br />
<br />
Despite various arguments and evidence put against cash transfers vis-a-vis PDS to ensure food security (by development economists in the past), the recent official correspondences show that the Ministry of Consumer Affairs is willing to rope in officials from Unique Identification Authority of India (UIDAI)/ National Population Register (NPR) so as to implement the appropriate model of cash transfer by complete digitization of beneficiary data and Aadhaar seeding. <br />
<br />
As per the official letter dated 10 February, any of the 3 models/ options (as shown below) can be adopted by states/ UTs for cash transfers: <br />
<br />
a. Under the first model, cash transfer of food subsidy can be submitted to bank account of beneficiaries every month. There is complete freedom given to beneficiaries to purchase foodgrains from anywhere in the market. However, for undertaking this model, there has to be adequate supply of foodgrains in the market around the year.<br />
<br />
b. Under the second model, fair price shops (FPS) dealers will be supplied foodgrains at minimum support price (MSP) or near market prices. Beneficiaries have to purchase foodgrains from the FPS at designated prices and all transactions are recorded on point-of-sale (PoS) device. The difference of MSP/ designated price and Central Issue Price (CIP) will be credited to the beneficiaries' bank account in advance against actual purchase from FPS. <br />
<br />
c. Under the third model, the existing manual process of issuance of foodgrains will be followed, with or without PoS, aided by digitized database seeded with Aadhaar. &nbsp;<br />
<br />
It is not clear from the above-mentioned official correspondences whether cash transfers will be indexed with the overall price level to protect the amount of real income transfers, as was actually recommended by the High Level Committee report on FCI restructuring. It has been argued earlier by Right to Food activists that cash transfer cannot ensure food security in the face of price rise, unless it is indexed to inflation. <br />
<br />
If the first option of cash transfer is adopted, then public procurement of foodgrains from farmers will be adversely affected, as has been cautioned by the Right to Food Campaign in its press note dated 25 January 2015.<br />
<br />
Riding on the claim that 13.2 crore new bank accounts have been opened under the Pradhan Mantri Jan Dhan Yojana in the last six months with coverage of 100% target, the Government seems to be confident of implementing the direct benefits transfer (DBT) of consumer food subsidy.<br />
<br />
However, in a <a href="tinymce/uploaded/Reetika%20PDS.pdf">study of PDS</a> undertaken in 9 states during May-June 2011, it was shown that more than two-thirds of the respondents expressed a clear preference for food over cash; less than one-fifth (18 percent) were in favour of cash over food. In states where PDS was running well, majority of the respondents preferred food over cash transfer. &nbsp;<br />
<br />
A group of <a href="../latest-news-updates/reforming-food-corporation-of-india-himanshu-4675364.html">economists</a> have recently shown that replacing the PDS with cash transfer will be like throwing out the baby with the bathwater since it has been revealed that PDS, which directly impacts rural poverty, could be revived even in poor states like Odisha, Chhattisgarh and Bihar thanks to the reforms undertaken by the respective state governments. For example, <a href="../latest-news-updates/understanding-leakages-in-the-public-distribution-system-jean-dreze-and-reetika-khera-4675312.html">PDS leakage</a> in Bihar reduced to 24% in 2011-12 from 91% in 2004-05 due to introduction of coupon system, while diversions declined in Chhattisgarh to 3.3% in 2011-12 from 52.0% in 2004-05 as a result of transparency measures adopted plus complete overhauling of PDS. &nbsp;<br />
<br />
<strong><em>References:<br />
</em></strong><br />
Report of the High level Committee on Reorienting the Role and Restructuring of Food Corporation of India, January 2015 (Please <a href="http://fciweb.nic.in/app/webroot/upload/News/Report%20of%20the%20High%20Level%20Committee%20on%20Reorienting%20the%20Role%20and%20Restructuring%20of%20FCI_English_1.pdf">click here</a> to access)&nbsp; <br />
<br />
Leakages from the Public Distribution System (PDS) and the way forward - Ashok Gulati and Shweta Saini (2015), ICRIER (Please <a href="http://icrier.org/pdf/Working_Paper_294.pdf">click here</a> to access)&nbsp; <br />
<br />
The National Food Security Act 2013 (Please <a href="tinymce/uploaded/NFSA%202013.pdf">click here</a> to access)<br />
<br />
The National Food Security Ordinance 2013 (Please <a href="tinymce/uploaded/NationalFoodSecurityOrdinance2013.pdf">click here</a> to access)<br />
<br />
Address by the President of India, Shri Pranab Mukherjee to the Joint Session of both houses of Parliament , Press Information Bureau, 23 February 2015, <a href="http://www.pib.nic.in">www.pib.nic.in</a> <br />
<br />
<a href="../latest-news-updates/centre-takes-steps-to-convert-pds-to-cash-transfers-nitin-sethi-surabhi-agarwal-4675398.html">Centre takes steps to convert PDS to cash transfers</a> -Nitin Sethi &amp; Surabhi Agarwal, Business Standard, 24 February, 2015 <br />
<br />
<a href="../interviews/prof-jean-dreze-noted-economist-and-former-member-of-the-national-advisory-council-interviewed-by-mayank-mishra-4675390.html">Prof. Jean Dreze, noted economist and former member of the National Advisory Council</a>, interviewed by Mayank Mishra, Business Standard, 23 February, 2015&nbsp; 
</div>
<div align="justify">
&nbsp;
</div>
<div align="justify">
<a href="../latest-news-updates/understanding-leakages-in-the-public-distribution-system-jean-dreze-and-reetika-khera-4675312.html">Understanding Leakages in the Public Distribution System</a> -Jean Dreze and Reetika Khera, Economic and Political Weekly, Vol-L, No. 7, February 14, 2015&nbsp; <br />
</div>
<div align="justify">
<br />
<a href="../latest-news-updates/food-insecurity-tk-rajalakshmi-4675382.html">Food insecurity</a> -TK Rajalakshmi, Frontline, 6 March, 2015&nbsp; <br />
<br />
'<a href="../news-alerts/039changes-in-pds-may-affect-food-security-of-half-of-indians039-4675318.html">Changes in PDS may affect food security of half of Indians</a>'&nbsp; <br />
<br />
<a href="../latest-news-updates/fci-reforms-prescription-to-cure-or-kill-roshan-kishore-4675181.html">FCI reforms: prescription to cure or kill?</a> -Roshan Kishore, Livemint.com, 27 January, 2015&nbsp; <br />
<br />
<a href="../latest-news-updates/water-for-the-leeward-india-jean-dreze-and-reetika-khera-24521.html">Water For The Leeward India</a> -Jean Dreze and Reetika Khera, Outlook, 24 March, 2014 <br />
<br />
<a href="../latest-news-updates/public-distribution-system-reforms-and-consumption-in-chhattisgarh-prasad-krishnamurthy-vikram-pathania-and-sharad-tandon-24265.html">Public Distribution System Reforms and Consumption in Chhattisgarh</a> -Prasad Krishnamurthy, Vikram Pathania, and Sharad Tandon, Economic and Political Weekly, Vol-XLIX, No. 8, February 22, 2014&nbsp; <br />
<br />
<a href="http://www.business-standard.com/article/economy-policy/there-seems-to-be-at-least-40-leakage-in-our-targeted-pds-system-ajay-chhibber-114020200447_1.html">Ajay Chhibber, Director General of the IEO</a>, a former assistant secretary general of the UN Development Programme, interviewed by Sanjeeb Mukherjee, Business Standard, 3 February, 2014&nbsp;&nbsp;&nbsp; <br />
<br />
<a href="../latest-news-updates/rural-poverty-and-the-public-distribution-system-jean-dreze-and-reetika-khera-23277.html">Rural Poverty and the Public Distribution System</a>-Jean Dreze and Reetika Khera, Economic and Political Weekly, Vol-XLVIII, No. 45-46, November 16, 2013&nbsp;&nbsp; <br />
<br />
<a href="../docs/335reforming-the-pds-lessons-from-chhattisgarh.pdf">Reforming the Public Distribution System</a>: Lessons from Chhattisgarh by Raghav Puri, Economic and Political Weekly, February 4, 2012&nbsp; <br />
<br />
<a href="tinymce/uploaded/Reetika%20PDS.pdf">Revival of the Public Distribution System</a> -Reetika Khera, Economic and Political Weekly, November 5, 2011, Vol xlvi, No. 44 &amp; 45&nbsp; <br />
<br />
<a href="http://www.cdedse.org/pdf/work198.pdf">Trends in diversion of PDS grain</a> -Reetika Khera (2011), Working Paper No. 198, Centre for Development Economics, Department of Economics, Delhi School of Economics <br />
&nbsp;&nbsp;&nbsp;&nbsp; <br />
<a href="http://web.iitd.ac.in/~reetika/projects.html">PEEP survey 2013 and PDS Survey 2011</a>&nbsp;&nbsp; <br />
<br />
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	'metaTitle' => 'NEWS ALERTS | Is the Govt doing away with PDS?',
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Following the recommendations of the Shanta Kumar Committee report on restructuring of the Food Corporation of India (FCI), there are signs that the Central Government is in a hurry to replace the Public Distribution System (PDS) with cash transfers. 

The...',
	'disp' => '<br /><div align="justify">Following the recommendations of the Shanta Kumar Committee report on restructuring of the Food Corporation of India (FCI), there are signs that the Central Government is in a hurry to replace the <a href="https://im4change.in/hunger-hdi/pds-ration-food-security-42.html" title="https://im4change.in/hunger-hdi/pds-ration-food-security-42.html">Public Distribution System</a> (PDS) with cash transfers. <br /><br />The Government's intention has been revealed in two official letters (one dated <a href="https://im4change.in/siteadmin/tinymce/uploaded/GoI%20Letter%20on%20DBT%20dated%2010%20Feb%202015.pdf" title="10 Feb" title="https://im4change.in/siteadmin/tinymce/uploaded/GoI%20Letter%20on%20DBT%20dated%2010%20Feb%202015.pdf" title="10 Feb">10 February 2015</a> and another dated <a href="https://im4change.in/siteadmin/tinymce/uploaded/GoI%20letter%20on%20DBT%20dated%2011%20Feb%202015.pdf" title="11 Feb" title="https://im4change.in/siteadmin/tinymce/uploaded/GoI%20letter%20on%20DBT%20dated%2011%20Feb%202015.pdf" title="11 Feb">11 February 2015</a>) that were sent from the Joint Secretary at Department of Food and Public Distribution to the Principal Secretary/ Secretary at Department of Food &amp; Civil Supplies of various states/ UTs. &nbsp;<br /><br />In the letter dated 10 February 2015, it has been clearly said that the <em>&quot;Government is looking forward to implement DBT for foodgrains initially in the UTs and few districts of the states on pilot basis&quot;</em>.<br /><br />Despite various arguments and evidence put against cash transfers vis-a-vis PDS to ensure food security (by development economists in the past), the recent official correspondences show that the Ministry of Consumer Affairs is willing to rope in officials from Unique Identification Authority of India (UIDAI)/ National Population Register (NPR) so as to implement the appropriate model of cash transfer by complete digitization of beneficiary data and Aadhaar seeding. <br /><br />As per the official letter dated 10 February, any of the 3 models/ options (as shown below) can be adopted by states/ UTs for cash transfers: <br /><br />a. Under the first model, cash transfer of food subsidy can be submitted to bank account of beneficiaries every month. There is complete freedom given to beneficiaries to purchase foodgrains from anywhere in the market. However, for undertaking this model, there has to be adequate supply of foodgrains in the market around the year.<br /><br />b. Under the second model, fair price shops (FPS) dealers will be supplied foodgrains at minimum support price (MSP) or near market prices. Beneficiaries have to purchase foodgrains from the FPS at designated prices and all transactions are recorded on point-of-sale (PoS) device. The difference of MSP/ designated price and Central Issue Price (CIP) will be credited to the beneficiaries' bank account in advance against actual purchase from FPS. <br /><br />c. Under the third model, the existing manual process of issuance of foodgrains will be followed, with or without PoS, aided by digitized database seeded with Aadhaar. &nbsp;<br /><br />It is not clear from the above-mentioned official correspondences whether cash transfers will be indexed with the overall price level to protect the amount of real income transfers, as was actually recommended by the High Level Committee report on FCI restructuring. It has been argued earlier by Right to Food activists that cash transfer cannot ensure food security in the face of price rise, unless it is indexed to inflation. <br /><br />If the first option of cash transfer is adopted, then public procurement of foodgrains from farmers will be adversely affected, as has been cautioned by the Right to Food Campaign in its press note dated 25 January 2015.<br /><br />Riding on the claim that 13.2 crore new bank accounts have been opened under the Pradhan Mantri Jan Dhan Yojana in the last six months with coverage of 100% target, the Government seems to be confident of implementing the direct benefits transfer (DBT) of consumer food subsidy.<br /><br />However, in a <a href="https://im4change.in/siteadmin/tinymce/uploaded/Reetika%20PDS.pdf" title="https://im4change.in/siteadmin/tinymce/uploaded/Reetika%20PDS.pdf">study of PDS</a> undertaken in 9 states during May-June 2011, it was shown that more than two-thirds of the respondents expressed a clear preference for food over cash; less than one-fifth (18 percent) were in favour of cash over food. In states where PDS was running well, majority of the respondents preferred food over cash transfer. &nbsp;<br /><br />A group of <a href="https://im4change.in/latest-news-updates/reforming-food-corporation-of-india-himanshu-4675364.html" title="https://im4change.in/latest-news-updates/reforming-food-corporation-of-india-himanshu-4675364.html">economists</a> have recently shown that replacing the PDS with cash transfer will be like throwing out the baby with the bathwater since it has been revealed that PDS, which directly impacts rural poverty, could be revived even in poor states like Odisha, Chhattisgarh and Bihar thanks to the reforms undertaken by the respective state governments. For example, <a href="https://im4change.in/latest-news-updates/understanding-leakages-in-the-public-distribution-system-jean-dreze-and-reetika-khera-4675312.html" title="https://im4change.in/latest-news-updates/understanding-leakages-in-the-public-distribution-system-jean-dreze-and-reetika-khera-4675312.html">PDS leakage</a> in Bihar reduced to 24% in 2011-12 from 91% in 2004-05 due to introduction of coupon system, while diversions declined in Chhattisgarh to 3.3% in 2011-12 from 52.0% in 2004-05 as a result of transparency measures adopted plus complete overhauling of PDS. &nbsp;<br /><br /><strong><em>References:<br /></em></strong><br />Report of the High level Committee on Reorienting the Role and Restructuring of Food Corporation of India, January 2015 (Please <a href="http://fciweb.nic.in/app/webroot/upload/News/Report%20of%20the%20High%20Level%20Committee%20on%20Reorienting%20the%20Role%20and%20Restructuring%20of%20FCI_English_1.pdf" title="http://fciweb.nic.in/app/webroot/upload/News/Report%20of%20the%20High%20Level%20Committee%20on%20Reorienting%20the%20Role%20and%20Restructuring%20of%20FCI_English_1.pdf">click here</a> to access)&nbsp; <br /><br />Leakages from the Public Distribution System (PDS) and the way forward - Ashok Gulati and Shweta Saini (2015), ICRIER (Please <a href="http://icrier.org/pdf/Working_Paper_294.pdf" title="http://icrier.org/pdf/Working_Paper_294.pdf">click here</a> to access)&nbsp; <br /><br />The National Food Security Act 2013 (Please <a href="https://im4change.in/siteadmin/tinymce/uploaded/NFSA%202013.pdf" title="https://im4change.in/siteadmin/tinymce/uploaded/NFSA%202013.pdf">click here</a> to access)<br /><br />The National Food Security Ordinance 2013 (Please <a href="https://im4change.in/siteadmin/tinymce/uploaded/NationalFoodSecurityOrdinance2013.pdf" title="https://im4change.in/siteadmin/tinymce/uploaded/NationalFoodSecurityOrdinance2013.pdf">click here</a> to access)<br /><br />Address by the President of India, Shri Pranab Mukherjee to the Joint Session of both houses of Parliament , Press Information Bureau, 23 February 2015, <a href="http://www.pib.nic.in" title="http://www.pib.nic.in">www.pib.nic.in</a> <br /><br /><a href="https://im4change.in/latest-news-updates/centre-takes-steps-to-convert-pds-to-cash-transfers-nitin-sethi-surabhi-agarwal-4675398.html" title="https://im4change.in/latest-news-updates/centre-takes-steps-to-convert-pds-to-cash-transfers-nitin-sethi-surabhi-agarwal-4675398.html">Centre takes steps to convert PDS to cash transfers</a> -Nitin Sethi &amp; Surabhi Agarwal, Business Standard, 24 February, 2015 <br /><br /><a href="https://im4change.in/interviews/prof-jean-dreze-noted-economist-and-former-member-of-the-national-advisory-council-interviewed-by-mayank-mishra-4675390.html" title="https://im4change.in/interviews/prof-jean-dreze-noted-economist-and-former-member-of-the-national-advisory-council-interviewed-by-mayank-mishra-4675390.html">Prof. Jean Dreze, noted economist and former member of the<br /> National Advisory Council</a>, interviewed by Mayank Mishra, Business Standard, 23 February, 2015&nbsp; </div><div align="justify">&nbsp;</div><div align="justify"><a href="https://im4change.in/latest-news-updates/understanding-leakages-in-the-public-distribution-system-jean-dreze-and-reetika-khera-4675312.html" title="https://im4change.in/latest-news-updates/understanding-leakages-in-the-public-distribution-system-jean-dreze-and-reetika-khera-4675312.html">Understanding Leakages in the Public Distribution System</a> -Jean Dreze and Reetika Khera, Economic and Political Weekly, Vol-L, No. 7, February 14, 2015&nbsp; <br /></div><div align="justify"><br /><a href="https://im4change.in/latest-news-updates/food-insecurity-tk-rajalakshmi-4675382.html" title="https://im4change.in/latest-news-updates/food-insecurity-tk-rajalakshmi-4675382.html">Food insecurity</a> -TK Rajalakshmi, Frontline, 6 March, 2015&nbsp; <br /><br />'<a href="https://im4change.in/news-alerts/039changes-in-pds-may-affect-food-security-of-half-of-indians039-4675318.html" title="https://im4change.in/news-alerts/039changes-in-pds-may-affect-food-security-of-half-of-indians039-4675318.html">Changes in PDS may affect food security of half of Indians</a>'&nbsp; <br /><br /><a href="https://im4change.in/latest-news-updates/fci-reforms-prescription-to-cure-or-kill-roshan-kishore-4675181.html" title="https://im4change.in/latest-news-updates/fci-reforms-prescription-to-cure-or-kill-roshan-kishore-4675181.html">FCI reforms: prescription to cure or kill?</a> -Roshan Kishore, Livemint.com, 27 January, 2015&nbsp; <br /><br /><a href="https://im4change.in/latest-news-updates/water-for-the-leeward-india-jean-dreze-and-reetika-khera-24521.html" title="https://im4change.in/latest-news-updates/water-for-the-leeward-india-jean-dreze-and-reetika-khera-24521.html">Water For The Leeward India</a> -Jean Dreze and Reetika Khera, Outlook, 24 March, 2014 <br /><br /><a href="https://im4change.in/latest-news-updates/public-distribution-system-reforms-and-consumption-in-chhattisgarh-prasad-krishnamurthy-vikram-pathania-and-sharad-tandon-24265.html" title="https://im4change.in/latest-news-updates/public-distribution-system-reforms-and-consumption-in-chhattisgarh-prasad-krishnamurthy-vikram-pathania-and-sharad-tandon-24265.html">Public Distribution System Reforms and Consumption in Chha<br />ttisgarh</a> -Prasad Krishnamurthy, Vikram Pathania, and Sharad Tandon, Economic and Political Weekly, Vol-XLIX, No. 8, February 22, 2014&nbsp; <br /><br /><a href="http://www.business-standard.com/article/economy-policy/there-seems-to-be-at-least-40-leakage-in-our-targeted-pds-system-ajay-chhibber-114020200447_1.html" title="http://www.business-standard.com/article/economy-policy/there-seems-to-be-at-least-40-leakage-in-our-targeted-pds-system-ajay-chhibber-114020200447_1.html">Ajay Chhibber, Director General of the IEO</a>, a former assistant secretary general of the UN Development Programme, interviewed by Sanjeeb Mukherjee, Business Standard, 3 February, 2014&nbsp;&nbsp;&nbsp; <br /><br /><a href="https://im4change.in/latest-news-updates/rural-poverty-and-the-public-distribution-system-jean-dreze-and-reetika-khera-23277.html" title="https://im4change.in/latest-news-updates/rural-poverty-and-the-public-distribution-system-jean-dreze-and-reetika-khera-23277.html">Rural Poverty and the Public Distribution System</a>-Jean Dreze and Reetika Khera, Economic and Political Weekly, Vol-XLVIII, No. 45-46, November 16, 2013&nbsp;&nbsp; <br /><br /><a href="https://im4change.in/docs/335reforming-the-pds-lessons-from-chhattisgarh.pdf" title="https://im4change.in/docs/335reforming-the-pds-lessons-from-chhattisgarh.pdf">Reforming the Public Distribution System</a>: Lessons from Chhattisgarh by Raghav Puri, Economic and Political Weekly, February 4, 2012&nbsp; <br /><br /><a href="https://im4change.in/siteadmin/tinymce/uploaded/Reetika%20PDS.pdf" title="https://im4change.in/siteadmin/tinymce/uploaded/Reetika%20PDS.pdf">Revival of the Public Distribution System</a> -Reetika Khera, Economic and Political Weekly, November 5, 2011, Vol xlvi, No. 44 &amp; 45&nbsp; <br /><br /><a href="http://www.cdedse.org/pdf/work198.pdf" title="http://www.cdedse.org/pdf/work198.pdf">Trends in diversion of PDS grain</a> -Reetika Khera (2011), Working Paper No. 198, Centre for Development Economics, Department of Economics, Delhi School of Economics <br />&nbsp;&nbsp;&nbsp;&nbsp; <br /><a href="http://web.iitd.ac.in/~reetika/projects.html" title="http://web.iitd.ac.in/~reetika/projects.html">PEEP survey 2013 and PDS Survey 2011</a>&nbsp;&nbsp; <br /><br /></div>',
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	'title' => 'Is the Govt doing away with PDS?',
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<div align="justify">
Following the recommendations of the Shanta Kumar Committee report on restructuring of the Food Corporation of India (FCI), there are signs that the Central Government is in a hurry to replace the <a href="../hunger-hdi/pds-ration-food-security-42.html">Public Distribution System</a> (PDS) with cash transfers. <br />
<br />
The Government's intention has been revealed in two official letters (one dated <a href="tinymce/uploaded/GoI%20Letter%20on%20DBT%20dated%2010%20Feb%202015.pdf" title="10 Feb">10 February 2015</a> and another dated <a href="tinymce/uploaded/GoI%20letter%20on%20DBT%20dated%2011%20Feb%202015.pdf" title="11 Feb">11 February 2015</a>) that were sent from the Joint Secretary at Department of Food and Public Distribution to the Principal Secretary/ Secretary at Department of Food &amp; Civil Supplies of various states/ UTs. &nbsp;<br />
<br />
In the letter dated 10 February 2015, it has been clearly said that the <em>&quot;Government is looking forward to implement DBT for foodgrains initially in the UTs and few districts of the states on pilot basis&quot;</em>.<br />
<br />
Despite various arguments and evidence put against cash transfers vis-a-vis PDS to ensure food security (by development economists in the past), the recent official correspondences show that the Ministry of Consumer Affairs is willing to rope in officials from Unique Identification Authority of India (UIDAI)/ National Population Register (NPR) so as to implement the appropriate model of cash transfer by complete digitization of beneficiary data and Aadhaar seeding. <br />
<br />
As per the official letter dated 10 February, any of the 3 models/ options (as shown below) can be adopted by states/ UTs for cash transfers: <br />
<br />
a. Under the first model, cash transfer of food subsidy can be submitted to bank account of beneficiaries every month. There is complete freedom given to beneficiaries to purchase foodgrains from anywhere in the market. However, for undertaking this model, there has to be adequate supply of foodgrains in the market around the year.<br />
<br />
b. Under the second model, fair price shops (FPS) dealers will be supplied foodgrains at minimum support price (MSP) or near market prices. Beneficiaries have to purchase foodgrains from the FPS at designated prices and all transactions are recorded on point-of-sale (PoS) device. The difference of MSP/ designated price and Central Issue Price (CIP) will be credited to the beneficiaries' bank account in advance against actual purchase from FPS. <br />
<br />
c. Under the third model, the existing manual process of issuance of foodgrains will be followed, with or without PoS, aided by digitized database seeded with Aadhaar. &nbsp;<br />
<br />
It is not clear from the above-mentioned official correspondences whether cash transfers will be indexed with the overall price level to protect the amount of real income transfers, as was actually recommended by the High Level Committee report on FCI restructuring. It has been argued earlier by Right to Food activists that cash transfer cannot ensure food security in the face of price rise, unless it is indexed to inflation. <br />
<br />
If the first option of cash transfer is adopted, then public procurement of foodgrains from farmers will be adversely affected, as has been cautioned by the Right to Food Campaign in its press note dated 25 January 2015.<br />
<br />
Riding on the claim that 13.2 crore new bank accounts have been opened under the Pradhan Mantri Jan Dhan Yojana in the last six months with coverage of 100% target, the Government seems to be confident of implementing the direct benefits transfer (DBT) of consumer food subsidy.<br />
<br />
However, in a <a href="tinymce/uploaded/Reetika%20PDS.pdf">study of PDS</a> undertaken in 9 states during May-June 2011, it was shown that more than two-thirds of the respondents expressed a clear preference for food over cash; less than one-fifth (18 percent) were in favour of cash over food. In states where PDS was running well, majority of the respondents preferred food over cash transfer. &nbsp;<br />
<br />
A group of <a href="../latest-news-updates/reforming-food-corporation-of-india-himanshu-4675364.html">economists</a> have recently shown that replacing the PDS with cash transfer will be like throwing out the baby with the bathwater since it has been revealed that PDS, which directly impacts rural poverty, could be revived even in poor states like Odisha, Chhattisgarh and Bihar thanks to the reforms undertaken by the respective state governments. For example, <a href="../latest-news-updates/understanding-leakages-in-the-public-distribution-system-jean-dreze-and-reetika-khera-4675312.html">PDS leakage</a> in Bihar reduced to 24% in 2011-12 from 91% in 2004-05 due to introduction of coupon system, while diversions declined in Chhattisgarh to 3.3% in 2011-12 from 52.0% in 2004-05 as a result of transparency measures adopted plus complete overhauling of PDS. &nbsp;<br />
<br />
<strong><em>References:<br />
</em></strong><br />
Report of the High level Committee on Reorienting the Role and Restructuring of Food Corporation of India, January 2015 (Please <a href="http://fciweb.nic.in/app/webroot/upload/News/Report%20of%20the%20High%20Level%20Committee%20on%20Reorienting%20the%20Role%20and%20Restructuring%20of%20FCI_English_1.pdf">click here</a> to access)&nbsp; <br />
<br />
Leakages from the Public Distribution System (PDS) and the way forward - Ashok Gulati and Shweta Saini (2015), ICRIER (Please <a href="http://icrier.org/pdf/Working_Paper_294.pdf">click here</a> to access)&nbsp; <br />
<br />
The National Food Security Act 2013 (Please <a href="tinymce/uploaded/NFSA%202013.pdf">click here</a> to access)<br />
<br />
The National Food Security Ordinance 2013 (Please <a href="tinymce/uploaded/NationalFoodSecurityOrdinance2013.pdf">click here</a> to access)<br />
<br />
Address by the President of India, Shri Pranab Mukherjee to the Joint Session of both houses of Parliament , Press Information Bureau, 23 February 2015, <a href="http://www.pib.nic.in">www.pib.nic.in</a> <br />
<br />
<a href="../latest-news-updates/centre-takes-steps-to-convert-pds-to-cash-transfers-nitin-sethi-surabhi-agarwal-4675398.html">Centre takes steps to convert PDS to cash transfers</a> -Nitin Sethi &amp; Surabhi Agarwal, Business Standard, 24 February, 2015 <br />
<br />
<a href="../interviews/prof-jean-dreze-noted-economist-and-former-member-of-the-national-advisory-council-interviewed-by-mayank-mishra-4675390.html">Prof. Jean Dreze, noted economist and former member of the National Advisory Council</a>, interviewed by Mayank Mishra, Business Standard, 23 February, 2015&nbsp; 
</div>
<div align="justify">
&nbsp;
</div>
<div align="justify">
<a href="../latest-news-updates/understanding-leakages-in-the-public-distribution-system-jean-dreze-and-reetika-khera-4675312.html">Understanding Leakages in the Public Distribution System</a> -Jean Dreze and Reetika Khera, Economic and Political Weekly, Vol-L, No. 7, February 14, 2015&nbsp; <br />
</div>
<div align="justify">
<br />
<a href="../latest-news-updates/food-insecurity-tk-rajalakshmi-4675382.html">Food insecurity</a> -TK Rajalakshmi, Frontline, 6 March, 2015&nbsp; <br />
<br />
'<a href="../news-alerts/039changes-in-pds-may-affect-food-security-of-half-of-indians039-4675318.html">Changes in PDS may affect food security of half of Indians</a>'&nbsp; <br />
<br />
<a href="../latest-news-updates/fci-reforms-prescription-to-cure-or-kill-roshan-kishore-4675181.html">FCI reforms: prescription to cure or kill?</a> -Roshan Kishore, Livemint.com, 27 January, 2015&nbsp; <br />
<br />
<a href="../latest-news-updates/water-for-the-leeward-india-jean-dreze-and-reetika-khera-24521.html">Water For The Leeward India</a> -Jean Dreze and Reetika Khera, Outlook, 24 March, 2014 <br />
<br />
<a href="../latest-news-updates/public-distribution-system-reforms-and-consumption-in-chhattisgarh-prasad-krishnamurthy-vikram-pathania-and-sharad-tandon-24265.html">Public Distribution System Reforms and Consumption in Chhattisgarh</a> -Prasad Krishnamurthy, Vikram Pathania, and Sharad Tandon, Economic and Political Weekly, Vol-XLIX, No. 8, February 22, 2014&nbsp; <br />
<br />
<a href="http://www.business-standard.com/article/economy-policy/there-seems-to-be-at-least-40-leakage-in-our-targeted-pds-system-ajay-chhibber-114020200447_1.html">Ajay Chhibber, Director General of the IEO</a>, a former assistant secretary general of the UN Development Programme, interviewed by Sanjeeb Mukherjee, Business Standard, 3 February, 2014&nbsp;&nbsp;&nbsp; <br />
<br />
<a href="../latest-news-updates/rural-poverty-and-the-public-distribution-system-jean-dreze-and-reetika-khera-23277.html">Rural Poverty and the Public Distribution System</a>-Jean Dreze and Reetika Khera, Economic and Political Weekly, Vol-XLVIII, No. 45-46, November 16, 2013&nbsp;&nbsp; <br />
<br />
<a href="../docs/335reforming-the-pds-lessons-from-chhattisgarh.pdf">Reforming the Public Distribution System</a>: Lessons from Chhattisgarh by Raghav Puri, Economic and Political Weekly, February 4, 2012&nbsp; <br />
<br />
<a href="tinymce/uploaded/Reetika%20PDS.pdf">Revival of the Public Distribution System</a> -Reetika Khera, Economic and Political Weekly, November 5, 2011, Vol xlvi, No. 44 &amp; 45&nbsp; <br />
<br />
<a href="http://www.cdedse.org/pdf/work198.pdf">Trends in diversion of PDS grain</a> -Reetika Khera (2011), Working Paper No. 198, Centre for Development Economics, Department of Economics, Delhi School of Economics <br />
&nbsp;&nbsp;&nbsp;&nbsp; <br />
<a href="http://web.iitd.ac.in/~reetika/projects.html">PEEP survey 2013 and PDS Survey 2011</a>&nbsp;&nbsp; <br />
<br />
</div>',
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$metaTitle = 'NEWS ALERTS | Is the Govt doing away with PDS?'
$metaKeywords = 'PDS,Public Distribution System,cash transfers,cash transfer,Right to Food,Food Security,Direct Benefit Transfer'
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Following the recommendations of the Shanta Kumar Committee report on restructuring of the Food Corporation of India (FCI), there are signs that the Central Government is in a hurry to replace the Public Distribution System (PDS) with cash transfers. 

The...'
$disp = '<br /><div align="justify">Following the recommendations of the Shanta Kumar Committee report on restructuring of the Food Corporation of India (FCI), there are signs that the Central Government is in a hurry to replace the <a href="https://im4change.in/hunger-hdi/pds-ration-food-security-42.html" title="https://im4change.in/hunger-hdi/pds-ration-food-security-42.html">Public Distribution System</a> (PDS) with cash transfers. <br /><br />The Government's intention has been revealed in two official letters (one dated <a href="https://im4change.in/siteadmin/tinymce/uploaded/GoI%20Letter%20on%20DBT%20dated%2010%20Feb%202015.pdf" title="10 Feb" title="https://im4change.in/siteadmin/tinymce/uploaded/GoI%20Letter%20on%20DBT%20dated%2010%20Feb%202015.pdf" title="10 Feb">10 February 2015</a> and another dated <a href="https://im4change.in/siteadmin/tinymce/uploaded/GoI%20letter%20on%20DBT%20dated%2011%20Feb%202015.pdf" title="11 Feb" title="https://im4change.in/siteadmin/tinymce/uploaded/GoI%20letter%20on%20DBT%20dated%2011%20Feb%202015.pdf" title="11 Feb">11 February 2015</a>) that were sent from the Joint Secretary at Department of Food and Public Distribution to the Principal Secretary/ Secretary at Department of Food &amp; Civil Supplies of various states/ UTs. &nbsp;<br /><br />In the letter dated 10 February 2015, it has been clearly said that the <em>&quot;Government is looking forward to implement DBT for foodgrains initially in the UTs and few districts of the states on pilot basis&quot;</em>.<br /><br />Despite various arguments and evidence put against cash transfers vis-a-vis PDS to ensure food security (by development economists in the past), the recent official correspondences show that the Ministry of Consumer Affairs is willing to rope in officials from Unique Identification Authority of India (UIDAI)/ National Population Register (NPR) so as to implement the appropriate model of cash transfer by complete digitization of beneficiary data and Aadhaar seeding. <br /><br />As per the official letter dated 10 February, any of the 3 models/ options (as shown below) can be adopted by states/ UTs for cash transfers: <br /><br />a. Under the first model, cash transfer of food subsidy can be submitted to bank account of beneficiaries every month. There is complete freedom given to beneficiaries to purchase foodgrains from anywhere in the market. However, for undertaking this model, there has to be adequate supply of foodgrains in the market around the year.<br /><br />b. Under the second model, fair price shops (FPS) dealers will be supplied foodgrains at minimum support price (MSP) or near market prices. Beneficiaries have to purchase foodgrains from the FPS at designated prices and all transactions are recorded on point-of-sale (PoS) device. The difference of MSP/ designated price and Central Issue Price (CIP) will be credited to the beneficiaries' bank account in advance against actual purchase from FPS. <br /><br />c. Under the third model, the existing manual process of issuance of foodgrains will be followed, with or without PoS, aided by digitized database seeded with Aadhaar. &nbsp;<br /><br />It is not clear from the above-mentioned official correspondences whether cash transfers will be indexed with the overall price level to protect the amount of real income transfers, as was actually recommended by the High Level Committee report on FCI restructuring. It has been argued earlier by Right to Food activists that cash transfer cannot ensure food security in the face of price rise, unless it is indexed to inflation. <br /><br />If the first option of cash transfer is adopted, then public procurement of foodgrains from farmers will be adversely affected, as has been cautioned by the Right to Food Campaign in its press note dated 25 January 2015.<br /><br />Riding on the claim that 13.2 crore new bank accounts have been opened under the Pradhan Mantri Jan Dhan Yojana in the last six months with coverage of 100% target, the Government seems to be confident of implementing the direct benefits transfer (DBT) of consumer food subsidy.<br /><br />However, in a <a href="https://im4change.in/siteadmin/tinymce/uploaded/Reetika%20PDS.pdf" title="https://im4change.in/siteadmin/tinymce/uploaded/Reetika%20PDS.pdf">study of PDS</a> undertaken in 9 states during May-June 2011, it was shown that more than two-thirds of the respondents expressed a clear preference for food over cash; less than one-fifth (18 percent) were in favour of cash over food. In states where PDS was running well, majority of the respondents preferred food over cash transfer. &nbsp;<br /><br />A group of <a href="https://im4change.in/latest-news-updates/reforming-food-corporation-of-india-himanshu-4675364.html" title="https://im4change.in/latest-news-updates/reforming-food-corporation-of-india-himanshu-4675364.html">economists</a> have recently shown that replacing the PDS with cash transfer will be like throwing out the baby with the bathwater since it has been revealed that PDS, which directly impacts rural poverty, could be revived even in poor states like Odisha, Chhattisgarh and Bihar thanks to the reforms undertaken by the respective state governments. For example, <a href="https://im4change.in/latest-news-updates/understanding-leakages-in-the-public-distribution-system-jean-dreze-and-reetika-khera-4675312.html" title="https://im4change.in/latest-news-updates/understanding-leakages-in-the-public-distribution-system-jean-dreze-and-reetika-khera-4675312.html">PDS leakage</a> in Bihar reduced to 24% in 2011-12 from 91% in 2004-05 due to introduction of coupon system, while diversions declined in Chhattisgarh to 3.3% in 2011-12 from 52.0% in 2004-05 as a result of transparency measures adopted plus complete overhauling of PDS. &nbsp;<br /><br /><strong><em>References:<br /></em></strong><br />Report of the High level Committee on Reorienting the Role and Restructuring of Food Corporation of India, January 2015 (Please <a href="http://fciweb.nic.in/app/webroot/upload/News/Report%20of%20the%20High%20Level%20Committee%20on%20Reorienting%20the%20Role%20and%20Restructuring%20of%20FCI_English_1.pdf" title="http://fciweb.nic.in/app/webroot/upload/News/Report%20of%20the%20High%20Level%20Committee%20on%20Reorienting%20the%20Role%20and%20Restructuring%20of%20FCI_English_1.pdf">click here</a> to access)&nbsp; <br /><br />Leakages from the Public Distribution System (PDS) and the way forward - Ashok Gulati and Shweta Saini (2015), ICRIER (Please <a href="http://icrier.org/pdf/Working_Paper_294.pdf" title="http://icrier.org/pdf/Working_Paper_294.pdf">click here</a> to access)&nbsp; <br /><br />The National Food Security Act 2013 (Please <a href="https://im4change.in/siteadmin/tinymce/uploaded/NFSA%202013.pdf" title="https://im4change.in/siteadmin/tinymce/uploaded/NFSA%202013.pdf">click here</a> to access)<br /><br />The National Food Security Ordinance 2013 (Please <a href="https://im4change.in/siteadmin/tinymce/uploaded/NationalFoodSecurityOrdinance2013.pdf" title="https://im4change.in/siteadmin/tinymce/uploaded/NationalFoodSecurityOrdinance2013.pdf">click here</a> to access)<br /><br />Address by the President of India, Shri Pranab Mukherjee to the Joint Session of both houses of Parliament , Press Information Bureau, 23 February 2015, <a href="http://www.pib.nic.in" title="http://www.pib.nic.in">www.pib.nic.in</a> <br /><br /><a href="https://im4change.in/latest-news-updates/centre-takes-steps-to-convert-pds-to-cash-transfers-nitin-sethi-surabhi-agarwal-4675398.html" title="https://im4change.in/latest-news-updates/centre-takes-steps-to-convert-pds-to-cash-transfers-nitin-sethi-surabhi-agarwal-4675398.html">Centre takes steps to convert PDS to cash transfers</a> -Nitin Sethi &amp; Surabhi Agarwal, Business Standard, 24 February, 2015 <br /><br /><a href="https://im4change.in/interviews/prof-jean-dreze-noted-economist-and-former-member-of-the-national-advisory-council-interviewed-by-mayank-mishra-4675390.html" title="https://im4change.in/interviews/prof-jean-dreze-noted-economist-and-former-member-of-the-national-advisory-council-interviewed-by-mayank-mishra-4675390.html">Prof. Jean Dreze, noted economist and former member of the<br /> National Advisory Council</a>, interviewed by Mayank Mishra, Business Standard, 23 February, 2015&nbsp; </div><div align="justify">&nbsp;</div><div align="justify"><a href="https://im4change.in/latest-news-updates/understanding-leakages-in-the-public-distribution-system-jean-dreze-and-reetika-khera-4675312.html" title="https://im4change.in/latest-news-updates/understanding-leakages-in-the-public-distribution-system-jean-dreze-and-reetika-khera-4675312.html">Understanding Leakages in the Public Distribution System</a> -Jean Dreze and Reetika Khera, Economic and Political Weekly, Vol-L, No. 7, February 14, 2015&nbsp; <br /></div><div align="justify"><br /><a href="https://im4change.in/latest-news-updates/food-insecurity-tk-rajalakshmi-4675382.html" title="https://im4change.in/latest-news-updates/food-insecurity-tk-rajalakshmi-4675382.html">Food insecurity</a> -TK Rajalakshmi, Frontline, 6 March, 2015&nbsp; <br /><br />'<a href="https://im4change.in/news-alerts/039changes-in-pds-may-affect-food-security-of-half-of-indians039-4675318.html" title="https://im4change.in/news-alerts/039changes-in-pds-may-affect-food-security-of-half-of-indians039-4675318.html">Changes in PDS may affect food security of half of Indians</a>'&nbsp; <br /><br /><a href="https://im4change.in/latest-news-updates/fci-reforms-prescription-to-cure-or-kill-roshan-kishore-4675181.html" title="https://im4change.in/latest-news-updates/fci-reforms-prescription-to-cure-or-kill-roshan-kishore-4675181.html">FCI reforms: prescription to cure or kill?</a> -Roshan Kishore, Livemint.com, 27 January, 2015&nbsp; <br /><br /><a href="https://im4change.in/latest-news-updates/water-for-the-leeward-india-jean-dreze-and-reetika-khera-24521.html" title="https://im4change.in/latest-news-updates/water-for-the-leeward-india-jean-dreze-and-reetika-khera-24521.html">Water For The Leeward India</a> -Jean Dreze and Reetika Khera, Outlook, 24 March, 2014 <br /><br /><a href="https://im4change.in/latest-news-updates/public-distribution-system-reforms-and-consumption-in-chhattisgarh-prasad-krishnamurthy-vikram-pathania-and-sharad-tandon-24265.html" title="https://im4change.in/latest-news-updates/public-distribution-system-reforms-and-consumption-in-chhattisgarh-prasad-krishnamurthy-vikram-pathania-and-sharad-tandon-24265.html">Public Distribution System Reforms and Consumption in Chha<br />ttisgarh</a> -Prasad Krishnamurthy, Vikram Pathania, and Sharad Tandon, Economic and Political Weekly, Vol-XLIX, No. 8, February 22, 2014&nbsp; <br /><br /><a href="http://www.business-standard.com/article/economy-policy/there-seems-to-be-at-least-40-leakage-in-our-targeted-pds-system-ajay-chhibber-114020200447_1.html" title="http://www.business-standard.com/article/economy-policy/there-seems-to-be-at-least-40-leakage-in-our-targeted-pds-system-ajay-chhibber-114020200447_1.html">Ajay Chhibber, Director General of the IEO</a>, a former assistant secretary general of the UN Development Programme, interviewed by Sanjeeb Mukherjee, Business Standard, 3 February, 2014&nbsp;&nbsp;&nbsp; <br /><br /><a href="https://im4change.in/latest-news-updates/rural-poverty-and-the-public-distribution-system-jean-dreze-and-reetika-khera-23277.html" title="https://im4change.in/latest-news-updates/rural-poverty-and-the-public-distribution-system-jean-dreze-and-reetika-khera-23277.html">Rural Poverty and the Public Distribution System</a>-Jean Dreze and Reetika Khera, Economic and Political Weekly, Vol-XLVIII, No. 45-46, November 16, 2013&nbsp;&nbsp; <br /><br /><a href="https://im4change.in/docs/335reforming-the-pds-lessons-from-chhattisgarh.pdf" title="https://im4change.in/docs/335reforming-the-pds-lessons-from-chhattisgarh.pdf">Reforming the Public Distribution System</a>: Lessons from Chhattisgarh by Raghav Puri, Economic and Political Weekly, February 4, 2012&nbsp; <br /><br /><a href="https://im4change.in/siteadmin/tinymce/uploaded/Reetika%20PDS.pdf" title="https://im4change.in/siteadmin/tinymce/uploaded/Reetika%20PDS.pdf">Revival of the Public Distribution System</a> -Reetika Khera, Economic and Political Weekly, November 5, 2011, Vol xlvi, No. 44 &amp; 45&nbsp; <br /><br /><a href="http://www.cdedse.org/pdf/work198.pdf" title="http://www.cdedse.org/pdf/work198.pdf">Trends in diversion of PDS grain</a> -Reetika Khera (2011), Working Paper No. 198, Centre for Development Economics, Department of Economics, Delhi School of Economics <br />&nbsp;&nbsp;&nbsp;&nbsp; <br /><a href="http://web.iitd.ac.in/~reetika/projects.html" title="http://web.iitd.ac.in/~reetika/projects.html">PEEP survey 2013 and PDS Survey 2011</a>&nbsp;&nbsp; <br /><br /></div>'
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Is the Govt doing away with PDS?

Following the recommendations of the Shanta Kumar Committee report on restructuring of the Food Corporation of India (FCI), there are signs that the Central Government is in a hurry to replace the Public Distribution System (PDS) with cash transfers. The Government's intention has been revealed in two official letters (one dated 10 February 2015 and another dated 11 February 2015) that were sent from the Joint Secretary at Department of Food and Public Distribution to the Principal Secretary/ Secretary at Department of Food & Civil Supplies of various states/ UTs.   In the letter dated 10 February 2015, it has been clearly said that the "Government is looking forward to implement DBT for foodgrains initially in the UTs and few districts of the states on pilot basis". Despite various arguments and evidence put against cash transfers vis-a-vis PDS to ensure food security (by development economists in the past), the recent official correspondences show that the Ministry of Consumer Affairs is willing to rope in officials from Unique Identification Authority of India (UIDAI)/ National Population Register (NPR) so as to implement the appropriate model of cash transfer by complete digitization of beneficiary data and Aadhaar seeding. As per the official letter dated 10 February, any of the 3 models/ options (as shown below) can be adopted by states/ UTs for cash transfers: a. Under the first model, cash transfer of food subsidy can be submitted to bank account of beneficiaries every month. There is complete freedom given to beneficiaries to purchase foodgrains from anywhere in the market. However, for undertaking this model, there has to be adequate supply of foodgrains in the market around the year. b. Under the second model, fair price shops (FPS) dealers will be supplied foodgrains at minimum support price (MSP) or near market prices. Beneficiaries have to purchase foodgrains from the FPS at designated prices and all transactions are recorded on point-of-sale (PoS) device. The difference of MSP/ designated price and Central Issue Price (CIP) will be credited to the beneficiaries' bank account in advance against actual purchase from FPS. c. Under the third model, the existing manual process of issuance of foodgrains will be followed, with or without PoS, aided by digitized database seeded with Aadhaar.   It is not clear from the above-mentioned official correspondences whether cash transfers will be indexed with the overall price level to protect the amount of real income transfers, as was actually recommended by the High Level Committee report on FCI restructuring. It has been argued earlier by Right to Food activists that cash transfer cannot ensure food security in the face of price rise, unless it is indexed to inflation. If the first option of cash transfer is adopted, then public procurement of foodgrains from farmers will be adversely affected, as has been cautioned by the Right to Food Campaign in its press note dated 25 January 2015. Riding on the claim that 13.2 crore new bank accounts have been opened under the Pradhan Mantri Jan Dhan Yojana in the last six months with coverage of 100% target, the Government seems to be confident of implementing the direct benefits transfer (DBT) of consumer food subsidy. However, in a study of PDS undertaken in 9 states during May-June 2011, it was shown that more than two-thirds of the respondents expressed a clear preference for food over cash; less than one-fifth (18 percent) were in favour of cash over food. In states where PDS was running well, majority of the respondents preferred food over cash transfer.   A group of economists have recently shown that replacing the PDS with cash transfer will be like throwing out the baby with the bathwater since it has been revealed that PDS, which directly impacts rural poverty, could be revived even in poor states like Odisha, Chhattisgarh and Bihar thanks to the reforms undertaken by the respective state governments. For example, PDS leakage in Bihar reduced to 24% in 2011-12 from 91% in 2004-05 due to introduction of coupon system, while diversions declined in Chhattisgarh to 3.3% in 2011-12 from 52.0% in 2004-05 as a result of transparency measures adopted plus complete overhauling of PDS.   References: Report of the High level Committee on Reorienting the Role and Restructuring of Food Corporation of India, January 2015 (Please click here to access)  Leakages from the Public Distribution System (PDS) and the way forward - Ashok Gulati and Shweta Saini (2015), ICRIER (Please click here to access)  The National Food Security Act 2013 (Please click here to access) The National Food Security Ordinance 2013 (Please click here to access) Address by the President of India, Shri Pranab Mukherjee to the Joint Session of both houses of Parliament , Press Information Bureau, 23 February 2015, www.pib.nic.in Centre takes steps to convert PDS to cash transfers -Nitin Sethi & Surabhi Agarwal, Business Standard, 24 February, 2015 Prof. Jean Dreze, noted economist and former member of the National Advisory Council, interviewed by Mayank Mishra, Business Standard, 23 February, 2015    Understanding Leakages in the Public Distribution System -Jean Dreze and Reetika Khera, Economic and Political Weekly, Vol-L, No. 7, February 14, 2015  Food insecurity -TK Rajalakshmi, Frontline, 6 March, 2015  'Changes in PDS may affect food security of half of Indians'  FCI reforms: prescription to cure or kill? -Roshan Kishore, Livemint.com, 27 January, 2015  Water For The Leeward India -Jean Dreze and Reetika Khera, Outlook, 24 March, 2014 Public Distribution System Reforms and Consumption in Chha ttisgarh -Prasad Krishnamurthy, Vikram Pathania, and Sharad Tandon, Economic and Political Weekly, Vol-XLIX, No. 8, February 22, 2014  Ajay Chhibber, Director General of the IEO, a former assistant secretary general of the UN Development Programme, interviewed by Sanjeeb Mukherjee, Business Standard, 3 February, 2014    Rural Poverty and the Public Distribution System-Jean Dreze and Reetika Khera, Economic and Political Weekly, Vol-XLVIII, No. 45-46, November 16, 2013   Reforming the Public Distribution System: Lessons from Chhattisgarh by Raghav Puri, Economic and Political Weekly, February 4, 2012  Revival of the Public Distribution System -Reetika Khera, Economic and Political Weekly, November 5, 2011, Vol xlvi, No. 44 & 45  Trends in diversion of PDS grain -Reetika Khera (2011), Working Paper No. 198, Centre for Development Economics, Department of Economics, Delhi School of Economics      PEEP survey 2013 and PDS Survey 2011