Kerala government on Saturday made it clear that it would go ahead with its proposal to distribute the ration subsidy through banks even as CPI-M led LDF Opposition demanded a re-look into the issue.

Speaking to reporters after accepting a memorandum submitted by LDF, led by Opposition leader V S Achuthanandan, Chief Minister Oommen Chandy said decision of cash transfer was to ensure that the subsidy reached the beneficiaries.

Even after government spending about Rs 700 crore as subsidy on PDS, the price of rice in the open market was rising, he said, adding, government could not remain a mute witness to it.

Chandy also explained the need to bring in changes in the PDS to opposition leaders who met him. However, he said the issue could be discussed as suggested by Opposition in the assembly which was set to meet on December 10.

The decision to disburse subsidy through banks was taken on the suspicion that a large quantity of subsidised rice was getting diverted, he said.

Such a move would prevent black marketing of ration goods.

If the subsidised rice distributed through PDS had reached people the price of rice would not have risen in the market, Chandy said.

The BPL category would continue to get 25 kg of rice a month at Rs one a kg. However smart cards would be made mandatory.

Government has taken a decision to give the subsidy amount of rice purchased through PDS by APL category through their bank account from January next.