This government is not listening to its own experts. The Economic Survey had a word of caution over the pilot exercises for giving cash instead of PDS, yet the Narendra Modi government has decided to scrap PDS and move towards direct benefit transfer.

 

The pilot project of ‘cash-for-PDS’ in three union territories of Chandigarh, Puducherry and Dadra and Nagar Haveli, launched in 2015, is now a cautionary tale, says the Economic Survey, 2017. It says, “The pilot exercises of DBT in lieu of PDS – not exactly a UBI – in Chandigarh and Pondicherry offer a cautionary tale. ... Despite some evidence on reduced leakages, independent evaluations emphasize the need for an improved digital financial infrastructure, even in these relatively urban settings.”

 

The independent evaluations quoted include the Governance Now cover story of the March 16-31, 2016 edition.

 

Prime minister Narendra Modi has said that money will be directly credited to the bank accounts of the poor beneficiaries in Chandigarh and Puducherry and they can buy grain from the market. “This model may be implemented in other states,” said Modi on July 31 at a meeting of parliamentarians from Delhi, Haryana, Punjab, Chandigarh, J&K, Himachal Pradesh and Uttarakhand.

 

Governance Now found that handing over cash instead of food grain through PDS has led to a situation where poor families are now worse-off.

 

In Chandigarh, where subsidised ration has been replaced with cash transfer, Governance Now came across many families who could not buy the same quality and quantity of ration with the money transferred in their bank accounts. There were also beneficiaries under the food security law who are yet to receive any cash subsidy. In Puducherry, many beneficiaries were unaware in which account they have received cash transfer.

 

 

 

 

Business Standard too reported on February 2, 2017 that after more than a year of their launch, government’s pilot programmes to replace subsidised food grains with cash in three union territories, Chandigarh, Dadra Nagar Haveli & Puducherry have failed, suggests results of an ongoing study commissioned by the Niti Aayog and the department of food of the Union government. These results were submitted in August 2016. The research found that 50% of the people were receiving either nothing or less cash than they were entitled in lieu of the subsidised grains that were stopped under the pilots starting from September 2015.