Direct cash subsidies not feasible: Chhattisgarh CM, others

Chhattisgarh chief minister Raman Singh has opposed the union government's move to substitute the public distribution system (PDS) with direct cash transfers. In a letter to Prime Minister Manmohan Singh he said the cash transfer method was liable to misuse and that any change in the present system should only be done with the state governments' consent.

"There are lots of problems in the implementation of cash subsidy transfer under PDS. In my view, fair price shops under PDS are the only viable and convenient option for access to foodgrains in rural areas in the state.

"Financial inclusion and availability of IT infrastructure are preconditions to any scheme of cash transfers. There are substantial problems in the state on both accounts. Moreover, it would also be difficult to fix the monthly cash subsidies in view of fluctuation in market prices," he said.

Experts suggest that Raman Singh's opposition to direct cash transfers is buoyed by Chhatisgarh's PDS being among the most efficient in the country.

The chief minister also made the valid point that a cash transfer system is vulnerable to misuse by the male heads of the households on ''purchase of non-PDS commodities'' (read alcohol), which would defeat the very purpose for which the subsidies are proposed to be transferred.

Singh told the prime minister that Chattisgarh's PDS system has been accepted as a model by the union government, as fair price shops function smoothly with much reduced leakages and corruption. He said the way forward is to tighten the PDS system rather than go for direct cash transfers, which would be an abdication of the state's responsibility.