Chhattisgarh CM opposes cash subsidy transfer; writes to PM

Chhattisgarh Chief Minister Raman Singh on Thursday opposed implementation of cash subsidy transfer under Public Distribution System (PDS), saying it was vulnerable to "misuse".

New Delhi: Chhattisgarh Chief Minister Raman Singh on Thursday opposed implementation of cash subsidy transfer under Public Distribution System (PDS), saying it was vulnerable to "misuse".
In a letter to Prime Minister Manmohan Singh, he said any changes in the proposed system should only be done with the state governments` consent.

"There are lots of problems in 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. It would also be difficult to fix the monthly cash subsidies in view of fluctuation in market prices," he said.

Finance Minister P Chidambaram had said on Tuesday that food and fertiliser subsidies were not sought to be covered under the direct cash transfer scheme being implemented from January one.

The Chief Minister said the system is also vulnerable to misuse of cash subsidy amount by the male heads of the households on purchase of non-PDS commodities which would defeat the very purpose for which the subsidies are proposed to be transferred.

"Any changes in present PDS system should only be implemented if the same result in better convenience to the beneficiaries. Also, since implementation of PDS at state level is the responsibility of State Government, any changes in the system should be done only with the consent of State Government," the CM of the BJP-ruled state said.

The Chhattisgarh Chief Minister said that substantial improvement in service delivery at the fair price shops can be achieved by bringing about qualitative changes in the existing system through reforms and by close monitoring of the whole PDS supply chain.

He said that Chhattisgarh has developed and implemented its own model--COREPDS-- for automation of fair price shops to empower the beneficiaries.

"I have personally monitored the PDS operations in Chhattisgarh state and have observed the instances of diversion and leakages in the PDS in the State come down substantially; and that implementation of cash subsidy transfer will not add much value to the PDS in the State.

"In fact, given the limitations of banking and IT infrastructure, the system of cash transfers will lead to increased inconvenience to beneficiaries," he said.

The CM said that his suggestions given as a member of the working group, headed by the Deputy Chairman Planning Commission Montek Singh Ahluwalia, were not incorporated in the final report on deciding improvements in PDS.

"I attended several meetings and gave inputs and suggestions on identification of BPL beneficiaries, strengthening of Public Distribution System and end-to-end computerization of PDS.

"Final report of the above working group has been made available to the State Government vide Govt of India letter dated October 20, 2011, recommending scheme to transfer cash subsidy to the beneficiaries, but I regret to note that many of my suggestions have not been included in the final report," Singh said.

He had earlier also conveyed that the Chhattisgarh government is not in favor of transfer of cash subsidy to the beneficiaries in Targeted Public Distribution System (TPDS).

"I would like to reiterate that the government of Chhattisgarh is committed to reforms in PDS and is of firm belief that substantial improvement in PDS service delivery can be achieved through reforms and monitoring.

"Hence, the State does not agree with transfer of cash subsidy to the beneficiaries in TPDS and I request you to exempt PDS in Chhattisgarh from the proposed cash transfer scheme," he said in his letter.

Singh has also written a letter today to Minister of Consumer Affairs, Food & Public Distribution Prof K V Thomas opposing cash subsidy transfer.


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