Lok Sabha Question No. 1781 (UNSTARRED), answered on 2016-03-08
Subject: Direct Food Subsidy
Ministry: CONSUMER AFFAIRS, FOOD AND PUBLIC DISTRIBUTION
Asked by: SRINIVAS KESINENI, K. ASHOK KUMAR

## MINISTRY OF CONSUMER AFFAIRS, FOOD & PUBLIC DISTRIBUTION

## GOVERNMENT OF INDIA DEPARTMENT OF FOOD AND PUBLIC DISTRIBUTION

## LOK SABHA

UNSTARRED QUESTION NO. 1781

TO BE ANSWERED ON 08 TH  MARCH, 2016

## DIRECT FOOD SUBSIDY

1781.

SHRI KESINENI NANI:

SHRI K. ASHOK KUMAR:

Will the Minister of CONSUMER AFFAIRS, FOOD AND PUBLIC DISTRIBUTION miHkksDrk ekeys] [kk| vkSj lkoZtfud forj.k ea=h be pleased to state:

- (a) the details of food subsidy provided during the previous and the current year, head-wise;
- (b)  whether the Government has initiated Direct Benefit Transfer (DBT) Scheme for  Public  Distribution  System  in  some  States/UTs,  if  so,  the  details  thereof indicating the amount of money given to beneficiaries along with the criteria on which it has been determined;
- (c) whether the said subsidy has been indexed against inflation, if so, the details thereof and if not, the reasons therefor;
- (d) whether any study has been conducted on the efficacy of the DBT Scheme, if so, the details and the outcome thereof along with the action taken thereon; and
- (e) the other steps taken by the Government to ensure proper distribution of PDS items so that the benefits reach the targeted population?

A N S W E R MINISTER OF CONSUMER AFFAIRS, FOOD & PUBLIC DISTRIBUTION

## (SHRI RAM  VILAS PASWAN)

(a): Government releases food subsidy to Food Corporation of India (FCI) and to those  States  which  procure  foodgrains  under  Decentralised  Procurement  (DCP) Scheme as well as under Direct Benefit Transfer (DBT) Scheme. Details of food subsidy released during the previous financial year and the current year are as under:

## (Rs. in crore)

| Year     |     FCI | DCP States   |
|----------|---------|--------------|
| 2014-15  | 91995.4 | 21175.81     |
| 2015-16* | 87000   | 21311.37 #   |

(b) & (c): As per the 'Cash Transfer of Food Subsidy Rules, 2015' notified on 2108-2015 under the National Food Security Act, 2013 (NFSA), scheme of providing food subsidy in cash into the bank account of entitled households to enable them to purchase food grains from open market, can be taken up in the identified areas for which there is a written consent of the State Government/ Union Territory (UT) Administration.  The  Rules  inter  alia  stipulate  that  the  amount  of  food  subsidy payable to beneficiaries shall be computed by multiplying entitled quantity of

food grains with the differential between 1.25 times applicable Minimum Support Price (MSP) and the Central Issue Price (CIP) or at a rate as may be revised from time  to  time  by  the  Central  Government.  Using  the  above  formula,  the  current admissible cash transfer works out to Rs. 16.125/ kg for Wheat and Rs. 23.125/ kg for  Rice.  Since  the  MSP  is  revised  every  year,  the  amount  payable  as  cash subsidy is adjusted upwards accordingly and not preferred to be indexed against inflation.  The  DBT  Scheme  has  been  implemented  on  pilot  basis  in  Chandigarh and Puducherry w.e.f. September' 2015 and in Dadra & Nagar Haveli (in partial areas) from March' 2016. Details of monthly cash subsidy released to these UTs is as under:

(in Rs. Crore)

| UT                   |   Monthly Transfer of Cash Subsidy |
|----------------------|------------------------------------|
| Chandigarh           |                               1.78 |
| Puducherry           |                               7.65 |
| Dadra & Nagar Haveli |                               0.35 |

(d): The  'Cash  Transfer  of  Food  Subsidy  Rules,  2015'  stipulates  that  State Government shall get the effectiveness of the Scheme, in ensuring food security of the targeted beneficiaries, evaluated concurrently and submit the first report to  the  Central  Government  at  the  end  of  six  months  of  implementation  of  the Scheme.  The  Department  has  got  independent  feedback  and  the  preliminary observations/challenges have been brought to the notice of the concerned UTs. These challenges are related to lack of awareness to the beneficiaries (for their entitlement, date of transfers and grievance redressal mechanisms), lack of bank mitra, SMS alerts to beneficiary regarding credit of subsidy etc

(e): Targeted  Public  Distribution  System  (TPDS)  is  operated  under  the  joint responsibility of the Central and the State/UT Governments. Central Government is  responsible for procurement, allocation and transportation of foodgrains upto the  designated  depots  of  FCI.  The  operational  responsibilities  for  intra-state allocation  and  distribution  of  foodgrains  within  the  States/UTs,  identification  of eligible beneficiaries, issuance of ration cards to them and supervision over and monitoring of functioning of Fair Price Shops (FPSs) etc. rest with the concerned State/UT Governments.

Strengthening  and  streamlining  of  TPDS  is  a  continuous  endeavour.  The Government is also implementing a plan scheme of 'End-to-end Computerisation of TPDS Operations' during the 12 th  Five Year Plan (2012-17). In order to ensure that  the  PDS  benefits  reach  the  targeted  population,  States/UTs  are  impressed upon to ensure proper identification  of  beneficiaries  through  a  transparent  and participative process, placing the list of beneficiaries on PDS portals, delivery of foodgrains upto the door-steps of fair price shops, end-to-end computerisation of TPDS operations and setting up of effective grievance redressal mechanism etc.

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