DBT Scheme: Direct transfer of Food Subsidy

Direct Benefit Transfer (DBT) for foodgrains is being implemented on pilot basis in UTs of Chandigarh and Puducherry w.e.f. September 2015 under the ‘Cash Transfer of Food Subsidy Rules, 2015’, which was notified on 21-08-2015, under the National Food Security Act, 2013.

The Rules stipulate that the DBT scheme shall be implemented in identified areas for which there is a written consent of the State Government for implementation of the Scheme. Section (5) of the Rules stipulate that the amount of food subsidy payable to beneficiaries shall be computed by multiplying entitled quantity of foodgrains with difference between 1.25 times applicable Minimum Support Price (MSP) and the Central Issue Price (CIP) or as may be revised from time to time by the Central Government.

Under DBT, cash transfers occur in the bank accounts of the beneficiaries directly, thereby ruling out possibility of leakages. It also leads to savings in operational expenditure involved in procurement of foodgrains, its storage and distribution through Fair Price Shops.

However, though the DBT gives a choice to beneficiaries to buy foodgrains from anywhere in the open market, it is not possible to ascertain actual utilization of cash.

Besides, State Govt. also need to ensure round the year availability of foodgrains with easier access to beneficiaries at a reasonable price.

This information was given by the Minister of Consumer Affairs, Food and Public Distribution, Shri Ram Vilas Paswan in a written reply in Rajya Sabha.

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