Debate on Cash Transfers or PDS continues

As the Govt moves closer to adopting Cash Transfer model instead of providing subsidized food grains, there are continuing debates. For example, even questions are being raised which option is better cash transfer or food coupons.

In a survey undertaken by well known economist John Dreze, some major findings have been identified. It has observed that there is a reluctance for Cash Transfer schemes particularly areas with a well-functioning PDS. In most cases, the reasons pertained in one way or another to food security – an overwhelming concern for poor households. For instance, many respondents were worried that money might be misused and further it might lead to food inflation. Also, there are apprehensions that traders might raise prices if the PDS is closed. States like Chattisgarh have strongly opposed the idea of Cash Transfers. They say, it is better to reform PDS.

It is only in Bihar and parts of Uttar Pradesh, where PDS is not working, people showed interest in cash transfers as a possible alternative.

PDS or Cash Transfer!!! The debate is still going on. Anyone would like to share their experiences.

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3 Responses to Debate on Cash Transfers or PDS continues

  1. shrikant says:

    Direct remittance into bank accounts of the beneficiaries would appear feasible and good, but under NAREGA problems of misappropriation of fund did occur where there is system of direct remittance of wages into the beneficiaries account.

  2. In PDS system at least family gets food. It will be difficult to get report for cash spending in cash transfer system.

  3. Satyadeo Bareth says:

    The entire things will be other way round in areas where PDF is well functioning if the cash transfer is introduced. Such areas must oppose this move. Well functioning PDF is blessings in disguise for the marginalized people and in fact they have struggled for it. John Drez has very rightly observed in his study about this phenomenon. It is in the fitness of things to make the PDF functional in non functioning areas. We can hope from Nitish in Bihar at least.

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