New Delhi: Even as the government finds itself under fire for the Land Acquisition Ordinance, there are now concerns over whether it is choosing a backdoor route of making food subsidy payments by cash transfers.
At the moment, those eligible under the Public Distribution System receive a fixed quota of subsidised rice and wheat through fair price shops. Under the Food Security Bill, that subsidy footprint has increased both in terms of the population covered and the quantum of grain.
Officially, the government has said they are committed to the Food Security Bill.
But NDTV has reviewed letters written two weeks ago by Deepak Kumar, Joint Secretary in the Union Food and Civil Supplies Ministry to all the Food and Civil Supplies Departments in all States, in which the government says it "is looking forward to implement DBT (Direct Benefit Transfers, or cash transfers) in Union Territories and a few districts of the States on a pilot basis."
Cash transfers remains a contentious idea because it calls for the dismantling of PDS. Instead of cheaper grain, the subsidy amount is remitted into the accounts of beneficiaries, who can buy the grain from the open market and market rates. Its proponents believe it can vastly reduce corruption in PDS; its critics worry that it will, amongst other concerns, expose the poor to the vagaries of price fluctuations.
But even as the debate continues, the letter by Mr Kumar appears to urge state governments to begin making that shift, even if it is on a pilot basis. In fact, as an indication of the government's cautious approach, it lists three models that states could adopt to switch to cash transfers, including, paradoxically, one that allows them to retain the existing manual distribution of cheap foodgrain.
The letter ends with Mr Kumar urging state's take a 'pro-active role' in putting in place the logistics needed to action cash transfers, specifically, the 'digitisation of ration cards and beneficiary database, along with seeding of Aadhar cards'.
It is unclear how this move will be viewed by state governments, given that several of them have formally expressed their reservations to cash transfers.
One of those states is Madhya Pradesh, run by the BJP. Its objections are outlined in a letter written by the MP government on February 9 to the Union Food Ministry, in response to the recommendations of a committee set up by the Centre under former Himachal Chief Minister Shanta Kumar to suggest ways of reforming the Food Corporation of India.
Mr Kumar's panel's recommendations include a shift to cash transfers in cities with a population above 10 lakhs.
But Madhya Pradesh says that cash transfers is an idea still under debate. One of the negatives, it says, is that the beneficiaries may spend the cash on items other than food. The letter also raises worries about traders cartelising to create artificial scarcity. It is on these grounds, the letter concludes, that the state is against the shift to cash transfers.
NDTV has learnt that at least two other state governments are said to have echoed Madhya Pradesh's sentiments objecting to cash transfers in food.
Clearly if the government is keen to make the shift using cash transfers to deliver food subsidy, it has a lot of convincing to do, even of state's run by the BJP.