On Jharkhand’s plea, Centre withdraws direct transfer of food subsidy into bank accounts

The Centre has accepted Jharkhand government’s proposal and withdrawn its pilot project for direct transfer of food subsidy into bank accounts of beneficiaries in place of ration in Ranchi’s Nagri block, state food minister Saryu Rai said after receiving letter from the Centre to this effect, on Wednesday.

The minister said the pilot scheme would be scrapped and the old format of food distribution, which offers ration at Rs 1 per kg, will be implemented in the block from September 1.

Ranchi’s Nagri block was selected for country’s first large scale pilot, covering over 52,000 beneficiaries, for transferring food subsidy money into their bank accounts and then allowing them to buy ration from fair price shops at the market rate.

Earlier, the DBT pilot projects were launched in Haryana, Andhra Pradesh and Karnataka.

The letter issued by the department of food and public distribution, a copy of which is in possession of Hindustan Times, states, “The proposal has been examined after considering the problems being faced by the state government in implementation of the project in Nagri block. This department with the approval of minister for consumer affairs, food and public distribution has decided to accept the request of the state government for withdrawal of the pilot project.”

Rai said they had requested the Centre to withdraw the project citing technical and legal glitches. “Direct benefit transfer in targeted public distribution system on ‘PAHAL’ model was causing trouble to beneficiaries as well as the department, as the rules in the National Food Security Act (NFSA) and the DBT contradicted each other,” he said.

An official in the food department, requesting anonymity, explained, “Section-3 of NFSA says beneficiaries should get ration every month as per their entitlement, while PAHAL model of DBT rules say if ration is not bought, subsidy will not be paid.”

“It means, if any beneficiary failed to buy ration within that month or exhausted the subsidy amount on other needs, he will not be given the subsidy of next month. He will be deprived of monthly ration, which violates the NFSA rule,” he added.

Jharkhand chief minister Raghubar Das had launched the project in Nagri block, around 20km from state capital Ranchi, in October 2017. Beneficiaries, however, have been protesting the scheme since the beginning.

HT had visited the block in February, and highlighted the problems faced by the villagers in getting subsidy and the ration. In most cases, people claimed there was no SMS alert about the money being transferred, leading to multiple visits to banks.

Economist Jean Dreze and activists of Right to Food campaign have been spearheading a campaign against the project. Dreze’s team conducted a survey, which showed 97% of ration card holders in Nagri were opposed. Later, state government’s social audit found similar results.

On withdrawal of the project, Dreze said, “People’s voices have been heard finally. This is a victory for democracy.”

First Published: Aug 09, 2018 00:52 IST