To bring about a synergy between the proposed direct transfer of food subsidies and the food security Bill, which will provide legal entitlement for cheap grain to a majority of India’s population, a Parliament standing committee has suggested states have the option of choosing between the two.

The suggestion has not been included as part of the report but is just mentioned in remarks. The committee, expected to give its final report to the Lok Sabha Speaker soon, has said it should be optional on states whether they want to go for distribution of cheap foodgrain under the food security scheme or distribute cash directly to beneficiaries.

The Parliamentary Standing Committee examining the National Food Security Bill is considering to recommend to the government to do away with the categorisation of “general” and “priority” (similar to the below poverty line) households in the legislation and provide uniform food guarantee to 75 per cent of the rural population and 50 per cent of the urban population.

Keeping in mind the fiscal implications, the committee is likely to suggest bringing down the food grain entitlements from 7 kg per person per month which is proposed in the Bill to five kg per person per month.

In a move that could speed up the ambitious direct cash transfer programme, rural development minister Jaiarm Ramesh has suggested other entities such as state governments and banks should be roped in to enroll residents in the Aadhaar system.

In a letter to Prime Minister Manmohan Singh, Ramesh said the direct benefits transfers (DBT) scheme would be successful if multiple registrars are allowed to enroll beneficiaries in the Aadhaar system.

The direct cash transfer scheme is not a “jaadu ki chhadi” (magic wand) to reform a “broken down” delivery system and problems are there in its implementation, Union minister Jairam Ramesh said on Sunday.

“It (Direct Benefits Transfer Scheme) is not a single ‘jaadu ki chhadi’ (magic wand). It is an experiment. The world's largest experiment in administrative reforms,” he told reporters.

Finance Minister P Chidambaram on Wednesday kicked off the customary pre-Budget consultations. In a meeting with the finance minister, agriculturalists shared concerns on the government’s widening fiscal deficit. They also suggested direct cash transfer of fertiliser and food subsidies, which they claimed would save the government Rs 70,000-85,000 crore directly.

To protect the interests of farmers, they also urged the finance minister and his team to set up a regulator on foreign direct investment (FDI) in the retail segment.

Several districts are lagging in Aadhaar cards and Aadhaar-linked bank accounts

Tuesday was the kick-off of the Union government’s Direct Benefits Transfer scheme and early reports show that despite scaling down the number of districts and schemes to be covered, much work still needs to be done to make the programme a success in the 20 districts in six States. Symbolic events marked the day and functions were organised. But many of the districts are still lagging in the basic requirements of the programme — Aadhaar card coverage and Aadhaar-linked bank accounts.

Direct cash transfers may curb migration among those who need to be at their native place to benefit from cash transfer

The country’s poor are bracing for what is dubbed as a potential game changer in the delivery of development. To monetise its support for the poor, the government has announced direct cash transfer of subsidies to the bank accounts of beneficiaries. To start with, the government will implement the system in 51 districts and extend it to the rest of the country by the end of 2013.

Chhattisgarh will bear an additional subsidy of Rs. 2,300 crore

Chhattisgarh Chief Minister Raman Singh does not favour proposed cash transfer for food and will not implement the scheme in his State.

“Food security means taking food to people’s doorstep,” he told journalists here on Saturday. The Chief Minister said that while cash transfer may be okay for fertilisers and other welfare schemes, it was not required as a substitute for grains. “If you give Rs. 600 in the hands of a poor person without a proper banking system, banks being far-flung and fluctuations in food prices, the idea will not work.”

Adding fuel to fire, people haven’t received subsidy

Mahipal Singh Yadav (31) is a contractual junior manager at the Kotkasim Gram Sewa Sahakari Samiti. Joining the cooperative, he had hoped, would be like any other job. However, since the direct cash transfer of kerosene subsidies scheme was piloted here, Mr. Yadav has found himself at the receiving end of people’s anger. The KGSSS operates five fair price shops (FPS) in the Kotkasim block. As the scheme came into effect, kerosene prices were hiked to Rs. 45 and then to Rs. 50 a litre from Rs. 15.