Indian food and welfare schemes: scope for digitization towards cash transfers

The paper presents a case for a phased rolling out of direct benefits transfer (DBT) for Food in India. By studying all states and Union Territories on three broad parameters: demographics, performance of the existing Public Distribution System (PDS), and current state of banking infrastructure, the paper evaluates their “readiness” for shifting away from the existing physical grain distribution system under PDS to the ICT based DBT where a food subsidy amount (in lieu of PDS grain entitlement) is directly transferred into the Aadhaar-linked bank account of identified beneficiaries. The analysis reveals that all 36 states can implement DBT-food in the next five years i.e. by the year 2022 and this should happen in four phases.