Ration Card Update: Central Govt Planning Direct Cash Transfer Instead of Food Grains
Ration Card Update: The Central Government is poised to introduce a revolutionary change in India’s public distribution system (PDS). Moving away from the traditional distribution of physical food grains like rice and wheat, the Modi government is actively considering a plan to transfer the subsidy amount directly to the bank accounts of beneficiaries. This new initiative aims to empower ration card holders, giving them the choice between receiving food grains or opting for cash.
How Will the New ‘e-RUPI’ System Work?
Technology plays a pivotal role in this proposed transformation. In collaboration with the State Bank of India (SBI), the government has developed a digital instrument called ‘e-RUPI’. Here is a breakdown of the proposed mechanism:
- Digital Vouchers: Beneficiaries will receive an e-voucher or digital token on their registered mobile numbers every month.
- Amount Based on Family Size: The value of the voucher will be determined by the number of family members (e.g., ₹500, ₹1000, etc.).
- Flexibility of Choice: This token can be used at a fair price shop to collect rations. However, the most significant update is the convertibility feature. If a beneficiary does not wish to take the food grains, they can redeem the token to transfer the equivalent cash amount directly into their bank account.
Reasons Behind the Government’s Move
The shift towards Direct Benefit Transfer (DBT) is driven by three primary factors:
- Fiscal Management: Following the Prime Minister’s announcement of free rations for the next five years, estimates suggest a massive expenditure of approximately ₹11.80 lakh crore. The government aims to rationalize this cost by targeting genuine beneficiaries more effectively.
- Eliminating Fake Cards: The Ministry of Food has identified a significant number of duplicate and ineligible ration cards. By cross-referencing data with Income Tax, GST, and the Vahan portal, the government is weeding out ineligible claimants. So far, 76,363 duplicate cards have been identified, with Uttar Pradesh alone accounting for over 30,000 such cases.
- Curbing Corruption: Direct transfers via digital vouchers aim to plug leakages in the supply chain and prevent the black marketing of food grains.
Current Status of the Project
It is important to note that this scheme has not yet been rolled out nationwide. It is currently in an experimental phase. Pilot projects have been launched in Chandigarh, Puducherry, Dadra and Nagar Haveli, and parts of Maharashtra. According to reports, over ₹113 crore has already been transferred to beneficiaries in these regions under the DBT model.
Opposition and Future Roadmap
While the government is preparing a detailed roadmap for a potential pan-India rollout based on the success of these pilots, the move faces opposition. The All India Fair Price Shop Dealer Federation has voiced concerns, fearing that ration dealers will lose their livelihoods. General Secretary Biswambhar Basu also argued that there is no guarantee that the cash transferred will be used by beneficiaries solely for purchasing food.
The proposal is currently under discussion, and a final decision on a nationwide implementation will depend on the outcomes of the ongoing trials.
