On Direct Remittance of Subsidy to BPL Families
Letter to the Prime Minister Dr. Manmohan Singh, June 19, 2009
            The Food Subsidy bill for 200809 may exceeds Rs. 43,500 crores. With the implementation of the proposed scheme of supply of 25 Kg of rice or wheat at Rs.3/- per kg to the BPL families, in addition, or as substitute for existing Annapurna Scheme of supply of 10 kg of foodgrains per person per month, the bill may go up to nearly Rs. 50,000 crores. Centrally, the Food Corporation of India is the main official agency for the procurement and distribution of food-grains under TPDS and for maintaining a buffer stock for the purpose of food security. To some extent, the system has been decentralized and several states have assumed the responsibility both of procurement and distribution. But the present system has many leakage points and involves wastage & corruption. Eminent experts have been working on direct remittance of subsidy to the BPL families along with a reinforced public distribution system.

It has been established that while some leakages and misuse may continue even under the direct remittance but undoubtedly a much higher proportion of the subsidy will reach the target BPL families.

I request you to kindly direct the Planning Commission to examine in detail through an Expert Committee the proposal of direct remittance of subsidy in cash to identified and targeted families, through the banking system now practically all Panchayats have banking facilities.