Setting Public Distribution System Right: The Case for ‘Direct Benefit Transfers’ – Part I

• by Lokesh Singh, Alekh Sanghera and Ankush Khanna
• Jun 19, 2015
• 1 min
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This note covers the issues that plague the public distribution system (PDS) in India; alternative methods for distribution being piloted; and necessary steps required to run a successful PDS scheme.’

India has made a determined effort to fulfil its ideal of a welfare state, not only in principle but also through economic planning. The welfare budget allocation of about Rs.2, 270 billion ($36 billion), which is about 40% of the total budget outlay for the country for the year 2015-16, reflects this fact. However, the proportion of this that actually reaches the intended beneficiaries is a matter of speculation. After the success of direct benefit transfer (DBT) for the liquefied petroleum gas subsidy, the government is contemplating the introduction of DBT for PDS as well. In these Notes, we will specifically talk about what ails the PDS, the various alternative methods for distribution being piloted and necessary steps required to run a successful PDS scheme.