It has been argued, for instance, that the cost of maintaining this elaborate PDS bureaucracy is much higher than the amount of subsidy it is supposed to save by enforcing, unsuccessfully, the exclusion of this small group of non-poor consumers from access to subsidized commodities. This is the experience with the public distribution system (PDS) presently in use to exclude non-poor consumers, a relatively small segment of the consumer base, from access to subsidized foodgrains, kerosene, sugar, etc. Direct Benefit Transfer (DBT) Scheme. So, determining the income of the rest of the citizens is still a challenge hence making it, difficult to identify the deserving beneficiaries. The CEEW study estimates that the richest 15% of the population account for about 25% of the LPG consumer base. You will get good content & we will get a subscriber. Yet, it accounts for only about 3.5% of the total annual flow of government subsidies. In other words, only 14% of the rich consumers actually ‘gave it up’. The Public Distribution System (PDS) is India’s flagship food security programme but also suffers from well-known inefficiencies. Researchers used benefit transfer to estimate the economic benefits of improved water quality. They may open more than one account for each beneficiary for incentive. However, to scale up the DBT approach to all target beneficiaries, not just for LPG but eventually for kerosene, foodgrains, sugar, etc., it is necessary to overcome the roadblock that currently exists in the banking system, especially in rural areas. Thus, DBT under PAHAL is just a beginning in using DBT as the medium for providing subsidies. But the most important challenge is generic for the DBT approach. Though there are some loopholes involved in Direct Benefit Transfer scheme, this program is an excellent way to ensure that every paisa reach the deserving beneficiaries, if carefully implemented. And this program is a big success. Despite this, problems of product adulteration, leakages, ghost ration cards and harassment of beneficiaries by the rationing bureaucracy remain endemic. Log in to our website to save your bookmarks. Apart from these generic lessons in providing subsidies through DBT, there are also lessons from PAHAL specific for the delivery of LPG. An important step in cracking this problem is the linking of Jan Dhan Yojana with Aadhaar, the unique biometric identification system. However, this is a work in progress and there is still a long way to go. The provision of around ₹ 20,000 crore for the scheme is about 8% of the total provision of ₹ 250,433 crore for subsidies in the 2016-17 Union budget. Thus, the adverse health and ecological consequences of traditional fuels notwithstanding, LPG penetration among this consumer group will remain a challenge. It will have some problems with banks, post offices mainly with technical issues and online connectivity in remote places. Please turn it off in order to continue, or whitelist Mint. How prepared is India to tackle the COVID-19 outbreak? DBT can cut clean from all the abuses of PDS. (200 Words) Business Standard Illiterate beneficiaries are more vulnerable in this case. A final, disappointing lesson is the failure of exhortations to induce rich households to voluntarily surrender their subsidy claims. As Aadhar card is based on biometric identification, fake & duplicate beneficiaries will be eliminated, eliminates intermediaries and rents for ‘fair price shops’, As everyone can purchase goods at market price, there will be, healthy competition between the sellers in the market, food grains storage and spoilage in the process can be eliminated, It will help India to transform itself into, Still there are many rural & tribal areas, which, As of now, only 3% Indians pay income tax. Please subscribe to our YouTube channel. Click here to read the Mint ePaperMint is now on Telegram. This scheme eliminates intermediaries and rents for ‘fair price shops’ because subsidies and benefits of welfare schemes are transferred directly. Let’s see some of them: 1. In contrast, the feedback from those who have access to PAHAL has been quite positive. Copyright © HT Digital Streams Limited All rights reserved. This program aims to transfer subsidies directly to the people through their bank accounts. And Union subsidies in turn account for only about a third of total subsidies provided by the Union and state governments taken together. In summarizing these lessons, this article has drawn on the analyses provided in the Economic Survey for 2015-16 and the report on DBTL (direct benefit transfer of LPG) Performance Evaluation published last month by the Council for Energy, Environment and Water (CEEW).

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