Here’s why Jharkhand withdrew direct benefit transfer scheme for food subsidy

The Union Food Ministry has decided to roll back the direct benefit transfer (DBT) scheme launched in Jharkhand’s Nagri as a pilot in October 2017. Under the scheme, beneficiaries would be able to collect cash from banks for purchasing rice at Rs 32 per kg. Prior to this, they were provided rice at Re 1 per kg.

On August 8, the state government issued a notice that the scheme be withdrawn immediately. It announced that the previous public distribution system, where citizens would get subsidised rice for Re 1 per kg, would be reinstated in Nagri after the Centre’s approval.

The Ministry of Consumer Affairs, Food and Public Distribution wrote to Secretary of Jharkhand Department of Food and Civil Supplies, announcing the withdrawal of the scheme due to unavoidable problems in implementation.

What were the issues?

Vulnerable groups including single women and elderly faced numerous issues procuring cash under the DBT system. The Right to Food Campaign expressed disappointment that the government took so much time to withdraw the scheme.

"The DBT pilot caused enormous hardships to people of Nagri. The Jharkhand government should abstain from further experiments of this sort and instead, attempt to improve and consolidate the PDS," Asharfi Nand Prasad, the campaign convener, told Scroll.in.

The state rural development department conducted a social audit to gauge the performance of the DBT scheme and found that most households preferred subsidised grains over cash transfer. Over 97 percent of the respondents claimed they had troubles withdrawing money from the banks and accessing food.

There have been numerous protests in gram sabhas of Nagri over the past year. Students of the area conducted a survey of 13 villages to get an idea of how difficult food access had gotten for people. Residents even marched to the Governor’s house in the state capital to demand a withdrawal of the scheme.

After conducting its own survey and confirming that 36 of the 38 gram sabhas rejected the new scheme, the state wrote to the Centre in May seeking permission to reinstate the old PDS system.