4 min read.Updated: 14 Mar 2013, 09:07 PM ISTHimanshu
The welfare gains for the poor from substituting subsidies by cash transfers are likely to prove illusory
The debate on cash transfers versus transfers in kind, such as the delivery of foodgrains through the public distribution system (PDS), is far from settled. While the government has ruled out converting existing PDS entitlements into cash at the moment—and is committed to passing the National Food Security Bill (NFSB) in Parliament—the voice of those who argue for shifting towards cash transfers is growing louder. This is particularly relevant as the existing NFSB does allow shifting of in-kind to cash transfers. The issue gains salience as the push towards direct benefits transfer (DBT) is viewed as a precursor of converting the PDS into a cash transfer scheme.
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