DBT can help Centre, Telangana govts save Rs 700 crore annually

Beneficiaries purchase rice at Rs 1 per kg from ration shops, they sell it at up to Rs 35 per kg.

Hyderabad: The state government and the Centre could save up to Rs 700 crore a year if the Direct Benefit Transfer (DBT) scheme for the public distribution system is implemented as proposed by Chief Minister K. Chandrasekhar Rao recently.

The Centre and state government spend over Rs 5,954 crore to supply PDS rice per year, of which Rs 700 crore rice is said to be diverted to open market.

Since the ration rice is of poor quality and not ‘sanna biyyam’ (fine quality rice) as is being supplied to students in government hostels, the beneficiaries prefer to sell the rice to traders or millers, who recycle it and supply the stocks to open market. While beneficiaries purchase rice at Rs 1 per kg from ration shops, they sell it at up to Rs 35 per kg.

To avoid this, Mr Rao had proposed to implement DBT and credit the amo-unt directly into the bank accounts of beneficiaries so that they can purchase the rice of their choice.

Mr Rao directed senior officials of the CMO and civil supplies department last week to study on the pros and cons of introducing the DBT for PDS beneficiaries and submit a report within a week.

According to sources, the report, which is to be submitted in a day or two, has recommended that the government credit Rs 27 per kg in the bank accounts of beneficiaries directly instead of supplying rice at Rs 1 per kg to check  irregularities like diversion and black marketeering.


As of now, only three Union Territories are implementing DBT and the Centre wants all states to follow suit. The Centre had sought feedback from state governments in mid-2016, but the TS government did not respond.

With dealers threatening to go on strike from November 1 demanding an increase in commission, the issue of DBT has come back into focus.

Mr Rao held a review meeting last week to discuss the implications of the strike and alternative measures to minimise the its impact where the proposal of DBT was mooted.

A source said, “The ration card-Aadhaar-bank account linkage will be crucial. Though 100 per cent ration card-Aadhaar linkage has been achieved, less than 5 per cent of Aadhaar numbers of beneficiaries have been linked with bank accounts. This linkage has to be done on a war footing if the DBT has to be introduced soon.”