News Update

[April 27th, 2022]

Choice - Free rations - Doorstep ration delivery

Andhra Pradesh to introduce Choice in PDS; Centre extends free rations by six months; Punjab announces doorstep delivery of rations.

The Andhra Pradesh government is planning to introduce a direct cash transfer scheme for PDS beneficiaries who do not want to take rice from fair price shops. The government has proposed to pay Rs 12 to Rs 15 per kg to white card holders, who are willing to take cash. If a white card holder wants to take cash instead of rice, he or she should give a consent letter to the volunteer, which will be accepted by the tahsildar concerned. The scheme is to be implemented on a pilot basis in select parts of the state from May. The government plans to extend the scheme across the State if there is positive feedback from the pilot districts.

The Union Cabinet, chaired by Prime Minister Narendra Modi, has extended the Pradhan Mantri Garib Kalyan Anna Yojana (PM-GKAY) for another six months till September 2022. The scheme was originally introduced in April 2020 during the initial onset of the COVID-19 pandemic. This will be the sixth phase of PM-GKY, which covers 800 million ration card holders across the country who are supplied 5 kg of rice or wheat and 1 kg of pulses per person per month. The extension of the scheme is expected to cost the government an additional INR 80,000 crore.

Following recent developments in other states, the Punjab government has introduced the Ghar Ghar Ration Yojana, to deliver wheat packed in bags to PDS beneficiaries at their doorstep. The scheme will be optional and all those who do not want to queue up outside the fair price shops or the ration depots can opt for it. This is estimated to benefit over 4 million families.

ONORC - Paddy Procurement

Assam to introduce ONORC in September; Women SHGs successfully involved in paddy procurement in Odisha; Centre not to lift Odisha surplus parboiled rice

Assam, the only state left to get connected under the Centre's One Nation One Ration Card (ONORC) programme, is getting technically ready to operationalise the scheme by September this year. In the last six months, The Assam government has installed 33,000 e-PoS devices and has completed 70 percent of Aadhaar seeding. As of last month, about 615 million portable transactions have been undertaken since the launch of the scheme in August 2019.

The Mission Shakti Women Self Help Groups (WSHGs) in Odisha’s Sundargarh were delegated Paddy Procurement tasks in 7 blocks on a pilot basis. The SHGs have successfully achieved a collection of over 100,000 Quintals of paddy from 1,926 farmers in the FY 2021-22 Kharif. Owing to the success of the pilot project, the Odisha government plans to engage an additional 50 WSHGs of the district in the next procurement cycle. Meanwhile, the Union Government has stated that it will not be lifting surplus parboiled rice from Odisha this procurement season.

PDS Implementation

Odisha to distribute rations even to non-Aadhar-seeded RCs; TN announces several improvements in PDS service delivery; Ration shops in Kerala to provide banking services.

The Orissa High Court has directed the State government to issue a fresh unambiguous instruction to all District Collectors stating that no beneficiary should be deprived of rations because of non-linkage of Aadhaar card with their bank account or seeding in the PDS database. This has followed from a news report which found that over 2000 beneficiaries were denied rations by PDS dealers due to Aadhar non-linkage.

The Tamil Nadu government is taking steps to provide ration rice in packets to beneficiaries. This move is aimed at preventing leakages and improving ration quality. Furthermore, the TN government is also undertaking a pilot project to provide ragi (finger millet) instead of rice in ration shops, in areas where anemia has been reported among adolescents and children. In a similar vein, steps are also being taken to sell dairy products at ration shops in Tamil Nadu.

In Kerala, over 800 ration shops will soon offer banking services to beneficiaries through the ePOS machine. Other proposals that will be offered through ration shops include facilities to pay power bills and water bills. Ration shops in Kerala will also be providing ‘Jaya’ rice in ration shops across the state soon, in addition to raw rice.

ICDS - DBT

App in Maharashtra maps workers’ migration for portability in ICDS scheme; WiFi, biometric attendance to be introduced in all government schools in Uttar Pradesh; Pre-school scholarships for disabled students in Maharashtra to be implemented through DBT.

The Maharashtra government has developed a website-based migration tracking system (MTS) application to map the movement of vulnerable seasonal migrant workers through individual unique identity numbers. The MTS project is envisaged to maintain the continuity of the Integrated Child Development Services (ICDS) to migrant beneficiaries including children aged up to 18 years, lactating mothers and pregnant women. Their migration will be tracked for ensuring the portability of the ICDS for their families in their destination districts within or outside the state until their return to their native places.

The UP government has directed WiFi facility in all the government schools in the state in the next 100 days. The government has also announced that all the schools should have a website each and email id for all the students. Schools are also gearing up to introduce biometric attendance for students. Furthermore, the Chief Minister has also directed that the career counseling portal ‘pankh’ and the e-library portal should also be developed at the earliest.

The pre-school scholarship scheme in Nashik, Maharashtra for disabled students will be implemented through DBT next year. At present, the scholarship amount is being credited manually to the accounts of the disabled students. The headmasters of all the schools with Divyang students have been informed to make necessary changes to start the implementation of the scheme through DBT from next year.

[March 15th, 2022]

FY 2022-23 Union Budget: Spending cuts for major welfare programmes; India bets on capex for growth

The budget for FY2022-23 featured spending cuts (or no increases) for most large welfare programmes such as NREGA, PM-KISAN, and the national social pensions scheme.

The demand for work through NREGA, and hence the expenditure on NREGA, has increased sharply since the pandemic: in FY2020-21, the government had budgeted Rs 61.5 thousand crores, whereas actual expenditure was closer to 111.5 thousand crores. In FY2021-22 the government budgeted 73 thousand crores, while actual estimates were around 98 thousand crores. Despite the high demand, the government this year has maintained the allotment at Rs 73 thousand crores for the scheme. However, of this amount, 18 thousand crores will be paid as arrears for work that was already completed last year, and so the effective budget is closer to 55 thousand crores. In addition to the disparity in previous expenditure and this year’s budget, the Parliamentary Standing Committee on NREGA has highlighted several other issues such as poor wage rates, severe delay in payments, and discrepancy between number of days of work demanded by citizens versus those provided. In a welcome move, Rajasthan announced an urban employment guarantee scheme with a budget of 800 crores wherein those who apply will receive 100 days of employment.

Similarly, the budget for ICDS and for food subsidy schemes such as the mid-day meal and the Pradhan Mantri Gareeb Kalyan Yojana (relief scheme introduced during the pandemic where households get an additional 5kgs of ration through the FPS) was also reduced. Actual expenditure on food subsidies last year was 210 thousand crores, whereas this year the budget allocation is 145 thousand crores. Some of these reductions may be seen as “corrections” after unusually high spending during the lockdown, but critics argue that pulling away the safety net too soon may cause distress to the most vulnerable.

India has, instead, bet on capital expenditure to spur growth in this financial year.

DBT: Spending on DBT schemes increases overall; new schemes announced in AP and Bihar

The government has increased the allotted budget for DBT schemes. The biggest example of this is the LPG subsidy scheme whose allocation increased from 3400 crores to 4000 crores, although this is to account for higher freight costs in delivering cylinders to beneficiaries. On the other hand, the allocation for disbursing new LPG connections to poor households under the Pradhan Mantri Ujjwala Yojana (PMUY) has been halved this time, from 1618 crores to 800 crores in the revised estimates of the Budget 2021-22. This is an indication that PMUY is nearing saturation with domestic LPG penetration reaching over 99 per cent of the country, according to official stats.

The Andhra Pradesh government has announced two new DBT schemes. The first is a scheme disbursing Rs 15,000 annually for 3 years to women belonging to “Economically Backward Classes” in the age group of 45-60. The second scheme benefits those belonging to “Other Backward Classes” who received Rs 10,000 as a one-time transfer.

The government of Bihar is also moving towards DBT payments. It announced in February that the earlier provision of cycles, uniforms, and scholarships to students will now be replaced with a cash transfer to the students’ accounts.

One Nation One Ration Card: CG becomes newest state to implement ONORC; scheme now covers 96.8% of PDS beneficiaries

Chhattisgarh became the 35th state/ union territory to implement the ONORC scheme as of February 2022. The scheme now covers 96.8 NFSA beneficiaries, or about 74 crore people – Assam is currently the only holdout. Since its launch in August 2019, 56 crore portable transactions have been recorded, according to the Union Food Minister. Bihar has recorded the most (16 crore transactions) followed by Andhra Pradesh (at 8.6 crore transactions). The number of portable transactions per month across the country is estimated to be around 2.5 crores.

Agriculture: Positive response to DBT-E pilot in AP; outlay on agriculture to increase this year

There has been a positive response from farmers to a pilot in AP where meters are installed in farms, and a DBT is given to farmers, based on consumption. This replaces an older system which did not have any metering or billing. However, farmers are concerned about the timeliness of payments.

In response to the farmer protests last year, the government is setting up a panel to make the Minimum Support Price more “effective and transparent.” The panel will be formed after the assembly polls end. In FY2021-22 the government spent 231 thousand crores, paying the MSP to procure rice and wheat. Agriculture is in focus in the current budget, and the total outlay has increased this year.

Miscellaneous: Govt plans to expand financial service access through FPSes; states object to sharing Aadhaar information for NHA

The government is adding financial services to ration shops, in the hopes that financial services become more easily accessible and also increasing the income of FPS owners. Currently there are 8,000 common service centres (or CSCs) attached to FPSes where people can register Aadhaar and PAN cards, check their bank account balance, etc. The plan is to add another 10,000 in the next year.

The National Health Authority (NHA) had asked states to share Aadhaar information from the PDS database to create a database for the Ayushman Bharat national health insurance programme. However, states have pushed back, citing privacy and security concerns over such a data transfer. The NHA was initially using SECC data, but due to deficiencies in the dataset, wants to supplement it with Aadhaar details of NFSA beneficiaries. The union government has claimed that there are no objections from states or union territories and is pushing forward with the exercise.

[January 24th, 2022]

ONORC - PDS MODERNIZATION

ONORC inter-state transactions highest in Delhi; intra-state transactions highest in Bihar; Telangana introduces hi-tech tracking system for gunny bags containing PDS commodities; Kerala introduces several changes to the PDS; PDS ration shops shut in Kerala due to server glitch.

In December, 80 percent of all inter-state ONORC transactions that happened in India took place in Delhi (230,000 out of 279,000 transactions). Despite the fact that inter-state transactions are only 0.2 percent of total monthly transactions in the country, there has been a quantum leap in ONORC (inter-state) transaction numbers in the past six months in Delhi - from 27,000 in July to 230,000 in December. On the other hand, Bihar has recorded the highest number of intra-state ONORC transactions (nearly 60 million transactions since August 2021).

In Telangana, the government has decided to install RFID tags or a QR code enabled system in gunny bags containing PDS commodities. This will allow Civil Supply Department officials to track the exact location of the gunny bags using a mobile app. The Kerala government has initiated several changes in the PDS. First, it is taking measures to construct modernized godowns in each block and also to modernize each ration shop. Second, ration shops in Kerala will now be open for the public for more time. Third, the entitlement of white (non-priority) ration cards in the state has been increased from 5kg per card to 7kg per card per month. Meanwhile, owing to a server glitch in the ePOS servers, a section of the ration dealers in Kerala suspended their ration supply last week.

FREE RATIONS - FOOD SUBSIDY - PADDY PROCUREMENT

Delhi announces extension of free rations until May 2022; Centre devising system to provide rations to all homeless people in the country; UP provides free rations to 82 percent of beneficiaries in the state; Food subsidy almost double of budget estimates for FY22; Women SHGs participate in paddy procurement process in Odisha.

Delhi Chief Minister Arvind Kejriwal has decided to extend the distribution of free ration in the city for six months till May 31, 2022. This is separate from and in addition to the Central government’s initiative to distribute free rations. Furthermore, the Union Food Secretary has stated that the government is in the works of finalizing a system to extend rations to all homeless and destitute people who do not own ration cards. Meanwhile, the Uttar Pradesh government recently announced that 82 percent of the total beneficiaries in the state have benefited from the state’s initiative to distribute 5kg of free rations in December. This scheme will continue until March 2022 alongside the Centre’s free ration initiative. Finally, the Union Food Secretary recently announced that the Centre’s total spending on food subsidies under the PDS for FY22 is expected to be around INR 4 lakh crores (USD 53 billion), as opposed to the budget estimates of INR 2.43 lakh crores (USD 33 billion).

The paddy procurement season recently kicked off in Odisha’s Ganjam district, with more than 100 women SHGs of over 1000 workers participating in the procurement process. These SHGs have been trained to verify the quality of the grains, procure the food grains and disburse them to millers. However, unseasonal rains in December damaged the paddy bags of many farmers, adding to their woes in the delayed paddy procurement process in the State. Furthermore, rural farmers in Madhya Pradesh face a huge crisis as they wait to receive over INR 1000 million of payments after the procurement process.

DBT

Punjab approves payments for widows and children; Additional INR 50,000 for kin of Covid victims in Delhi; Uttarakhand launches free mobiles, tablets scheme; Deposits in Jan Dhan bank accounts cross INR 1.5 trn.

The Punjab Cabinet has decided to grant Rs 1,000 as one time grant per beneficiary over and above the monthly financial assistance of Rs 1,500 being given to old, widow, destitute women, dependent children and disabled persons in order to mitigate their hardships amid COVID-19 pandemic. This financial assistance would be credited directly into the bank accounts of beneficiaries through Direct Benefit Transfer (DBT) and is intended to help them meet their domestic needs. In a similar vein, the Delhi government announced an additional INR 50,000 cash assistance to people who lost a family member to Covid-19. This is in addition to the INR 50,000 which is already being distributed under the Mukhyamantri Covid-19 Pariwar Aarthik Sahayata Yojna.

The Uttarakhand Chief Minister recently launched the Free Mobile and Tablet Distribution scheme across the state. This scheme is expected to benefit over 2.65 lakh students of government degree colleges and schools, wherein the subsidy amount is transferred into students’ accounts through DBT. Moreover, deposits in bank accounts opened under the Jan Dhan scheme, launched about seven and half years ago by the government, have crossed the INR 1.5 trillion mark.

ICDS - POVERTY - SUBSIDIES

ICDS pilot project underway in Maharashtra to track migration of children and pregnant women; Jharkhand announces ₹25/L subsidy on petrol for ration card holders; Gujarat raises subsidies for farmers to buy smartphones and tractors; Kerala announces cow subsidies to families affected by Covid-19.

A pilot project to track the migration of children (0-18 years), pregnant and lactating women is under way in Maharashtra to streamline a process to ensure that no child or mother falls off the net of nutrition. The project has found that the observed pattern of migration could be driven by the availability of agricultural work. The Jharkhand CM announced to provide ₹25 per litre (25% of per litre petrol cost) in subsidy to all ration card holders in the state for purchasing fuel for their two-wheelers. Each family holding a ration card would be entitled for the subsidy of up to 10 liters of petrol every month, which will be deposited into their bank account once they make a purchase.

In Gujarat, the government has increased the subsidy for farmers to buy smartphones (priced Rs 15,000 or less) to 40 per cent of the product or Rs 6,000. The subsidy to buy tractors of 60 horsepower or less has been raised to Rs 60,000-75,000 or 25 percent of the tractor cost. Similarly, the assistance provided to farmers for developing crop-storage facilities in their farm has been doubled to Rs 1 lakh or 50 per cent of the cost of the structure. Meanwhile in Kerala, the Kollam district panchayat recently launched the Kamadhenu Santhvana Sparsham project which provides cows and calves with full subsidy to families who have lost their livelihood due to COVID-19. 32 beneficiaries were provided cows and calves in the first phase of the project.

[December 14th, 2021]

ONORC - FREE RATIONS - COMMUNITY KITCHENS

ONORC transactions in Delhi driven by migrant workers from UP and Bihar; Centre extends free ration scheme until March 2022; Tamil Nadu announces free Pongal hamper for PDS beneficiaries; Supreme Court orders creation of National Policy for community kitchens to eradicate starvation.

ONORC transactions in Delhi steadily increased between July (16,150) and September (86,430), but dipped in October (51,348). The government has said that this decrease is due to migrant workers returning to their home states for the festive season. Between August and October, 1,55,715 or 87.06 per cent of the ONORC transactions happened on ration cards issued in Bihar (78,195) and Uttar Pradesh (77,520). These numbers are in line with the fact that the majority of migrant workers in Delhi are from these two states. Other states driving ONORC transactions in Delhi include Madhya Pradesh, Haryana and Rajasthan.

The Central government recently announced that it will continue to provide free rations under the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) till March 2022. This is expected to benefit around 800 million (80 crore) beneficiaries. Meanwhile, in Kerala, around 198,000 beneficiaires (about 6 percent of eligible beneficiaries) did not receive their free rations in November. Tamil Nadu has announced a Pongal gift hamper containing 20 items for PDS beneficiaries in January 2022.

Due to the lack of progress in establishing community kitchens to eradicate starvation in the country, the Supreme Court ordered the formation of a National Policy for the same. A group of eight Food Secretaries across India are currently working on framing the National Policy. Further, the Centre is charting out a plan in consultation with State Food Ministers to create the community kitchen scheme.

PDS AUTHENTICATION - DOORSTEP RATIONS

Madhya Pradesh and Kerala introduce new measures for revision and authentication of ration cards; District in Uttar Pradesh mandates COVID vaccines for receiving rations; Madhya Pradesh initiates doorstep delivery of rations; Centre-State tussle continues over doorstep ration delivery in Delhi.

The Madhya Pradesh government has decided to install scanning devices which use the Intelligent Retinal Imaging System (IRIS) technology at PDS shops. This is to cater to daily laborers and the elderly, who struggle to authenticate their ration cards due to the erosion of their fingerprints. Further, the Kerala government has taken steps to make the revision of ration cards more public-friendly. Now, beneficiaries can request changes to their ration cards at drop-box facilities in their FPS, designated service centres (Akshaya Kendras), or online. Moreover, the ATM card model of the ration card that the Kerala government recently introduced, is gaining traction among people.

The Aligarh administration in Uttar Pradesh has mandated the COVID-19 vaccine for PDS beneficiaries who want to avail their monthly rations. Additionally, some FPSes have been made to serve as inoculation facilities to make vaccines more accessible to the beneficiaries.

Madhya Pradesh recently flagged off vehicles for the first phase of the Ration Aapke Gram scheme, aimed at delivering a monthly quota of PDS ration to beneficiaries in tribal villages. Meanwhile, the Centre and the Delhi government continue to have opposing views over the implementation of the doorstep ration delivery scheme in Delhi.

DBT - SUBSIDIES

Phone-Aadhar linking to be done at post offices to facilitate direct transfer of procurement prices to farmers in Telangana; 415 farmers avail solar pump subsidies in Haryana; Centre increases amount earmarked for fertilizer subsidies in 2021-22; Centre forecasts savings of INR 44,000 crore during 2020-21 owing to DBT.

Ahead of the procurement season, the Telangana government has mandated the linking of mobile numbers with Aadhar cards for farmers to sell their crops at government procurement centres. This is to facilitate the direct transfer of procurement amounts to farmers. The government has made it possible for farmers to complete this process at post offices near them.

In Haryana, 415 farmers have benefited from solar pump subsidies amounting to INR 12 crore (USD 1.5 million) since 2019. These subsidies were awarded to farmers under the initial phase of the Pradhan Mantri Kisan Urja Suraksha and Utthan Mahabhiyan. Further, the Centre plans to increase 2021-22 fertilizer subsidies to more than USD 20 billion to avoid shortages amid a sharp increase in global prices of the chemicals. The figure is almost double the amount budgeted for fertilizer subsidies in the Budget for this fiscal year.

Meanwhile, the Centre has estimated a saving of over INR 44,000 crore (USD 5.8 billion) in fiscal 2020-21 due to the DBT mechanism. These gains have resulted from weeding out fake or duplicate beneficiaries of the PDS, NREGA and LPG subsidies.

ICDS

Rajasthan introduces a mobile app to help malnourished kids and pregnant women; Parenting camps to be held in Kerala panchayats; 25 percent jobs in Anganwadi centres for widows in Tamil Nadu; Schools in Jharkhand likely to resume serving cooked meals under the midday meal scheme.

The Rajasthan government has introduced a mobile application called ICDS CSS for Anganwadi workers. This app is aimed at facilitating the digitization of records to provide immediate help to pregnant women and malnourished children. In a similar vein, the Kerala government is planning to organize outreach camps in all Panchayats as part of the ICDS scheme in December. These camps will be aimed at sensitizing parents of young children.

The Jharkhand government is likely to resume serving cooked meals to government school students of classes 6 to 8 under the Mid Day Meal (MDM) scheme after a gap of almost two years. Schools, however, are waiting to receive an official confirmation and the disbursement of funds for the same.

Further, in Tamil Nadu, 25 percent of Anganwadi jobs will be allotted on a priority-basis to widows and deserted women. These jobs include anganwadi workers, mini-workers and helpers.

[November 11th, 2021]

ONORC transactions pick up pace in Delhi; UP links close to 100 percent ration cards with Aadhar cards; Centre announces that ration card-related services will now be available at common service centres.

The Delhi government recently introduced the One Nation One Ration Card (ONORC) scheme which facilitates the inter-state portability of PDS benefits. Since then, ONORC transactions in Delhi are steadily increasing every month and have crossed 46,000 transactions in October. The Uttar Pradesh government has declared that 99.79 percent of the state’s ration cards have been linked with Aadhar cards, making it the first state to link maximum rations cards with Aadhar cards. Meanwhile, technical glitches due to ePoS server errors have caused delays in implementation of the ONORC scheme after its recent roll out in West Bengal. Moreover, the Andhra Pradesh government will no longer distribute rations to beneficiaries who haven’t linked their Aadhar and ration cards.

To make the process of linking Aadhar cards with ration cards easier, the government has announced that ration card-related services will now be available at common services centres (CSCs). Services including applying for a new card, updating details and seeding with Aadhaar, will now be available at over 3.7 lakh CSCs across the country. Further, the Food Ministry has recently signed an MoU with CSC e-Governance Services India to let FPSes have the option of serving as CSCs. This is aimed at allowing beneficiaries to apply for government documents at their ration shops, while serving as an additional income source for FPS dealers.

Some states announce doorstep delivery of rations; Free rations announced in Odisha, UP, and Puducherry; MP to distribute fortified rice to PDS beneficiaries.

West Bengal, Karnataka and Madhya Pradesh have announced measures to soon start delivering rations to beneficiaries at their doorstep. However, in Delhi, the Centre has refused to approve the doorstep delivery of rations scheme, and the state government is in talks with the Centre to seek approval for the same.

In addition to ONORC which is targeted at benefiting migrants, Odisha has announced a dry rations scheme, which will provide free rice to migrant workers and their families even if they do not own a ration card. Puducherry has announced that PDS beneficiaries will receive 10kg rice and 2kg sugar free of cost for Diwali. In Uttar Pradesh, the government is chalking out a plan to extend the distribution of free rations until March 2022. In line with the Prime Minister’s independence day announcement, Madhya Pradesh has launched a pilot to distribute fortified rice to PDS beneficiaries.

Mid-day meal scheme to bring in children covered under ICDS; States celebrate Rashtriya Poshan Maah to generate awareness on malnutrition; Cash transfers announced in Kerala, UP and Telangana; Jharkhand and UP announce changes in NREGA.

The mid-day meal scheme, renamed as PM Poshan, will now bring in an additional 24 lakh pre-primary children who are currently covered under the ICDS. States across the country observed the Rashtriya Poshan Maah in September, aimed at improving Holistic Nutrition through various activities. These include distribution of regional nutritious food kits at AWCs, planting of fruit and vegetable trees, promoting awareness on Yoga, and identification of Severely Acute Malnourished (SAM) children.

Kerala has announced a monthly aid of Rs 5,000 per family for dependent below poverty line families of those who succumbed to Covid-19. This is in addition to the existing financial assistance of Rs 50,000 to the families of Covid-19 victims. The Telangana government has announced a cash transfer scheme for Muslims living below the poverty line (BPL), similar to its flagship “Telangana Dalit Bandhu” scheme. In Uttar Pradesh, parents of children attending government schools will receive a DBT in their Aadhaar seeded bank accounts. This is intended for the purchase of uniforms, socks, shoes, school bags and sweaters for the current school year. Meanwhile, students in Bihar are still waiting to receive government funds for purchasing school books from the open market. Further, a recent report has stated that a total of 179.9 crore beneficiaries received support via DBT in 2020-21 (81.9 crore (819 million) through in-kind benefits and 98 crore (980 million) via cash transfers).

Uttar Pradesh Chief Minister Yogi Adithyanath has announced an increase in the honorarium and the introduction of a HR policy for NREGA workers. The Jharkhand government is set to increase NREGA man-days, and is working to provide migrant workers returning to the state with NREGA work after their quarantine.

Punjab announces subsidies in wheat seeds; Farmers in Bihar to receive compensation for losses; MP and Kerala announce electricity subsidies for farmers; Punjab to introduce changes in the crop procurement system; Centre to cross check land records before procurement of paddy starting October.

States have announced different forms of agricultural subsidies. The Punjab government has approved the provision of certified wheat seeds at 50% subsidy to farmers, limited to Rs 2000 per farmer, during the rabi season. Farmers in Bihar will receive Rs 650 crore worth of compensation against crop damages. This move is aimed at compensating farmers for losses due to excess rainfall and waterlogging.

Further, The Madhya Pradesh cabinet recently approved a subsidy in power bills of over Rs 15,700 crore, which is estimated to benefit about 21.75 lakh farmers. In a similar vein, the Kerala government has announced that the electricity subsidy to farmers, which was piloted in the Pathanamthitta district in 2020, will soon be extended to all the districts. The subsidy will be paid in advance into the bank accounts of registered beneficiary groups under the DBT scheme. Meanwhile, an acute shortage of fertilizers in Kerala has left the State’s farmers in distress.

The Punjab government is introducing changes to the crop procurement system in order to rein in pilferage and the sale of rice imported from other states at a cheap cost. Following the Centre’s orders to ascertain how much paddy per acre is expected to be purchased by the state and the FCI, the state is working on enforcing a cap of 34 quintals on the paddy yield per acre of crop. Furthermore, the Centre has decided to cross-check land records before the procurement of paddy from October in a bid to ensure that the MSP reaches farmers and not the middlemen. Recently, the Centre had intimated to Odisha that no surplus parboiled rice will be procured by the FCI during the next Kharif Marketing Season. Following this, the Odisha CM has sought the intervention of the Prime Minister on this issue.

[August 31st, 2021]

States take measures to weed out fake ration cards; 129 crore ration cards deleted since 2018; Central government announces rice fortification to combat malnutrition; Delhi and West Bengal implement ONORC

Different state governments are taking measures to weed out fake or duplicate ration cards. While Jharkhand has started deleting ration cards automatically by linking it to death records, other states (UP, Himachal Pradesh, Rajasthan and Andhra Pradesh) have started convergence of different social welfare benefits that the poor get to identify genuine beneficiaries. In Karnataka, 91,189 ration card holders have been cancelled. The Minister of State for Consumer Affairs, Food and Public Distribution told the Parliament that 129 crore ration cards have been deleted since 2018. Meanwhile, in July, Telangana issued over 3 lakh new ration cards, taking the number of PDS households in the state to 90.5 lakh. The state has over 103 lakh households (2014 figures).

The Prime Minister, in his Independence Day address, announced the fortification of rice distributed under various government schemes, including the Public Distribution System (PDS) and mid-day meals in schools, by 2024. Rice fortification is aimed at combating micronutrient deficiency. Till now, fortified rice was being distributed on a pilot basis in 112 districts but will now be scaled up to the national level. However, experts have advocated for caution before proceeding with the program and placed more emphasis on a natural diverse diet.

After the Supreme Court directed all states/UTs to implement One Nation One Ration Card (ONORC) by July 31, the Delhi and West Bengal governments have ordered its implementation. However, in Delhi, the implementation has not been without glitches as e-PoS machines in some areas did not work due to poor network connectivity.

Andhra Pradesh to merge anganwadi centres with schools; lapses in supplementary nutrition program in ICDS in Jharkhand; committee set up to explore portability of child entitlements

The Andhra Pradesh government has decided to merge anganwadi centres in rural areas with pre-primary and primary schools to form “Foundation Schools”, with effect from the current academic year. A total of 55,607 anganwadi centres with 870,000 children are currently functional in Andhra Pradesh. As for health-related activities of anganwadi centres, it has been proposed that all these activities be brought under YSR Village Clinics and urban clinics being set up by the state.

In a recent survey by the Right to Food Campaign and other organizations, it was found that over 55% of beneficiaries did not get nutrition under the Supplementary Nutrition program of ICDS in the first six months of 2021. The survey covered a total of 8818 families in 159 Jharkhand blocks. The National Human Rights Commission has taken cognizance of the issue and has sought a response from Jharkhand and the Center.

In Maharashtra, a committee has been set up to work on a mechanism for portability of child entitlements in tribal areas in Amravati district. This is after it was found that children in the Melghat region are more malnourished than other parts of the district due to their parents migrating for work and the children losing their place-based entitlements under ICDS.

Government launches e-RUPI for contactless delivery of benefits; Karnataka provides DBT in-lieu of mid day meals; Cash transfer schemes announced in Odisha, Telangana and West Bengal; Farmers receive a record sum as MSP payments during the Rabi season

The Government of India launched a new digital payment solution, called e-RUPI which is a QR code or an SMS string-based electronic voucher that can be sent directly to the end-user for a specific purpose. The system will enable cashless and contactless digital payments and is aimed at ensuring leakage-free delivery of welfare schemes. The Government is already considering using e-RUPI to transfer food and fertilizer subsidies to beneficiaries. The new payment service is developed by National Payment Corporation of India. Only entities approved by the Reserve Bank of India like banks and payment service providers can issue the vouchers. Any government agency or corporate entity can approach banks to issue vouchers for a specified set of beneficiaries. The identity will initially be linked to the unique mobile number of the beneficiary, who can redeem the voucher at the relevant service point using a One-Time-Password delivered to the same mobile number. The voucher is valid for a single transaction and is non-transferable.

Meanwhile in Karnataka, the government has decided to give the 'cooking cost' of the mid-day meals to school students through DBT. The move comes as the government could not serve the free mid-day meals to the children due to the ongoing Covid pandemic. The Government of Telangana recently announced a flagship welfare scheme for Dalit families called the Dalit Bandhu Scheme, It is envisioned as a welfare scheme for empowering Dalit families and enable entrepreneurship among them through a direct benefit transfer of Rs 10 lakh per family. In West Bengal, the government assigned outlays in the budget for 2021-22 to fulfill the poll promise of monthly cash transfers to 1.6 crore families in the state.

In the recently concluded Rabi crop season, farmers have received a record Rs 84,369 crore as direct cash transfers for the wheat they sold to the government procurement agencies since April. The Centre has purchased 43.3 million tonne of wheat from farmers in the season, an all-time high quantity. In Odisha, the Government disbursed Rs 385 crore as a special COVID-19 package for landless farmers across the state, which is expected to reach a total of 17,89,103 farmers. Rs 1,000 will be transferred to the bank accounts of each beneficiary through, in addition to transfers under KALIA.

Parliamentary Standing Committee recommends NREGA-like urban work program and cash transfers for informal workers; Survey finds that urban youth prefer job guarantees to cash transfers

A parliamentary standing committee has recommended an urban workfare program similar to NREGA to help urban residents recover from job and income losses following the pandemic. It also recommended a cash transfer scheme for informal workers during adverse conditions like Covid-19. In a survey conducted by the London School of Economics, it was found that 82 percent of respondents across urban India favoured job guarantees in comparison to just 16 percent who chose cash transfers. This was based on responses from 4,763 individuals between January and March 2021 from Bihar, Jharkhand and Uttar Pradesh.

[July 20th, 2021]

Cash Transfers

Karnataka government launches a DBT app showing bank seeding status; researcher claims that DBT in agriculture has helped farmers; experts discuss the feasibility of direct cash transfers in the face of the second wave of pandemic; The State of Working India 2021 report proposes cash transfers of Rs. 5000 per month for three months to poor households

The Karnataka government has launched a DBT app linked to NPCI, which allows beneficiaries of all its 120 DBT schemes to see the status of bank seeding required for Aadhar-based payments. Since most beneficiaries are unaware of whether their bank account is linked to Aadhaar or which of the many bank accounts the transfers are going to, the new app would allow them to see the amount of cash transferred, date of payment, bank account number and other payment-related details for each of the DBT scheme they are entitled to and separately for each instalment.

In June, the Centre transferred Rs. 76,000 crores directly into the bank accounts of farmers, after procuring wheat from them in the current Rabi marketing season. As per this article, DBT in agriculture is aimed at helping farmers in moving from informal to formal credit channels due to increased liquidity and cash transfers directly into the farmers’ bank accounts are aimed at increasing transparency and reducing opportunities for arhatiyas (money lenders cum commission agents) to exploit the farmers.

The President of the Confederation of Indian Industries (CII) recently suggested that along with fiscal stimulus, cash transfers to Jan Dhan accounts are required to spur economic growth by boosting consumer demand. In contrast, NITI Aayog chairman is of the opinion that fiscal stimulus is required for economic revival, but that direct cash transfers may not be that useful if people do not spend the money in their accounts. UBI is also gaining traction as governments look to revamp their social security programs in the face of the pandemic. This article discusses a universal basic income initiative in India in the context of the two waves of the pandemic and its feasibility with respect to the fiscal deficit. India’s Chief Statistician Pronab Sen admitted that the government was considering basic income support of Rs. 5000 per month to vulnerable households last year.

Azim Premji University’s Centre for Sustainable Employment released their State of Working India 2021 - One year of COVID-19 report in May, which proposes direct cash transfers of Rs. 5000 per month for three months to the poor and vulnerable population as a solution to reviving income loss due to the pandemic. According to the report, an additional 230 million Indians have fallen below the poverty line since the pandemic. As Jan Dhan has a much lower reach compared to schemes like PDS or MGNREGA (across multiple surveys, they find that 90% of respondents had a ration card but only 50% households had a woman-owned Jan Dhan account), they recommend expanding the reach of Jan Dhan with supplementary beneficiary lists from these schemes.

PDS

Delhi government faces criticism from the high court on capping of non-PDS beneficiaries during the second pandemic wave; Kejriwal announces finality of his doorstep delivery scheme even as the Centre instructs Delhi to operationalize ePoS devices for portability; Centre’s free ration scheme extended till November 2021 and CACP requests Centre to allocate more food grains due to surplus stocks in warehouses; PDS beneficiary data stolen from Tamil Nadu’s PDS website; Telangana reports sale of PDS commodities back from beneficiaries to the government via middlemen

The Delhi government announced in June that they have given free ration to 4.5 lakh households that are not covered by the PDS. This additional relief measure is capped at 20 lakh households. The Delhi High court said that the cap of 20 lakh was arbitrary and inadequate. At around the same time, Arvind Kejriwal in a letter to the lieutenant governor, announced on June 18th that his doorstep delivery scheme Mukhya Mantri Ghar Ghar Ration Yojana has attained finality (i.e., is ready for rollout) and has addressed all the concerns of the Centre. In contrast, the Centre has instructed the Delhi government to operationalize all ePoS devices and to submit a compliance report by June 30.

In its latest report, the Commission for Agricultural Costs and Prices (CACP) has directed the Central government to allocate more food-grains to PDS beneficiaries in order to clear space from the warehouses. This coincides with the Centre’s announcement to digitally integrate all state-run granaries and silos across the country. The Union food department will also spend Rs. 67,000 crores in order to provide free ration under the PMGKY scheme to 81 crore beneficiaries till November 2021. During the pandemic, the off-take, procurement, warehouse stock and export levels are all at a record high.

According to Bangalore-based cyber-security firm Technisanct, sensitive data of 3.1 crore PDS beneficiaries has been stolen from Tamil Nadu’s PDS website - including Aadhaar information, contact information and family details. Details of at least 50 lakh households were uploaded on a hacker forum, where hackers could use the data for phishing. As per the article, the Tamil Nadu Food and Civil Supplies department has said that Oasys, the company responsible for managing the data, has denied the leak.

Incidentally, in a welcome move, UIDAI has proposed a new biometric lock feature that could prevent illegal use of biometrics and reduce fraud or leakages.

In Telangana, there are reports of thousands of PDS beneficiaries selling PDS grains to middlemen for Rs 10 per kg, followed by these middlemen selling these same grains to rice millers, who in turn sell it back to the food and civil supplies department.

Portability of PDS Benefits

SWAN report highlights non-portability of ration cards as a major challenge; Supreme Court instructs Delhi, West Bengal, Assam and Chattisgarh to implement ONORC by July end; Centre announces additional incentives for States judiciously using ePoS devices

A recent study (refer to page 36 of the No Country for Workers report) conducted by the Stranded Workers Action Network (SWAN) highlights that non-portability of ration cards within and across States remains a big problem even now. The SWAN study finds that 93% of the migrant workers they surveyed have a ration card but it is non-functional in the places where they were stranded during the second-wave lockdown. Earlier in May, a brick kiln union in Rajasthan wrote that 2,000 migrant workers spread over 200 factories were unable to purchase ration under ONORC, suggesting that implementation of portability is still a work in progress.

On June 22nd the Prime Minister blogged about the success of the carrot-and-stick policy to push States to implement reforms like ONORC that are driven by the Centre. Earlier on June 14th, the Centre had informed the Supreme Court that Delhi, West Bengal, Assam and Chattisgarh were yet to implement the ONOR scheme, despite it empowering beneficiaries and making food security portable. The Centre specifically highlighted Delhi’s implementation, where only 42 ePoS devices have been installed in one region. SC responded by saying that all States must implement the ONOR scheme to benefit beneficiaries by July-end. West Bengal responded by saying that the work is in progress with respect to seeding ration cards with Aadhaar numbers. The State food department has roped in a private firm to fast-track the seeding process through door-to-door visits and camps.

In an attempt to accelerate ePoS penetration required for ONORC to smoothly function, the Centre has also announced additional incentives for States that are judiciously operating their ePoS devices, by allowing them to use any savings generated for the purchase of electronic weighing scales. These scales would be linked to the ePoS machines and would ensure that beneficiaries are getting the correct amount of entitlements owed to them.

Agriculture & Fertilizers

Concerns raised about data privacy, information asymmetry and surveillance as the Department of Agriculture enters into a data-sharing agreement with private partners for Agristack; Union Cabinet increases fertilizer subsidy by 140% to help farmers

After the Department of Agriculture signed an MoU with Microsoft in April for a pilot project in 100 villages across 6 States, the Department has subsequently also signed MoUs with other private partners like Star Agribazaar, Patanjali, Amazon and Esri. This has kicked up concerns about data privacy, consent, information asymmetry and surveillance, as the government has entered into a data-sharing agreement with these partners. The aim of the project is to set up Agristack (collection of technological interventions in agriculture), which involves initiatives like creating a mobile app to advise farmers on soil nutrition, crop estimation using remote sensing, land profiling and farmer data sanitisation.

The Union Cabinet increased the subsidy for NPK fertilizer by 140%, to cushion the impact of global rise in prices of input commodities on farmers, amidst the kharif sowing season. This will reflect in the additional subsidy amount of Rs. 14,775 crores approved. After increasing fertilizer subsidies, the government now plans to increase production of fertilizers to counter the price rise in the global markets. The food and fertilizer bills have collectively raised the subsidy amount three times in the financial year of 2021.

[May 12th, 2021]

Central and State governments revive Covid relief measures amidst the massive surge of cases and lockdowns

In view of the lockdowns announced in several states to curb the surge of Covid cases, the Central and State governments have once again announced relief measures. In Maharashtra, the government will provide 5 kg ration for one month, free cooked food in canteens and a cash transfer of Rs 1500 to construction workers. Madhya Pradesh has announced free rations for three months, to be collected in one go. Uttar Pradesh has announced free ration kits and cash allowance of Rs 1000 for organized and Rs 2000 for unorganized sector workers. The Central government has announced free food grains of 5 kgs per person per month for 80 crore PDS beneficiaries in May and June under the PM Garib Kalyan Ann Yojana.

Supreme Court hears PIL on cancellation of ration cards and alleged denial of benefits; NITI Aayog proposal to reduce coverage under NFSA circulated to concerned departments; Delhi’s doorstep delivery of ration scheme runs into objections

The Supreme Court of India is hearing a Public Interest Litigation (PIL) filed by Koili Devi, on the cancellation of 30 million ration cards between 2013-2016. Koili Devi’s 11-year-old daughter Santoshi died of starvation in 2018 in Jharkhand. The Supreme Court termed the cancellation of ration cards due to non-linking with Aadhaar card as “too serious", and has sought a response from the Central government and all states on the issue. The Centre had previously denied allegations of arbitrary cancellation of cards, pointing out that cancellation between 2013-2016 pertained to ghost ration cards.

A recent Lokniti-CSDS survey shows that 28 percent of respondents reported being deprived of food grains due to lack of Aadhaar or other Aadhaar-related problems such as authentication failures, with the proportion rising to 39 per cent among low-income households. One reason for such high figures could be the widespread use of the “ultimatum method” to enforce the mandatory linking of ration cards with Aadhaar, writes Jean Dreze.

Meanwhile, the NITI Aayog has proposed to cut down food subsidies by reducing coverage of NFSA from 75 percent to 60 per cent in rural areas and from 50 percent to 40 per cent in urban areas, which could result in annual savings of up to Rs 47,229 crore in the food subsidy bill. However, researchers have questioned the proposal given several reports of pandemic-induced lower employment and wages, and persistent hunger and malnutrition.

In Delhi, the Centre has raised objections to the AAP government’s doorstep delivery scheme, which was due to begin on March 25. The objection is that beneficiaries in Delhi may end up buying food grains at a higher rate than ₹1-3 per kg fixed under the NFSA and that there might be a diversion of foodgrains due to lack of ePoS facility. The Delhi government said that it will roll out the scheme without a name (earlier called Mukhyamantri Ghar-Ghar Ration Yojana) but the timeline for implementation remains uncertain. Meanwhile, Delhi has started rolling out the Centre’s One Nation One Ration Card scheme on a pilot basis.

Odisha extends deadline for generating Aadhaar IDs for pensioners; exclusion of beneficiaries in Assam as biometric details locked in NRC process

The Odisha State government has extended the deadline for generating new Aadhaar IDs for social security pensioners without Aadhaar to March 31. The State government has been attempting to make Aadhaar seeding mandatory for pensioners but has been unable to do so as five lakh beneficiaries are still without Aadhaar number. As the social security pension scheme covers elderly persons and persons with disabilities (with problems in iris and fingers), failed Aadhaar cases are common. Meanwhile in Assam, biometric details of around 38 lakh citizens have been locked due to the National Registry of Citizens (NRC) process, leading to exclusion of beneficiaries from various welfare schemes.

Central government revises NREGA wages for states; increase in number of jobs generated in the current fiscal year

State-wise NREGA wage revisions notified by the Ministry of Rural Development came into effect on April 1. Overall, the average increase in wages is less than 4% this year, compared to a 11% hike last year. Civil society groups such as the NREGA Sangharsh Morcha and Human Rights Forum have called the revisions insufficient. Groups have called for a raise to the level of the statutory minimum wage rate for agriculture and an increase in the guarantee of work from 100 to 200 days. Activists have also demanded transparency in the way the wages are determined.

The Central Government has meanwhile reported a 40% increase in jobs generated in the current fiscal under MGNREGA with demand for work in April increasing by 89% compared to April of last year. At the state level, Chhattisgarh has ranked first in terms of providing jobs in the NREGA. Employment of 16.07 crore man-days has been created so far, against the target of creating 15 crore man-days of employment. In the past year, 60.80 lakh households completed 100 days of work, the highest since 2011-12 and 1 in every 4 workers in the labour force worked under NREGA, suggesting an increased demand by rural workers.

However, a recent survey by ICRIER and Inferential Survey Statistics and Research Foundation (ISSRF) shows that only 7.7% of reverse migrants were engaged in NREGA work and only 1.4% of migrants reported getting any skill upgradation or training under the Garib Kalyan Rozgar Yojana (GKRY). The authors highlight the need to ensure portability of benefits and broadening the type of work under NREGA as lockdowns grow across the country.

Ministry of Agriculture makes efforts to boost a digital agro-ecosystem; direct cash transfers for MSP procurement begins in Punjab

The Ministry of Agriculture has signed an MoU with Microsoft to develop digital farming in 100 districts on a pilot basis. Microsoft has joined its local partner, CropData to leverage technology, data and artificial intelligence to support farmers with input decisions and post-harvest management.

In Punjab, the State government has begun rolling out direct cash transfers to farmers for procurement of wheat. Payments from FCI are being made on the basis of the quantity of crop brought by farmers to the mandis. There has been some opposition to direct transfers by the arthiyas (commission agents) as this system increases their workload without any incentives. Another potential roadblock to the reforms is that the Central government is considering asking farmers to furnish proof that they are the owners or have the authority to cultivate the land on which the crops are grown. This would need strengthening of land records and tenancy agreements, many of which are verbal in nature in Punjab. The Central government reported that so far, Rs 13000 crore has been transferred directly to farmers against sale of wheat in Punjab and Haryana.

Cash transfer schemes announced by various parties ahead of state elections; Several reports suggest improvements in social protection architecture needed to overcome adverse effects of Covid on incomes and livelihoods

The All India Trinamool Congress wooed voters in the run up to the now-concluded state elections in West Bengal by promising cash transfers to households. Under the scheme, the government will transfer Rs 500 a month for the underprivileged and weaker sections in the general category and Rs 1000 a month for Scheduled Tribe and Scheduled Caste families. In the backdrop of parties announcing similar schemes in Kerala and Tamil Nadu, interest in the idea of a Universal Basic Income in India has increased along with the idea of paying homemakers for their unpaid domestic work. There have also been calls for universalizing the PDS and income assistance to the poor to withstand the effects of the second wave of Covid.

A report from Gram Vaani in collaboration with Dvara Research and others, highlights the gaps in the implementation of DBT and PDS schemes, with exclusion of beneficiaries resulting from lack of Aadhaar linkage and active bank accounts. A recent study by the National Human Rights Council found that inter-state migrant workers are without access to social protection or healthcare and are treated as outsiders in their host states. The report suggested that a multi- pronged strategy with the involvement of Central, State and local governments supported by community based organizations is needed to address the vulnerabilities of migrant workers.

[March 23rd, 2021]

Union Food Secretary reviews progress of One Nation One Ration Card scheme; Delhi government notifies scheme for doorstep delivery; No increase in PDS prices, says Union Food Minister Piyush Goyal; Central Food Ministry is considering automatic dispensing machines in PDS

• The Centre has requested states to send proposals for additional borrowing against ONORC by February 15th. The Union Food Secretary reviewed states’ progress on installation of ePoS devices, Aadhaar seeding of all beneficiaries, biometric authentication of public distribution system (PDS) transactions and portability transactions (both inter-state and intra-state) and asked them to expedite rollout of the scheme. States can claim additional borrowing of 0.25 per cent of gross state domestic product (GSDP) against the implementation of the scheme. The Finance Ministry said 17 states have operationalized the scheme and are eligible for additional borrowing. These states have been granted additional borrowing permission of Rs 37,600 crore by the Department of Expenditure. Additionally, the Central Government has launched an app called ‘Mera Ration’ (My Ration) to facilitate smooth rollout of ONORC. The app will help in identifying the nearest Fair Price Shop (FPS), in checking details of their entitlement and recent transactions.

• The Delhi government has notified its scheme for doorstep ration delivery called Mukhya Mantri Ghar Ghar Ration Yojna (MMGGRY). The scheme is scheduled to be launched on March 25 with 100 households in Seemapuri and will be expanded to all areas in April. The notification says that beneficiaries will have to opt for doorstep delivery and pay the processing (conversion) charge along with the cost of subsidised foodgrains. Delhi State Civil Supplies Corporation (DSCSC) will empanel millers and rice processors to lift the foodgrains for cleaning, grinding and packaging. Packed wheat flour and rice will be delivered under this scheme by direct home delivery (DHD) agencies to be engaged by Delhi Consumer's Cooperative Wholesale Store Ltd (OCCWS). Meanwhile, Telangana’s newly announced OTP verification system for lifting grains has led to people thronging MeeSeva centers for mobile phone number linkage. Under the new rule, Fair Price Shops are not distributing ration to those who have not linked their Aadhaar card and ration card with a mobile number.

• A commission in Karnataka has recommended that millets be included in the PDS. The Karnataka Agriculture Price Commission has recommended the inclusion of millets in the midday meal scheme to encourage farmers growing millets and to provide nutritious food to schoolchildren. It has also recommended that the State government should directly procure millets from the state’s farmers. In Karnataka, 55 lakh tonnes of paddy, 13 lakh tonnes of ragi and 10 lakh tonnes of jowar are grown in the state every year which is higher than the 30.38 lakh tonnes foodgrains needed to cover 5.10 crore beneficiaries under NFSA.

• Union Food Minister Piyush Goyal has said that there is no proposal to increase prices in the PDS. This is after the Economic Survey 2021 recommended an increase in prices of foodgrains in the PDS to reduce the food subsidy bill.

• The Central Food Ministry is running trials of automated food grains dispensing machines in the PDS in five cities. The shift is aimed at bringing transparency, plugging leakages, and ushering in real-time management of the country’s food stocks. In the automated machines, beneficiaries have to feed some simple inputs about their ration card along with biometric-based authentication into the internet-linked machine, which then dispenses the monthly quota of grains.

DBT for food and fertilizer being considered but both issues are complex, says Niti Aayog vice-chairman Rajiv Kumar; Centre creating a national database of farmers aimed at better targeting of subsidies

• The Centre is considering DBT for eligible beneficiaries to bring in more efficiency in key subsidy programmes. However, when and how DBT in food and fertilizer sectors will be implemented is undecided for now due to the complexity of introducing reforms, said NITI Aayog vice-chairman Rajiv Kumar. DBT in LPG-Pahal has led to a saving of Rs 71,301 crore between FY15 and FY20 while the PoS system in the fertilizer subsidy has helped the Centre save Rs 10,000 crore up to FY20, the official data showed.

• Meanwhile, the Centre is in the process of creating a “digital agri-stack”, a hi-tech national farmers’ database that could aid precise targeting of subsidies, services and policies. Under the programme, each farmer of the country will get a farmers’ ID, linked to land records to uniquely identify them. India has 140 million operational farm-land holdings. The data of 4.3 crore (43 million) farmers linked with land records have already been verified, said one official.

Lower allocation in NREGA compared to the previous year’s revised estimates causes concern among experts; Parliamentary panel flags issue of inordinate delays in release of funds; States increase number of persondays under the scheme

• Lower allocation to NREGA than the revised estimate of 2020-21 could lead to employment challenges. The Centre has allocated Rs 73,000 crore to NREGA, which is higher than the Budget Estimate of Rs 61,500 crore in 2020-21. However, it is 34% lower than the Revised Estimate of Rs 1.11 lakh crore, which included the additional outlay provided for COVID-19 relief. Experts say this may be insufficient to meet work demand given that persondays generated this year was 3.4 billion while the government has provisioned for about 2.7-2.8 billion person days for next year. The Central Government confirmed that there would no increase in persondays. A parliamentary panel report on NREGA has said that an “inordinate delay” in the release of 40 percent of the funds was discouraging, despite the increase in demand for work during the COVID-19 pandemic. The panel also highlighted the disparity in wages disbursed under the scheme in different states and union territories.

• Meanwhile at the state level, in Madhya Pradesh, the persondays has been raised from 37.80 crore days to 42.80 crore days. Uttarakhand has increased MNREGA days from 100 to 150. In Bengal, the government’s doorstep delivery service scheme received 10 lakh applications for NREGA job cards in one week, suggesting continued demand for work under the scheme.

Seven states now eligible for additional borrowing against power sector reforms; Finance Ministry seeks parliament approval for Rs 6.3 trillion extra spending through the second supplementary demand for grants.

• In the past month, the Centre has allowed Andhra Pradesh to borrow an additional Rs. 1,515 crores after power sector reforms. The state becomes the second state to receive additional borrowings. Five more states - Bihar, Goa, Karnataka, Rajasthan and Uttarakhand - have also been allowed to borrow additionally for undertaking power sector reforms. While Andhra Pradesh and Madhya Pradesh have started DBT for farmers, the other states have met two of the three parameters to qualify for additional borrowing. There are three parameters a state must meet under the power sector reforms—reduction in Aggregate Technical & Commercial (AT&C) losses, targeted reduction in Average Cost of Supply and Average Revenue Realisation (ACS-ARR) gap, and direct benefit transfer (DBT) of electricity subsidy to farmers.

• The Finance Minister has sought parliamentary approval for Rs 6.3 trillion additional spending which includes additional Rs 4.12 trillion in the second supplementary demand for grants of the current fiscal year. This is one of the highest demands for grants sought by the government. A significant portion of the additional funds will be used for expenditure on fertiliser subsidy under Atmanirbhar Bharat Abhiyan 3.0, as the government aims to wipe out the backlog in payments to fertilizer companies. The Finance Minister did not announce any fertilizer subsidy reform in this year’s budget, despite concerns raised over growing subsidy bills.

Central Government to supply fortified rice through ICDS, Midday Meal scheme from April; Government of Telangana to introduce fortified rice in government-run programmes

• The Central government has decided to scale up the distribution of fortified rice through the ICDS and Midday Meal schemes from April. Currently, fortified rice is being distributed on a pilot basis in one district each in six states - Andhra Pradesh, Gujarat, Maharashtra, Tamil Nadu, Chhattisgarh and Uttar Pradesh - through the PDS. The objective is to address anaemia and micro-nutrient deficiency in the country. The Government of Telangana also announced that it will provide fortified rice in anganwadis, ICDS, MDM and government hostels. Technology training has been given to mills in the state to ensure that they have the capacity to produce fortified rice. Currently, the state provides fortified milk and oils under the ICDS programme

Major political parties in Tamil Nadu announce cash transfers for women

• Ahead of the elections in Tamil Nadu, both major political parties in the state - the ruling AIADMK and DMK - have announced cash transfers for women. While the exact beneficiary of the scheme has not been defined by either party, they aim to target women of households that have ration cards. The AIADMK will give a monthly allowance of Rs 1,500 and six gas cylinders for free annually while the DMK will give Rs 1,000 per month. The state has 2.6 crore ration card holders.

[February 4th, 2021]

Budget for FY22 presented; Union Finance Minister announces a portal for data on migrant workers; a pre-budget survey highlights the sectors where Indian citizens feel social protection policies can be strengthened; Economic Survey 2021 proposes hiking central issue prices of foodgrains

• Union Finance Minister Nirmala Sitharaman presented the Budget for FY22 in the Parliament on February 1, 2021 and it is being hailed as pro-growth and a step in the right direction by experts. The main focus of the Budget is on health and well-being, physical, financial capital and infrastructure, inclusive development for aspirational India, reinvigorating human capital, innovation and R&D and minimum government and maximum governance. As the FM revealed that the fiscal deficit has trebled over the last year, the Centre’s approach has moved right-of-Centre with regards to the economy as public sector banks and insurance companies would be sold off, instead of ramping up subsidy allocations as was expected. Agriculture, rural employment and education have witnessed deep cuts in spending. Notably, the funds for NREGA labourers have been slashed and allocations for ICDS, midday meals and maternity entitlements reduced. Commenting on the allocation cuts, the Right to Food Campaign said that the Centre has abdicated responsibility in ensuring social protection.

• To provide relief to the unorganised labour force, Finance Minister Nirmala Sitharaman has proposed launching a portal that will gather and store important information on gig, building, and construction workers, among others. In her words, it will “help formulate health, housing, skill, insurance, credit, and food schemes for migrant workers”.

• A pre-budget survey of 1,451 respondents across 24 States in India by Fight Inequality Alliance India -- a group of NGOs, rights' groups and campaigners has found that 95% of people surveyed want minimum wages and insurances for anganwadi and ASHA workers, 88% want an urban employment guarantee scheme (up to 96% for urban Muslims), 87% wish universalisation of PDS and 97% desire universal minimum social security. 87% respondents also desire free COVID vaccination for all. Meanwhile, the PDS Chamber of Commerce and Industry has recommended the government to come up with well-designed social protection policies for the vulnerable sections in India.

• The Ministry of Finance’s Economic Survey 2021 has proposed hiking the central issue price of wheat, rice and coarse grains in order to reduce the food subsidy bill. The central issue price has not been revised since the National Food Security Act (NFSA) came into place in 2013, even though the economic cost has been updated several times over the years.

Food subsidy bill approaches Rs. 6 lakh cores; Delhi and Andhra Pradesh to start doorstep delivery of PDS ration; Telangana replaces biometric authentication with mobile-OTP system; Tamil Nadu and J&K face biometric issues; Karnataka to distribute jowar, red gram, green gram and ragi under PDS; West Bengal increases license renewal period of ration shop dealers; UP and Himachal simultaneously focus on computerization in PDS; Maharashtra to detect and cancel illegal rationcards in a special drive

• The food subsidy bill for FY 2021 nears Rs. 6 lakh crores, which is a 2.5 fold jump from the initial budget estimates. Most of the expenditure has been attributed to the Central government’s free food distribution during April-November 2020 in the wake of the pandemic. In addition, dry ration was also distributed to migrant workers.

• A rapid response survey involving 1,267 respondents as conducted by the Delhi Commission for Protection of Child Rights (DCPCR) in January on distribution of dry ration from anganwadis found that 85% of beneficiaries have received their Take Home Ration(THR) entitlements. Meanwhile, the Delhi Rozi Roti Adhikhar Abhiyaan (DRRAA) has written to the Chief Minister Arvind Kejriwal expressing concerns over the soon-to-be-launched doorstep delivery of ration scheme in Delhi, highlighting that without proper protocols and monitoring mechanisms, there is a risk of less transparency and more corruption. This comes at a time when Delhi Chief Minister Arvind Kejriwal has announced that the AAP government will initiate the doorstep delivery scheme from March 2021.

• The Andhra Pradesh government announced the start of doorstep delivery of PDS rice from February 1. Earlier, the State Election Commission (SEC) had asked the State government not to go ahead with doorstep delivery, resulting in the State government filing a petition with the court. AP High Court has since asked the State government to explain the importance of doorstep delivery to the SEC. Recently, doorstep delivery has started in urban areas of Krishna district.

• In order to prevent the spread of the virus in the pandemic, the Telangana government has decided to replace biometric authentication via ePoS machines with an OTP system on the mobile numbers linked to the Aadhaar cards of beneficiaries. PDS beneficiaries have been informed to update their mobile numbers at eSEVA or MEESEVA centres before the policy is rolled out on 1st February. Telangana is the first state to implement this rule and the Telangana State Food Commission has directed the Food and Civil Supplies Department to ensure that no cardholder is bereft of their entitlements, after receiving complaints from civil society organisations.

• This comes at a time when the district authorities of Tamil Nadu are planning to seek relaxation from biometrics to be able to smoothly distribute essential commodities under PDS. In addition, J&K faces severe biometric issues unique to the region, since security forces have installed jammers which prevent the internet from working and where cold temperatures and power cuts create charging problems in ePoS machines.

• The Karnataka government has decided to distribute jowar, red gram, green gram and ragi under PDS from April in order to improve nutritional consumption of beneficiaries under PDS. There are also plans to introduce jaggery produced in the region Mandya at a subsidized cost in the PDS, for which a response is pending from the Chief Minister. Meanwhile, the Tamil Nadu government is considering distributing palm products like palm jaggery and palm sugar and the Uttar Pradesh government is planning for fortified rice to be distributed under PDS.

• In order to acknowledge the frontline work done by ration shop owners during the pandemic, the West Bengal government has announced increasing the license renewal period of ration shop dealers to from one year to three years and reducing working capital needed from Rs. 5 lakh to Rs. 2 lakh, with an additional assistance of Rs. 2 lakh if the ration shop dealer dies on duty.

• The Uttar Pradesh government has recently digitized data of all beneficiaries in the PDS and set up the online ration card management system to automate the food distribution process. Transaction data from Fair Price Shops is also currently being digitized in both rural and urban areas. Parallelly, the Himachal Pradesh government is also planning end-to-end computerisation and automation of the food distribution system under PDS. Maharashtra government is one step ahead, as the Food and Civil Supplies Department is using their already digitized data to initiate a special drive from February to detect illegal rationcard holders and to cancel the cards.

One Nation One Rationcard Scheme to be scrutinized by a parliamentary panel; 32 States and Union Territories now under ONORC as Andaman & Nicobar join the scheme;Tamil Nadu becomes the 11th State to fulfill ONORC reforms and become eligible for additional borrowings

• ONORC scheme will be scrutinized by a parliamentary panel as Opposition leaders get ready to raise gaps in implementation and the efficiency of PDS. This comes at a time when the Centre is being urged not to rush on the implementation, given still many Fair Price Shops remain without ePoS devices.

• Andaman & Nicobar Islands kickstarted the ONORC scheme from November 30th, with a plan to introduce the scheme in all FPS by December 15th 2020. Currently 32 States and Union Territories are under ONORC, with a reach of 69 crore beneficiaries.

• Tamil Nadu becomes the 11th State to complete ONORC reforms and becomes eligible for additional financial resources of Rs. 4,813 crores through Open Market Borrowings. The State government received permission for additional borrowings by the Department of Expenditure, Government of India.

Centre’s focus moves to digital delivery in India; Rethink Aadhaar campaign highlights the increasing frequency of scams with Aadhaar-linked DBT; Centre introduces production-linked incentive DBT scheme; Karnataka to disburge age-old pensions through DBT; Madhya Pradesh first State to disburse power subsidy through DBT; West Bengal announces DBT transfer to children for online learning; Assam initiates the ‘Orundoi’ scheme

• Building on the momentum from JAM and DBT, the Centre’s focus has now shifted to digital delivery in order to encourage financial inclusion in India. Centre has also introduced a production-linked incentive (PIL) DBT scheme where manufacturers who create and then sell/export goods up to Rs. 100 crore will get Rs. 5 crore from the government as a reward. Meanwhile, the Rethink Aadhaar campaign has published a report that highlights how easy scams have been with Aadhaar-linked DBT. The main concern is that people are unaware of when and how their personal details are used to divert payments. The problem is exacerbated by the fact that the Aadhaar number is arbitrarily linked to the last bank account of a person, making it difficult to verify whose account it is. This comes at a time when about 5.5 lakh ineligible beneficiaries have been found in Tamil Nadu’s PM Kisan Scheme, resulting in a loss of Rs. 110 crores. The accused used publicly available Aadhaar information to register for the schemes. Surprisingly though, the Opposition Party has also asked for more cash transfers in the social protection schemes of India.

• Many State governments have also recently introduced new cash transfers in their social protection schemes. The Karnataka government has decided to disburse age-old pensions through DBT, with people above 60 automatically being cleared for pensions given their Aadhaar and income certificate information. Madhya Pradesh became the first State to disburse power subsidy through DBT and fulfilling this reform condition allows the State to make additional borrowings from the Centre. The West Bengal government has announced a DBT of Rs. 10,000 for each child enrolled in class XII to help them buy tablets or smartphones for online learning. Meanwhile, the Andhra Pradesh government has offered students from class IX to XII laptops in lieu of DBT. Assam has started the ‘Orundoi’ scheme to 17 lakh beneficiary households at the moment where Rs. 830 will be transferred every month to a female in the household. The coverage is expected to increase to 22 lakh families with time.

Niti Aayog’s report highlights the gaps in implementation of Poshan Abhiyan; Mission Poshan 2.0 launched and supplementary nutritional schemes merged; Budget cuts in ICDS shock public health experts

• Niti Aayog’s monitoring and evaluation unit has come out with a report that highlights the challenges that the delivery mechanisms of National Health Mission (NHM) and Integrated Child Development Services (ICDS) have, especially the fact that delivery is not reaching as many women and children in high burden States as desired and the overall reach is wanting even in model regions. The report indicates that the main interventions through ICDS like Take-Home Ration (THR) and growth-monitoring need quality improvements and stresses on the need to move to a Poshan plus strategy to tackle malnutrition more effectively.

• Meanwhile, The Ministry of Women and Child Development(WCD) has received a 16 percent increase in its budget allocation this year, amounting to Rs. 24,435 crores. The Union Finance Minister has however announced that supplementary nutritional schemes will be merged with Poshan Abhiyan as part of Mission Poshan 2.0. Poshan 2.0 now combines ICDS, Anganwadi services, Poshan Abhiyan, Scheme For Adolescent Girls and National Creche Scheme and the Budget for the main nutritional program ICDS has been cut by over Rs. 5,000 crore. This has come as a shock for public health experts given the National Family Health Survey done in 2019-20 revealed an increase in children under five suffering from malnutrition.

Fertilizer subsidy may cross Rs. 1 trillion next fiscal; Centre may introduce DBT for fertilizer subsidies; Union FM commits to the MSP system and announces support to APMC; Bihar farmers who burnt crop residue to be denied DBT benefits

• As the fertilizer subsidy may cross Rs. 1 trillion in the next fiscal after clearing the backlog of producers, The Department of Fertilisers and the Ministry of Agriculture are working out the details for the ambitious DBT in fertilizer subsidy scheme, which is likely to be announced in the Budget of FY22 and is expected to reach 140 million farmers in the country.

• The Budget has focused on existing infrastructure gaps in agriculture as well as credit and investments. Assuring the continuation of the MSP regime, the Union FM has announced the use of a Rs. 1 lakh crores infrastructure fund for the development of state-controlled mandis. The major cut in the ministry’s budget is being attributed to lower spending in the PM-Kisan scheme. Reportedly, farmers will still continue to get Rs. 6,000 per annum under the scheme.

• Around 900 farmers in Bihar who have disregarded the government’s order to not burn crop residue will not be given DBT for subsidies or incentives for farm equipment as a form of punishment. This makes Bihar the first State to penalize farmers for burning crop residue.