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18th September 2017 Part-2:Daily News Analysis
Advantages of cash system over PDS a) Cash transfers in form of PDS would involve the transfer of money directly into bank accounts of identified card holders. b) Instead of going to their local ration shops to take subsidized grains, recipients would withdraw this money to buy the food of their choice from the market. c) to enormous leakages into the black market, and high waste in costs of transferring subsidies in the form of food transfers. d) replacing food with direct cash transfers would greatly reduce corruption and leakages. It would enable the poor to access goods currently denied them by a PDS beset by corruption. Further, it would enable people to buy better quality food of their choice from the open market e) not be restricted to items sold in the PDS, which are often inferior in quality and limited in range. f) it would both bypass brokers as well as reduce the waste and holding costs of storing grains in government silos. The amount of grain actually required for India’s buffer stock needs could be held in better-quality warehouses, eliminating waste and rotting. g) Cash transfers would help reduce fiscal deficit (currently we are facing with it) by curbing expenditures earmarked for the PDS that are siphoned off through corruption, as well as avoiding substantially higher costs of transferring food rather than cash. Disadvantages- a) Irregularities are empirically found to be high in existing cash transfer programmes. the difference between the corruption or probity of delivery of welfare programmes is not dependent on whether cash or food is delivered, but on political and administrative will and capacities, and public vigilance and organization. b) It is also possible for people to spend cash transfers not on more nutritious food,but instead on non-food items, which would decrease the amount of household money left for buying food. c) There are significant gendered differences of choice here. culturally decisions relating to cash in households tend to be made by men, who may or may not spend the money on food. Decisions relating to food are made by women in almost all cultures, and therefore food rather than cash in a household is more likely to end up as food in a child’s stomach. d) There are also worries about how genuinely inclusive of people in remote rural regions is India’s banking system. e) Fair price shops exist in three of every four villages, and are therefore generally accessible. f) average distance to the nearest bank branch is between 6.5km to 10km. Distances would be much longer in remote regions, entailing high additional costs of transport and time. g) Another advantage of PDS over cash transfers from the perspective of the poor is that PDS supplies rations at a constant price, irrespective of the fluctuations in market prices. cash transfers cannot match. h) PDS requires the government to procure food from farmers. The government builds up stocks of grains which are also useful for price stabilization. Indeed, the guarantee of minimum support price purchase by the government for wheat and rice is the most important instrument for the protection of farmers’ income in India, and this would become unfeasible if the government could not offload a lot of this grain back through the PDS and it will affect farmers.
Shashank jain
2 years ago
sir please review it please sir and sir actually i used to make my notes on notepad. it became easy for me to answer here so you can review my answer please sir review it