-The Financial Express
Food minister KV Thomas’ proposal of giving grain as part payment of wages under the MGNREGA stands to undo most of the progress the government has made in trying to curb leakages in distribution of subsidies. While close to half of food to be given through ration shops is believed to be making its way to the open market, the UIDAI-based system’s attempt is to give cash grants instead, and directly to UIDAI-linked bank or post office accounts. This has been tried for petroleum subsidies in select areas and even MGNREGA has taken to this method, with more than 10 crore savings accounts having already been opened for MGNREGA workers, and officials saying that more than 80% of the wages paid under MGNREGA are being paid directly to bank accounts.
Making part of MGNREGA payments in foodgrains, then, takes us back to square one. Jairam Ramesh has criticised this plan, saying that not only will grain payments lead to the pilferage of foodgrains, it will also delay the massive financial inclusion programme based on cashless payments straight to bank accounts. If Thomas wants to reduce the load on FCI’s godowns, the solution lies in fixing the FCI process, not to burden MGNREGA with FCI’s huge inefficiencies. Indeed, the plan for even PDS should be to move away from grain transfers to UIDAI-based cash transfers.