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Be cautious in shifting to DBT, RBI tells States
News:
Recently, The RBI has advised the states to be cautious that are planning to shift to cash transfers
Important facts:
- At present, three UTs- Puducherry, Chandigarh and urban areas of Dadra and Nagar Haveli are implementing the mode of cash transfer
- However, Puducherry has approached the Centre to permit to return back to the old system of supplying rice after there have been complaints about poor facing difficulty to get rice
- Advantages of DBT:
- Cash transfers reduce the need for physical movement of food grains
- It provides greater autonomy to beneficiaries to choose their consumption basket
- Important for reducing leakages in the public distribution system (PDS)
- Issues in implementing DBT
In a report on state finances, RBI has highlighted the following problems:
- Inadequacy of transfers to maintain pre-DBT consumption levels
- Insufficiency of last mile delivery mechanism
- Weak grievance redressal mechanism
- Pre-conditions to be taken prior to DBT execution
- Complete digitisation and de-duplication of beneficiary database
- Seeding of bank account details and Aadhaar number in the digitised database
