Nexus of Good: Revolutionary disbursement

With a view to providing additional 5 kg foodgrains per month to every member of a poor family, the new government in Karnataka announced the Annabhagya Scheme. According to the National Food Security Act, there were two categories of ration cards for the poor: PHH (Priority Household) and AAY (Antyodaya Anna Yojana) cards. Each member having a PHH card receives 5 kg foodgrains per month whereas each AAY card-holder receives a flat allocation of 35 kg, regardless of the number of members in the household. Considerable efforts were made to procure the required foodgrains for the implementation of the new scheme. However, the Food Corporation of India (FCI) suddenly halted the Open Market Sale Scheme (OMSS). The state government was left with no choice but to opt for Direct Benefit Transfer (DBT). Before embarking on this ambitious route, extensive data was prepared and technical checks were undertaken. The initiative began by establishing criteria for the selection of beneficiaries from among the Below Poverty Line (BPL) segment.

The standard approach was to follow the same calculation used in the PMGKY, where each member in PHH and AAY families received an extra 5 kg. A proposal was sent to the government that for one-, two-, and three-member AAY families, the average ration per capita already exceeded 10 kg. Hence, these one-, two-, or three-member families were considered ineligible for state food scheme (Annabhagya). Instead, the aim was to allocate additional food (DBT) for the 4th member onwards in each AAY card, ensuring a 10 kg entitlement per member. This approach enabled the state to save 11,600 metric tonnes of ration per month, equivalent to Rs 500 crore per annum.

Another criterion implemented was in the context of treating ration cards as ineligible if the cardholders had not availed their ration continuously for the past three months, and this led to monthly savings of nearly Rs 31 crore. This was a dynamic figure that changed every month. However, for the initial month, nearly 5.46 lakh ration cards were identified for which no ration was collected consecutively during the preceding three months.

Using these filters, 1.19 crore ration cards were found eligible for the DBT implementation.

After finalising the eligible ration cards for DBT, the next objective was to prepare the data for DBT. This data preparation entailed calculating the DBT amount per card, and checking the bank account status through the National Payments Corporation of India, among other steps.

During the data preparation process, all the ineligible ration cards were closely examined. Additionally, a decision was taken to disburse the funds to the Head of the Family (HoF).

It was decided to transfer funds exclusively to the female HoF. Upon revisiting the calculation for ration cards with bank account issues, the number soared to 21 lakhs, a substantial figure, constituting nearly 16 per cent of the ration cards. Remarkably, almost all these cases pertained to female HoFs. Despite Jan Dhan Yojana for creating bank accounts, these accounts were never truly integrated into active financial transactions. The scheme not only entails DBT to HoFs (primarily females) but also endeavours to achieve true financial inclusion by directly conducting financial transactions through their bank accounts. In doing so, women will come to understand the importance of their active bank accounts.

This DBT initiative aimed to go beyond simple money transfers and instead focused on empowering an additional 21 lakh women through active financial inclusion. It serves as a blueprint for other DBT schemes having women at the forefront, such as Grah Lakshmi.

To address this challenge, resources of the Indian Post and Payment Bank (IPPB), along with their Business Correspondents (BCs) available at 3,500 Fair Price Shop (FPS) locations, capable of facilitating the opening of no-frill bank accounts, were leveraged. In addition to these two entities, individuals were also given the option to approach any bank to open a National Bank account. More than 1.33 lakh new bank accounts of heads of families were opened. Fair price BCs also received Rs 60 for opening each new account.

As a consequence of this effort, more than 7 lakh new families became active participants through financial inclusion.

The primary challenge, however, was to raise awareness among the populace about the programme and its functioning. To educate the beneficiaries, multiple approaches were employed:

1) The 'DBT tab' on Ahara portal, the website used for ration card management and distribution, was enabled. This 'DBT tab' is designed to be user-friendly, allowing beneficiaries to input their ration card number to receive an immediate status update in various categories;

2) A list of ineligible and problematic cases were displayed in front of each ration shop, enabling people to review issues related to their DBT. This approach was easily accessible to beneficiaries, as they visit the shop monthly to collect their ration;

3) State helpline numbers were prominently displayed at all shops, offering beneficiaries the option to call and promptly address their concerns.

Being an accidental DBT programme, a lot of positive feedback was received from the people. With the DBT money, the lady of the house could spend more money on vegetables, protein and nutritious food.

While the benefits of DBT are evident in terms of savings and reducing leakages within the scheme, it is necessary to acknowledge that the efficient distribution of foodgrains to beneficiaries also plays a vital role in the food supply chain. DBT not only enhances efficiency by directly delivering benefits to beneficiaries but also helps curb leakages in the system. However, the supply of foodgrains remains a significant aspect to consider. It serves as a check against foodgrain inflation, lessening its impact on the economically disadvantaged. Due to geographical disparities, there exist price differences that prevent all individuals from accessing the same food grains at uniform price.

The National Food Security Act is a vital governmental initiative aimed at ensuring equitable access to affordable and nutritious food for all members of society. By providing subsidised food and stabilising prices, these acts effectively combat hunger and malnutrition, particularly among vulnerable and low-income populations. The primary goal is to enhance nutritional well-being, with a particular focus on children, pregnant women, and lactating mothers.

What has been initiated in food scheme implementation by this dedicated team of food and civil supplies of Karnataka, led by Gyanendra Gangwar, is a wonderful example of Nexus of Good as the model can be replicated through public-private partnership. A couple of young IAS officers, M Kanagavalli and MT Reju, played a critical role in the initial success of the initiative.

Views expressed are personal