Mumbai: Crisil said implementing direct benefit transfer (DBT) for food subsidy will help government save Rs 25,000 crore by eliminating costs associated with procurement, distribution and storage of food grains.
Apart from saving money for the government, implementing the DBT, which would entail cash transfers into beneficiary accounts in lieu of food material, will also push up consumption in the economy, Crisil Research said. At 2015-16 prices, a family of five will get Rs 5,800 per year in cash transfers into their bank accounts, which Crisil said is higher than the reported total annual expenditure (food +non-food) of the poorest 5 percent of the rural households and more than half the annual expenditure of the poorest 10 percent of urban households.
It said, “Such a significant unconditional cash transfer will undoubtedly raise discretionary spending of the recipient households, providing a consumption boost the economy.” Families having higher income level will spend the money on protein-rich food like milk, egg, fish and meat, clothing and footwear, rent and conveyance, medical and education expenses, it said.
