Three separate news stories have a link.

The first is about the Vidhwa Pension Yojana in UP, under which widows get a monthly pension of Rs 300 as long as they are BPL (below the poverty line).

UP has 1.5 million widows, so the annual expenditure is Rs 540 crore. The delivery mechanism is apparently foolproof. A village pradhan or city corporator identifies a widow as BPL and then forwards the name to the block office. Then the name goes to the probation officer of the tehsil. After approval, the beneficiary opens a bank account into which the money is transferred directly. Since Rs 300 every month is a large sum for the poor, women who aren't widows have declared themselves widows.

For instance, in Azamgarh's Mahula village, 104 out of 187 widow pensioners were found to be fake widows. The point is that these aren't isolated cases of fraud. There has been systematic embezzlement with official connivance.

The second story is about a pilot cash transfer scheme, pushed by the Ministry of Consumer Affairs, Food and Public Distribution, so as to replace PDS.

PDS doesn't work and leakage and corruption in the system has been abundantly documented, including in variants like the TPDS (targeted PDS) and the AAY (Annapurna Anna Yojana).

Cash transfers are superior, and these are conditional cash transfers, since they can only be used for food. Under the Ministry's proposed pilot, cash transfers will be used in five villages: Lakhimpur and Hardoi in UP, Panchkula and Jhajjar in Haryana and Central Delhi. BPL rice costs Rs 6 per kg, the open market price is Rs 10. The government subsidy is Rs 10 per kg and the 35-kg-a-month entitlement means an equivalent cash transfer of Rs 350 per month. This will be directly transferred to the beneficiary's bank account. Given the experience with UP's widows, is there any guarantee that there won't be organized embezzlement here too? (Not that PDS is any superior!) After all, similar reports have appeared about the NREGS.

... contd.