Cash Transfer Plan in Karnataka Triggers Controversy for Anna Bhagya

Under the revised Anna Bhagya 2.0 scheme, which was one of the government's five electoral promises, each member of a Below Poverty Line (BPL) household is guaranteed five kilograms of free rice per month. Consequently, BPL households will benefit from an increased monthly rice allocation, with a total of 10 kilograms per person. Out of this allocation, the Central government will contribute five kilograms, ensuring enhanced support for these households.

As per the Chief Minister's Office, around 128 million ration cardholders in Karnataka are eligible to receive the cash transfer. The government will provide Rs 34 per kilogram of rice, totaling Rs 170 per person per month, as compensation for the rice. It is noteworthy that nearly 99 percent of the ration cards are Aadhaar-linked, and out of these, approximately 82 percent (106 million) are connected to active bank accounts. The cash transfer process will be initiated for these eligible cardholders, as confirmed by an official release from the Chief Minister's Office.

 To accommodate the remaining ration cardholders, necessary instructions will be provided to facilitate the opening of new bank accounts. Among the 127 million ration cards, an overwhelming majority of over 99 percent are associated with a designated Head of Household (HoH).

The introduction of the Anna Bhagya scheme in Karnataka stirred up controversy, with Chief Minister Siddaramaiah expressing dissatisfaction over the Central government's disruption of the program by suspending grain. Despite Karnataka's persistent efforts to procure rice from alternative central government agencies and other states, they faced hurdles and were unable to succeed.

In a bid to meet the scheme's commitments, the Congress party succumbed to pressure and introduced cash transfers. The program carries an annual expense of around Rs 10,000 crore. Initially, the monthly cost for grain supply was estimated at Rs 840 crore, but the cash transfer approach will save transportation expenses, reducing the burden on the state exchequer to around Rs 750 crore.