Raising strong objections to certain aspects of Centre's Direct Benefits Transfer, Tamil Nadu chief Minister Jayalalithaa today said the scheme in its present form should "not be operationalised" in the state as it is an "infringement" on the authority of state governments.
In a strongly worded letter to Prime Minister Manmohan Singh, Jayalalithaa wondered if the state governments were expected to look on as mere "bystanders", far removed from the process of administering the scheme, after having placed their entire field machinery at the disposal of the Centre.
"This is clearly an infringement of the authority of the state governments and totally violative of the federal polity of the country and the spirit of democratic decentralisation," she said.
If the intention of the Centre in introducing the scheme was to ensure efficient delivery, then it should route funds through state government, which she said was already progressively switching over to the bank mode of disbursement for all its beneficiary oriented schemes.
The Centre should confine itself to monitoring implementation, she said while urging it to give up moving Direct Cash Transfer of subsidy for PDS and fertilizer and kerosene subsidy.
"Therefore, until our serious concerns are addressed, clarity is provided and a consensus is reached on the manner of transfer of resources to the state government for disbursement to beneficiary bank accounts, the implementation of the Central Direct Benefits Transfer in its present form should not be operationalised in Tamil Nadu," she said.
If the scheme is implemented through the state govenment, it would enable their rightful place as equal partners in the governance of the country and not reduce them to becoming "vassals" in the structure of governance, she said.
Jayalalithaa said her government was equally opposed to direct transfer of cash to bank accounts of beneficiaries by the Centre bypassing the state government altogether.
"This is neither an administratively sound practice nor in keeping with the spirit of federalism and democratic decentralisation enshrined in the Constitution," she argued.
Alleging that the intention of the scheme is to bypass "democratically elected state governments," Jayalalithaa said "they fly in the face of federalism and democratic decentralisation. They insidiously seek to secure for the Government of India unnecessary influence and authority over the finances of the states."
Expressing serious reservations about the DCT model adopted and now sought to be 'superimposed' on her government, she said the state government was already adopting Direct Cash Transfer through bank accounts of beneficiaries in schemes which involve conditional cash transfers like scholarships and maternity benefits.
"To begin with, we are strongly opposed to any move to monetise and transfer in cash the subsidy element under the Public Distribution System, and fertilizer, kerosene and LPG subsidies, where not just the quantum of subsidy, but the access to and timely availability of commodities is a critical concern."
With the state government's field machinery carrying out identification and verification and cash releases done by the Centre, it will result in 'divorcing' authority from responsibility and accountability, she alleged.
"Further Union Planning Commission had issued instructions and guidelines on a number of conceptual and operational issues relating to Direct Benefits Transfer, with virtually no consultation with the state governments," she said.
Once decisions are taken and the scheme is finalised unilaterally by the Central Government, states are required only to place their field machinery at the disposal of the former for implementation, she said, expressing reservations.
Pointing out at many other practical difficulties, she said the scheme would become unmanageable and create more administrative problems rather than solving them.
Confusion would arise in those areas where central schemes would attempt to replicate state government schemes such as the Indira Gandhi Matritva Suraksha Yojana which she said attempted to replicate Tamil Nadu's Dr Muthulakshmi Reddy Scheme, "which provides a far higher benefit and much wider coverage."