The government is planning to introduce a ration card system as part of a welfare scheme to protect the poor from spikes in market prices.

Cardholders will be able to buy daily essentials at subsidized rates from government-owned enterprises and cooperatives.

Salt Trading, National Trading and Food Corporation will set up fair price shops where people can use the ration cards. In rural areas, basic commodities will be distributed through cooperatives.

“The government will reimburse these entities for supplying daily essentials to cardholders at subsidized rates,” a government official said. In 2008, the first Maoist-led government had introduced the concept of operating fair price shop under cooperatives. But the plan failed. According to the Supply Ministry, a meeting of the Consumer Protection Council headed by Supply Minister Ganesh Man Pun instructed the ministry to form a study committee to launch ration cards.

“The process of forming the committee has begun,” said Ananda Ram Regmi, spokesperson for the ministry. “We have submitted a proposal to the secretary of the Supply Ministry regarding its structure and mandate.”

According to him, the committee has been tasked to study similar schemes implemented in different countries and recommend a suitable plan to the government.

The ministry is likely to form a committee under a joint secretary that will include consumer rights activists and representatives from the Cooperatives and Poverty Alleviation and Federal Affairs and Local Development ministries besides officials from the Department of Supply Management.

“The committee will be given two to three months to study such practices implemented in different countries and prepare a report.”

Regmi said the Finance Ministry was agreeable to the proposal. “The Finance Ministry has promised to allocate the necessary budget from its emergency fund.”

Meanwhile, the ministry is also considering a plan to introduce a direct cash transfer mechanism to provide food subsidies for the relief of the poor.

“The scheme could be a key step to plug leakages in welfare schemes,” said Regmi, adding that it would check malpractices like selling subsidized essentials provided to the people. Under the plan, beneficiaries will buy essentials from fair price shops and the subsidy amount will be deposited in their bank account.

The ministry said the plan was mainly directed at people living under the poverty line. In the first phase, it plans to enforce the card system in the 14 earthquake affected districts or the 25 districts where the Ministry of Cooperatives and Poverty Alleviation has conducted a survey to distribute identity cards to the poor.