Ensuring food security with an efficient Public Distribution System

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With the Food Security Bill almost ready to be rolled out, it seems like a good time to fix the problems in the Public Distribution System(PDS).  Several state governments have taken innovative measures to solve the problems in the PDS. Let’s have a comprehensive look at the problems in PDS and the various fixes incorporated in it by different states.

The Public Distribution System (PDS) distributes subsidized food and non-food items to India’s poor. Major commodities distributed include staple food grains, such as wheat, rice, sugar, and kerosene, through a network of Fair Price Shops also known as Ration shops established in several states across the country.

In its original form, the system was universal in nature and did not distinguish between different income-groups in the society. However after poor performance of the scheme, the system was revamped and re-launched as Targeted Public Distribution System (TPDS). Under this scheme, the Below Poverty Line (BPL) families would get basic commodities at a subsidized rate whereas the Above Poverty Line (APL) families would get them only at their economic cost.

How the PDS Works:

Central Government purchases foodgrains and  transports them to principal Food Corporation of India(FCI) godowns and fixes the quantity and price of foodgrains to be distributed to BPL families. FCI is responsible for warehousing of foodgrains.

State governments identify  BPL families and issue ration cards

The Last mile distribution to actual consumers is accomplished through Fair Price Shops.

Leakages  and inefficiencies in PDS

“57% of the PDS food grain does not reach the intended people” (UIDAI, 2009)

The major reasons for leakages are:

Inclusion Error: This is caused due to inclusion of people who are not eligible into BPL

Ghost Cards: Bogus ration cards in the name of fictitious owners, is a serious problem causing significant leakages as it does not reach the intended beneficiaries.

Shadow Ownership: This is caused due to migrant families in search of work not able to avail their quota or poor families due to paucity of funds keep the ration cards with FPS owners or others to avail credit or get small portions of cash.

Non-accountability of FPS’: This  is one of the major drivers for the diversion of food grains from retail points.The FPS owners divert the food grains intended for ration card holders to open market and report unavailability of stock in the store.

The successful PDS model of Chhattisgarh

With the Centre’s Food Security Bill in focus, there is much talk about the Chhattisgarh PDS model. Let’s have a look at it to find out what sets it apart.

1. Private ownership of The Ration shops was removed and women’s self-help groups, panchayats and cooperative societies were given the responsibility of managing them.

2. The Chhattisgarh government made sure that those running the shops earned a proper income. For this, their commission was increased four times.

3.The warehousing capacity of the state has been increased five times in the past five years.

4. Proper monitoring of goods from warehouses to consumers is done.The ration is sent directly from the warehouse to the shops. Once the goods reach the shop, the cardholders themselves come to take them, and it becomes difficult to do black marketing from here. The system has been computerised to stop any wrongdoing on the way. When the goods leave the godown, the village members are informed through an sms. They check the goods and make a panchnama.

5. Smart ration cards instead of the usual ration cards have been introduced in some big cities and several villages of Mahasamund district. The consumers can use these smart cards to buy their monthly quota from any fps. As soon as the consumer pays his bill, all his information is passed on to the server.

Universal PDS of Tamil Nadu

The PDS in Tamil Nadu is a success story, in its coverage and pricing. The state government is implementing the system and no exclusion is made based on income criteria. The present system became effective from June 1, 2011.From May 2007, in addition to rice, kerosene, and sugar, Tamil Nadu has been issuing wheat, wheat products, pulses and palmolien to cardholders — under the Special Public Distribution System. It is the only State do so. How does it ensure the proper implementation of PDS?

1. The movement from the warehouses to the PDS outlets is through trucks — which are tightly controlled by route charts. Any elected representative or government official who notices any deviation from the route is authorised to check the vehicle and report to the nearest police station.As a trial measure, a GPS-based vehicle movement monitoring system has been implemented in few districts to track the movement of vehicles carrying PDS goods.

2. Similarly the State Government has introduced an online godown monitoring system for enabling online capture of all transactions in warehouses in a phased manner.

3. To prevent mass diversion of goods by lorry drivers, every vehicle is accompanied by a department assistant who is provided with a special SIM card attached to a BSNL tower and through this the movement of the vehicle can be tracked from the control room in the Civil Supplies Corporation.

4. Further, SMS-based fair price shop stock monitoring has been set up by the Cooperative Department to track the stock of every commodity at each fair price shop on a daily basis.

5.Handheld billing machines with a GPRS connection have been installed in all fair price shops in Chennai to enable real time monitoring of sales and stocks. To avoid short measurement fair price shops are being supplied electronic weighing machines.

6.A majority of fair price shops in the State are run by the Cooperative Department. In fact, Tamil Nadu is the only State where fair price outlets are run either by the Government or by its agencies.

IIM Shillong’s proposed PDS structure for Assam:

IIM Shillong’s proposed  structure for PDS in Assam is being seen as a game-changer. This proposed system, called the Assam State Civil Supplies Corporation, is designed to be an efficient management method that will eliminate ‘leakages’ and ‘inefficiencies’ of the legacy system. To be set up on a private-public-partnership mode, this novel system will have a two-tier structure consisting of an initiating corporate body and an executing company.

“The model for the corporation is based on Indian kibbutz, a new-age government-initiated community business organization, where the communities would love to take part, invest and reap the benefits wherever they may be. It’s the most robust model across the globe. Unfortunately, no one thought of replicating the same,” said a faculty member of IIM.

Faculty sources from IIM-Shillong said the new corporation would be induced with women empowerment, self governance and sustainable, trust and long term bonding, competitive managerial capabilities and cutting edge technologies.

I would like to thank Arnab Saha for allowing I See India to use few facts and figures from his paper on PDS. He is an IIM A Alumnus and presently works as a senior manager in Reliance Industries Ltd.

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