(Article) Public Distribution System - PDS

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PUBLIC DISTRIBUTION SYSTEM

Evolution of public distribution of grains in India had its origin in the 'rationing' system introduced by the British during the World War II. It was really the generation of World War's own compulsions that forced the then British Government to introduce the first structured public distribution of cereals in India through the rationing system-sale of a fixed quantity of ration (rice or wheat) to entitled families (ration card holders) in specified cities/towns. The system was started in 1939 in Bombay and subsequently extended to other cities and towns.

Public distribution of foodgrains was retained as a deliberate social policy by India, when it embarked on the path of a planned economic development in 1951. It was, in fact, an important component of the policy of growth with justice. Creation of Food Corporation of India and Agricultural Prices Commission in 1965 consolidated the position of PDS. Government was now committed to announce a minimum support price for wheat and paddy and procure of quantities that could not fetch even such minimum prices in the market.

The PDS seeks to provide to the beneficiaries two cereals, rice and wheat and four essential commodities viz. sugar, edible oil, soft coke and kerosene oil. However, state governments, which actually manage the system at the ground level, are exhorted to add other essential commodities like pulses, salt, candles, matchboxes, ordinary clothes, school text books/copies and the like.A number of state governments have set up Civil Supplies or Essential Commodities Corporations to buy such additional items directly from the manufacturers and use the existing structure of PDS to arrange for the sale at lower than market rates.

Making available the six essential commodities (rice, wheat, sugar, edible oil, soft coke and kerosene oil) to the state government is the responsibility of the central government.

The PDS has been functioning for more than four decades now, if we leave aside its predecessor, the rationing system. Its greatest achievement lies in preventing any more famines in India.

Criticism of PDS

PDS means distribution of essential commodities to larger section of the society, mostly vulnerable people, through a network of fair Price Shops on a recurring basis. The essential commodities under PDS at present are wheat, rice, sugar and Kerosene.
Today, with the network of around 5 Lakh fair price shops PDS is virtually world’s largest system of its kind. However, PDS was criticized for several reasons. .A few of them are as follows:
Its bias towards the urban consumers and inability to reach to the last corner of the country.
Some states such as Bihar and UP were virtually out of the PDS network.
There are no criteria of monitoring the high income group purchases more than low income purchases.
The coverage and network of PDS does not ensure that the poorest or the poor is benefited
The PDS has been untargeted and proved to be regressive in some parts of the nations.
Consumers get inferior food grains in ration shops. Because , the dealers replace good supplies received from the F.C.I, with inferior stock,
Issue of the bogus cards in large numbers which are used to procure the grains from the PDS and sell them in open market.
The dealers have little profit so indulge in malpractices.
In other words, despite of having world’s largest Public Distribution System, there are people dying in the country out of hunger.

Targeting of PDS to the really needy is, therefore, immediately required and an effective PDS maintained till such time the country has poor, needy households.

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Suggestions for Improvement of Existing PDS

i) Delivery of Stocks to FPSs should be on actual and not on sample weight.
ii) Retail price at FPSs should be uniform throughout the state/area after weight-averaging the transport cost for the FPS.
iii) Regular supply of good quality grains has to be ensured. iv) Entitlement card's easy availability and improvement in its design and durability.
v) FPS doorstep delivery of PDS commodities instead of delivery to FPS owners at FCI godowns.
vi) Improvement in the viability of FPSs.
vii) Enlarging the basket of PDS commodities to enhance its utility as also to improve economic viability of FPSs.
viii) Steamlining of the supply chain by construction of small intermediary godowns between FCI's base godown and FPSs in the interior.
ix) Introduction of a more effective Management Information System.

The Central government, through FCI has following responsibilities:

Procurement, storage, transportation of food grains
Bulk allocation of food grains to the State Governments.
The state government’s responsibility is operational. They are as follows:
Identification of families below the poverty line
Issue of Ration Cards
Supervision of the functioning of FPS.

Aadhaar would help reduce corruption in the public distribution system .This claim / assumption is mainly based upon the Aadhaar-based authentication across PDS network, Which would enable the government to guarantee food delivery to the poor.

In addition to powerfully streamlining PDS processes, an Aadhaar- enabled MIS would make possible a more transparent, flexible system, and enable the government to fulfil the objective of food security in times of crises.
Aadhaar would thus be a tool - albeit, a powerful one - in fulfilling the government’s overall objectives for the PDS and in ensuring food security for the poor.

The areas of reforms in PDS include:

Beneficiary identification and addressing inclusion/exclusion errors
Addressing diversions and leakages
Managing food grain storage and ensuring timely distribution
Effective accountability and monitoring, and enabling community monitoring
Mechanisms for grievance redressal
Ensuring food security ,

The role of Aadhar in these reforms can be summarized as below:

One Aadhaar = one beneficiary: Aadhaar is a unique number, and no resident can have a duplicate number since it is linked to their individual biometrics.
Portability in identification: Aadhaar is a universal number, and agencies and services can contact the central Unique Identification database from anywhere in the country to confirm a beneficiary’s identity. The number thus gives individuals a universal, portable form of identification.
Aadhaar-based authentication to confirm entitlement delivered to the beneficiary: Aadhaar enables remote, online biometric and de mo graphic authentication of identity. Such Aadhaar -based authentication can take, place in real- time, and can even be performed through a mobile phone. One challenge here is ensuring that such authentication is carried out at the FPS.
Aadhaar-based authentication to track food grain movement: Aadhaar-based authentication can be implemented across the supply chain, which will enable governments to track foodgrain as it is exchanged between PDS intermediaries. This would curb diversions, and help identify bottlenecks in delivery
Aadhaar-enabled cloud -computing infrastructure: The use of Aadhaar-based authentication across the supply chain gives governments the opportunity to link such authentication to a cloud-based management information system (MIS) within the PDS Central Pool

Targeting PDS to only Poor Households

Poverty and associated hunger is a curse and every civilized society endeavours to alleviate extreme manifestations of poverty in their own way. The underlying policy approach is, however, more or less same and is basically built on 'providing direct assistance to poor households' so that their access to essentials of life like food is improved. The policy could be implemented through an income transfer mechanism like Food Stamps or cash doles (as in USA etc.) or a dual price system (e.g., through a PDS as in India etc.). These mechanism or their variations, cost money and this has to come from the food subsidy budgets of the country.

Besides, the inherent weakness of a universal PDS, as organised now, allows quite a bit of diversion and leakage. Part of the subsidy is, therefore, going to the non-poor and even to the FPS dealers, handling contractors and some state functionaries involved in unscrupulous siphoning off and replacement of commodities. Such wastage of this precious and limited subsidy cannot be allowed any longer, and therefore, there is no alternative but to direct the subsidy to the poor and nobody else.

Once this is accepted, the mechanism for achieving such focus can be chosen, depending on the situation prevailing in the country. We will also have to decide whether to create an altogether new mechanism or build upon the four decades old foundation provided by the PDS. It will also be necessary to ensure that the size of the population to be covered should be such that they all can be effectively accommodated under the newly created safety net, the largeness of the net being limited by the physical (government stocks of foodgrains) and financial (amount available for food subsidy) resources of the country.

The present PDS can hardly be described as a safety net. Each and every Indian and also some ghost card holders, presently constitute the unorganized crowd that jostles under the ungainly net, nobody knowing who is able to receive the shelter under it or who, requiring such shelter badly, is being kept out or pushed out. As explained earlier, in this vast country, with millions of poor, we cannot dispense with the net altogether; there is therefore, no option but to mend the net, erect it afresh with only the needy households under it.

With inputs from Food and Agricultural Organizations of the UN , The Hindu and The Indian Express Newspaper