Sunday, December 12, 2010


The present Public Distribution System (PDS) owes its existence to the erstwhile colonial power, the Britishers which began during World War II period. It was in 1942 that the Government of India (GOI) set up the first structured PDS for ensuring supply of food grains and other essential commodities with the Department of Food vested with the task of coordinating the activity. However it was abolished next year probably because of better availability of food grains as the intensity of the War eased some what. Independent India felt the need for reviving the PDS which was done in 1950 as a deliberate social policy for creating social equity. The avowed objectives were to provide food at subsidized cost to low income families, price moderation in the market and ensuring equity in distribution of essential commodities.

In order to feed the PDS, massive procurement of food grains at minimum support price was necessary for which Food Corporation (FCI) was set up in 1965. With the cooperation of State level agencies FCI has been able to mobilize food grains more than adequate to feed the PDS beneficiaries and to day it has more than 60 million tons (mt) of food grains under its custody. As per the buffer norms FCI is to hold at each quarter of the year 16.2 mt (April), 26.9 mt (July), 16.2 mt (October) and 20 mt (January). The so called ration shops (the term was inherited from Britishers) are the centers from where beneficiaries draw their entitlements and there are more than 5 lakh such shops in the country.

According to some estimates pilferage of food grains from the PDS is rampant and has assumed massive proportion. Total leakage is put at 36% as a conservative figure though there are reports that it could be as high as 50%. Almost one fifth of the ration cards are ghost cards owned by fraudsters who obtain the ration quota on fictitious beneficiaries while in collusion with the shops another 20% of the food grains is diverted to black marketeers. In states like Punjab and Bihar the diversion is reported to be more than 75% while AP, Kerala, Tamil Nadu, Orissa and West Bengal have better performance record, leakage being restricted to less than 25%. It is really creditworthy for states like Tamil Nadu and Karnataka to have set up vehicle tracking system that can provide vital information like vehicle details, quantity carried, destination, date of delivery etc and such innovations can significantly reduce pilferage since on-line tracking facility makes the situation more transparent.

As per the Model Citizens Charter of November 1997 GOI issued guidelines regarding management of PDS under which there are supposed to be vigilance committees at various levels like panchayat, ward, taluk, district and state. When Targeted PDS was introduced the Panchayat Raj institutions were vested with responsibilities to monitor the so called Fair Price Shops(FPSs) and vigilance committees are supposed to include as members, eminent persons representing government, social organizations, local bodies, etc to periodically review the functioning of the scheme as a whole and the FPSs in particular. If in spite of all these institutional arrangements, fraudsters can corner 50% of the quantity flowing through the PDS, one can imagine the ingenuity of Indian "wheelers and dealers" involved in the scam!

In a recent report GOI has reported that vigilance committees have been set up as per guidelines, meetings are held routinely, minutes are recorded, compliance reports are prepared leading one to believe that every thing is fine with Indian PDS operations. How ever the experience of the citizens is totally different and to get even a Below Poverty Line ( BPL) ration card is beset with many insurmountable logistical problems. As per the rights, each BPL card holder is entitled to receive rice or wheat at prices varying between Rs 4.15 to 5.65 per kg with maximum entitlement being 35 kg per family per month. Besides the Above Poverty Line (APL) card holders can get the same at prices between Rs 6.10 and 7.90 per lg per family. Over 80 million families are targeted under the TPDS scheme.

Discussions within the GOI regarding universalization of PDS are still incomplete and radical suggestions like Food Stamps in place of subsidization are under consideration. No matter what GOI does, unless honesty and public probity are restored amongst public officials, no fool proof system can be evolved in spite of enormous management resources with the government.


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