Measures to Improve the loopholes & lacunas associated with PDS

Government initiatives undertaken

  • Aadhaar Linked and digitized ration cards: This allows online entry and verification of beneficiary data. It also enables online tracking of monthly entitlements and off-take of foodgrains by beneficiaries.
  • Computerized Fair Price Shops: FPS automated by installing ‘Point of Sale’ device to swap the ration card. It authenticates the beneficiaries and records the quantity of subsidized grains given to a family.
  • DBT: Under the Direct Benefit Transfer scheme, cash is transferred to the beneficiaries’ account in lieu of foodgrains subsidy component. They will be free to buy food grains from anywhere in the market. For taking up this model, pre-requisites for the States/UTs would be to complete digitization of beneficiary data and seed Aadhaar and bank account details of beneficiaries. It is estimated that cash transfers alone could save the exchequer Rs.30,000 crore every year.
  • Use of GPS technology: Use of Global Positioning System (GPS) technology to track the movement of trucks carrying foodgrains from state depots to FPS which can help to prevent diversion.
  • SMS-based monitoring: Allows monitoring by citizens so they can register their mobile numbers and send/receive SMS alerts during dispatch and arrival of TPDS commodities
  • Use of web-based citizens’ portal: Public Grievance Redressal Machineries, such as a toll-free number for call centers to register complaints or suggestions.

Measures needed

  • The Justice Wadhwa Committee Report for PDS (2011)
  • It recommended end to end computerisation to prevent diversion, and to enable secure identification at ration shops.
  • The Committee recognised Chhattisgarh as a model state for prevention of diversion and Gujarat as a model for identification at ration shops.
  • Other states have embarked upon the ambitious effort of computerising the whole supply chain, most notably Karnataka, where electronic PDS (e-PDS) covers transactions with authorised wholesale dealers and a biometric database of users.
  • As part of Beneficiary Data Digitisation, States/UTs have been requested to seed the Aadhaar Number wherever available so as to weed out bogus/duplicate/ineligible beneficiaries.
  • universal PDS such that every household is entitled to subsidised food grains as seen in Tamil Nadu will go a long way in reducing exclusion errors.
  • Primacy should be given to ensuring that the functioning of FCI is streamlined and fast paced as per recommendations of the Shanta Kumar Committee.
  • Storage capacities need to be improved ensuring proper storage of procured food grains for PDS schemes.
    • Thus, storage capacities have been augmented across the country by using funds under plan schemes as well as through private investment in Public Private Partnership (PPP) mode.
    • 100 lakh ton silo storage capacity must be created in the country. For this, RITES has been assigned the task of changing the silo model and they will give their recommendations in 90 days to FCI.
  • To improve the usage of Information Technology in FCI, a Human Resource Management System (HRMS) must be implemented.

High Level Committee (HLC) constituted under the chairmanship of Shanta Kumar to restructure, reorient and reform the Food Corporation of India (FCI)

The government had set up a six-member committee under Shanta Kumar to suggest restructuring or unbundling of FCI to improve its financial management and operational efficiency in procurement, storage and distribution of food grains.

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Important recommendations made:

  • Reduce the number of beneficiaries under the Food Security Act—from the current 67 per cent to 40 per cent.
  • While the poor under the Antyodaya category should keep getting the maximum food subsidy, for others, the issue price should be fixed at, say, 50 per cent of the procurement price (as was done under Atal Bihari Vajpayee for the BPL category)
  • Allow private players to procure and store food grains.
  • Stop bonuses on minimum support price (MSP) paid by states to farmers, and adopt cash transfer system so that MSP and food subsidy amounts can be directly transferred to the accounts of farmers and food security beneficiaries.
  • Limit the procurement of rice particularly in the north-western states of Punjab and Haryana where the groundwater table is depleting fast, and invite private sector participation in grain management
  • FCI should involve itself in full-fledged grains procurement only in those states which are poor in procurement. In the case of those states which are performing well, like Haryana, Punjab, Andhra Pradesh, Chhattisgarh, Madhya Pradesh and Odisha, the states should do the procurement.
  • Abolishing levy rice: Under levy rice policy, government buys certain percentage of rice (varies from 25 to 75 per cent in states) from the mills compulsorily, which is called levy rice. Mills are allowed to sell only the remainder in the open market.
  • Deregulate fertiliser sector and provide cash fertiliser subsidy of Rs 7,000 per hectare to farmers.
  • Outsource of stocking of grains: The committee calls for setting up of negotiable warehouse receipt (NWR) system. In the new system, farmers can deposit their produce in these registered warehouses and get 80 per cent of the advance from bank against their produce on the basis of MSP.
  • Clear and transparent liquidation policy for buffer stock: FCI should be given greater flexibility in doing business; it should offload surplus stock in open market or export, as per need.

Way forward

Suggested measures to improve efficiency in PDS functioning

  • Distribution of  food  coupons maybe  adopted  to  stop  leakages  at  the  FPS level, especially in poorly performing states like Assam and Uttar Pradesh. Twelve   coupons   a   year   maybe   distributed   through   village   Beneficiaries will exchange one coupon every month when collecting their quota  of  food  grain.  Their  entitlement  and  exact  issue  price  of  grains should be written clearly on the coupons.
  • Ration cards  should  be  digitised.  It  is  important  to  minimise red  tape and  distribute  the  digitised  cards  at the earliest.
  • The introduction of electronic weighing machines in place of conventional ones may  help  resolve  the  problem  of  beneficiaries  receiving  less  than their  entitlement  of  food  grain  under  the    Frequent    power    cuts    and problems  with Internet usually  hinders the use of  such machines. Therefore, it is  also  important  to  ensure  uninterrupted  supply  of  electricity,  proper power back-up and Internet connectivity.
  • To decrease  leakage  of  food  grains,  one  important  step  is  to  authenticate whether the  food  grain  distributed  through  the  PDS  is  received  by  an eligible household. Collecting biometric information of all cardholders in a household (head of the  family  and  other  members  of  the  household),  linking  it  with  their Aadhar number and storing the data may solve the problem. This will also enable  any  member  of  a  household  to  collect  monthly    Karnataka has   already   collected   biometric   information   of   ration   cardholders   in selected  districts.
  • Lack of  awareness  regarding  their  entitlement  and  the  issue  price  among beneficiaries  is  another    Display  boards  containing  the  correct information  about  entitlement,  availability  of  food  grain  and  issue  price should be maintained at  all  FPSs. Information must be written in the local language  so  that  it  is  easily  read  by  beneficiaries.
  • A significant proportion of PDS beneficiaries are illiterate and may not be able to read the information on the  display  board.  Hence,  information  related  to the PDS can also  be disseminated   through   awareness   campaigns   conducted   by   NGOs   and government officials on a regular basis in villages.
  • The introduction  of  an  SMS  alert  at  the  beneficiary  level  is  an  important measure    to    increase
  • A sample  of  the  food  grain  to  be  distributed  is not  kept  in the majority  of  FPSs.  Some  FPS  dealers  complained  that  they do  not  even  see  such  samples  in  the  godown from where  they  collect  the PDS      The   practice   of   keeping   such   samples   needs   to   be   re-introduced. It will help beneficiaries to match the quality of food grain that they are supposed to receive with the food grain they actually receive from the FPS.

Suggested measures to introduce an effective monitoring mechanism

  • Unbiased inspection  of  FPSs  by  the  state  department  of food  and civil supply should  be  arranged  on  a  regular    At  present,  inspectors  visit  FPSs  only occasionally,  and they  do  not  always  check  all the  registers  in  the  FPS.  The process is characterised by corruption.
  • Introducing a corruption-free monitoring mechanism will be crucial to the success of the food security programme.
  • Gram panchayat members should be made aware of their role in the PDS. Such awareness may be increased through the involvement of civil society  and  local  NGOs
  • Representatives from   state   food   departments   should   meet   beneficiaries   in villages or urban wards to listen totheir complaints and address their concerns at regular intervals.
  • The grievance  redressal   mechanism  in  all  states  needs  to   be  revamped immediately.  The  Department  of  Food  in  each  state  should  open  a  special  cell  on  grievance redressal and appoint a grievance redressal officer as the nodal person
  • State governments should take initiatives to reconstitute the vigilance committee(VC) in all villages and urban wards. Awareness of the existence of the committee should be  increased  among    The  VCs  should  be  elected  by  local villagers  and should  consist of representatives from the gram panchayat and the beneficiaries.
  • Appropriate budget   allocation   should   be   made   to   maintain   the   monitoring system.

Suggested measures to identify target households

  • The identification   process   needs   to   be   state   or   region-specific   since   state priorities  are  different  across  the    However,  the  criteria  adopted  should help to easily   identify   the   target   group.
  • In several instances, the  respondents’  lack  of  education  results  in  their  giving incorrect information.  Therefore, interviewers need to be trained rigorously.
  • Organisations conducting  identification  surveys  should  have  a  strong  local  base and  proficiency  in  the  local  language  to  get  the  right    They  must  be chosen at the state level.
  • Organisations participating  in  such  surveys  should  be  unbiased  with  no  political inclination. The survey will become error-free only when it can be conducted in a non-corrupt environment without interference from any political party.