Public Distribution System - Economics, UPSC, IAS. | Indian Economy (Prelims) by Shahid Ali PDF Download

Public Distribution System

 Public Distribution System

(PDS) is an Indian food security system. Established by the Government of India under Ministry of Consumer Affairs, Food, and Public Distribution and managed jointly with state governments in India, it distributes subsidised 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 Public distribution shops, also known as Ration shops established in several states across the country. Food Corporation of India, a Government-owned corporation, procures, maintains the Public Distribution System

In terms of both coverage and public expenditure, it is considered to be the most important food security network. However, the food grains supplied by the ration shops are not enough to meet the consumption needs of the poor or are of inferior quality. The average level of consumption of PDS grains in India is only 1 kg per person / month. The PDS has been criticised for its urban bias and its failure to serve the poorer sections of the population effectively. The targeted PDS is costly and gives rise to much corruption in the process of extricating the poor from those who are less needy. Today, India has the largest stock of grain in the world besides China, the government spends Rs. 750 billion ($13.6 billion) per year, almost 1 percent of GDP, yet 21% remain undernourished. Distribution of food grains to poor people throughout the country is managed by state governments. As of date there are about 4.99 lakh Fair Price Shops (FPS) across India.

Overview

Both the central and state governments shared the responsibility of regulating the PDS. While the central government is responsible for procurement, storage, transportation, and bulk allocation of food grains, state governments hold the responsibility for distributing the same to the consumers through the established network of Fair Price Shops (FPSs). State governments are also responsible for operational responsibilities including allocation and identification of families below poverty line, issue of ration cards, supervision and monitoringthe functioning of FPSs^[

Under PDS scheme, each family below the poverty line is eligible for 35 kg of rice or wheat every month, while a household above the poverty line is entitled to 15 kg of foodgrain on a monthly basis.

A BPL card holder should be given 35 kg of foodgrain and the card holder above BPL should be given 15 kg of food grain as per the norms of PDS. However, there are concerns about the efficiency of the distribution process.

Fallouts of P.D.S System

1. Generally, the consumers get inferior food grains in ration shops.
2. Deceitful dealers replace good supplies received from the F.C.I (Food Corporation of India) with inferior stock.
3. Many retail shopkeepers have large number of bogus cards to sell food grains in the open market.
4. Many FPS dealers resort to malpractice since they acquire less salary.
5. Despite the PDS, India accounts for over 400 million poor and hungry people. Numerous malpractices make safe and nutritious food inaccessible and unaffordable to many poor.

Several schemes have augmented the number of people aided by PDS, but the number is still extremely low. Poor supervision of FPS and lack of accountability have spurred a number of middlemen who consume a good proportion of the stock meant for the poor. There is also no clarity as to which families should be included in the BPL list and which excluded. This results in the genuinely poor being excluded whilst the ineligible get several cards.

The stock assigned to a single family cannot be bought in instalments. This is one of the biggest barriers to the efficient functioning of PDS in India. Many BPL families are not able to acquireration cards either because they are seasonal migrant workers or because they live in unauthorised colonies. A lot of families also mortgage their ration cards for money.

To improve the current system of the PDS, the following suggestions are furnished for:

1. Vigilance squad should be strengthened to detect corruption, which is an added expenditure for taxpayers.
2. Personnel-in-charge of the department should be chosen locally.
3. Margin of profit should be increased for honest business, in which case the market system is more apt anyway.
4. F.C.I. and other prominent agencies should provide quality food grains for distribution, which is a tall order for an agency that has no real incentive to do so.
5. Frequent checks & raids should be conducted to eliminate bogus and duplicate cards, which is again an added expenditure and not fool proof.
6. The Civil supplies Corporation should open more Fair Price shops in rural areas.
7. The Fair Price dealers seldom display rate chart and quantity available in the block-boards in front of the shop. This should be enforced.

In aggregate, only about 42% of subsidised grains issued by the central pool reach the target group, according to a Planning Commission study released in March 2008.