• The Public distribution system (PDS) is an Indian food Security System established under the Ministry of Consumer Affairs, Food, and Public Distribution.
  • PDS evolved as a system of management of scarcity through distribution of food grains at affordable prices.
  • PDS is operated under the joint responsibility of the Central and the State Governments.
    • The Central Government, through Food Corporation of India (FCI), has assumed the responsibility for procurement, storage, transportation and bulk allocation of food grains to the State Governments.
    • The operational responsibilities including allocation within the State, identification of eligible families, issue of Ration Cards and supervision of the functioning of Fair Price Shops (FPSs) etc., rest with the State Governments.
  • Under the PDS, presently the commodities namely wheat, rice, sugar and kerosene are being allocated to the States/UTs for distribution. Some States/UTs also distribute additional items of mass consumption through the PDS outlets such as pulses, edible oils, iodized salt, spices, etc.

 

EVOLUTION OF PDS IN INDIA

 

  • PDS was introduced around World War II as a war-time rationing measure. Before the 1960s, distribution through PDS was generally dependant on imports of food grains.
  • It was expanded in the 1960s as a response to the food shortages of the time; subsequently, the government set up the Agriculture Prices Commission and the FCI to improve domestic procurement and storage of food grains for PDS.
  • By the 1970s, PDS had evolved into a universal scheme for the distribution of subsidised food
  • Till 1992, PDS was a general entitlement scheme for all consumers without any specific target.
  • The Revamped Public Distribution System (RPDS) was launched in June, 1992 with a view to strengthen and streamline the PDS as well as to improve its reach in the far-flung, hilly, remote and inaccessible areas where a substantial section of the underprivileged classes lives.
  • In June, 1997, the Government of India launched the Targeted Public Distribution System (TPDS) with a focus on the poor.
    • Under TPDS, beneficiaries were divided into two categories: Households below the poverty line or BPL; and Households above the poverty line or APL.
  • Antyodaya Anna Yojana (AAY): AAY was a step in the direction of making TPDS aim at reducing hunger among the poorest segments of the BPL population.
    • A National Sample Survey exercise pointed towards the fact that about 5% of the total population in the country sleeps without two square meals a day. In order to make TPDS more focused and targeted towards this category of population, the “Antyodaya Anna Yojana” (AAY) was launched in December, 2000 for one crore poorest of the poor families.
  • In September 2013, Parliament enacted the National Food Security Act, 2013. The Act relies largely on the existing TPDS to deliver food grains as legal entitlements to poor households. This marks a shift by making the right to food a justiciable right.

 

OBJECTIVES OF PUBLIC DISTRIBUTION SYSTEM

  • The goal of Public Distribution System does not limit itself with the distribution of rationed articles. Making available sufficient quantities of essential commodities at all times, in places accessible to all, at prices affordable to all and protection of the weaker section of the population from the malicious spiral of rising prices is prime objective of public distribution system.
  • Major goals of public distribution system are as under:
    1. Make goods available to consumers, especially the disadvantaged/vulnerable sections of society at fair prices.
    2. Rectify the existing imbalances between the supply and demand for consumer goods. Check and prevent hoarding and black marketing in essential commodities.
    3. Ensure social justice in distribution of basic necessities of life.
    4. Even out fluctuations in prices and availability of mass consumption goods.
    5. Support poverty-alleviation programmes, particularly, rural employment programmes, (SGRY/SGSY/IRDP/ Mid-day meals, ICDS, DWCRA, SHGs and Food for Work and educational feeding programmes

 

FUNCTIONING OF PDS

 

  • The central and state governments share responsibilities to provide food grains to the identified recipients. The centre procures food grains from farmers at a minimum support price (MSP) and sells it to states at central issue prices. It is responsible for transporting the grains to godowns in each state.
  • States hold the responsibility of transporting food grains from these godowns to each fair price shop (ration shop), where the beneficiary buys the food grains at the lower central issue price. Many states further subsidise the price of food grains before selling it to recipients. The Food Corporation of India (FCI) is the nodal agency at the centre that is responsible for transporting food grains to the state godowns.
  • State-level ministries of food and civil supplies control networks of ration shops within their authorities, and are responsible to allocate licenses to the private traders who operate the shops.
  • State governments also issue ‘ration cards’ to their residents (at one time on a nominally universal basis, but more recently on a ‘targeted’ basis), and determine the quantities to which consumers are entitled. These differ from one commodity to the next.
  • The prices are determined by state governments. Under Public Distribution System 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 food grain on a monthly basis. The Central Government take responsibility 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 such as Allocation and Identification of families below poverty line, Issue of ration cards, Supervision and Monitoring the functioning of Fair Price Shops.

A) Major functioning of Public Distribution System encompasses following (Logistical Management of PDS):

  1. Procurement of Food Grains:
    • The food grains offered to recipients under TPDS are procured from agrarians at MSP. The MSP is the price at which the FCI purchases the crop directly from farmers; typically the MSP is higher than the market price.
    • This is intended to provide price support to farmers and incentivise production. It is done by the central government.
    • They procure the food materials from the Food Corporation of India and the State Agencies at Minimum Prices which include wheat, rice, kerosene and sugar. Other essential commodities like iodized salt, Palm oil, candles, Ghee and cloth etc. have also been purchased.
    • Currently procurement is performed in two ways:
      • Centralised procurement: Centralised procurement is done by the FCI, where FCI purchases crops directly from farmers.
      • Decentralised procurement: Decentralised procurement is a central scheme under which 10 states/Union Territories (UTs) procure food grains for the central pool at MSP on behalf of FCI.. These states directly store and distribute the grains to beneficiaries in the state. Any surplus stock over the state’s requirement must be handed over to FCI. In case of a shortage in procurement against an allocation made by the centre, FCI meets the deficit out of the central pool.
    • The centre procures and stores food grains to fulfil the prescribed minimum buffer stock norms for food security, release food grains under TPDS on a monthly basis, meet emergency situations arising out of unexpected crop failures, natural disasters and sell through the Open Market Sale Scheme (OMSS).
    • The central government introduced the Open Market Sale Scheme (OMSS) in 1993, to sell food grains in the open market; this was intended to increase the supply of grains to moderate or stabilise open market prices.
  2. Identification of poor and needy:
    • The centre and states identify eligible BPL households through a detailed process. Process of identification of BPL families is as below :

 

 

    • The government does not identify APL households; therefore, any household above the poverty line is eligible to apply for a ration card. The centre allocates food grains to states for APL families in addition to BPL families.
    • Nevertheless, this allocation is based on availability of food grains in the central stocks and the average quantity of food grains bought by states from the centre over the last three years. Hence, the allocation to a state increases if its offtake increases over the previous years.
  1. Issue of ration cards to poor people:
    • A Ration Card is a file issued under an order or authority of the State Government, as per the Public Distribution System, for the purchase of essential commodities from Fair Price Shops.
    • State Governments issue unique Ration Cards to Above Poverty Line, Below Poverty Line and Antyodaya families and conduct periodical review and checking of Ration Cards. An Indian citizen may get the application form for making a new Consumer (Ration) Card from any Circle Office.
    • Person will require some documents to get ration card such as a photograph of the head of the family attested by a gazetted officer/MLA/MP/Municipal Councilor, proof of residence and the Surrender/ Deletion Certificate of the previous Ration Card, if there was any.
    • In case, if person is not able to provide proof of his/her residence, the Circle FSO conducts spot inquiries by recording the statements of two independent witnesses in the neighbourhood. The standard prescribed time schedule for the preparation of a Ration Card is generally 15 days.
    • However, the procedure and time limit may vary. In case, Ration card holders lost their card or it is stolen or burnt, they can also obtain a duplicate ration card if the same could not be traced out within one month after its loss by submitting applications, duly endorsed by the Fair Price Depot dealer, to the Deputy Director of the Tahsildar, as the case may be, by enclosing a passport size photograph of the applicant and a duplicate card will normally be issued within a week.
    • If card holder has transferable job, within the District, the card could be transferred to the new place and if the place of residence happens to be outside the District, the card-holder will be issued a Surrender Certificate after surrendering it to the office so as to enable him/her to obtain a new ration card at the new place.
  2. Storage:
    • Besides the food grains requirement for immediate distribution under targeted public distribution system, the central government maintains minimum buffer reserves of food stocks for emergencies.
    • The food grains procured for targeted public distribution system and other contingencies are maintained and stored as the central pool stock. Food Corporation of India is the main government agency delegated with the storage of food grains in the central pool.
    • According to the storage rules of the Food Corporation of India, food grains are normally stored in covered godowns, silos, and in the open, referred to as Covered and Plinth (CAP). However, FCI’s own storage capacity has been inadequate to accommodate the central pool stock of food grains.
    • Consequently, Food Corporation of India hires space from various agencies such as the central and state warehousing corporations, state government agencies and private parties. In an evaluation of the storage management of food grains by FCI, the Comptroller and Auditor General (CAG) noted that there is sub-optimum utilisation of the existing storage capacity available with FCI and states.
    • It is apparent that inadequate storage will result in wastage of food. Therefore, proper Storage becomes an essential factor in Logistics Management. The Food Corporation of India has huge responsibility to perform job of storing the grains efficiently.
    • There is a regular monitoring mechanism under which inspections at all levels are carried out to ensure safe preservations of food grains in Food Corporation of India.
    • The steps taken to monitor the warehouse are under:
      1. Food grains are to be stored by adopting proper scientific code of storage practices.
      2. Adequate materials are to be used to prevent entering of moisture from the floor to the food grains.
      3. Spraying of insecticides.
      4. Effective rat control measures taken in godowns.
      5. Regular periodic inspections of stocks.
      6. The principle of “First in First Out” (FIFO) is to be followed to the extent possible so as to avoid longer storage of food grains in godowns.
  3. Allocation of food grains to states:
    • The central government allocates food grains from the central pool to the state governments for distribution to BPL, AAY and APL families. Allocation for BPL and AAY families is performed on the basis of the number of identified households. Conversely, allocation for APL families is made on the basis of:
      1. The availability of food grains stocks in the central pool.
      2. The past off take (lifting) of food grains by a state from the central pool.
    • Given the food grains stocks in FCI, the centre has the discretion to allocate more grains to states on an ad-hoc basis. Earlier, ad-hoc allocations have been provided in the disaster of floods, droughts, and festivals.
  4. Transportation of food grains to all Fair price shops
    • In India, food grains and other items are normally transported through Roadways and Railways. Choice of transport depends on volume of food grain.
      Through roadways, food grains are transported that are distributed at short distances. Railways deliver food items with high speed and suitable over long distances. This means of transportation have large carrying capacity, and can carry bulky goods.
  5. Fair price shop (Ration Shops):
    • Fair Price Shops (FPS) are called at ration shops in general way. In these centres, the consumer gets a Ration Card on the basis of which he is given food grains. The state government has given license to the Ration Shops to sell the food grains at comparatively lower price.
  6. Consumer:
    • Consumer are the people who buy the food grains from the Fair Price Shops at Minimum Market Price. They are availed to purchase food grains only if they own a ration card.

 

PDS REFORMS

  • Role of Aadhar:Integrating Aadhar with TPDS will help in better identification of beneficiaries and address the problem of inclusion and exclusion errors. According to a study by the Unique Identification Authority of India, using Aadhaar with TPDS would help eliminate duplicate and ghost (fake) beneficiaries, and make identification of beneficiaries more accurate.
  • Technology-based reforms of TPDS implemented by states: Wadhwa Committee, appointed by the Supreme court, found that certain states had implemented computerisation and other technology-based reforms to TPDS. Technology-based reforms helped plug leakages of food grains during TPDS.
    • Tamil Nadu implements a universal PDS,such that every household is entitled to subsidised food grains.
    • States such as Chhattisgarh and Madhya Pradesh have implemented IT measures to streamline TPDS, through the digitisation of ration cards, the use of GPS tracking of delivery, and the use of SMS based monitoring by citizens.
  • Technology-based reforms to TPDS undertaken by some states

 

 

 

 

 

LIMITATIONS OF PUBLIC DISTRIBUTION SYSTEM

  • The problems of Public Distribution System have not been undeviating in the nation. In some states, the administration is weak and dishonest.
  • In these states, deficiencies regarding huge shortage of stocks, fake supply entries in ration cards, diversion of commodities for sale to open market and bogus ration cards are recorded.
  • Public Distribution System suffers from irregular and poor quality of food grain made available through Fair Price Shops. In general, the public distribution system has following limitations.
    • Identification of poor by the states is not fool proof. A large number of poor and needy persons are left out and a lot of fake cards are also issued.
    • Fair Price Shop owner gets fake Ration cards and sell the food grains in the open market.
    • People do not get the permitted amount of food grains from the Fair price shop.
    • Diversion of Food grains by Fair Price Shops holder and mediator.
    • Many times, good quality food grains are replaced with poor quality cheap food grains.
    • Public distribution system includes only few food grains such as wheat and rice, it does not fulfil the requirement of complete nutrition.
    • Uneven distribution of Food generations, procurement and distribution. For example: north eastern states are very far from Punjab and Haryana, from where wheat is procured. To transport food grains from Punjab to far flung areas in North east will entail cost and time both.
  • Main problem involved in the operation of public distribution system is the issue of containing the food subsidy to reasonable levels.
  • Other major issues which confront the system include the issue of targeting the system to benefit the actual poor and restricting the coverage of public distribution system to only the major commodities.
  • De-centralization of operations and devolving to the states the key decision making powers as regards the operation of public distribution system are some major issues that needs to be addressed.
  • Government agencies can reform the system by introducing innovative ideas such as food stamps and food credit/debit cards to facilitate better working of the system with a view to reduce malpractices like diversion and reducing the costs of food delivered to the poor.
  • Though government has taken several measures to improve public distribution system like decentralised procurements, introduction of UIDAI etc. but still these measures are not completely espoused. More measures like universalization of public distribution system are need of the hour. Public distribution system can provide food security only when it covers wide range of food grains. With introduction of Food Security Ordinance, It is expected that public distribution system will be able to fulfil the long valued goal of Food security.

 

PDS OR CASH TRANSFERS??

 

  • National Food Security Act,2013 provides for reforms in the TPDS including schemes such as Cash transfers for provisioning of food entitlements.
  • Direct Benefit Transfer (DBT) aims to :
    • reduce the need for huge physical movement of foodgrains
    • provide greater autonomy to beneficiaries to choose their consumption basket
    • enhance dietary diversity
    • reduce leakages
    • facilitate better targeting
    • promote financial inclusion
  • Advantages and disadvantages of PDS and other delivery mechanisms

 

 

 

REVAMPING PDS

  • To overcome these problems the Government has decentralized the procurement process by dispersing the procurement centers to different parts of the country, encouraging local procurement. Under this scheme, the designated States procure, store and issue food grains as per allotments indicated by the Centre under PDS. The difference between the economic cost of the State Governments and the Central Issue Prices is passed on to State Governments as subsidy by centre.
  • An adequate storage of buffer stock of foodgrains in the Central Pool is an essential element of the national food policy. Buffer stock of foodgrains is necessary not only to impart inter-seasonal stability to foodgrain supply and prices but also to ensure food security and meet emergent situations arising out of unexpected crop failures and natural disasters. Buffer stock norms for each quarter have beenprescribed.
  • India’sfood grain production has almost reached a plateau, one of the means of meeting the consumption requirement for increasing population is by reducing the post-harvest losses by strengthening forward linkages in the agriculturesector.
  • computerization of PDS: Ministry of Consumer Affairs, Food & Public Distribution has given top priority to Public Distribution System (PDS) reforms which include improvement of infrastructure for distribution and storage of PDS food grains. State Governments have been urged to take initiatives to computerize systems and adopt best practices of management.
  • E-governance and PDS: Computerization of TPDS is being implemented as a Mission Mode Project (MMP) under the National e-Governance Plan (NeGP) by the Central Government. As per MMP guidelines, a dedicated institutional mechanism and Central Project e-Mission Team (CPeMT)for computerization of TPDS has been set up. Detailed guidelines for end-to-end Computerization of TPDS have been issued to all States/UTs. Theapplication software prepared by National Informatics Centre (NIC) has been shared by it with State Information Officers (SIOs) of NIC. A pilot scheme on Smart Card based delivery of essential commodities has been initiated in Chandigarh UT and Haryana. Under the scheme, existing ration cards are to be replaced by SmartCards.

 

VARIOUS TYPES OF REFORMS UNDERTAKEN BY DIFFERENT STATES

  • 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’devices to swap the ration card (similar to debit /credit cards). 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 food grains 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 has 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 food grains 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.

 

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