Public Distribution System
The Public Distribution System or PDS is a Government maintained system by which the essential commodities such as wheat, rice, maize, and food grains as well as many other non-food items are supplied at a minimum affordable price to the unprivileged and below poverty line community.
To help provide for the same, the use of Targeted Public Distribution System has been implemented since 1997. It is operated under the joint responsibility of the Central and the State/Union Territory (UT) Governments. The Center is responsible for procurement, allocation, and transportation of food grains up to the depots of the Food Corporation of India. The operational responsibilities for allocation and distribution of food grains within the States/UTs, identification of eligible beneficiaries, issuance of ration cards to them, and supervision over and monitoring of functioning of Fair Price Shops (FPSs) rest with the concerned State/UT Governments.
The National Food Security Act, 2013 (NFSA) has been notified which provides for all India coverage of up to 75% of the rural population and up to 50% of the urban population of the country for receiving highly subsidized food grains. State/UT Governments are required to review the lists of beneficiaries every year for the deletion of ineligible families and the inclusion of eligible families. They have been requested from time to time to carry out drives for reviewing the list of beneficiaries under TPDS.
To ensure compliance and measures that are to be observed strictly under the various schemes, the Department of Food & Public Distribution has implemented a Scheme on ‘End-to-end Computerization of TPDS Operations’ on a cost-sharing basis with the States/UTs. The Scheme comprises of activities like digitalization of ration cards, automation of supply-chain management, setting up of transparency portals and installation of e-PoS devices at Fair Price Shops, and issuance of food via biometric authentication. All States/UTs have also seeded the Aadhaar numbers in the Ration Card database. The scheme will be important to enable removal of illegitimate ration cards and better targeting of food subsidy, facilitate the availability of food grains to intended beneficiaries at Fair Price Shops (FPS), check leakages, etc. As of a report, 100% digitalization of ration cards and 73% seeding of Aadhaar has been achieved and more than 1.78 lakh e-PoS is currently operating at Fair Price Shops.
Above all, the System is very much important to providing food security to the needy and poor as well as the producers by providing a subsidy on both ends. For the suppliers or producers, the Food Corporation of India buys the grains at a price designated as the Minimum Support Price, stores and allocates to different States/UTs according to the demand and storage availability, and makes it affordable to the required consumers via Fair Price Shops at rates known as the Central issue Price or CIP which is decided by the Central Government. Owing to this, the PDS is also seen as an effective tool to help decrease the severe impacts of inflation to the targeted groups and strata of the population by taking on the massive task of regular distribution of commodities all over India through timely deliverance via the Supply Chain System.
Antayodaya Anna Yojana was specifically formulated under the TDPS to help effectively cater to those who were the poorest of the poor. The individuals or families who were identified via BPL schemes were further analyzed to make way for those who belonged to the lowest strata among the poor. Initially, around 1 crore families were inducted under this and which was further targeted to more than 2.5 crore families. The idea is to provide the essential commodities at a highly subsidized process at the rate of Rs 2 or Rs 3 per kg of food grains such as Rice and Wheat with an issue of 35 kg of food gains to the families per month.
The remaining categories are constituted by the BPL and APL families. As the name suggests, based on the household income generation and ability to cater to afford commodities, the Below and Above Poverty Line people/families have been specifically demarcated to aim for providing suitable interventions and food security as specified by the Central Government.
Owing to its penetrating capacity to many villages and rural areas in India, rather than being a platform receiving full of praise, it is fraught with problems and delays.
Odd, isn’t it?
So, what are those “problems” we just talked about?
Challenges
- Huge account of losses have been identified with more than 40% of grains being lost as it is or diverted and thus unable to reach the designated poor or needy families. A surge in Transportation and distribution costs have been markedly affecting the sustenance of operations which already functions with razor-thin margins and subsidies.
- Designated process systems adopted under the TDPS given the masses of BPL and other lower strata of population were not being fairly treated. The Central Issue Price is not much cheaper than the available market prices with major households not being able to get the 35 kg foodgrains quota. It also found that many households had to bear the high transaction costs of accessibility with some of the PDS Fair Price shopkeepers involved in illegal higher pricing of commodities. Under-utilization of food grains with less availability of the good quality of coarse grains in comparison to wheat adds to the problems and worries.
- The method of PDS adopted was novel and beneficial yet, the actual scenario presented a different picture in which the targeted segment of the population was being left out. The case of rampant leakages proving to be cumbersome and a heavy toll for proper functioning, the whole process system needed a careful survey with better communication to understand the pain points. Scarce resources with mounting subsidies are proving to be too much toll on the flexible functioning of the same and hence required a stronger administrative intervention with a better scope of reach to the people and households that were really in need of such facilities.
- Field Review of PDS also specified that despite the introduction of Targeted PDS and schemes, the varying range of malpractices and the prevalent increasing diversions were proving to be a serious issue in context to effectively manage the system. The use of better technologies to combat inflation on the poorest of the poor with better opportunities of increased support prices to the suppliers of commodities and strengthening the ways to offset losses was the need of the hour and suitably important for bringing in a revamped system of development and growth subsequently.
- PDS system is very conducive to malpractices and rampant illegal diversions and leakages. The razor-thin margins that the shopkeepers had to cope up with inevitably led them to sell these grains at a higher price in the black markets which is subsequently very difficult to monitor due to the significant intervention these shopkeepers had in the supply chain system. Caste networks may serve as a surrogate monitoring/enforcement mechanism that can ensure access to grain for a historically vulnerable population for those belonging to lower castes.
- The grains sold in PDS do imply ballooning prices of grains specifically of major constituents like Rice, Wheat, etc. that are needed in massive quantities by which, it is unable to meet the requirements of many households. The main aim of TDPS was to reduce the number of people that availed the same by improving the livelihood via food security and reflecting growth and development which has been realistically far from ideal conditions. The massive increase in total subsidy on account of obsolescent practices and increasing costs of maintenance and transportation has been severely influencing the sustainability of the whole system of operations negatively.
- Expenditure management of public distribution system in India pertains to various cost parameters that influenced the total cost of procurement and distribution and found to be constituted by Freight charges, Storage and Warehousing charges, Administrative expenses, Interest costs, and various other handling charges. The issues in management over lack of efficiency indicate that a better supply chain flow and operations could successfully bring down the costs to highly affordable ones with the use of IT infrastructure and systems to minimize physical intervention and transaction costs involved.
So, what is the way forward?
Doctrine of Self-Sufficiency
The notion of Self Reliance and Sufficiency was at the core of the idea of building rural institutions that aid in the attainment of complete independence i.e. social, economic, and moral independence. This openly advocated the reconstruction of society in which agriculture remained the basic unit of industry and the use of other small scale industries by employing the best modern systems of technology that did not threaten the human intervention.
The ultimate dream is to develop a decentralized economy in which the basic unit would be completely self-sufficient and reliant on material needs such as food, clothing, housing, etc. The Government in the post-independence period did not focus more on developing the rural economy that constituted the majority of the population. Due to more and more negligence towards improving the lives of the villagers, development remained very low and thus created problems of employment and sustainability. In high hopes of finding opportunities in urban areas, rural migration occurred which increased the proportion of slum dwellers. Hence, rural empowerment and productivity is the need of the hour to counteract this serious issue.
Big industries and firms have indeed destroyed many rural livelihoods and productive capacity to earn. Rather than introducing the very same level of technologies at the village level and increasing the ways to improve their sustainability, goods economics has thrown more people into poverty than providing employment.
Citing one example, a farmer said,
“Once the paddy grown in the village was hand pounded in the village itself and consumed by the villagers, the surplus being sent to the nearest town or area where there was a shortage. Now all the paddy grown is taken by improved means of transport to the rice mills in a large city where it is pounded and sent back to the villages infected with all kinds of diseases. The village workers have lost their jobs and the net result remains the same, if not worse…”
What could have been done was to introduce paddy threshing equipment in the village itself. Unless we put all the able-bodied young people to productive use in the villages, it would not be possible to help India out of the poverty in which it finds itself today.
Moreover, Capital Saving was also one of the components that can reap benefits in any field of work that was being carried out. The use of modern technologies and machinery is making humans become machine miners. This kind of mindset is proving to be extremely difficult to use of resources rather than substituting in place reliable and cheaper means of production that could help to provide work for all rather than selected few.
The final part lies in preserving the size and aiming for near and connected means of production. A production unit that catered to larger masses had a problem of massive complexity with increased transaction costs due to more transportation and control. Keeping the units near with small scale production everywhere ultimately helped to add value to the goods being produced without much addition to the costs of affordability and accessibility. Hence, a better means would be to have small scale production with near ancillary units that helped to save costs and improve productivity.
Swadeshi Philosophy
The argument against PDS revolves around the idea of procuring commodities locally that can help to cut down expenses and effort rather than having it transported or sourced from outside at all times.
In the context of the COVID -19 pandemic, while the government is trying its best to reach out to all families across rural and urban areas, analysis shows that a huge gap remains in meeting the total need for food and rations. The most vulnerable people are the ones who have fallen prey to not being able to have sufficient grains that can last for even a week. On the other hand, most of the food grains have been lying at the village level, due to issues of transportation or due to speculation about getting the expected minimum support price in Agricultural Produce Market Committees.
Social groups and organizations working in many drought-prone areas have done intense research on the communities that have lived in such lands for generations. Working with the farmers and tillers, many have started to understand and implement Co-operatives and Self-Help Groups that have enabled them to utilize wastage and increase productivity.
For example, the dearth of Supply and Demand owing to the Lockdown initiated during Covid-19 was a huge challenge to overcome. The strategy to procure food grains from local farmers and distribute it using merchants or volunteers was one such pilot program that enabled to fight the problem.
By calculating the number of food grains that each household on an average required for a sufficient period, kits containing a mix of essential grains were introduced. These kits were strategically distributed in villages and have been continuing since then. The price that would have rather been invested to transport to a nearby warehouse for storage was effectively eliminated with only a small amount being adjusted towards selling and marketing expenses. The result was a two-fold increase in the income of the farmers and better utilization of resources. Further improvements by streamlining the processes and initiating procurement and supply of sanitary pads, masks, and other essential safety commodities swiftly followed. A typical organization in several collaborations with other institutes and NGOs working in remote districts of Gujarat have been successful in reaching over to more than 10000 families and distributing more than 4500 food kits, 40000 sanitary pads, 80000 masks, 55000 soaps, and 2500 kitchen garden kits. the aim is to further identify and include more communities and districts as part of its ongoing efforts to make this a self-reliant process that continues well into the future.
A nation-wide approach to this model can being a new system that functions way more effectively and employs self-monitoring by stakeholders involved.
If this can happen on a larger scale whereby the government buys all the available stock at the local level and redistributes it in local communities, several benefits could be reaped. This model will duly reduce the insecurity of timely availability of food grains, save energy consumed in transportation, reduce the level of distress sale by farmers, and ensure local taste on the plates of communities. By reducing the labor and transport cost, boosting the local economy, and allowing the farmers to invest promptly for the kharif season, this model of People to People market is amazingly environmentally and poor friendly, as well as gender just. As a result, communities would not only become secure for food but also for their seeds. Of course, only the surplus could be sold outside to help other communities where there is a need to fill the gap or to the urban centers. This Swadeshi model will result in the speedy delivery of food grains without any external costs and internalize the monetary benefits for the local community. It can wholly contribute to reducing pollution and help in reduce the drudgery and anxiety of farmers of selling their crops.
Future Scope
- Use of a similar approach of the model to be implemented pan-India whereby the decentralized system of procurement and distribution will avail easy accessibility and affordability of commodities.
- A more comprehensive evaluation of the operational expenses that can be further modified and optimized to make it efficient towards minimizing potential wastage and losses.
- Management of stakeholders and members towards improving the model from time to time via close standardization of transportation and distribution mechanisms.
- Inclusion of smaller startups and supply chain vendors in the model to effectively reduce the waiting time.
- Opportunities for community-based monitoring and self-responsibility measures to develop a service mentality and a fair income generation for the stakeholders involved.
References
- Mogale, D. G., Kumar, S. K., Márquez, F. P. G., & Tiwari, M. K. (2017). Bulk wheat transportation and storage problem of public distribution system. Computers & Industrial Engineering, 104, 80–97.
- Gupta, A., & Mishra, D. K. (2018). Public Distribution System in Uttar Pradesh: Access, Utilization and Impact. Indian Journal of Human Development, 12(1), 20–36.
- Ahluwalia, D. (1993). Public distribution of food in India: Coverage, targeting and leakages. Food Policy, 18(1), 33–54.
- Kattumuri, R. (2011). Food security and the targeted public distribution system in India.
- Nagavarapu, S., & Sekhri, S. (2016). Informal monitoring and enforcement mechanisms in public service delivery: Evidence from the public distribution system in India. Journal of Development Economics, 121, 63–78.
- Mane, R. P. (2006). Targeting the poor or poor targeting: A case for strengthening the public distribution system of India. Journal of Asian and African Studies, 41(4), 299–317.
- Singh, C., Shah, A., Aggarwal, M., Nair, P., Kashyap, R., Mohamed, S., & Pal, S. (2015). Expenditure management in the public distribution system. IIM Bangalore Research Paper, (481).
- Venugopal, K. R. (1992). Deliverance from hunger: the public distribution system in India. Sage.
- Welcome to Public Distribution System (PDS). (n.d.). Retrieved April 28, 2020, from http://epds.nic.in/
- Public distribution system. (2020, March 15). Retrieved May 03, 2020, from https://en.wikipedia.org/wiki/Public_distribution_system
