Current Affairs

Reform in PDS

The Public Distribution System (PDS), till 1992, was a general entitlement scheme for all consumers without any specific target. The Revamped Public Distribution System (RPDS) was launched in June 1992 in 1775 blocks throughout the country. RPDS was launched with a view to strengthen and streamline the PDS as well as to improve its reach poor families especially in the far-flung, hilly, remote and inaccessible areas.

RPDS covered those areas where special programmes such as the Drought Prone Area Programme(DPAP), Integrated Tribal Development Projects (ITDP), Desert Development Programme (DDP) and certain Designated Hill Areas (DHA) were in operations while the main focus was to improve the PDS infrastructure. Foodgrains for distribution in RPDS areas were issued to the states at 50 paise below the Central Issue Price. The entitlement was 20 kg grain per card.

Subsequently in June, 1997, the central government launched the Targeted Public Distribution System (TPDS) with focus on the poor families. Under the TPDS, states were required to formulate and implement foolproof arrangements for the identification of the poor for delivery of foodgrains and for its distribution in a transparent and accountable manner at the Fair Price Shops (FPS) level. TPDS aimed at benefiting about six crore poor families for whom a quantity of about 7.2 million tonne (MT) of food grains was earmarked annually.

However, the High Level Committee, chaired by former food minister Shanta Kumar, in its recommendation to government last year had stated gradual introduction of cash transfers in PDS, starting with large cities with more than a million population; extending it to grain surplus states, and then giving option to deficit states to opt for cash or physical grain distribution. This will be much more cost effective way to help the poor, without much distortion in the production basket, and in line with best international practices.

According to HLC's calculations, DBT could save the exchequer more than Rs 30,000 crore annually, and still giving better deal to consumers. “Cash transfers can be indexed with overall price level to protect the amount of real income transfers, given in the name of lady of the house, and routed through Prime Minister's Jan-DhanYojana (PMJDY) and dovetailing Aadhaar and Unique Identification (UID) number. This will empower the consumers, plug high leakages in PDS, save resources, and it can be rolled out over the next 2-3 years,” HLC had stated.

According to recent government estimate, DBT scheme for subsidies has resulted in significant savings across welfare schemes, including Rs 27,000 crore in PDS, LPG distribution and Mahatma Gandhi National Rural Employment Guarantee Act.

According to the food ministry data, Andhra Pradesh, Telangana, Chhattisgarh and Delhi, besides union territories Chandigarh and Andaman and Nicobar, have completed seeding of all the ration cards with Aadhaar. States such as Kerala (95%), Rajasthan (94%), Haryana (86%), Jharkhand (73%) and Odisha (65%) have also reported significant progress in terms of seeding of PDS beneficiaries’ cards with Aadhaar.

However, Uttar Pradesh, Bihar, Tamil Nadu and north-eastern states such as Assam and Manipur, have been slow in this technological process aimed at eliminating pilferage and ensuring that subsidised foodgrains reach intended beneficiaries. Among the laggards, Bihar, which has 1.54 crore ration cards, still has only 9,000 cards seeded with Aadhaar. Similarly, Tamil Nadu with around 2 crore ration cards has only 10% of these cards linked with Aadhaar.

On electronic point of sale (ePOS) installation, Gujarat and Andhra Pradesh have almost completed the process, while others like Chhattisgarh and Madhya Pradesh are catching up. States with large poor populations like Uttar Pradesh, Bihar and Odisha have, however, yet to make any headway in equipping their fair price shops with ePOS devices. According to estimate, Andhra Pradesh would save around Rs 800 crore annually through steps like putting ePOS devices in its 28,000 odd public distribution system (PDS) outlets and seeding ration cards with Aadhaar numbers.

The objective of ePOS, of course, is to ensure that only genuine cardholders or his or her family members whose names are mentioned in the ration card can buy the subsidised commodities. When the ration is taken, the ePOS device captures the buyer’s biometrics, which is verified online with the Aadhaar database.

The device helps record all FPS transactions electronically, which enables real-time accounts of opening stock, daily sales and closing stock. In turn, this would facilitate monthly allotment of stocks to the FPSs based on the stock position and also facilitate monitoring and detection of fraudulent transactions. However, there is still a long way to go on this front as only 22% of the 5.3 lakh fair price shops (FPSs) in the country have installed ePOS devices so far.

However for next couple of years, the government’s task is to ensure that all the states uniformly carry forward PDS reforms so that pilferage and inefficiency in the system could be removed.

Source - PIB 

Category - GS 3