Public Distribution System

Public Distribution System: (Click Here To Download)

Public Distribution System (PDS) is a means of distribution of essential commodities to a large number of people. It forms an important constituent of the strategy for poverty eradication and intends to serve the undernourished. With a network of more than 400,000 Fair Price Shops (FPS), the Public Distribution System (PDS) in India is perhaps the largest distribution machinery of its type in the world.  

Objectives of Public Distribution System:

·        To facilitates the supply of food grains to the poor at a subsidized price.

·        To oversees the arrangements for provision of essential commodities  to citizens

·        To provide food grains and other essential items to vulnerable sections of the society at reasonable (subsidized) prices

·        To put an indirect check on the open market prices of various items and

·        To attempt socialization in the matter of distribution of essential commodities

Functioning:

Functioning of PDS encompasses following

·        Procurement of Food Grains.

·        Identification of poor and needy.

·        Issue of ration cards to poor people.

·        Transportation of food grains to all Fair price shops.

·        Selling Food grains to all the needy people.

Working:

1.     The PDS operates through a chain of fair price shops that issue rationed quantities of wheat, rice, sugar, kerosene, etc. at subsidized rates to various categories of less privileged people through ration cards.

2.     The District Food and Supply Officer controls and supervises the activities of these shops under overall superintendence of the Collector.

3.     This department has the responsibility to ensure that basic commodities such as foodgrains, sugar, oil, coal, etc. remain available to the people at the reasonable prices in the district.

It has powers to penalize the hoarders of essential commodities, take steps to deal with adulteration in diesel/petrol/other commodities and to ensure proper usage of weights and measures etc.

Limitations of Public Distribution System:

·        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 bogus cards are also issued.

·        Fair Price Shop owner gets bogus Ration cards and sell the food grains in the open market.

·        People do not get the entitled amount of food grains from the Fair price shop.

·        Diversion of Food grains by FPS owner and middle men.

·        Many time good quality food grains are replaced with poor quality cheap food grains.

·        PDS covers only few food grains like wheat and rice, it does not fulfill the requirement of complete nutrition.

·        Uneven distribution of Food generations, procurement and distribution.

·        PDS Leakages

·        A large number of families living below the poverty line have not been enrolled  and therefore do not have access to ration cards

·        A number of bogus ration cards which do not correspond to real families, exist in the BPL & AAY categories.

·        Errors in categorization of families that lead to BPL families getting APL cards and vice versa.

·        A significant portion of benefits provided to the APL category under the TPDS, are not availed by the intended beneficiaries and are instead diverted out of the system.

Direct and Indirect Farm Subsidies:

By centre:

·        Food Subsidy

·        Fertiliser Subsidy

·        Petroleum Subsidy

·        Credit Interest subvention

·        Minimum Support Price

By States:

·        Agriculture and Irrigation

·        Rural Development

·        Electricity

Issues:

·        Improper Targeting

·        Leakages

·        Improper use due to free electricity

·        Environmental degradation

·        Over exploitation of resources

·        Excess pumping of ground water

·        Interest subvention results in loan default and increase NPAs

·        Interferes with free trade

MSP is the price at which govt. procures from farmers through FCI (Food Corporation of India) and sell it at subsidized rates through PDS, however issue of WTO or market distortion, food inflation as farmers produce only those crops for which the subsidy is provided.

·        It leads to envt. degradation as rice is high water consuming and results in less production of fruits, vegetables and millets.

·        Another issue with MSP is govt. procures in excess to the requirements which leads to wastage of food due to lack of the storage facilities.

The rationale behind determination of MSP include,

(i)                the need to provide incentive to the producer/farmer for adopting improved technology and for developing a production pattern broadly in the light of national requirements;

(ii)              the need to ensure rational utilization of land, water and other production resources;

(iii)            the likely effect on the price policy on the rest of the economy, particularly on cost of living, level of wages, etc., and (iv) the terms of trade between agricultural sector and non-agricultural sector.

Issue of Buffer Stock and Food Security:

·        to provide space for effective implementation of minimum support price for rice  and wheat through procurement mechanism.

·        to maintain price stability arising out of year to year fluctuations in output or any other exigency.

·        As a source of supply for public distribution system and various other schemes to  sustain food and nutrition security particularly of economically weaker sections.

Buffer stocks have come under frequent attack on three grounds. The level of stocks is said to be too high in relation to the buffer stock norms which is causing huge cost in terms of storage, interest on value of produce, and wastage.

The National Food Security Bill, 2011

·         The Bill proposes foodgrain entitlements for up to 75 percent of the rural and up to 50 percent of the urban population. Of these, at least 46 percent of the rural and 28 percent of the urban population will be designated as priority households. The rest will be designated as general households.

·         Priority households will be entitled to 7 kg of subsidised foodgrains per person per month. General households will be entitled to at least 3 kg.

·         The central government will determine the percentage of people in each state that will belong to the priority and general groups. State governments will identify households that belong to these groups.

·         The Bill proposes meal entitlements to specific groups. These include: pregnant women and lactating mothers, children between the ages of six months and 14 years, malnourished children, disaster affected persons, and destitute, homeless and starving persons.

·         Grievance redressal mechanisms will be set up at the district, state, and central levels of government.

·         The Bill proposes reforms to the Targeted Public Distribution System.

Public stocks of foodgrains have two major components:

(i) Operational Stocks for regular distribution under the PDS

(ii) Buffer Stocks for easing out fluctuations in consumption and prices arising out of instability in the production of foodgrains.

Issues:

·        With FSA total subsidy will exceed WTO specified limits.

·        Lack of storage

·        Distortion in cropping pattern

·        Need to weed out bogus beneficiaries

    PDS system needs to be strengthened, recently Delhi has allowed PDS shops to sell non PDS items like mobile recharge to ensure their sustainability and allow them to meet their operational costs like rent, electricity.

·        Proper identification of beneficiaries and linking them with Aadhar

·        Aadhar based PDS

Important to Note:

PDS is operated under the joint responsibility of Central and State Governments wherein the Central Govt. is responsible for procurement, storage and bulk allocation of foodgrains to States, and the operational responsibilities including allocation within States, identification of eligible families, issue of ration cards, supervision over functioning of fair price shops etc. lies with State Govts. 

Way Ahead:

Digitization of beneficiary database will help in de-duplication of ration cards, weeding out the bogus ration card and better targeting of subsidies. With computerization of supply-chain, the movement of food grains up to FPS levels can be tracked and the problem of leakage and diversion can be addressed. Transparency portal will strengthen the functioning of FPSs and ensure accountability at various levels