SAMARTHA

PDS is considered as principal instrument in the hands of State Governments forproviding safety net to the poor against the spiralling rise in prices of essentialcommodities.

Public Distribution System (PDS) is a poverty alleviation programme Andcontributes towards the social welfare of the people. Essential commodities likerice, wheat, sugar, kerosene and the like are supplied to the people under the PDSat reasonable prices.

PDS is a boon to the people living below the poverty line. PDS is the primary socialwelfare and antipoverty programme of the Government of India. RevampedPublic Distribution System (RPDS) has been initiated by the Government of Indiafrom the year 1992 in order to serve and provide essential commodities to thepeople living in remote, backward and hilly areas. Government introducedTargeted Public Distribution System (TPDS) in the year 1997.







General problems in publicdistribution system

COVERAGE

It counts the population being fed by PDS. Although PDS is the largest network of food grainproduction, still it is not in reach of every consumer. According to National Sample Survey(2004-2005), it is estimated that 73% did not get any food grains from PDS. Therefore coverageis one of the major problem in PDS. Also, stocks arrived in FPS are not always on time due towhich the consumers may have to depend on private shops.

IMPLICIT SUBSIDY

In this government has provided subsidy on various commodities. This government policy aimsat subsidizing price of commodities lower than minimum support price. With the alarminginflation, the minimum support price will bound to increase. The subsidy will henceforthincrease.

EXCLUSION ERROR

This error occurs due to the proportion of poor left out of PDS. In this a poor person of BPL isnot classified as one and hence is deprived of the benefits of PDS.

UNDERNUTRITION

PDS aims not just to distribute food grains but also aims at providing good quality food grains/commodities so that the problem of malnutrition is reduced. But malnutrition persists to be themost important concern of India.

TRANSPORTATION LEAKAGE The distance of grains from go downs to FPS is also a majorfiltration point in the distribution mechanism. The grain won’t reach to FPS but goes to openmarket for selling, getting the margins which benefits the middle men that is FPS owners andofficials of the distribution wing.

BPL PROBLEMS

The numbers shown by state government for BPL families do not tally with the ration cardsissued and also with the planning commission statistics. Due to this two types of problem arises- one is the number of ration card holders are less compared to the number of BPL familiesannounced by the state government. Second is the number of ration cards issued are morethan the real BPL families in the village. In the second case, huge quantity of grains got releasedfrom second but not the concerned but reselling the same at higher margins in market.

PDS is highly corrupt system which is not benefiting the needy- poorest of the poor, as perobjective of the government.

To reduce the filtration of the grains into open market technology usage from go downs – Fairprice shop – consumer mechanism has to be automated.

FAIR PRICE SHOPS: A MAJOR PROBLEM

Fair price shops are not viable. Most shops do not display stock statements, and bill books arepoorly maintained. Issuance of bills for the transactions undertaken is done rarely and stockbooks are improperly maintained. Card holders complained about the FPS owners charginghigher prices for commodities and receiving less quantity than what they are entitled to.Shops use unfair practices in distribution such as adulteration, improper weighing, etc.

FPS OWNERS DO BLACKMARKETING THROUGH VARIOUS WAYS:

He fools illiterate consumers by selling them less quantity of ration through takingtheir thumb prints for different quantities.

Adulteration is the most common thing which is done by FPS. Thus compromising withthe nutritional value of ration.

FPS OWNER exchange good quality of ration present in FPS stocks with poor quality ofstocks from market shops, hence earning their profit with this black marketing

They don’t maintain proper report of ration transactions and bribe the food securityinspectors.

They sell the remaining ration of FPS in open market at higher for their own benefits,thus reducing the government’s subsidy.

LACK OF PORTABILITY OF FPS

The consumers are bound to purchase their ration from a specifically allotted FPS. If case ifthere is no stock at the FPS the consumer cannot approach any other FPS for his requiredration. The same problem is faced by the migrants. The tribal people who move from one placeto another cannot avail the ration from new FPS with the old ration cards.

CAUSES OF THE PROBLEM

Food security inspector are not honest towards their job so there is lack oftransparency in the PDS

Since the food given to the PDS customers are not packed, thus the chancesof adulteration of food increases.

The manual billing of the ration being sold leads to forgery at the districtlevel which in turn gives rise to corruption.













Generation of Ghost Cards

• Manual Process involved• Tatkal Ration Card System• Lack of identity of persons inRC• No accountability•Registers kept at Governmentoffice (G-register) and FP Shop•As per the year 2004information, it is estimatedthat out of the total no. ofration cards about 5.14% ghostcard exists.





PROPOSED SOLUTION

Food dispatched from central government should be in the form of smallrecyclable packets which will have various advantages:-• Food packets should be of standard weights of 2, 5, 10, 15 ,25 kgs• The packaging material should be recyclable so that food packets can be

easily dispersed as well as exchange effectively.

Return of empty packets. For effective recycling of packets ( in order to savemanufacturing cost ) It is mandatory for consumers to return the previousempty packets on the next visit. On return of 20 packets the consumers willget 2 kg packet of ration as a reward .

Flexibility in FPS. The consumer must be given rights to purchase rationfrom any of the FPS rather than the allotted FPS. This will help the migrants(such as tribal who move from one place to another).

Mobile distribution of ration in remote areas. The ration from the variousFPS should be send through any transport means to remote areas which aredeprived of FPS. It will cut off the transportation cost of the people hailingfrom remote areas for their daily meal.

Centralized system at state level should maintain data that contains thecontact number of all those who avail the facility of PDS. The people whoare categorized in BPL will get an sms from the centralized system afterarrival of the stocks at FPS. This system of keeping contact numbers will alsohelp to bring transparency between BPL and APL. With the consumersallotted with unique Aadhar card an entry is made into the electronic devicethat tallies the Aadhar card number. The device is digitalized and hencechances of corruption at FPS level are reduced. Identification of consumersis made through thumb prints.

There should be state patch ups in case of calamities. Itmeans that there must be mutual understanding betweenvarious states to help them in times of calamities.

PROPOSED SOLUTION








PROPOSED SOLUTION








FLAWS IN FOOD SECURITY ORDINANCE

If a family consists of 5 people the previous system provided them with 35 kg of rice. With theintroduction of Food Security Bill , the quantity reduces to 25 kg. The people has to depend onprivate shops for this “10kg” and with the inflating prices. Moreover, this bill aims at feeding67.5lakh population of India-that is double the number of BPL families. Subsequently theburden on govt. as well as the consumer is bound to increase.

India’s poverty index is measured in calories. According to FSB, the adults will beprovided 165 gm of food subsidy. A normal person requires 2500 calories per daywhereas 400 grams of food will provide only upto 330 calories.

It is the duty/responsibility of central government to decide and make up a criteria onwho can avail the facility of PDS that is norms for consideration into BPL. But the FSP,the central government is giving this duty to state governments which in turn wouldcreate interstate disparities.

In case of any contingency like drought, flood, etc. The new FPS states that it isincumbent on state government for purchase/procurement of food grains.

The condition of ware houses in our country is pathetic.there is no investment in terms of storage, transportation & maintenance.

DEMERITS OF GOVERNMENT

POLICIES PROPOSED

Cash transfer : opening of bank accounts,availability of banks, delays in release ofamounts

Difficult to fix the monthly cash subsidy:fluctuation in market prices

Cash cannot guarantee food security:purchase of non PDS commodities

No MSP: due to cash transfer FCI does notprovide MSP, farmers not incentivize.

HIGH LEVEL DESCRIPTION OF KEY STEPS INVOLVEDIN IMPLEMENTING SOLUTION

Accessibility

Monitoringand Packaging

FPS working


• Integrating AADHAR CARD of every familymember into a common e-ration card of family

• Computerized system at very fair price shop whichwill be linked with the centralized system at everystate level.

• Government will provide vans that woulddistribute ration in remote areas.

• Ration will be provided on the basis of number offamily members.

Accessibility

• Packaging unit will be setup in all FCI godowns.• Ration will be packed in standard size packets.• CCTV cameras will be there in every FCI godown.• Central will monitor warehouses through its

vigilance officers and CCTV’s.• Dispatched packed ration from ware houses and

stocks reached at every FPS will be electronicallymonitored by a central body.

Monitoringand Packaging

• FPS purchase data will be sent to central.• Consumers can now purchase their ration from any

FPS.• Consumers will hold power to purchase as much

ration as they want of their allotted ration (just likewithdrawing money from ATM).

• FPS owner will earn his share in form of salaryfrom central system on the basis of his purchase.

FPS working


• Integrating AADHAR CARD of every familymember into a common e-ration card of family

• Computerized system at very fair price shop whichwill be linked with the centralized system at everystate level.

• Government will provide vans that woulddistribute ration in remote areas.

• Ration will be provided on the basis of number offamily members.

• Packaging unit will be setup in all FCI godowns.• Ration will be packed in standard size packets.• CCTV cameras will be there in every FCI godown.• Central will monitor warehouses through its

vigilance officers and CCTV’s.• Dispatched packed ration from ware houses and

stocks reached at every FPS will be electronicallymonitored by a central body.

• FPS purchase data will be sent to central.• Consumers can now purchase their ration from any

FPS.• Consumers will hold power to purchase as much

ration as they want of their allotted ration (just likewithdrawing money from ATM).

• FPS owner will earn his share in form of salaryfrom central system on the basis of his purchase.

FCI GODOWNS

Farmers

Packaging unit in FCI godown

Packed ration Packed ration

Beneficiaries mobile FPS in remote

Areas

Ration

Purchase money

SALARY

Database of warehouses

FCI database

WAREHOUSE WAREHOUSE Database of allFPS

FPS FPS FPS FPS

FPSTerminal

e-card reader

Printer

FPS Database

E ration cardlinked with

Aadhar

FPS OWNER BANK FCI account

LEVERAGING GOVERNMENT INFRASTRUCTURE

Computerization

Gadgets, computers, networks must be installed in the FPS at a much professional level. A team of engineers and technicians must be appointed. Whenever there is a technical

error in the automated system, the team ought to improvise it as soon as possible. The vehicles for transportation must be well equipped and well maintained such that in

any emergency case when there is traffic jam or rainfall the ration must not spoil.

FUNDING

TOTAL FUNDING REQUIRED

Organization cost

Infrastructure cost

Transportation cost

Technology cost

procurement

subsidy

packaging

cost

FCI godowns

CCTV cameras

warehouses

Central FCI godownsto warehouses

Warehouses to FPS

Mobile distribution

Setting up computers +e- card reader

IT software

90000 crore

5000 crore

1500crore

2500crore

CRITERA TO MEASURE IMPACT OF THE SOLUTION

ADULTERATION : In our proposed solution procured food are packed and transported tostate government warehouses by the central government. When the responsibility isgiven to state government for packaging, the chances of adulteration are more.

BLACKMARKETING : Due to punctual transfer of reports to the central server, thechances of black-marketing will reduce.

GHOST CARDS: Biometric verification through Aadhar card ensures full proof identity ofthe beneficiary. Hence the problem of ghost cards will be eliminated.

With our proposed solution, flexibility is bound to increase and therefore the existingstocks (not being used) will not rot away. Therefore the commodities available will bereasonable and quantified.

SCALABILITY AND SUSTAINIBILTY

The packaged food is now free from any possible adulteration and diversion to openmarkets. Also the quality of grains is ensured as well as do not spoil under adverseconditions. More and more BPL families will be taken into account and off take willincrease.

CHALLENGES

1. Due to emerging trends like CLOUD technology we will always have to update thesystems to cope up with the increasing data and security issues.

2. Orthodox people in rural areas will not adjust with the technology and would have anurge to pursue the older system of written stock management.

3. As we have fixed major loop holes, the ration mafias will surely outburst theirfrustration through political and illegal means. They may also lead to litigation andbloodshed.

MITIGATION

1. While applying the technologies, the government must be strict enough in installationand vigilance.

2. NGO’s will aware people about their rights and the benefits of the new automatedsystem.

3. Awareness about RTI will surely help in proper functioning of FPS.4. Role of media is vital for mitigation.








CHALLENGES




MITIGATION











CHALLENGES




MITIGATION




Appendix AADHAR CARD- A unique identification project which provides a unique id

number to all Indian .

AAY-Antyodya Ann Yogna

ADULTERATION-Mixing inedibles in food grains so that quantity increaseand quality decrease.

APL-Above poverty line

BPL-Below poverty line

Cloud technology-Computing concepts that involve a large number ofcomputers conected through a real-time communication network.

FCI-Food Corporation of India

FPS-Fair price shop

FSB-Food Security Bill

NSS-National Sample Survey,largest organization in India conductingregular socio-ecenomic surveys.

PDS-Public distribution system

RPDS-Revamped Public Distribution System

RTI-Right to information

TPDS-Targeted Public Distribution System









FPS-Fair price shop















FPS-Fair price shop







REFERENCE

1. Talk delivered by Mr. Akshay of Boston consultants group on PDS.

2. Ch.Srinivas and S.Abdul Jhaha Global Research and Consultancy Services ,Hyderabad,Deccan Development Society.

3. Chattisgarh Cheif Minister's letter to Prime Minister on cash transfers in thePDS.

4. Dr. S. nakkiran,principal (Retd.) , TBML college Poragar, TAmil Nadu.National Food Security Bill 2013.

REFERENCE





REFERENCE





Submitted by :-

TEAM SAMARTHA MANIT BHOPAL

Saumya Shivhare

Shubham Bhatnagar

Rajnandini Sharma

Vishal Jaiswal

Kamakshi Gupta

Business

SAMARTHA