Indianfarmers

Articles >

The public distribution (Disaster) system -K. Ramasubba Reddy

Creating a government-run or government-supervised foodgrain supply system to cater to the poor is almost certain to be hugely wasteful, and subject to leakages of all kinds. Supplying 25 kg of wheat and rice at Rs 3 per kg to every BPL household is supposed to cost around Rs 50,000 crore annually. FCI’s inefficient procurement operations have been documented, and leakage and wastage are endemic and the amount is estimated to be Rs 10,000 crore per annum. Imperfect delivery has been documented in issuance of BPL and Antodaya cards. Problems also include diversion of such grain to FCI procurement, non-availability of ration shops and inferior quality of supplies. These are particularly acute in poorer states and districts. At a NDC meeting in late 2007, the then Finance Minister remarked that cost to deliver one rupee of PDS benefit to poor is Rs 3.65. In a paper published in EPW in 2008, three Indian economists computed that if the entire food subsidy was converted into direct cash transfers to BPL households, each such household would have enough income to purchase

MAGIC WAND- People in A P State 8.3 crore, but ration cards cover 9.8 crore people

While the total population of the state is about 8.3 crore, there are ration cards for 9.8 crore people. How can this be possible? The civil supplies department issued a white ration card, meant for people Below Poverty Line, to tennis player Sania Mirza. Mr Lakshmi Narayana, a resident of Vepadu village in Vizianagaram district was issued the card in which Sania’s photo was also present with his name. “Thousands of bogus ration cards were unearthed during the regular inspection.

BOGUS RATION CARDS IN TN :

If you go by the ration cards, the population of Tamil Nadu has crossed eight crore. The actual figure is around 6.5 crore. Even the names of those who died before 1984 find a place in the ration cards. 2,13,367 bogus cards were unearthed when a pilot project was launched in Coimbatore and in Anna Nagar in Chennai. It was followed up in 10 districts and a total of 7,96,680 bogus cards were found. In the other 20 districts it will begin next month.

BETTER ALTERNATIVE, cash transfer scheme for all poor people. NREG now provides database of self-identified poor, with mandatory accounts in banks or post offices. Here’s a thought: won’t it be far more efficient to introduce revenue neutral direct cash transfers to these accounts

And finally acknowledging reality of Public Disaster System in the Economic Survey

Replace PDS with food stamps :

Freedom to export and import foodgrain within a domestic price band.To insulate poor producers and poor consumers of agricultural commodities, including consumer goods like cereals and pulses, the Economic Survey suggests the government should announce a price band for domestic prices in which imports and exports are freely allowed without any duty controls."If international prices change beyond this band, domestic prices would be systemically dampened though imposition of variable import export duties," the survey says. This, along with targeted subsidies, would help balance the interests of farmers, who need a predictable price regime to plan their cropping patterns, the survey says.
It is also critical of the the failure of the public distribution system and even the Targeted PDS (TPDS). It calls for introduction of food stamps or food coupons which could be valid outside the PDS outlets once the markets get better integrated. Food coupons will allow the consumers a wider choice, the survey says.It also suggests introduction of smart cards for reducing the incidence of bogus ration cards or diversion of foodgrainsThe distribution of foodgrains at subsidised rates to the poor, including the 65.2 million families below the poverty line has led to a 40 per cent jump in spending on food subsidy, amounting to Rs 43,668 crore (for wheat and rice only) in 2008-09 over the previous fiscal, says the Economic Survey. BS 030709