REPORT ON THE FUNCTIONING OF TPDS

• much of the opposition to the recently passed Food Security Act has been in the background of inefficient  Public Delivery System- as it is, no one can in principle oppose food security to the poor
• in this context, it is important to analyse the entire PDS system- its processes, challenges, issues and most importantly the need to reform

  Analysis of issues surrounding  the TPDS :

1.Procurement of food grains-  It is necessary to have enough grains available for the purpose of distribution to the entitled

To induce farmers to produce more grains, government provides for MSP(minimum support price)

MSPs, though is a great assurance of fair returns to farmers has its own problems

• it has been criticized for having kept prices of the grains artificially high despite huge production levels- logically increased production and availability should lead to decrease in prices
• MSP has been blamed to be the cause of preventing the farmers to respond to the market demand- we know that the diet pattern of Indians is changing and shifting towards fruits, vegetables, pulses and other protein based food products- MSP prevent farmers from diversifying to these items-thereby leading to shortage of these items and a spiralling high prices- as we know, fruits and vegetables substantially contributes towards inflation
• also, food grains are water intensive crops and MSP has induced farmers to go grow water intensive crops like rice in regions which naturally and traditionally has not been suited for it

E.g. rice cultivation by farmers is Punjab and Haryana- is said to be the main culprit behind ground water depletion; additionally, this practice also leads to soil degradation and poses a risk on the future of agriculture

the present act requires procurement of around 61 million of food grains- the availability of such huge quantity is easier in years of increased production but is  under question but in years of domestic shortage, for varied reasons , the government will have to rely on  large scale imports of grains thereby leading to significant increase in prices

the recent act thereby raises question on government ability to procure food grains without affecting the open market prices and subsidy bill (a very pertinent point in the context of high fiscal deficit and recessionary growth of Indian economy)

2.Storage of food grains- FCI(food corporation of India)is the main agency responsible for storage of food grains

• food grains normally stored in godowns, silos on in the open- storage capacity has been insufficient and FCI hires storage space from centre and sate warehousing corporations  as  well as private parties
• inadequate and inefficient storage severely compromises the quality of food grains
• besides, there is imbalance in availability of storage capacity across states and whatever space is available that is not optimally utilised (as reported by CAG)

3 .Distribution of food grains- responsibility for distribution is shared by both centre and the state. Transportation of food grains to state godowns is carried out by the centre while its distribution to end consumers is taken care by the states

here,   the problem relate to those of

• leakages to open markets
• errors of inclusion exclusion
• adulteration of grains etc.

MECAHNISM TO STRENTHEN TPDS

•  Role of AADHAR- may help in eliminating duplication or ghost beneficiaries; make identification more accurate
• However,  100% enrolment and subsequent renewal, admission of newborns etc. will depend on the efficiency of this system

• TECHNOLOGY based reforms- this becomes important in light of the fact that manual recording of eligibility of beneficiaries is prone to errors and tampering

Some examples:

1. Digitalisation of ration cards

this allows for online entry and verification of data regarding storing of monthly instalments, no. of dependents, off take of grains from fair price shops etc.

1. computerised allocation to fair price shops(FPS), declaration of stock balance, web based truck challans etc.- this allows for quick and efficient tracking of transactions
2. use of GPS technology to track movement of trucks from state depots
3. SMS based monitoring-citizens to receive sms alerts during dispatch and arrival of TPDS commodities
4. web based citizens portal to publicise the grievance Redressal mechanism

the above mentioned mechanisms are already in operation in different states and hence can easily be emulated across the country to  make PDS  efficient

Alternatives to PDS-

• Universal PDS-  here errors of identification and inclusion exclusion can be eliminated completely

Tamil Nadu has an efficient universal PDS

• cash transfers

this helps in reducing administrative costs and allows for efficient, quick and leak proof mechanism- however has been strongly opposed by food rights activists on certain grounds such as-

- The fact that cash can be used for other things;

-women and children are disadvantaged as the head of the family is usually the men who get to decide on the area where cash is to be spent;

-100% financial inclusion is yet to be achieved

- cash transfers do not guard against price fluctuations

• Food coupons-food coupons could be bought in lieu of money which could be used to buy food grains from any grocery store… this has certain advantages such as

– Freedom of citizens to choose where it wants to buy grains from

-increases incentive for competitive pricing and

-assures the quality of food grains

the disadvantage is that it is gain not indexed to inflation.