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  2. 2. Despite for the Indian Government spending Rs 85000cr, about 230 million people strive for food in India  In fact to provide Re 1 to the poor, the GOI spends Rs 3.75 but due to corruption in PDS only Rs 0.375 reaches finally. PROBLEMS :- • Identification Error Rs 4,360 cr of the subsidy goes to the non-poor in 2012-13. • Leakage at Different Levels 57% of the PDS does not reach the intended people, due to leakage at different levels. • Storage Approx Rs 380 cr & 1.7 lakhs Tonnes of food grains were wasted In 2012-2013 due to storage problem . • Transportation Approx Rs 339 cr & 18.4 lakhs Tonnes of food grains were wasted In 2012-2013 due to transportation problem . •Non-Transparency Non-transparency at different levels and lack of Public Awareness. Virtually non existence vigilance machinery at the grass root level. • Weak & corrupt Administration Undue political interference, lack of adequate supervision over PDS operation at field level and laxity which often does not result in any punishment to culprit found at the supervisory. Unit 2004- 2005 2009- 2010 Distribution of Food via PDS ration shops Mn Tons 41.5 48.9 PDS Food Received by the population , NSS Mn Tons 13.2 25.3 % Leakage of Food via PDS ration shops 68.2% 48.3% Food Subsidy- Ministry of Finance Rs. Crores 24479 59621 Food subsidy according to NSS Rs. Crores 8474 38875 PDS corruption estimate Rs. Crores 16005 20746
  3. 3. A Major Problem : Corruption GOI FCIFarm FPS Block District State Corruption (20,747cr) Poor Problem:-An ADB study suggests that only 10% of poor receive intended benefits on the subsidies offered by the Public Distribution System (PDS) in India. The country facing the problem today is not one of shortage of food grains but of managing the surplus. Corrupt implementing machinery and sleepy and sloppy programme where there is freedom to play with its great objectives with impunity to derive unlawful pecuniary benefits. India State hunger Index (2009) India’s GHI 2008 score is 23.7 which ranks it 66th out of 88 countries “57% of the PDS food grain does not reach the intended people.”
  4. 4. Complaint & Awareness Centre MULTI- APPLICATION SMART CARD (MASC) Bar-Code in Packets of Food Grain Reform of PDS System  The whole power of controlling the PDS will be exercised by the District  This decentralises the powers to the state.  Smart cum ATM cards for all citizens, with the Thumb Impressions(of atleast 2members in a family) as their password.  It would result from surveys done on a regular basis conducted by NSS and asserted by UIDs. The Smart Cards will be registered with Mobile no. and bank account of the people.  All food grains will come properly packed with a unique barcode on each of them.  Each packet contains the amount of food grain which the GOI seeks to provide to each person. This ensures efficient distribution system.  The packing of food supplies will be done by electronic system.  IVRS System  Toll Free No.  Internet Complaint Box to make the people aware of their rights and latest government schemes and also to Register complaints. Brief of The Proposed Solution :-
  5. 5. New policy Transparency Portal Building Transport Network Advantage over existing System  Licence to the FPS are given on Storage basis.  FPS owners earn Commission on the supplies they render and amount of food grains they store.  punishment to culprit found in providing wrong information in survey  Web Portal containing all the information about PDS, visible to all people.  A separate Login Section for Monitoring Committee & concerned officers to manage information on procurement , allocation and off take at all levels of the distribution system.  Distribution of supplies is done on district level basis.  Each district is responsible for procurement and deliver of food grains in its area.  In case of shortage of Food Grains in a District, it collects supplies from its surrounding nearby districts having surplus.  Removes exclusion errors thereby covering maximum people.  Government saves Rs 19000cr in this system by reducing corruption.  Effective handling of complaints.  Error free and correct allotment and movement of foodgrains to FPS through E-Governance. PDS Network with the aim of providing support in the areas of development, Operations and maintenance of technology, supply chain management and transparency.
  6. 6. Implementing the plan :- The PDS network will be managed by a District management system supported by Central as well as state government Salient features  Decentralization of Operations  Private Trade in Food grains: – Private Agencies Can also contribute to the work of Block & FPs  Competitive Grain Procurement  Effective, efficient and transparent delivery system  Accessibility of Location  Assurance of Product Delivery (at the desired time , in the desired size , in the ownership status  System Transparency and accountability  Account Transparency.  Beneficiary Database  Individual beneficiary tracking  Shifting of power from political hand to administrative hand DISTRICT MANAGEMENT SYSTEM is responsible for implementation and monitoring
  7. 7. Name, photo, Address, Bank account , UID no., Mobile no., biometrics category in which the beneficiary falls and the monthly entitlement of the beneficiary, family members. Data stored on smart cum ATM card Data is developed on the basis of survey, verified by bank, UID, LPG card and other cards(PAN, D.L, Credit, visa card, etc.) Verification of data or identity Working of card Distribution of card Using biometrics as a tool for authentication of identity of beneficiaries. Response on complete transactionRegister complaints. • Swapping the card • Fingerprint reader. • Scanning barcode on packets • Providing sealed packets of food grains • Updating system • Conformation message on registered mobile no. • Circulating updated information to district center • Getting information through IVRS • Filling complain through toll free no. • Online Complaint Box to make the people aware of their rights and latest government schemes and also to Register complaints MULTI-APPLICATION SMART CARD (MASC) Through this system , MASC will be accepted by FPS anywhere in India.
  8. 8. District head District food & supply team Transport team Monitoring team Finance team Technical team Block level supply team District management system At Centre – Manages fund, does survey and set up guidelines to the System. e.g.– set MSP(Minimum Support Price), Subsidized Price, Amount of food grain allotted to the people At State – Manages fund (optional) & does survey of the system. At District – District Level Management System At block -- F.P.S level supply team Provides food grains to FPS and private Agencies. Keeps a store of food grains atleast one month in advance Organisational Structure Collects supplies from farmers, other districts and provides it to other districts & block . Provides Food grains to the block and wholesaler. Manages transport of food grains at all levels. Deals with money related issues Web portal management, IVRS and SMS updates. Keeps a Check of proper functioning of other Teams
  9. 9. Transportation cost Storage(Commission) cost Barcoded packet cost Computerization cost Technical team(5×4.5lakh pa) Finance team(6×4.6lakh pa) Logistics cost Technology cost Organization cost TotaladditionalFundingRequired Card Swapping Machine INR 50lakh Pa Smart card cost INR 75 lakhs INR 50 lakhs INR 1.4 cr # An average of 2.65cr of additional funding will be required, per district annually. IVRS & Toll Free No. cost Proposed funding will be provided by the central govt. Total funding required for implementing this scheme(for whole country) will be 1714.65cr (647×2.65cr) which is 8.26% of the total estimated PDS corruption(20747cr).
  10. 10. The program will be able to impact maximum no. of poor who were earlier deprived of the subsidies offered by the Public Distribution System (PDS ) and reduces corruption up to Rs 19000cr. Minimum Leakage Benefits for Poor Reduced Wastage Easy monitoring and inspection  Food grain for every card.  Choice to collect grains from any FPS centre.  Awareness of their rights.  Toll free number for complaints.  Satisfaction, in terms of quality & quantity.  Reduced wastage/spoilage of food grains.  Improved storage system at the FPS to store sufficient foodgrain  Reduced storage burden on DMS.  DMS can buy & store more grains.  Increased Storage & Transportation infrastructure.  Transparent operation at each level.  Easy data updating.  Better identification.  Detailed information about allocation & off take of PDS, at any level. The GDP of India would get increased.  Ensuring no loss in weight of packets.  Proper record of each card holder through UID & Computer Database.  Transaction through Bank Accounts, instead of cash. Impact and Reach
  11. 11. Challenges and Risks Concept Risks • Difficulty in handling Multi-Application Smart Cards by illiterate people • There are still some chances of Inclusion errors. • Problem of division of poor into groups. • Unavailability of skilled workers at FPS. • Problem of identifying a customer, if the Card Swapping Machine goes out of order. • Chances of change of fingerprints of labourers. • Lack of interest among rural people towards learning and use of new technologies/facilities. Mitigation Factors Implementation Factors • Government does not see the viability of this scheme. • Concentrated Procurement of Rice (Punjab – 25.4%,AP- 24.4%) and Wheat (Punjab- 39.2% Haryana-25.1%) • Advertising and Awareness Campaigns. • Universalization of PDS : Entitlement of same PDS, i.e. equal subsidies/food grains to all, irrespective of their financial/social status (along with the proposed plan) to completely remove the Inclusion errors. Source of funds for universal PDS : - o Money saved from leakage. o Reducing TAX exemptions.(The Right to Food Campaign estimates that Rs.1,56lakh crore would be required for universal PDS, which is about 1/3rd of tax exemptions given by the Central govt. in 2009-10.) • Workers will be trained with new technology. • An alternate offline mechanism, by which the IVRS system would generate a customer’s unique code to identify the customer, using his registered mobile no. • The proposed Biometric System would accept if the fingerprints match is more than 75%. • Increasing farming of food grains at district level.
  12. 12. References • Planning Commission. (2005). Performance Evaluation of Targeted Public Distribution System (TPDS). • Bhalla, Surjit S. (2012, Jan 7). Enhancing Corruption the NAC Way. Oxus Investments • Press Information Bureau (2012, Dec 17). Review of Food grains Procurement Policy RBI handbook of Statistics, Ministry of Finance, Budget statements, different years. • International Journal of Business Economics & Management Research. • Discussion paper (DEC 2012): National Food Security bill, Ministry of Agriculture ,Govt. of India. • Report on computerization of PDS by JUSTICE WADHWA COMMITTEE. • Report by Ministry of Rural Development on the methodology for conducting the BPL Census. • Report on National Food Security Bill by Dr. C.RANGARAJAN • RBI handbook of Statistics, Ministry of Finance, Budget statements, different years. • Ministry of Consumer Affairs , Food and Public Distribution • Report of National Sample Survey Organisation • Report by Department of Economics and Statistics of U.S. • http://www.pdsportal.nic.in • http://www.righttofoodindia.org ...