PLUGGING THE LEAKS
Improving reach and efficiency of the Public
Distribution System
SEMI- PRIVATISATION OF PDS
TEAM MEMBER...
Disconcerting Facts About PDS
21.9
78.1
B.P.L
A.P.L
•An ADB study suggests that only 10% of poor receive intended
benefits...
ROLE OF IRA NUMBER
(INTERACTIVE RATION
ACCOUNT NUMBER)
SEMI-PRIVATISATION OF PDS ADVANTAGES
•The purpose of introducing IR...
GOVT BODY
STATE X
STATE
GOVT
FUNDS
PRIVATE COMPANIES
CALL CENTRE
REGIONAL
OFFICES
EAAY SECTION
+
NGOS
FARMERS
OR
PRODUCE
R...
1- Food products packagers, especially those food products that contains necessary nutrients for
sustaining a good health ...
EAAY SCHEME + NGOs
• EAAY OR EXTREME ANTYODAYA ANNA YOJANA SCHEME.
• The Pri ate Co pa y i asso iatio ith a NGO ill o du t...
RECORD KEEPINGS
• Every BPL and AAY card holder must be given a unique account number (I.R.A) I N T E R A C I V E R A T I ...
QUANTITY FOR
BPL
MARKET PRICE
IN Rs.
GOVERNMENT
PRICE IN Rs.
DIFFERENCE REQUIRED
AMOUNT
Rs. 1469.50
WHEAT 15 4.5 10.5*35 3...
QUALITY CONTROLAND
AVAILABILITY
As people can buy anything they want and from and
shop. So quality control and availabilit...
1. Why would Government allow this proposal?
1. Why would private companies involve in such tie
up?
2. Why would shopkeepe...
Appendix
• Wikipedia BPL And AAY content reference articles
• EPDS Portal reference
• Planning Commission. (2005). Perform...
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CreatingDifference

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CreatingDifference

  1. 1. PLUGGING THE LEAKS Improving reach and efficiency of the Public Distribution System SEMI- PRIVATISATION OF PDS TEAM MEMBERS: 1. SAKET SRIVASTAVA 2. ASHUTOSH TRIPATHI 3. ROHIT RAJPOOT 4. ABHISHEK TYAGI 5. HARSH AGRAWAL TEAM DETAILS: Currently pursuing B.tech Course From : Harcourt Butler Technological Institute(HBTI), Kanpur Uttar Pradesh
  2. 2. Disconcerting Facts About PDS 21.9 78.1 B.P.L A.P.L •An ADB study suggests that only 10% of poor receive intended benefits on the subsidies offered by the Public Distribution System (PDS) in India. •A Planning Commission estimate suggests that 61% of households are excluded from the Below Poverty Line (BPL) net and 25% of households become unintended beneficiaries. • Around 23% of all Fair Price Shops (FPS) are not viable and survive solely due to leakages and diversions. • On an average the central government spends Rs. 15.70 per kg of food grain as subsidy while the intended cost is only Rs. 5.02 per kg. • A report suggests that the PDS Corruption estimate is around Rs. 20747 Crores •The problem of identifying beneficiaries leads to high exclusion and inclusion errors. High exclusion errors lead to low coverage of BPL households. High inclusion errors lead to APL families receiving excessive food grain which increases the burden on the governments. •Another challenge relating to the Public Distribution of India is that of leakages either during transportation or due to the existence of ghost cards. •. Leakage at various levels of the distribution chain leads to increased subsidy cost. •The unintended subsidy cost is way higher than the intended cost. • Viability of FPSs Some of the issues include : 1. delay in receiving the goods, 2. losses due to shortage of goods 3. unequal distribution of ration cards between APL and BPL holde 4. increasing transportation cost, 5. low commission and blockage of working capital Fig: Survey about number of poor Survey: Distribution Of Ration Card
  3. 3. ROLE OF IRA NUMBER (INTERACTIVE RATION ACCOUNT NUMBER) SEMI-PRIVATISATION OF PDS ADVANTAGES •The purpose of introducing IRA number is to keep a record of all transactions between the consumer and fair price shop •Every consumer is issued a particular unique account number through which transparency is maintained •The main concept is to introduce e commerce in our current system through setting up a mobile portal . •The mobile portal will act as a hub between all the consumers • Instant confirmation of transactions through SMS Alerts. •In present scenario government is the main controlling body in the existing PDS system. •In our concept we introduce a private company which acts as medium between the consumers and the government • Its functions are as follows: 1. Maintenance of mobile portal 2. Provision of subsidy 3. Management of funds 4. Quality control 5. EAAY Scheme( Extreme Antayodaya Scheme) • Cut down on Corruption: By introducing a private company we provide transparency and cut down corruption •Employment: The company employs people which create a great opportunity for unemployed •Subsidy control: The regulation of subsidy is done to relieve the government from unwanted losses. •Quality Control: Food grains are given a quality check and are distributed under a standard label. Key Ingredients of our Recipe
  4. 4. GOVT BODY STATE X STATE GOVT FUNDS PRIVATE COMPANIES CALL CENTRE REGIONAL OFFICES EAAY SECTION + NGOS FARMERS OR PRODUCE RS FAIR PRICE SHOP STATES F.C.I (GOVT AGENCY) DistributeGrains Allocate Grains Central Issue Price Grains MSP EXISTING SYSTEM PROPOSED SYSTEM
  5. 5. 1- Food products packagers, especially those food products that contains necessary nutrients for sustaining a good health e.g. wheat, rice, sugar, wheat flour etc., Should be given subsidy or asked to give (under a proper body) by relieving taxes. For example manufacturing taxes, service taxes etc. 2- A government body must be formed to manage and control these manufacturers. 3- Conduct tenders to give control to private companies. GOVERNMENT REFORMS MONEY FLOW GOVT. BODY MANUFACTURERS OR PACKAGERSFARMERS PRIVATE COMPANY REGISTERED SHOPS PEOPLE Relieve Taxes Start Up and yearly working capital Subsidy on product prices + Target benefits I.R.A(Monthly Recharge)
  6. 6. EAAY SCHEME + NGOs • EAAY OR EXTREME ANTYODAYA ANNA YOJANA SCHEME. • The Pri ate Co pa y i asso iatio ith a NGO ill o du t this progra e. • The Private Company must employ a group of people to provide a specific amount of grains to those who does not hold even an AAY card. • This amount of grain is that which is prescribed by government under AAY scheme. • These employed people must be given salary via Private Company . • Private Company must provide the list of families/peoples covered under EAAY scheme on their website. • The government could also employ the workers who work under NREGA or other government scheme which could help the government to cut the costs and invest more in the P.D.S. POPULATION UNDER EXTREME POVERTY PRIVATE COMPANY N.G.Os
  7. 7. RECORD KEEPINGS • Every BPL and AAY card holder must be given a unique account number (I.R.A) I N T E R A C I V E R A T I O N A C C O U N T . • Through such record keeping system we can record the information of the families who are part of such scheme and also hold a ration card. • The Pri ate Co pa y ust re harge e ery I.R.A. u er ith o ey per o th per fa ily* i.e. B.P.L= Rs.1469.50 A.A.Y=Rs.1661.50 (The calculation of this recharge is done on the chart explained on next page.) • Pri ate Co pa y ust use Fair Pri e “hops or the o pa y’s Regional Offices for reati g their area of ork for supplyi g the grain. It must include IT services to provide accessibility to the system. • This recharge is calculated on the basis of difference between market and fair price that government provide to the people. • At present the government tries to lowers the bar by providing subsidies to the ration card holder . • But what we are doing is that the subsidy must be directly provided to the people in form of their recharge and they can easily purchase only food items from it. Market Price of goods - Ration Card Rates = Subsidy by Govt = Recharge Of IRA * Estimation of 4 members per family Working Formula
  8. 8. QUANTITY FOR BPL MARKET PRICE IN Rs. GOVERNMENT PRICE IN Rs. DIFFERENCE REQUIRED AMOUNT Rs. 1469.50 WHEAT 15 4.5 10.5*35 368 RICE 22 6 16*35 560 SUGAR 38 13.5 24.5*3 73.50 KEROSENE 18 13 5*3 15 MUSTARD OIL 105 105 105*3 315 MOONG DAL 44 - 44*3 132 SALT 16 10 6*1 6 QUANTITY FOR APL MARKET PRICE IN Rs. GOVERNMENT PRICE IN Rs. DIFFERENCE REQUIRED AMOUNT Rs. 1661.50 WHEAT 15 2 13*35 455 RICE 22 3 19*35 665 SUGAR 38 13.5 24.5*35 73.5 KEROSENE 18 13 5*3 15 MUSTARD OIL 105 105 105*3 315 MOONG DAL 44 - 44*3 132
  9. 9. QUALITY CONTROLAND AVAILABILITY As people can buy anything they want and from and shop. So quality control and availability problem is resolved. The “Private company” must provide “Mobile bill” to maximum shopkeepers in their area . In “Mobile bill” the consumers had to enter the “I.R.A” number and “password” and the like mobile recharge ;but in the reverse process of it; the money will be deducted from users account. WHY WOULD SHOPKEEPERS SUPPORT? The “Private company” must give benefits on products that are enlisted in scheme and shopkeepers can get their profit from there. Also ,the “private company” may apply different scheme to attract shopkeepers. For example: Giving benefits on targeted competition i.e. providing profits on 100,200 (say) transactions etc. SUBSIDY CONTROL WHY WOULD PRIVATE COMPANIES INVOLVE? The government will help in their start up and must give a yearly working capital. The P.C can engage with the government panel of food products manufacturer to give them products on lower rates to create profit in exchange they would marketize their products to A.P.L card holders and cut the cost of packagers that they invest in marketing by providing them a vast market. PRIVATE COMPANY GOVT. PACKAGERS MONEY FLOW
  10. 10. 1. Why would Government allow this proposal? 1. Why would private companies involve in such tie up? 2. Why would shopkeepers be a part of such scheme? 3. Quality control . 1. The government would have to only relieve some figures of taxes from the manufacturing and packaging companies and provide a start up cost and the rest work would be done by the Private Company. 2. In our system we have given a good offer to Private Companies to start their business. 3. Shops are given benefits on products they purchase as well as target completion wages. 4. It would not be a problem as buyers can purchase any brand of their choice. Also the Go er e t ody ould keep he k of the quality of products distributed.
  11. 11. Appendix • Wikipedia BPL And AAY content reference articles • EPDS Portal reference • Planning Commission. (2005). Performance Evaluation of Targeted Public Distribution System (TPDS). Retrieved from http://planningcommission.nic.in/reports/peoreport/peo/peo_tpds.pdf

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