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  1. 1. INDIAN  INSTITUTE  OF  TECHNOLOGY  DELHI   Plugging  the  Leaks  -­‐  Improving  reach   and  efficiency  of  the    Public  DistribuIon  System  
  2. 2. “Only  10%  benefits  reach  the  targeted  poor,  what  about   the  ones  who  are  not  even  targeted  !!!  “   Source  :  Planning  commission  of  India,  PDS  survey  2005,  ADB  report   Hypothesis:   •  High subsidy due to inability to identify target population and high leakages, creating burden on govt.(61% do not reach the target group) •  Absence of quantifiable measures to identify target population (fallouts of Tendulkar poverty line). •  No universal way to identify the poor. (Problems of Ghost card, collusion etc.) •  Farmers are not given adequate incentives for cultivation evident from decreasing total production and farmer population (by 9 million from 2001),. •  Currently about 67% of calorific and 68% of protein needs are not met. (No subsidy on coarse grains).   Problem  Overview  at  each  level:  
  3. 3. “Preven@ng  leakages  could  be  assured  by  civil  society   mobiliza@on  and  technological  advancements”   •  Overview  of  the  solu@on  at  various  levels:   • Extension  of    MSP  to  coarse  grains  to  diversify  agriculture   • Establishment  of  Warehouse  Development  Center  socially  audited   • Coopera@ves  for  inclusion  of  small  and  marginal  farmers.   Farmers   • Performance  evalua@on    to  be  based  on  per  capita  improvement  of  income  levels  rather  than  target   based  approach  for  BPL  families   • Effec@ve  computeriza@on  (IISFM)  at  FCI  alloca@ons  centers.     • Procurement  of  food  grains  should  be  decentralized.   Central   Government   • Inclusion  of  gram  sabhas  and  village  panchayats  to  iden@fy  target  popula@on  based  on  assets  and   income  of  individuals   • Verifica@on  of  records  by  BDOs,  Zila  Parishads  to  reduce  inclusion  error   State   Government   • Subsidies  to  be  loaded  into  cards  to  prevent  ghost  iden@@es  and  collusion,  use  of  KCC,  KVK,VO  and  BC   model  for  technological  support   • Mul@-­‐stakeholder  approach  at  FPS  level.   • Appropriate  feedback/  Grievance  redressal  mechanisms.   PDS   For  middleman  leakages  at  various  levels,  bar  codes/RFID  during  packaging  of  the   grains  can  be  used.  PPPP  can  be  used  for  successful  implementa@on  of  technological   changes.  
  4. 4. Extension  of  MSP  to   coarse  grains   NFSB  fails  to  incorporate  pulses  and  oilseeds   into  the  PDS,  thus  depriving  the  poor  of  these   important  sources  of  nutri@on   According  to  2004-­‐05  NSS  report  on   nutri@onal  intake,  most  Indians  derive  about   67  percent  of  their  calorific  needs  and  68   percent  of  protein  requirements  from  cereals   Easing  of  financial  credit  for  farmers  who   invest  in  pulses  and  other  coarse  grain.   Extending  the  MSP  to    coarse  grains  will  help   in  feeding  the  rural  household  with  different   variety  of  grains  and  will  improve  the   efficiency  of  PDS   Encouraging  Coopera@ves  of   small  and  marginal  farmers   70%  of  these  farmers  are  members  of  PACS  at  the   na@onal  level  and  these  PACS    serve  as  the  outlets   for  public  distribu@on  system  of  food  (NASFSCOB   data),however  faces  problem  of  low  resource   base.   Coopera@ves  to  be  financially  strengthened  by   linking  it  with  the  exis@ng  SHG-­‐  bank  linkage   program.   Employing  the  exisi@ng  business  correspondent   model  for  banking  services  to  the  small  farmers.   Grassroot  level  ins@tute  to  facilitate   procurement  of  grains  from  these  coopera@ves.   (Would  encourage  the  forma@on  of   coopera@ves)   “Only  a  healthy  farmer  can  ensure  a  healthy  PDS”     NAFSCOB:  Na@onal  Federa@on  of  State  Coopera@ve  Banks  Limited   NFSB:  Na@onal  Food  Security  Bill   PACS:  Primary  Agricultural  Credit  Socie@es   NSS:  Na@onal  Sample  Survey  
  5. 5.     Reforms  for  Central  Government   DecentralizaIon  of  OperaIons     •  Procurement  by  states  from  the   nearest  region  (  decentralized   approach)  rather  than  FCI  procuring   the  grains.   •  The  cost  of  procurement  to  be  paid  by   center,  incen@ves  can  be  given  to  the   states  adop@ng  this  approach.   •  The  logis@cs  of  opera@on  to  be   decided  by  center(FCI).     EffecIve  ComputerizaIon   • GPS  and  human  monitoring:  easily  by-­‐passable   • An  effec@ve  computeriza@on  at  FCI  alloca@on  centers  is   required   • ICT  infrastructure  will  need  to  be  deployed  to  connect   all  the  key  offices  of    the  Food  Department  and  should   include  a    central  department  data  center  to  host  the   beneficiary  database.   Data  Centre   Food  department  offices   State  Government   State  Government   State  Government   Central  Government   Procurement                      FCI   State  Government   State  Government   State  Government   DistribuIon   State  Government   State  Government   State  Government   Central  Government  
  6. 6. ‘PDS’  RFID  cards  with  subsidy  related  informaIon     Profile  of  the  beneficiary,  amount  of  grain  lee  for  month  ,  pending  amount  for  previous  months,   equivalent  food  allowance   Leveraging  on  the  UID  database    to  issue  the  cards  to  beneficiaries  and  eliminate  ghost  iden@@es   Cards  recharged/dispatched/reissued  at  FPS   Computerized  account  of  all  transac@ons/grains  released  and  therefore  prevent  diversion  and   increase  accountability   Using  KCC’s  and  exis@ng  OBD  and  IVRS  systems  for  technical  assistance  to  card  holders   For  beneficiary  tracking,  deployment  of  a  PoS    that  is  equipped  with  a  fingerprint  reader  to   posi@vely  iden@fy  a  beneficiary  before  an  issue  needs  to  be  made.   FPS     RFID  card   Technical  Assistance   PoS  equipped  with  a  fingerprint  reader   Database   OBD  :OutBound  Dialers   IVRS  :  Int.  Voice  Response  System   KCC  :  Kissan  Call  Center  
  7. 7. Revitalizing  Procurement   and  Transfer  procedures   A  centralized  database    and  Use  of  RFID  /bar   codes  during  packaging  to  eliminate   middleman  leakages  and  increase   transparency.     applying  TSP  (Travelling  Salesman  Problem)   solu@on  for  minimum  distance  and  @me  by   procured  grains  to  reach  an  FPS  thus   increasing  savings  on  logis@cs  ,  freight  charges   Incen@vizing    decentralized  procurement   (including  coarse  grains)  ‘Grain  banks’  at   village  level  or  at  panchayat  level  to  increase   the  efficiency  and  amount  of  procurement   Geographical  diversifica@ons  of  procurement   opera@ons  Reach  out  to  farmers  of  every   geographical  area  enable  procurement  at  the   local  level   Mul@-­‐stakeholder  approach   at  FPS  level   Assessment    of  an  FPS  by  members  of  different   village  panchayats  concerned  and  give  bi-­‐annual   feedback  to  district  redressal  officer   Licensing  and  Management  of  FPS  by  women  or   their  collec@ves   Social  Audi@ng  by  independent  agencies  ,  SHG’s   and  coopera@ves.  Clusters  of  max  3  people   repor@ng  to  a  group  of  panchayats  and  pujng   the  informa@on  in  public  domain   The  district  grievance  redressal  officer  (NFSB)     can  devolute  to  panchayat  secretary  for   effec@ve  and  faster  func@oning  
  8. 8. IdenIfying  the  Beneficiaries  –  ‘Achilles  Heel’   •  Onus  of  crea@on  and  upda@on  lies  on  State  Govt.     •  Delete  ineligible  households  rather  than  adding  the  eligible  one   –  Low  exclusion  errors   •  The  criteria  for  selec@on  is  two  fold   –  Exclusion  criteria  –  Will  help  skimming  the  rich  people   –  Inclusion  Criteria  –  Will  help  targe@ng  the  socially  vulnerable  households   Exclusion  Criteria   • Based  on  the  ownership  of  basic   assets   • 1)  Ownership  of    any  of  ‘Baseline   Asset’   • Include  Car,  fridge,  Scooter  and   Ameni@es  (Electricity,  Piped  water,   toilet  all  three)   • 2)  Ownership  of  irrigated  land.   • A  state  will  decide  how  much  land   will  act  as  cut-­‐off  ex.  –  2  acre   • 1:3  conversion  for  irrigated  to   unirrigated  land   • 3)  Ownership  of  a  mul@-­‐room  pucca   house   • The  exclusion  only  if  a  household   found  posi@ve  in  two  of  three  criteria     Inclusion  Criteria   • SC/ST  household   • Landless  households   • Household  headed  by  single  women     • Agricultural  labor  households   • Inclusion  will  depend  on  sa@sfying  any   of  the  two  criteria.     • A  certain  household  will  be  included  if   it  sa@sfies  Inclusion  criteria  but  fails   the  Exclusion  criteria   • Can  be  used  to  target  the  AAY   schemes   Benefits     • Tangible  and  easy  criteria  of  addi@on  and  dele@on   • Easy    for  par@cipatory  verifica@on     • Less  arbitrariness  &  less  inclined  to  manipula@on.       • Easy  upda@on     The   rural   popula@on   can   easily   understand  the  exclusion  criteria   and  thus  can  ac@vely  take  part  in   the  planning  and  management.     Beneficiaries     Criteria    1  &  2   Criteria   1&3   UP   81   77   Bihar   85   84   RJ   69   72   MH   66   64   KL   18   33   TN   61   67   India   71   72   •  Nearly  in  affirma@on  with  the  67%  beneficiaries   cap  introduced  by  NFSB   •  A  common  villager  can  know  why  he  is/or  not  on   the  beneficiary  list   Percentage  of  popula@on   included  even  aeer  applica@on   exclusion  criteria    
  9. 9. PromoIng  PRA  (ParIcipatory  Rural  Appraisal)   •  Incorpora@ng  the  knowledge  and  opinions  of  local  public  in  the  planning  and   management   • Responsible  for  selec@on  of  the  criteria  and  fine  tuning  it.   • Responsible  for  sejng  up  a  state  level  and  regional  level  social  audit  body  with   the  collabora@on  of  local  NGOs   State   Office   • Responsible  for  upda@ng  the  beneficiary  list  every  year   • Responsible  for  promo@ng  PRA  (Par@cipatory  Rural  Appraisal)   District   Office   • Assuring  that  the  FPS  shop  should  open  on  a  specific  date  in  a  month.  The  date   can  be  different  for  different  GPs   • Will  help  to  reduce  the  last  mile  problem   • Responsible  for  making  the  FSP  owner  display  the  en@tlements  and  beneficiary  list   in  the  FSP     Taluka/ Block   office   • Compulsory  submission  of  the  report  about  the  PDS  with  at  list  50  signatories  to   the  Tehsil  Office,  else  the  next  installment  will  be  deferred   FSP  &   GPs  
  10. 10. AddiIonal  Costs   Involved   People   •  About 70% of the population covered •  Availability of nutritional cereals at subsidized prices •  Involvement of women at FPS Government   •  Reduction in logistics cost by decentralized procurement •  Lesser leakage and diversion at each step by use of technology Other  Benefits   •  Easy to understand and implement inclusion/ exclusion criteria •  Better Vigilance of PDS by social auditing “The  impact  of  PDS  can  reach  the  enDre  targeted   populaDon  at  an  expense  of  less  than  the  current  losses”   OrganizaIonal  Cost   •  Salaries of ICT centers at Regional Level •  Management of FPS •  Benefits to volunteers Technology  cost   •  ICT Infrastructure at Centre and at FPS •  RFID Cards and Bar Codes for packaging LogisIcs  Cost   •  Setting of Warehouse Development Centers Rs.20 crore per annum Rs.450 crore (1 time) Rs20 cr.(Operational ) Rs. 10 crore per annum (maintenance cost) Impact  And  Reach   Net  Addi@onal  Cost  :  Rs.  500  crore  (50  crore  per  annum)  
  11. 11. Exclusionary  criteria  should  be  more  focused  upon  than  inclusionary         criteria  for  universaliza@on       Concept  Risks:   §  A  universal  solu@on  will  not  find  the  consent   and  willful  par@cipa@on  of  all  states.   §  Census  data  has  not  been  collected  and   updated  on  regular  intervals  of  @me  for   applica@on  of  exclusionary  principles.(SECC   data  not  available).   §  The  various  private  stakeholders  may  not   incorporate  the  needs  of  the  local  and   emerge  as  mere  profit  making  organiza@ons.   Learning  by  doing  &  decentralized   approach  undertaken  in  a  phased   manner  could  be  very  effec@ve   A  proac@ve  consensus   building  approach  will  be   basic  guidelines  to   bidders  at  each  stage   Infrastructural  Problems:   §  Infrastructure  including  informa@on   technology  requires  large  funds  ini@ally   and  they  demand  con@nuous  repair.   §  Necessary  voluntary  par@cipa@on  and  lack   of  willingness  to  work  on  the  part  of   panchayat.   §  Exis@ng  government  infrastructure  may   not  extend  the  required  help.   Census  to  be  conducted  in  a   decentralized  manner  by   volunteer  and  bureaucra@c   par@cipa@on  with  central   database  management   -­‐Help  from  Na@onal  level   NGO’s  for  crea@ng  awareness   at  regional  level.   -­‐ICT  management  through  skill   development  at  village  level.   “Where  there  is  a  will,  there  is  a  way”   MiIgaIon   factors  
  12. 12. References   •  12th  plan  document  :  hqp://   •  Jus@ce  Wadhwa  commiqee  report  :   hqp:// %20Commiqee%20Report%20on%20PDS.pdf   •  Opinions  :   –   Biraj  Patnaik  (Principal  Advisors,  commissioner  to  Supreme  court)     hqp://­‐news-­‐updates/pds-­‐universalisa@on-­‐should-­‐be-­‐@me-­‐bound-­‐by-­‐biraj-­‐ patnaik-­‐2604.html   –  Ree@ka  Khera  (renowned  economist,  Prof.  IIT  DELHI)   hqp:// December_2011_revival_of_pds_evidence_explana@ons_ree@ka_5_november_2011.pdf   –  Kaustav  Banerjee,  Decentralized  Procurement  of  food  grains   hqp:// July_2012_decentralised_procurement_universalised_pds_kaustav_epw_24_december_2011.pdf   –  J.  Dreze,  R.  Khera  :the  BPL  census  and  a  possible  alterna@ve     hqp://   •  Performance  of  TPDS,  Planning  commission  of  India   –  hqp://   •  Na@onal  Food  Security  Bill,  Government  of  India   hqp://   •  ICT  infrastructure  and  service  for  rural  India  -­‐  Archana.G.Gula@   hqp:// Kurukshetra%20October%202012.pdf