1. INDIAN
INSTITUTE
OF
TECHNOLOGY
DELHI
Plugging
the
Leaks
-­‐
Improving
reach
and
efficiency
of
the
Public
DistribuIon
System

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. “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. 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.
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. ‘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. 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. 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. 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. 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. 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. References
• 12th
plan
document
:
hqp://12thplan.gov.in/
• Jus@ce
Wadhwa
commiqee
report
:
hqp://www.prsindia.org/uploads/media/Food%20Security/Jus@ce%20Wadhwa
%20Commiqee%20Report%20on%20PDS.pdf
• Opinions
:
–
Biraj
Patnaik
(Principal
Advisors,
commissioner
to
Supreme
court)
hqp://www.im4change.org/latest-­‐news-­‐updates/pds-­‐universalisa@on-­‐should-­‐be-­‐@me-­‐bound-­‐by-­‐biraj-­‐
patnaik-­‐2604.html
– Ree@ka
Khera
(renowned
economist,
Prof.
IIT
DELHI)
hqp://www.righqofoodindia.org/data/pds/
December_2011_revival_of_pds_evidence_explana@ons_ree@ka_5_november_2011.pdf
– Kaustav
Banerjee,
Decentralized
Procurement
of
food
grains
hqp://www.righqofoodindia.org/data/right_to_food_act_data/
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://www.epw.in/system/files/pdf/2010_45/09/The_BPL_Census_and_a_Possible_Alterna@ve.pdf
• Performance
of
TPDS,
Planning
commission
of
India
– hqp://planningcommission.nic.in/reports/peoreport/peo/peo_tpds.pdf
• Na@onal
Food
Security
Bill,
Government
of
India
hqp://www.thehindu.com/mul@media/archive/01404/Na@onal_Food_Secu_1404268a.pdf
• ICT
infrastructure
and
service
for
rural
India
-­‐
Archana.G.Gula@
hqp://yojana.gov.in/cms/(S(hdo5z43sdi3g5uu5pnomx3m1))/pdf/Kurukshetra/English/2012/
Kurukshetra%20October%202012.pdf