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  1. 1. Public Distribution System (PDS) By- Shreet Mishra
  2. 2. Public Distribution System (PDS)
  3. 3. Areas covered • Evolution of Present • Procurement • Distribution • Scenario of public distribution system – A detailed study • Evaluation of Public Distribution System • Suggestions / Possible solutions
  4. 4. Evolution of PDS in India • Rationing was first introduced in Bombay in 1939 by British Govt. so as to ensure equitable food grain to urban consumer in face of rice prices. • The concept (PDS) was brought up in the year 1942 during second world war due to shortage of food grains. • Basic objective was price stabilization. • Food grain policy committee (1943) introduced rationing system exclusively for urban consumers
  5. 5. Evolution of PDS in India • Till late 1960s, govt. focus was on cheap procurement of food. • ◦ • Imposition of levies, regulation on interstate movement (surplus to deficit), restriction on exports etc. • Food Corporation Of India(FCI) was established in 1965 as an autonomous body working on purchase, storage, transportation, distribution and sale of food grains. • In 1970s, focus shifted to support to farm-gate prices, stabilization and subsidy for lower income group. • After undergoing several changes under five year plans, PDS role became crucial when the entire population of country was brought under it in the seventh five year plan. • In 1984, GoI created department of food and department of civil supplies, later being in-charge of PDS headed by minister of food and civil supplies
  6. 6. Evolution of PDS in India • By 1984, there were 320 thousand fair price shops all over India. wheat, rice, sugar, kerosene, edible oil and soft coke were supplied as essential commodities. • Distribution of these commodities was made possible by multifaceted coordination of different government agencies such as FCI for food grains, FCI / Civil Supplies corporation for sugar, edible oil by State trading corporation and soft coke by Coal India Limited. • However, studies show that major weakness is in operational inadequacy in irregular supply to FPS and poor quality leading ton on drawl. • PDS, till 1992, was a general entitlement scheme for all consumers without any specific targets.
  7. 7. Evolution of PDS in India • Essential supply programme gave way to • Revamped public distribution system (RPDS) • in1992, under which 1775 blocks were identified as economically and socially backward. • It was launched so as to improve reach of PDS to far- flung, hilly, remote and inaccessible areas where substantial section of poor live. • The scheme involved development of infrastructure such as additional fair price shops & storage capacity and facility of door delivery for FPS. • Despite several efforts, PDS was widely criticized for its failure to serve population BPL, its urban bias, negligible coverage in states with highest concentration of poor people, lack of transport and accountable arrangements for delivery.
  8. 8. Procurement • Food grains are procured at minimum support price (MSP),by the govt. • Decentralized procurement scheme. • Central government meet the entire expenditure incurred in the process by the state government as per the approved costing. • Total • procurement of rice • including paddy during kharif marketing season (KMS) in 2008-09 was 336.85 lakh tonnes.Andhra Pradesh, Chattisgarh, Orissa, Punjab and Uttar Pradesh together contribute about 80% to this.
  9. 9. Procurement • A total of 226.89 lakh tonnes of wheat • Wheat was procured in therabi marketing season (RMS) during 2008-09. Haryana, M.P., Punjab and U.P. together contribute about 90% to this. • Figures show that more than 80% of total wheat and rice procurement is done by state agencies (SWC, CSC, STC etc.). • The average buffer stock of food grains with FCI was 10.66mT in 2006-07 and utilization of storage capacity was only54% as on March 2007. • The carrying cost of buffer stock per quintal was Rs. 407 /- , the procurement cost for wheat and rice ranges between Rs. 180 –200 /- and the distribution cost is about Rs. 280 /per quintal of food grain.
  10. 10. Distribution • Food grains as per allocation to state government are further distributed to district and block level. From there food grains are delivered to fair price shops as per their demands. • There are around 5 lakhs FPSs across India. Food grains are either door delivered to or are procured by, FPS and are finally sold to targeted end consumers at subsidized prices as per entitlements. • For people under APL, common grade rice is sold at a central issue price of Rs. 790 /- per quintal whereas grade A rice is sold at Rs.895 /- per quintal and wheat is sold at Rs. 610 /- per quintal. • For people under BPL category, both common grade and grade A rice is sold at a central issue price of Rs. 565 /- per quintal and wheat is sold at Rs. 415 /- per quintal.
  11. 11. Distribution • In addition to distribution of food grain to population under BPL and APL, allocation is made to population identified undervarious schemes such as: • Antyodaya Ann YoJna • Mid day meal scheme • Annapurna Scheme • Wheat based nutrition programme • Food grains to adolescent girls and lactating mothers nutrition programme • SC/ST/OBC Hostels& welfare institutions
  12. 12. EVALUATION OF PDS • According to an independent study carried out by the Program Evaluation Organization (PEO) of Planning Commission, it is found that about 58 per cent of the subsidized food grains issued from the Central Pool do not reach the BPL families. According to this study, for one rupee worth of income transfer to the poor, the GoI spends Rs.3.65, indicating that one rupee of budgetary consumer subsidy is worth only 27 paisa to the poor. This study also reveals that over36% of the budgetary subsidies on food are siphoned off the supply chain. The Government spends around Rs. 30,000 crore per annum for subsidy. That means Rs. 10,800 crore ends up in wrong hands. According to this study, leakages and diversions raised the delivery cost in the sense that for every kilogram of food grains delivered to the poor, the GOI had to issue 2.4 kg. of subsidized grains from the Central Pool. In other words, the amount of implicit subsidy per kilogram of food grains delivered to the poor is more than the difference between the Economic Cost and Central Issue Price.
  13. 13. States Running PDS Better • Andhra Pradesh Tamil Nadu are two states who have taken initiatives to make PDS e-governed. • Andhra Pradesh • now has electronic based solution to TPDS wherein movement of food grains from FCI godown still FPS, sale of food grains at FPSs (through bar- codedration cards) and payment to dealers at different levels are monitored online. • The information on lifting, receipt and issue of food grain sat different levels is transferred to concerned people and to central hub using hand-held device using SMS
  14. 14. States Running PDS Better • Tamil Nadu and Karnataka also have vehicle tracking system wherein the details such as vehicle details, quantity, destination, date of delivery etc. can be tracked online. • Though Himachal Pradesh is not having any electronic PDS monitoring system, the leakage, diversion and targeting errors are among the lowest across the country
  15. 15. Shortcoming of PDS • Non availability of food grains at FPSs. • Poor quality of food grains • Irregular opening of FPSs. • Lack of training of FPS dealers. • Lack of information.
  16. 16. Suggestions • Food consumption pattern should be given due weightage while deciding composition of food grains . • Sale of food grains to beneficiaries via biometric system.(transaction done on acceptance by beneficiaries). • Ensure sufficient income at all levels in the system. • Training on duties and obligations to all the people in the system. • Easy to access complaint redresser system.