What do you understand by Public Distribution System? Examine the performance of targeted public distribution system in India. How far it has helped the deprived section of our economy

2. Question. What do you understand by Public Distribution
System? Examine the performance of targeted public
distribution system in India. How far it has helped the deprived
section of our economy?

3. ACRONYMS
• PDS Public Distribution System
• GOI Government of India
• TPDS Targeted Public Distribution System
• BPL Below Poverty Line
• APL Above Poverty Line
• CIP Central Issue Price
• FCI Food Corporation of India
• AAY Antyodaya Anna Yojana
• FPS Fair Price Shop
• IHDS Indian Human Development Surrey
• AC Air Conditioner
• NSS National Sample Survey

4. PUBLIC DISTRIBUTION SYSTEM IN INDIA
PDS is a rationing mechanism that entitles households to specified quantities of
selected commodities at subsidized prices. In most parts of the country, up to 1997, all
households, rural and urban, with a registered residential address were entitled to rations.
Eligible households were given a ration card. PDS was first started in 1939 during world
war 2ND
. The British government introduced it in Bombay. The PDS was made a universal
scheme in the 1970 because of the drought and food shortage of the mid-sixties to provided
cheap food and to alleviate poverty.
There have been four phases:-
1} First phase from origin to 1960,
2} Second phase from 1960 to 1978,
3} Third phase from 1978 to 1991,
4} Forth phase from 1991 to the present,
Over the entire period, the PDS was grew from a rationing scheme to a
national universal programme of food distribution and then to a policy target at the
poor.

5. TARGETED PUBLIC DISTRIBUTION SYSTEM
The GOI adopted the TPDS from June 1, 1997 to target the better to
the really needy people. The policy initiated targeting of household to
demarcate 'poor' and 'non-poor' household.
Some features of TPDS as adopted by the GOI are as follows:-
1} TARGETING - The introduction of targeting by dividing the entire population
into BPL and APL categories, based on the poverty line defined by Planning
Commission.
2} MULTIPLE PRICES - The PDS now has dual CIPs, that is prices at which the
FCI sells grains for the PDS to State Government, for BPL consumer and for
APL consumer. A third price is introduced in 2001, is for beneficiaries of the
AAY.
3} CENTRE - STATE CONTROL - The TPDS has changed centre state
responsibilities. The Central Government is responsible for procurement,
allocation and transportation of the food grains to the state godowns. The state
government have responsibilities for identification of the eligible beneficiaries,
issuing ration cards to them, supervision and monitoring of the FPSs, etc.

6. EVALUATION
There is the possibility of two types of targeting errors. Targeting errors
arise either when the poor do not get the benefits of the scheme, and/or the non-poor
are seen to benefit from the scheme. These errors are:- inclusion errors and
exclusion errors. Inclusion errors mean coverage of non-poor households and
exclusion errors mean no coverage of poor households.
Fig. 1. Inclusion and exclusion errors: 2004-05 and 2011-12 (in percent )
The IHDS I and II surveys suggest that inclusion errors increased from
28.8% in 2004-05 to 36.9% in 2011-12. Simultaneously, the exclusions errors declined
from 54.9% to 41.4%.

7. The IHDS data indicate that poverty rate in India fell from 38.4% in 2004-05 to
21.3% in 2011-12 using Tendulkar Committee poverty line based on consumption data.
However, the number of households having an AAY/BPL card increased by 15.2%.
Fig. 2. Poverty transition between IHDS-I and IHDS-II
Income growth between 2004-05 and 2011-12 has affected AAY/BPL
households. In 2011-12, the AAY/BPL households owned just around of 10% of the
assets of high values like washing machine, AC, computer, refrigerator, etc. These
10% represents an improvement in living standards.

8. CONCLUSION
The 10% which is an indicator of the improvement may be due to 36.9% of
inclusion errors. This 10% improvement in living standards of AAY/BPL households
and 15.2% increase in AAY/BPL households can't describe that how far TPDS was
helpful for the deprived section of our economy. But decline in exclusion errors
clearly shows that it is reaching to the deprived section. However, it increases
government expenditure as inclusion errors lead to subsidies being wastefully spent.
Using the NSS 2004-05, survey, Jha found that the PDS being a targeted programme in
India. Only one third of total subsidy went to the poor that means remaining went to
the non-poor which was the wastage of subsides.

9. REFERENCES
1} Government of India (Dec, 2016). Evaluational Study on Role Public of
Distribution System in Shaping Household and Nutritional Security India. NITI
Aayog Development Monitoring and Evaluation Office, New Delhi -110001.
From,
http://niti.gov.in/writereaddata/files/document_publication/Final%20PDS%20R
eport-new.pdf
2} http://www.gktoday.in|gk|target-public-Distribution-System/