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LATEST NEWS UPDATES | Is universal PDS a good idea?

Is universal PDS a good idea?

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published Published on Jan 30, 2011   modified Modified on Jan 30, 2011

Thiruvoipati Nandakumar

How is better delivery expected by allocating more foodgrains, when the system is not equipped to handle even the current level of allocation?

The debate about the proposed national food security act seems to be centred on the magnitude of the allocation of food grains. But the issue is far beyond only foodgrains. It is about improving health, sanitation and nutrition standards so that India’s human development goals can be achieved.

Before enacting the Food Security Act, the government must ensure that the existing mechanisms for the implementation of the targeted public distribution system (TPDS), mid-day meal scheme, integrated child development scheme and other related social schemes are improved upon. The governments, both at the Centre and state, must ensure that deficiencies in the delivery of these schemes are addressed before enacting the Food Security Act. Even the current debate is mostly silent on these aspects.

Under the current system, are we delivering what we aim to? Are foodgrains reaching the deserved population? Most of the time, the off take of foodgrains by the states have been inefficient and far below allocation. How is better delivery expected by allocating more foodgrains, when the system is not equipped to handle even the current level of allocation?

There need of the hour is to empower the gram panchayats, district administrations and state governments so the existing TPDS is implemented efficiently. First, measures must be taken to curb leakages in foodgrains as the current level of pilferage at 40-50% is unacceptable and unsustainable. If the system doesn’t improve, what is the point of putting more foodgrains under the same inefficient system? Does the Act take into account these issues of malpractices in TPDS, where foodgrains allocated to poor families enter the market illegally?

Another grey area is whether higher procurement by the Food Corporation of India (FCI) for meeting the food security needs would lead to rise in prices of rice and wheat in the open market. If the National Advisory Council’s suggestion for higher procurement is implemented, in case of drought year or a year during which there are inefficient rains, will the government import to give subsidised foodgrains? Particularly in the regions such as Northeast, Jammu & Kashmir and Kerala, which are not self-sufficient, what would be the impact on sourcing foodgrains? These factors need to debated, discussed and studied before finalising the Act.

Besides, the Act’s impact on the overall agricultural production is another key issue that has not been given enough attention. With the majority of villagers receiving subsidised food grains, would farmers have enough incentive to produce more when they are aware that getting highly subsidised food grains is their right? It may have an adverse impact on the overall agricultural production.

There have been reports about shortage of workforces during sowing and harvesting seasons because of the MGNREGA. The Food Security Act, in its current form, may have similar adverse consequence on the agricultural sector. Pushing for a rights-based approach often obligates the state without looking at the adverse consequences on the market. The government is already grappling with rising inflation and any further increases in food prices of the Act would be bad for the overall economy. Thus, the need of the hour is to look at aspects to increase the overall human development index rather narrowing the debate on only foodgrain allocation.

—The author is former secretary, department of agriculture and cooperation, ministry of agriculture

(As told to Sandip Das)

Alok Sinha

Suppose the Act envisages an annual distribution of 60 mt of foodgrain. Even if 20% is misused through ghost ration cards, about 50 mt will reach the needy

India has seen rapid GDP growth in the last 5 to 10 years and the country seems to be shining, with the growth rate approaching 9%. The middle-class is smiling because, for them, the prices of the items they buy are not going up at the same rate as the essential commodities needed by the majority of the population.

Now, if we say that the middle-class constitutes about 25% of the population, then the rest coincides with the 77% that the Arjun Sengupta commission said exists on less than $1 a day. There is no doubt that as far as three-quarters of the population is concerned, we are malnourished. Therefore, the National Advisory Council did the right thing in declaring six to eight months back that there should be food security for everyone.

Since then, there has been intellectual quibbling on how many Indians are poor—whether it is 30% or 37% or 50%—and how many should be covered under the food security legislation. Second, there has been a great amount of intellectual quibbling on how much food is required through the public distribution system (PDS) to feed this large segment of the population.

Food Corporation of India (FCI) procures 55-60 million tonnes (mt) of foodgrains per year. If we have 60-70% of the population under the Food Security Act, as some members of the NAC want, then what we need is about 65 mt of foodgrains—which means a shortfall of 5-10 mt a year.

Now, looking at the fact that our tax collections are jumping by leaps and bounds, our GDP growth rate is approaching 9%, and foreign investment is also on the rise, there is no doubt that government treasuries have the money and strength to import 5-10 mt of foodgrains per year. Therefore, both in terms of the quantity of foodgrains and the money required, it is not a hopeless task; it can be done.

If we have a food security system, then it is of prime importance that we should have a good PDS. The PDS in many parts of the country is in shambles. It is in shambles because wherever the Panchayati Raj system hasn’t taken root, there is no way for cardholders to keep an eye on where the fair price shops (FPS) is, how much grain it is getting, does it have ghost ration cards and are the foodgrains received from the state food department via FCI being distributed fairly and ethically.

One way to ensure this would be to make the gram sabha fully accountable and responsible to see that the FPSs work well. If that happens, then, suppose the Food Security Act envisages an annual distribution of 60 mt of foodgrain and of that 20% is misused through ghost ration cards, even then about 50 mt will have been distributed to the needy and the country’s malnourishment levels would be reduced.

We should not shy away from food security, we should not keep tom-toming that subsidising is bad because we have had economic liberalisation since 1991. Because wheat and rice have been subsidised, procured by FCI and distributed through PDS, the price curve of wheat and rice has not been zig-zag as in the case of vegetables and fruits. It has had a steady rise in the same way that our wages have had a steady rise. Subsidised procurement and distribution of foodgrains would ultimately lead to a healthy economy for everyone concerned, not merely for the middle class.

—The author is former chairman and managing director, Food Corporation of India

(As told to Chanpreet Khurana)

The Indian Express, 28 January, 2011, http://www.indianexpress.com/news/is-universal-pds-a-good-idea/742837/


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