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$adminprix = 'admin' $rn = object(App\Model\Entity\Article) { 'id' => (int) 14, 'title' => 'PDS/ Ration/ Food Security', 'subheading' => 'NSS Report-Household Consumption of Various Goods and Services in India (released in 2014)', 'description' => '<p style="text-align:justify">KEY TRENDS</p> <p style="text-align:justify"> </p> <p style="text-align:justify">• During 2014-15, while procurement of foodgrains (rice and wheat) increased from 56.9 million tonnes to 60.2 million tonnes, offtake of foodgrains (rice and wheat) from the PDS decreased from 59.8 million tonnes to 55.9 million tonnes. Despite increased availability in the PDS and prevalence of high inflation in foodgrains, dependence on the PDS is reducing, suggesting that there may be issues of availability, timely availability and quality of the PDS foodgrains <strong>$*</strong><br /> </p> <p style="text-align:justify">• The PDS share in rice consumption in 2011-12 was about 27.9 percent in the rural sector and about 19.6 percent in the urban sector. The proportion of households reporting PDS purchase of rice during a 30-day period was 46 percent in the rural sector and about 23 percent in the urban sector <strong>**</strong><br /> <br /> • The share of PDS in wheat/atta consumption was about 17.3 percent in the rural sector and about 10.1 percent in the urban. The proportion of households reporting PDS purchase of wheat/atta during a 30-day period was about 34 percent in the rural sector and 19 percent in the urban sector <strong>**</strong> </p> <p style="text-align:justify"> </p> <p style="text-align:justify">• The per capita consumption of PDS rice has doubled in rural India and risen by 66% in urban India since 2004-05, implying that the share of PDS purchases in rice consumption has risen substantially. The share of PDS purchase in wheat consumption has increased considerably, per capita consumption of PDS wheat having more than doubled since 2004-05 in both sectors <strong>$</strong></p> <p style="text-align:justify"> </p> <p style="text-align:justify">• FCI owned storage capacity remained more or less constant ranging between 151 lakh metric tonne (LMT) and 156 LMT during the period 2006-07 to 2011-12. The foodgrains stock in the Central Pool steadily increased to 824 LMT on 1 June 2012. As a result, hiring of storage space by FCI increased from 100 LMT to 180 LMT during the period significantly adding to hiring charges from Rs. 322 crore in 2006-07 to Rs. 1119 crore in 2011-12. Further, due to constraints in available storage capacity, FCI could not take over stock of wheat procured by State Governments Agencies for the Central Pool within the prescribed time frame of June each year. This led to increase in payment of carry over charges to State Government Agencies from Rs. 175 crore in 2006-07 to Rs. 1635 crore in 2011-12 for holding of foodgrains beyond the prescribed time <strong>α</strong><br /> <br /> • The storage gap in FCI against the Central Pool stock witnessed a steady increase during the period 2006-07 to 2011-12. Against the storage gap of 332 LMT (March 2012), GoI/ FCI envisaged capacity addition of only 163 LMT during the 6 year period under various augmentation programmes. Out of this, only 34 LMT was completed (March 2012) <strong>α</strong><br /> <br /> • There has been a revival of the Public Distribution System in several states. The contribution of PDS purchases to total consumption in 2009-10 shows a considerable rise compared to 2004-05, particularly for rice and wheat/atta <strong>€</strong><br /> <br /> • The share of PDS purchase in rice consumption in 2009-10 was about 23.5% in the rural sector (1.41 kg out of 6.00 kg per person) and about 18% in the urban (0.81 kg out of 4.52 kg per person). In 2004-05, the PDS share in rice consumption had been about 13% in the rural sector and 11% in the urban <strong>€</strong><br /> <br /> • The share of PDS in wheat/atta consumption in 2009-10 was about 14.6% (0.62 kg out of 4.25 kg per person) in the rural sector, double what it was in 2004-05 (7.3%), and about 9% in the urban sector, compared to only 3.8% in 2004-05 <strong>€</strong><br /> <br /> • The Chhattisgarh Food Security Act was passed on 21 December 2012 to ensure “access to adequate quantity of food and other requirements of good nutrition to the people of the state, at affordable prices, at all times to live a life of dignity”.<br /> <br /> • Under the Consumer Protection Act, 1986 and Delhi Citizens' Charter 2011, consumers are empowered to file complaints in case of unfair trade practice of the PDS dealer/ trader, defect in goods, deficiency in services, sale of unsafe goods and overcharging in excess of that stamped on the product.<br /> <br /> • The Delhi Citizens' Charter 2011 makes it mandatory for the fair price shops to proactively display the following information: 1. License No./ Name of PDS outlets; 2. Stock as on date; 3. Weekly off; 4. Rates of Commodities; 5. Sample of Sugar, Wheat and Rice; 6. Timing of PDS outlets Fair Price Shop/KOD i.e. 9:00 am to 1:00 pm and 3:00 pm to 7 pm; 7. Complain Register is available. <br /> <br /> • The PDS operates through a large distribution network of around 4.89 lakh fair price shops (FPS), and is supplemental in nature <strong>**</strong><br /> <br /> • Access to ration card by the land poorest section in the rural areas is minimal. 51% of households in the lowest size class of landholding “<0.01 hectares” had no ration card at all <strong>*</strong><br /> <br /> • 81% of rural households and 67% of urban households held ration cards <strong>*</strong><br /> <br /> • Antyodaya cardholders formed less than 3% of rural households and less than 1% of urban households <strong>*</strong><br /> <br /> • In rural areas, the percentage of households having Antyodaya cards was 5% for Scheduled Tribes (ST), about 4.5% for Scheduled Castes (SC), and 2% for the other groups <strong>*</strong></p> <p style="text-align:justify"> </p> <p style="text-align:justify">$* Economic Survey 2015-16, Ministry of Finance, <a href="http://indiabudget.nic.in/es2015-16/echapter-vol1.pdf">Volume 1</a> and <a href="http://indiabudget.nic.in/es2015-16/echapter-vol2.pdf">Volume 2</a> </p> <p style="text-align:justify"> </p> <p style="text-align:justify">** NSS 68th Round report entitled: Public Distribution System and Other Sources of Household Consumption, 2011-12 (released in June 2015), please <a href="http://mospi.nic.in/Mospi_New/upload/report_565_26june2015.pdf">click here</a> to access </p> <p style="text-align:justify"> </p> <p style="text-align:justify">$ NSS Report entitled Household Consumption of Various Goods and Services in India 2011-12 (NSS 68th Round, July 2011-June 2012), released in June 2014 (please <a href="http://mospi.nic.in/Mospi_New/upload/Report_no558_rou68_30june14.pdf">click here</a> to download)</p> <p style="text-align:justify"> </p> <p style="text-align:justify">α Report of the Comptroller and Auditor General of India on Performance Audit of Storage Management and Movement of Food Grains in Food Corporation of India, Report no.-7 of 2013-Union Government (Ministry of Consumer Affairs, Food and Public Distribution),<br /> <a href="http://saiindia.gov.in/english/home/Our_Products/Audit_Report/Government_Wise/union_audit/recent_reports/union_performance/2013/Civil/Report_7/Report_7.html">http://saiindia.gov.in/english/home/Our_Products/Audit_Report/Government_Wise/union_audit/recent_reports/union_performance/2013/Civil/Report_7/Report_7.html</a><br /> </p> <p style="text-align:justify">€ NSS 66th Round Report titled: Public Distribution System and Other Sources of Household Consumption (July 2009-June 2010), <a href="http://mospi.nic.in/Mospi_New/upload/nss_report_545.pdf">http://mospi.nic.in/Mospi_New/upload/nss_report_545.pdf</a></p> <p style="text-align:justify"> </p> <p style="text-align:justify"><span style="font-family:arial,helvetica,sans-serif; font-size:small">* Public Distribution System (PDS) and Other Sources of Household Consumption, 2004-05, NSS 61st Round, (July 2004 - June 2005), Volume I</span></p> <p style="text-align:justify"> </p> <p style="text-align:justify"><span style="font-family:arial,helvetica,sans-serif; font-size:medium">Since the nineteenth Century, the British Raj had vast experience of facing droughts and famines, and very often helplessly. The British Famine Commission had estimated in the 1880s that “…in times of very great scarcity, prices of food grain rise to three times their ordinary amount” (B G Kumar, 1988). It is in this backdrop that the achievement of India’s imperfect Public Distribution System (PDS) become significant. According to the author, it was due to the PDS that the prices of food grain never rose beyond 10 per cent in the worst years of drought, scarcity and failed crops since independence. Compared to 1,50,000 deaths in the 1942 drought (Samra J S 2004), even the most uncharitable estimates of deaths in the 2002 drought, one of the worst in over four decades, were below 100. </span></p> <p style="text-align:justify"><span style="font-family:arial,helvetica,sans-serif; font-size:medium">It is well known that a large portion of food grain meant for the PDS is pilfered and sold in the black market, and that this sort of corruption is on the rise. However, what is equally true but not so well known is that in some of free India’s worst years of droughts and food scarcity the self sufficiency in food, adequate storage facilities and the PDS brought the country back from the brink. The PDS played three important functions, particularly during droughts and crop failures: a) distribution of food far and wide through fair-price outlets popularly known as the ‘ration’ shops, b) income generation through labour intensive food for work programmes, and c) price stabilization by augmenting availability in the market. </span></p> <p style="text-align:justify"><span style="font-family:arial,helvetica,sans-serif; font-size:medium">The big achievement of the PDS hence was to stop prices from spiraling to something like three times their normal price as was prevalent during the British Raj. It also played a role in controlling hoarding and black marketing. Within India the best example of public distribution having an impact on the state’s overall wellbeing comes from Kerala. Unlike most of India where the PDS is confined to the urban areas, in Kerala it penetrated the rural areas very well and emerged as an important instrument of public policy against hunger and deprivation. In terms of resources and prosperity Kerala is behind many other states like Punjab and Haryana but is ahead of most in terms of literacy, health services and many social indicators like the life expectancy.<br /> </span></p> <p style="text-align:justify"><span style="font-family:arial,helvetica,sans-serif; font-size:medium">**page**</span></p> <p style="text-align:justify">Please <a href="https://im4change.org/upload/files/Take-home-ration-report-30_06_2022.pdf">click here</a> to access the document titled [inside]Take Home Ration: Good Practices across the States/UTs (published in 2022)[/inside], which has been prepared jointly by NITI Aayog and UN World Food Programme.</p> <p style="text-align:justify">NITI Aayog and the UN World Food Programme have collaborated in bringing out good practices related to Take Home Rations (THR) prevalence across the States/UTs. There has been a lot of innovation in the field of THR in terms of production, distribution, quality control, monitoring, and use of technology. Such good practices is expected to help other States/UTs to further strengthen the effectiveness of their THR programmes.</p> <p style="text-align:justify">Within the food-based safety nets, the Integrated Child Development Services (ICDS) scheme seamlessly juxtaposes the ‘first 1000 days’ window of opportunity whilst aiming to address malnutrition among young children and pregnant/ lactating women through a host of services including provision of take-home rations (THR), nutrition health education, etc. Quality assured, safe and nutritious take-home rations delivered to the ICDS participants with appropriate messages on nutrition have the potential to prevent malnutrition in the communities.</p> <p style="text-align:justify"><strong>---</strong></p> <p style="text-align:justify">The first edition of ‘State Ranking Index for NFSA’ (please <a href="/upload/files/NFSA%20index%201st%20edition.pdf">click here</a> to access) was released on July 5, 2022 during the conference of Food Ministers of States/UTs on ‘Food Nutrition and Security in India’, which was organised by the Department of Food and Public Distribution. </p> <p style="text-align:justify">The [inside]State Ranking Index for NFSA - 1st edition (released on July 5, 2022)[/inside] attempts to document the status and progress of implementation of National Food Security Act and various reform initiatives across the country, post consultation with states. It highlights the reforms undertaken by states and UTs and create a cross-learning environment and scale-up reform measures by all states and Union Territories (UTs). The present 'State Ranking Index for NFSA' is largely focused on NFSA Distribution and will include procurement, PMGKAY Distribution in future. The Index for ranking the states and UTs is built on three key pillars which covers the end-to-end implementation of NFSA through TPDS. These pillars are: i) NFSA — Coverage, targeting and provisions of the Act; ii) Delivery platform; and iii) Nutrition initiatives.</p> <p style="text-align:justify">The main findings of the State Ranking Index for NFSA - 1st edition are as follows: </p> <p style="text-align:justify">• The top five states/ UTs in terms of index score and ranking (i.e., Comprehensive country level Index) are: Odisha (Score: 0.836; Rank: 1), Uttar Pradesh (Score: 0.797; Rank: 2), Andhra Pradesh (Score: 0.794; Rank: 3), Gujarat (Score: 0.790; Rank: 4), and Tripura (Score: 0.788; Rank: 5).</p> <p style="text-align:justify">• The bottom five states/ UTs in terms of index score and ranking (i.e., Comprehensive country level Index) are: Ladakh (Score: 0.412; Rank: 34), Meghalaya (Score: 0.512; Rank: 33), Manipur (Score: 0.522; Rank: 32), Andaman and Nicobar Islands (Score: 0.562; Rank: 31), and Jammu and Kashmir (Score: 0.564; Rank: 30).</p> <p style="text-align:justify">• The top five states/ UTs (belonging to special categories -- North Eastern states, Himalayan states, and the Island Regions) in terms of index score and ranking (based on complexity in providing services owing to geographical constraints) are: Tripura (Score: 0.788; Rank: 1); Himachal Pradesh (Score: 0.758; Rank: 2), Sikkim (Score: 0.710; Rank: 3), Nagaland (Score: 0.648; Rank: 4), and Uttarakhand (Score: 0.637, Rank: 5). </p> <p style="text-align:justify">• The bottom five states/ UTs (belonging to special categories -- North Eastern states, Himalayan states, and the Island Regions) in terms of index score and ranking (based on complexity in providing services owing to geographical constraints) are: Ladakh (Score: 0.412; Rank: 14), Meghalaya (Score: 0.512; Rank: 13), Manipur (Score: 0.522; Rank: 12), Andaman and Nicobar Islands (Score: 0.562; and Rank: 11), and Jammu & Kashmir (Score: 0.564; Rank: 10). </p> <p style="text-align:justify">• Among the 3 UTs where Direct Benefit Transfer (DBT)- Cash is operational, Dadra and Nagar Haveli & Daman and Diu is the top ranked UT.</p> <p style="text-align:justify">**page**</p> <p style="text-align:justify">The key findings of the report titled [inside]Fulfilling the promise of One Nation One Ration Card: A frontline perspective from 5 Indian states (released in April, 2022)[/inside], which has been prepared by Dalberg and Omidyar Network India, are as follows (please <a href="https://im4change.org/upload/files/Dalberg%20Report-Fulfilling-the-promise-of-One-Nation-One-Ration-Card-A-frontline-perspective-from-5-Indian-states.pdf">click here</a> to access):</p> <p style="text-align:justify">• The <a href="https://im4change.org/upload/files/Dalberg%20Report-Fulfilling-the-promise-of-One-Nation-One-Ration-Card-A-frontline-perspective-from-5-Indian-states.pdf">study</a> brings to light both demand and supply-side perspectives on the ONORC. The <a href="https://im4change.org/upload/files/Dalberg%20Report-Fulfilling-the-promise-of-One-Nation-One-Ration-Card-A-frontline-perspective-from-5-Indian-states.pdf">study</a> has been done by Dalberg in partnership with Kantar, and with support from Omidyar Network India. A mixed-methods, data-driven approach was used for the study.</p> <p style="text-align:justify">• Two key prerequisites for rolling out ONORC were largely fulfilled in the five study states (i.e., Andhra Pradesh, Karnataka, Rajasthan, Uttar Pradesh, and Jharkhand): more than 98 percent of beneficiaries’ ration cards in each of the Dalberg study states was seeded with Aadhaar (for biometric authentication), and 95 percent of Fair Price Shops had an electronic point of sale machine (ePoS) for authenticating and recording transactions.</p> <p style="text-align:justify">• A survey of 6,750 PDS beneficiaries was conducted along with a survey of 1,540 PDS dealers. The survey was conducted telephonically with all beneficiaries except women who were widowed, divorced or separated; for them, the researchers conducted the survey in person because they believed that such vulnerable beneficiaries would be difficult to reach or may be uncomfortable responding by phone. Interviews with PDS dealers were also conducted in person. Stakeholder interviews with government officials and researchers were also undertaken. </p> <p style="text-align:justify">• Both users and non-users of portability, including migrants and vulnerable populations, were interviewed. The sample included 25 percent migrants (N = 1703) who the Dalberg team expected to be the most impacted by the ONORC. In addition, the sample included 6 percent marginalized women (N = 377) who were widowed, divorced, or separated to understand if they faced any specific challenges. </p> <p style="text-align:justify"><strong><em>Ration card holders' experience in the five study states</em></strong> </p> <p style="text-align:justify">• Around 12 percent of households with a ration card tried to use PDS portability recently; 20 percent of migrant households with a ration card tried to use PDS portability recently.</p> <p style="text-align:justify">• Roughly 6 percent of all ration card holders who had not used PDS portability would like to do so in the future; at least one-fifth of them had not used it, because they were unaware of ration portability.</p> <p style="text-align:justify">• Nearly 12 percent of households that tried availing rations using portability experienced a transaction failure compared to 9 percent of households overall who experienced failures (for portability and non-portability transactions combined) when trying to collect their rations. </p> <p style="text-align:justify">• About 4 percent of households that tried to access rations under portability could not do so, as compared to 1 percent of households using PDS overall.</p> <p style="text-align:justify"><strong><em>Experience of PDS dealers</em></strong></p> <p style="text-align:justify">• About 97 percent of PDS dealers knew that ration portability was possible; nearly 73 percent knew that inter-state ration portability was allowed. </p> <p style="text-align:justify">• Nearly 66 percent of PDS dealers reported receiving ration card holders not registered to their FPS; approximately 28 percent of these PDS dealers were unable to serve at least some portability customers, primarily due to technology failures or because they feared running out of stocks. </p> <p style="text-align:justify">• Around 10 percent of PDS dealers ran out of stock at least once in the three months preceding the survey, often due to demand fluctuation under portability.</p> <p style="text-align:justify">• About 32 percent of PDS dealers felt that portability would make their business model unviable, at least some of the time.<br /> <br /> • Nearly 52 percent of PDS dealers did not use exception handling methods when ePoS-based transactions failed due to biometric authentication or connectivity failure</p> <p style="text-align:justify"><strong><em>About the ONORC</em></strong></p> <p style="text-align:justify">• The “One Nation One Ration Card (ONORC)” scheme is a one-of-its-kind citizen-centric initiative in the country, swiftly implemented in 34 states/ UTs in a short-span of time (as of August 2021), after being <a href="https://pib.gov.in/factsheetdetails.aspx?id=148563">sanctioned in 2018-19</a> and <a href="https://pib.gov.in/factsheetdetails.aspx?id=148563">implemented from August 2019</a>.</p> <p style="text-align:justify">• In a <a href="https://pib.gov.in/newsite/PrintRelease.aspx?relid=200525">written reply by the Minister for Consumer Affairs</a>, Food and Public Distribution, Shri Ramvilas Paswan, in Rajya Sabha on March 20, 2020, it <a href="https://pib.gov.in/newsite/PrintRelease.aspx?relid=200525">was said that</a> under the PDS reforms, a scheme on "Integrated Management of Public Distribution System (IM-PDS)" is being implemented w.e.f. April 2018 in all states/ UTs. The minister had stated that the main objective of the scheme is to introduce nationwide portability of ration card holders under NFSA (2013), through 'One Nation One Ration Card' system. This system enables the migratory ration card holders to lift their entitled food grains from any Fair Price Shop (FPS) of their choice in the country by using their existing/ same ration card issued in their home states/ UTs after biometric authentication on electronic Point of Sale (ePoS) devices installed at the Fair Price Shops.</p> <p style="text-align:justify">**page**</p> <p style="text-align:justify">Please <a href="/upload/files/Aatma%20Nirbhar%20Bharat%20presentation%20Part-2%2014-5-2020.pdf">click here</a> to access the [inside]Details of Second Tranche announced by Union Finance & Corporate Affairs Minister Smt. Nirmala Sitharaman (dated 14th May, 2020) under Aatmanirbhar Bharat Abhiyaan[/inside] to support Indian economy in fight against COVID-19, Ministry of Finance, Press Information Bureau.</p> <p style="text-align:justify">Please <a href="https://im4change.org/upload/files/Garib%20Kalyan%20Yojana%2026%20March%202020.pdf">click here</a> to access the [inside]Details of the Relief Package of Rs 1.70 Lakh Crore under Pradhan Mantri Garib Kalyan Yojana (dated 26th March, 2020)[/inside] for the poor to help them fight the battle against Coronavirus, Ministry of Finance, Press Information Bureau Delhi.</p> <p style="text-align:justify"><span style="font-family:arial,helvetica,sans-serif; font-size:medium">---</span></p> <p style="text-align:justify"><br /> As per the [inside]Economic Survey 2015-16[/inside], Ministry of Finance, <a href="http://indiabudget.nic.in/es2015-16/echapter-vol1.pdf">Volume 1</a> and <a href="http://indiabudget.nic.in/es2015-16/echapter-vol2.pdf">Volume 2</a> :<br /> <br /> • During 2014-15, while procurement of foodgrains (rice and wheat) increased from 56.9 million tonnes to 60.2 million tonnes, offtake of foodgrains (rice and wheat) from the PDS decreased from 59.8 million tonnes to 55.9 million tonnes. Despite increased availability in the PDS and prevalence of high inflation in foodgrains, dependence on the PDS is reducing, suggesting that there may be issues of availability, timely availability and quality of the PDS foodgrains.<br /> <br /> • Food subsidy in India has increased by more than 4 times from Rs. 23,071 crore in 2005-06 to Rs. 1,05,509.41 crore in 2015-16. PDS costs are high and increasing with leakages, high administrative costs, corruption and mismanagement. The costs including opportunity costs of resources diverted for subsidy are high in terms of the public investments in agriculture which are foregone and which can improve productivity.<br /> <br /> • The economic cost of foodgrains to the Food Corporation of India (FCI) comprises pooled cost of grain, procurement incidentals and distribution cost.<br /> <br /> • The pooled cost of grain (MSP and bonus) accounts for two-thirds of the economic cost of wheat and rice.<br /> <br /> • The procurement incidentals (i.e costs related to mandi charges and taxes, cost of gunny bags, arhatiya commission, mandi labour, forwarding charges, internal movement, storage charges, interest, administrative charges and others) constitute around 16-17 percent of total economic costs for both rice and wheat.<br /> <br /> • There has been a rise in the share of distribution cost in total economic cost for rice and wheat in the recent years.<br /> <br /> • According to the Commission for Agricultural Costs and Prices (CACP) report, the increasing economic costs of handling foodgrains through procurement, distribution and storage, large procurement in recent years and the widening gap between the economic cost of foodgrains and the central issue price have been the major factors leading to the ballooning food subsidy.<br /> <br /> • The Economic Survey 2015-16 informs that there has been a steady increase in the Minimum Support Price (MSP) of crops over the years since 2011-12.<br /> <br /> • Between 2015-16 and 2014-15, the MSP for paddy (common) and paddy (Grade A) increased by 3.7 percent and 3.6 percent, respectively. Between 2015-16 and 2014-15, the MSP for wheat increased by 5.2 percent.<br /> <br /> • The Economic Survey 2015-16 has suggested that there is a case for replacing the present system of MSP/procurement based PDS with DBT and freeing the market of all controls on domestic movement and import. The entire activity of changes in the policy parameters vitiates the concept of a market and needs to be discontinued to enhance productivity in agriculture, says the Survey.<br /> <br /> • Most states have now digitised their PDS. Agents along a commodity’s supply chain can obstruct the spread of JAM (Jan Dhan, Aadhaar and Mobile Phones) if their interests are threatened. The limited progress in getting Fair Price Shops in the Public Distribution System (PDS) to adopt Point-of-Sale (POS) machines for biometric authentication is suggestive of such resistance. Profits are required for FPS, fertiliser retail outlets and other distributors to remain viable, and ought to be seen as a feature, not a bug, in subsidy design. Rents must be shared for reform to proceed, and thus distributors need incentives before they invest in JAM infrastructure. The hold-up power of groups within the subsidy system is an example of the Indian’s economy exit problem.<br /> <br /> • Beneficiaries verify their identities through scanning their thumbprint on a POS machine while buying the subsidised product—say kerosene at the PDS shop. This is being successfully attempt by Krishna district in Andhra Pradesh, with significant leakage reductions.<br /> <br /> • Despite financial inclusion scores being low, if Fair Price Shops are equipped with POS machines beneficiaries can simply authenticate their identities while taking their rations as under the current system. BAPU—Biometrically Authenticated Physical Uptake preparedness is much better than for Rural DBT preparedness. The average state preparedness is 12 percent, but there are some states – like Andhra Pradesh (96 percent), Chhattisgarh (42 percent) and Madhya Pradesh (27 percent) – that with some policy push could be well-prepared for BAPU in the near future.<br /> <br /> • Kerosene makes up about 1 per cent of the consumption basket of the poor; however about 50 per cent of the Kerosene given under PDS is consumed by the well-off and the rest by the bottom 3 deciles, showing that half of the subsidy benefit goes to the well-off section.<br /> <br /> • Future prices are guaranteed by the government through the MSP. But while the government announces MSP for 23 crops, effective MSP-linked procurement occurs mainly for wheat, rice and cotton. While there is no government procurement per se in sugarcane, a crop with assured irrigation, mills are legally obligated to buy cane from farmers at prices fixed by government, an effective MSP-like engagement. But even for these crops MSP is restricted to a subset of farmers in a few states. This can be clearly observed in large gaps in the percentage of farmers who are even aware of the MSP policy.<br /> <br /> • In Punjab and Haryana, almost all paddy and wheat farmers are aware of the MSP policy. However, very few farmers who grow pulses are aware of an MSP for pulses. Even for paddy and wheat where active procurement occurs, there is a substantial variation across states – with only half or less paddy and wheat farmers reporting awareness of MSP, especially in states such as, Gujarat, Maharashtra, Rajasthan, Andhra Pradesh and Jharkhand. This points to the possibility that procurement in these states may be happening in some districts and not in others.<br /> <br /> • Public procurement at MSP has disproportionately focused on wheat, rice and sugarcane and perhaps even at the expense of other crops such as pulses and oilseeds. This has resulted in buffer stocks of paddy and wheat to be above the required norms, but also caused frequent price spikes in pulses and edible oils, despite substantial imports of these commodities.<br /> <br /> • The absence of MSP procurement for most crops in most states implies either that farmers are selling their products to private intermediaries above the MSP or the converse, i.e., farmers have little option but to sell their produce at prices below the MSP, resulting in a regional bias in farm incomes. There is a general sense that the latter is a more prevalent phenomenon, highlighting the need for reorienting agriculture price policies, such that MSPs are matched by public procurement efforts towards crops that better reflect the country’s natural resource scarcities.<br /> <br /> • One way of rationalizing MSP policy is to make these price signals reflect social rather than just private returns of production. The social returns to pulse production is higher than the private returns, because it not only uses less water and fertiliser but fixes atmospheric nitrogen naturally and helps keep the soil porous and well aerated because of its deep and extensive root systems. These positive social benefits should be incorporated into MSP estimates, says the Economic Survey 2015-16.<br /> <br /> • Farmers could also be assured a floor price for their crops through a “Price Deficiency Payment” (Niti Aayog, 2015). Under this system if the price in an Agriculture Produce Market Committee (APMC) mandi fell below the MSP then the farmer would be entitled to a maximum of, say, 50 percent of the difference between the MSP and the market price. This subsidy could be paid to the farmer via Direct Benefits Transfer (DBT). Such a system would keep the quantum of the subsidy bill in check and also be consistent with India’s obligations to the WTO.<br /> <br /> • The weaknesses of state agriculture universities (SAU) imply that extension systems critical for the diffusion of new agricultural innovations and practices, or even dissemination of information about public programs such as MSP, are unable to achieve their intended objectives.<br /> <br /> **page**</p> <p style="text-align:justify"><br /> The NSS Report no. 565: Public Distribution System and Other Sources of Household Consumption, 2011-12 is based on information collected through NSS Schedule 1.0 (Consumer Expenditure), Type 2, during July 2011-June 2012 from 101651 households (59683 rural and 41968 urban) in 7469 villages and 5268 urban blocks spread over the entire country.<br /> <br /> According to the [inside]NSS 68th Round report: PDS and Other Sources of Household Consumption, 2011-12 (released in June 2015)[/inside], please <a href="http://mospi.nic.in/Mospi_New/upload/report_565_26june2015.pdf">click here</a> to access:<br /> <br /> • The PDS share in rice consumption in 2011-12 was about 27.9% in the rural sector and about 19.6% in the urban sector. The share of PDS in wheat/atta consumption was about 17.3% in the rural sector and about 10.1% in the urban. PDS purchases accounted for 15.8% of consumption of sugar in the rural sector, and for 10.3% in the urban sector. For kerosene, on the other hand, the contribution of PDS purchase was 80.8% in rural areas and 58.1% in urban.<br /> <br /> <em>Rice:</em> <em>Utilisation of PDS across states</em><br /> <br /> • At the national level, the proportion of households reporting PDS purchase of rice during a 30-day period was 46% in the rural sector and about 23% in the urban sector.<br /> <br /> • The major States with relatively high incidence of PDS purchase of rice in the rural sector were Tamil Nadu (89% households), Andhra Pradesh (87%), Kerala (78%) and Karnataka (75%).<br /> <br /> • In the urban sector, Tamil Nadu (67% households) again had the highest proportion of households reporting purchase during a 30-day period, followed by Kerala (61%), Andhra Pradesh (about 45%) and Chhattisgarh (42%).<br /> <br /> • The contribution of PDS purchases was highest in Tamil Nadu (rural: 53%, urban: 43%), followed by Karnataka (rural: 45%, urban: 25%), Chhattisgarh (rural: 38%, urban: 30%), Kerala (rural: 36%, urban: 30%) and Andhra Pradesh (rural: 33%, urban: 22%). For West Bengal, where rice is the main item of cereal consumption, the share of PDS purchases in consumption was lowest (rural: 10%, urban: 6%).<br /> <br /> <em>Wheat/ Atta:</em> <em>Utilisation of PDS across states</em><br /> <br /> • At the all-India level, the proportion of households reporting PDS purchase of wheat/atta during a 30-day period was about 34% in the rural sector and 19% in the urban sector.<br /> <br /> • Among the major States where wheat is the major cereal food, the States with the highest incidence of PDS purchase of wheat/atta in the rural sector were Maharashtra (40%), Madhya Pradesh (36% households), and Gujarat (32%).<br /> <br /> • In the urban sector, among predominantly wheat-consuming States, Madhya Pradesh (23%) had the highest incidence of PDS purchase.<br /> <br /> • The contribution of PDS purchases was highest in Maharashtra (30%), followed by Gujarat and Madhya Pradesh (18%) among the predominantly wheat-consuming State in rural sector. In the urban sector, among States where wheat is an important cereal food, the PDS share in consumption was relatively high in Madhya Pradesh (14%).<br /> <br /> <em>Sugar:</em> <em>Utilisation of PDS across states</em><br /> <br /> • The proportion of households reporting PDS purchase was highest in Tamil Nadu (rural: 90%, urban: 77%), followed by Andhra Pradesh (rural: 82%, urban: 42%), Assam (rural: 71%, urban: 41%) Chhattisgarh (rural: 66%, urban: 36%), and Karnataka (rural: 67%, urban: 27%).<br /> <br /> • The incidence of PDS purchase was very low in Punjab, Jharkhand, Bihar and Rajasthan, urban areas of Maharashtra and Gujarat (0-5% households), and also low in Haryana, and urban areas of Uttar Pradesh and West Bengal (5-10%).<br /> <br /> <em>Kerosene: Utilisation of PDS across states</em></p> <p style="text-align:justify"><br /> • In both rural and urban sectors of each State, a considerably larger proportion of households reported consumption of kerosene from PDS purchase than from other sources. For India as a whole, 76% rural households and 30% urban households reported consumption of kerosene from PDS purchases, while 22% rural households and 16% urban households reported consumption of kerosene from other sources.<br /> <br /> • In all major States except Punjab and Haryana, the proportion of households reporting consumption of kerosene from PDS purchase ranged from 62% to 91% in the rural sector and from 10% to 59% in the urban sector.<br /> <br /> • Both in rural and urban India, use of kerosene from PDS was most widespread in West Bengal (91% of rural households, 59% of urban), followed by Bihar (88% rural, 53% urban), and Chhattisgarh (86% rural, 48% urban).<br /> <br /> <em>Consumption from Home-growth stock in rural India</em></p> <p style="text-align:justify"><br /> • About 29.4% of total cereal consumption and 10.3% of total pulse consumption in rural India in 2011-12 came from home-grown stock; this is not very different from the 2009-10 estimate.<br /> <br /> • For rice, the share of home produce in quantity of consumption increased from 25% in 2009-10 to 28% in 2011-12, whereas for wheat/atta, it decreased marginally from 37% to 36% during this period.<br /> <br /> • For pulses, as a whole, the share of home produce in quantity of consumption remained almost unchanged since 2009-10. The share increased for ‘moong’ and ‘split gram’; for the other varieties it either decreased or remained unchanged.<br /> <br /> • For milk, the share of home produce dropped by about 2 percentage points since 2009-10 to about 57%. The percentage of households reporting “only home consumption” of milk was around 33%.<br /> <br /> <em>Distribution of Households by type of Ration Card possessed</em></p> <p style="text-align:justify"> </p> <p style="text-align:justify">• At national level, 5% rural households possessed Antyodaya ration cards, 38% had BPL cards, 42% possessed cards other than BPL and Antyodaya, and the remaining 14% did not have any card. Among urban households, 2% had Antyodaya cards, 16% had BPL cards, 50% had other cards, and 33% had none.<br /> <br /> • Among the different household types in rural India, the proportion possessing Antyodaya was highest (7%) for casual labour in agriculture & non-agriculture households. For the ‘regular wage-salary earning’ category, the incidence was as low as 3%. BPL cards were possessed by 56% of households of the ‘casual labour in agriculture’ category.<br /> <br /> • In rural India, Antyodaya cards were possessed by 8% of SC households, 7% of ST households and 3% of households of the ‘Others’ category. BPL cards were possessed by 49% of ST and 47% of SC households, and by 26% households of the ‘Others’ category.<br /> <br /> • In urban India, on the other hand, possession of an Antyodaya card was rare for all the social groups: 3% for SC & ST, 2% for OBC and 1% for ‘Others’. Around 20% of ST, SC and OBC households, but only 8% of ‘Others’ had BPL cards. Scheduled Tribes had the highest proportion (41%) of households with no ration card.<br /> <br /> • At all-India level, incidence of possession of Antyodaya as well as BPL cards was seen to fall with increase in size of land possessed. At the same time, it is of interest to note that households belonging to the smallest size class of land possessed had the highest proportion (21%) of households with no ration card.<br /> <br /> • In rural areas, the percentage of households possessing Antyodaya cards exceeded 5% in nine out of seventeen major States. In urban India, on the other hand, the percentage possessing Antyodaya cards was low for all the major states, the highest being only 4% (Chhattisgarh).<br /> <br /> • In both rural and urban India, the incidence of possession of BPL cards was relatively high in Andhra Pradesh (85% rural, 49% urban), Karnataka (64% rural, 29% urban) and Chhattisgarh (59% rural, 33% urban).</p> <p style="text-align:justify"> </p> <p style="text-align:justify">**page**</p> <p style="text-align:justify"><br /> [inside]Recommendations of High Level Committee on restructuring of FCI[/inside] (Please <a href="tinymce/uploaded/Report%20of%20the%20High%20Level%20Committee%20on%20Reorienting%20the%20Role%20and%20Restructuring%20of%20FCI_English_1.pdf" title="Report of HLC on FCI reforms">click here</a> to access the report)<br /> <br /> High Level Committee (HCL) on restructuring of Food Corporation of India (FCI) has submitted its report to the Government. It was submitted by Shri Shanta Kumar, Chairman of the Committee to the Prime Minister, Shri Narendra Modi yesterday. The HCL was set up by the Government on 20th August, 2014.The major issue before the Committee was how to make the entire food grain management system more efficient by reorienting the role of FCI in MSP operations, procurement, storage and distribution of grains under Targeted Public Distribution System (TPDS).<br /> <br /> The Committee had wide consultations with several Chief Ministers, Food Secretaries and other stakeholders in various States. Suggestions from public were invited through various newspapers also. Executive Summary of the report is as follows-<br /> <br /> <strong>Backdrop</strong><br /> <br /> * Government of India (GoI) set up a High Level Committee (HLC) in August 2014 with Shri Shanta Kumar as the Chairman, six members and a special invitee to suggest restructuring or unbundling of FCI with a view to improve its operational efficiency and financial management. GoI also asked HLC to suggest measures for overall improvement in management of foodgrains by FCI; to suggest reorienting the role and functions of FCI in MSP operations, storage and distribution of foodgrains and food security systems of the country; and to suggest cost effective models for storage and movement of grains and integration of supply chain of foodgrains in the country.<br /> <br /> * The HLC had wide consultations with various stakeholders in its several meetings in different parts of the country. It also invited comments through advertisements in newspapers and electronic media. HLC would like to gratefully acknowledge that it has benefitted immensely from this consultative process, and many of its recommendations are based on very intensive discussions with stakeholders.<br /> <br /> * In order to conceive reorienting the role of FCI and its consequent restructuring, one has to revisit the basic objectives with which FCI was created, and what was the background of food situation at that time. It is against that backdrop, one has to see how far FCI has achieved its objectives, what the current situation on foodgrain front, what are the new challenges with regard to food security, and how best these challenges can be met with a reoriented or restructured institution like FCI.<br /> <br /> * FCI was set up in 1965 (under the Food Corporation Act, 1964) against the backdrop of major shortage of grains, especially wheat, in the country. Imports of wheat under PL- 480 were as high as 6-7 MMT, when country's wheat production hovered around 10-12 MMT, and country did not have enough foreign exchange to buy that much quantity of wheat from global markets. Self-sufficiency in grains was the most pressing objective, and keeping that in mind high yielding seeds of wheat were imported from Mexico. Agricultural Prices Commission was created in 1965 to recommend remunerative prices to farmers, and FCI was mandated with three basic objectives: (1) to provide effective price support to farmers; (2) to procure and supply grains to PDS for distributing subsidized staples to economically vulnerable sections of society; and (3) keep a strategic reserve to stabilize markets for basic foodgrains.<br /> <br /> * How far FCI has achieved these objectives and how far the nation has moved on food security front? The NSSO's (70th round) data for 2012-13 reveals that of all the paddy farmers who reported sale of paddy during July-December 2012, only 13.5 percent farmers sold it to any procurement agency (during January-June 2013, this ratio for paddy farmers is only 10 percent), and in case of wheat farmers (January-June, 2013), only 16.2 percent farmers sold to any procurement agency. Together, they account for only 6 percent of total farmers in the country, who have gained from selling wheat and paddy directly to any procurement agency. That diversions of grains from PDS amounted to 46.7 percent in 2011-12 (based on calculations of offtake from central pool and NSSO's (68th round) consumption data from PDS); and that country had hugely surplus grain stocks, much above the buffer stock norms, even when cereal inflation was hovering between 8-12 percent in the last few years. This situation existed even after exporting more than 42 MMT of cereals during 2012-13 and 2013-14 combined, which India has presumably never done in its recorded history.<br /> <br /> * What all this indicates is that India has moved far away from the shortages of 1960s, into surpluses of cereals in post-2010 period, but somehow the food management system, of which FCI is an integral part, has not been able to deliver on its objectives very efficiently. The benefits of procurement have not gone to larger number of farmers beyond a few states, and leakages in TPDS remain unacceptably high. Needless to say, this necessitates a re-look at the very role and functions of FCI within the ambit of overall food management systems, and concerns of food security.<br /> <br /> <strong>Major Recommendations of HLC</strong> <br /> <br /> Below is a summary of major recommendations of HLC keeping in mind how procurement benefits can reach larger number of farmers; how PDS system can be re-oriented to give better deal to economically vulnerable consumers at a lower cost and in a financially sustainable manner; and finally how stocking and movement operations can be made more efficient and cost effective in not only feeding PDS but also in stabilizing grain markets.<br /> <br /> <em>On procurement related issues</em><br /> <br /> * HLC recommends that FCI hand over all procurement operations of wheat, paddy and rice to states that have gained sufficient experience in this regard and have created reasonable infrastructure for procurement. These states are Andhra Pradesh, Chhattisgarh, Haryana, Madhya Pradesh, Odisha and Punjab (in alphabetical order). FCI will accept only the surplus (after deducting the needs of the states under NFSA) from these state governments (not millers) to be moved to deficit states. FCI should move on to help those states where farmers suffer from distress sales at prices much below MSP, and which are dominated by small holdings, like Eastern Uttar Pradesh, Bihar, West Bengal, Assam etc. This is the belt from where second green revolution is expected, and where FCI needs to be pro-active, mobilizing state and other agencies to provide benefits of MSP and procurement to larger number of farmers, especially small and marginal ones.<br /> <br /> * DFPD/FCI at the Centre should enter into an agreement with states before every procurement season regarding costing norms and basic rules for procurement. Three issues are critical to be streamlined to bring rationality in procurement operations and bringing back private sector in competition with state agencies in grain procurement: (1) Centre should make it clear to states that in case of any bonus being given by them on top of MSP, Centre will not accept grains under the central pool beyond the quantity needed by the state for its own PDS and OWS; (2) the statutory levies including commissions, which vary from less than 2 percent in Gujarat and West Bengal to 14.5 percent in Punjab, need to be brought down uniformly to 3 percent, or at most 4 percent of MSP, and this should be included in MSP itself (states losing revenue due to this rationalization of levies can be compensated through a diversification package for the next 3-5 years); (3) quality checks in procurement have to be adhered to, and anything below the specified quality will not be acceptable under central pool. Quality checks can be done either by FCI and/or any third party accredited agency in a transparent manner with the help of mechanized processes of quality checking. HLC also recommends that levy on rice millers be done away with. HLC notes and commends that some steps have been taken recently by DFPD in this direction, but they should be institutionalized for their logical conclusion.<br /> <br /> * Negotiable warehouse receipt system (NWRs) should be taken up on priority and scaled up quickly. Under this system, farmers can deposit their produce to the registered warehouses, and get say 80 percent advance from banks against their produce valued at MSP. They can sell later when they feel prices are good for them. This will bring back the private sector, reduce massively the costs of storage to the government, and be more compatible with a market economy. GoI (through FCI and Warehousing Development Regulatory Authority (WDRA)) can encourage building of these warehouses with better technology, and keep an on-line track of grain stocks with them on daily/weekly basis. In due course, GoI can explore whether this system can be used to compensate the farmers in case of market prices falling below MSP without physically handling large quantities of grain.<br /> <br /> * GoI needs to revisit its MSP policy. Currently, MSPs are announced for 23 commodities, but effectively price support operates primarily in wheat and rice and that too in selected states. This creates highly skewed incentive structures in favour of wheat and rice. While country is short of pulses and oilseeds (edible oils), their prices often go below MSP without any effective price support. Further, trade policy works independently of MSP policy, and many a times, imports of pulses come at prices much below their MSP. This hampers diversification. HLC recommends that pulses and oilseeds deserve priority and GoI must provide better price support operations for them, and dovetail their MSP policy with trade policy so that their landed costs are not below their MSP.<br /> <br /> <em>On PDS and NFSA related issues</em><br /> <br /> * HLC recommends that GoI has a second look at NFSA, its commitments and implementation. Given that leakages in PDS range from 40 to 50 percent, and in some states go as high as 60 to 70 percent, GoI should defer implementation of NFSA in states that have not done end to end computerization; have not put the list of beneficiaries online for anyone to verify, and have not set up vigilance committees to check pilferage from PDS.<br /> <br /> * HLC also recommends to have a relook at the current coverage of 67 percent of population; priority households getting only 5 kgs/person as allocation; and central issue prices being frozen for three years at Rs 3/2/1/kg for rice/wheat/coarse cereals respectively. HLC's examination of these issue reveals that 67 percent coverage of population is on much higher side, and should be brought down to around 40 percent, which will comfortably cover BPL families and some even above that; 5kg grain per person to priority households is actually making BPL households worse off, who used to get 7kg/person under the TPDS. So, HLC recommends that they be given 7kg/person. On central issue prices, HLC recommends while Antyodya households can be given grains at Rs 3/2/1/kg for the time being, but pricing for priority households must be linked to MSP, say 50 percent of MSP. Else, HLC feels that this NFSA will put undue financial burden on the exchequer, and investments in agriculture and food space may suffer. HLC would recommend greater investments in agriculture in stabilizing production and building efficient value chains to help the poor as well as farmers.<br /> <br /> * HLC recommends that targeted beneficiaries under NFSA or TPDS are given 6 months ration immediately after the procurement season ends. This will save the consumers from various hassles of monthly arrivals at FPS and also save on the storage costs of agencies. Consumers can be given well designed bins at highly subsidized rates to keep the rations safely in their homes.<br /> <br /> * HLC recommends gradual introduction of cash transfers in PDS, starting with large cities with more than 1 million population; extending it to grain surplus states, and then giving option to deficit states to opt for cash or physical grain distribution. This will be much more cost effective way to help the poor, without much distortion in the production basket, and in line with best international practices. HLC's calculations reveal that it can save the exchequer more than Rs 30,000 crores annually, and still giving better deal to consumers. Cash transfers can be indexed with overall price level to protect the amount of real income transfers, given in the name of lady of the house, and routed through Prime Minister's Jan-Dhan Yojana (PMJDY) and dovetailing Aadhaar and Unique Identification (UID) number. This will empower the consumers, plug high leakages in PDS, save resources, and it can be rolled out over the next 2-3 years.<br /> <br /> <em>On stocking and movement related issues</em><br /> <br /> * HLC recommends that FCI should outsource its stocking operations to various agencies such as Central Warehousing Corporation, State Warehousing Corporation, Private Sector under Private Entrepreneur Guarantee (PEG) scheme, and even state governments that are building silos through private sector on state lands (as in Madhya Pradesh). It should be done on competitive bidding basis, inviting various stakeholders and creating competition to bring down costs of storage.<br /> <br /> * India needs more bulk handling facilities than it currently has. Many of FCI's old conventional storages that have existed for long number of years can be converted to silos with the help of private sector and other stocking agencies. Better mechanization is needed in all silos as well as conventional storages.<br /> <br /> * Covered and plinth (CAP) storage should be gradually phased out with no grain stocks remaining in CAP for more than 3 months. Silo bag technology and conventional storages where ever possible should replace CAP.<br /> <br /> * Movement of grains needs to be gradually containerized which will help reduce transit losses, and have faster turn-around-time by having more mechanized facilities at railway sidings. <br /> <br /> <em>On Buffer Stocking Operations and Liquidation Policy</em><br /> <br /> * One of the key challenges for FCI has been to carry buffer stocks way in excess of buffer stocking norms. During the last five years, on an average, buffer stocks with FCI have been more than double the buffer stocking norms costing the nation thousands of crores of rupees loss without any worthwhile purpose being served. The underlying reasons for this situation are many, starting with export bans to open ended procurement with distortions (through bonuses and high statutory levies), but the key factor is that there is no pro-active liquidation policy. DFPD/FCI have to work in tandem to liquidate stocks in OMSS or in export markets, whenever stocks go beyond the buffer stock norms. The current system is extremely ad-hoc, slow and costs the nation heavily. A transparent liquidation policy is the need of hour, which should automatically kick-in when FCI is faced with surplus stocks than buffer norms. Greater flexibility to FCI with business orientation to operate in OMSS and export markets is needed.<br /> <br /> <em>On Labour Related Issues</em><br /> <br /> * FCI engages large number of workers (loaders) to get the job of loading/unloading done smoothly and in time. Currently there are roughly 16,000 departmental workers, about 26,000 workers that operate under Direct Payment System (DPS), some under no work no pay, and about one lakh contract workers. A departmental worker (loader) costs FCI about Rs 79,500/per month (April-Nov 2014 data) vis-a-vis DPS worker at Rs 26,000/per month and contract labour costs about Rs 10,000/per month. Some of the departmental labours (more than 300) have received wages (including arrears) even more than Rs 4 lakhs/per month in August 2014. This happens because of the incentive system in notified depots, and widely used proxy labour. This is a major aberration and must be fixed, either by de-notifying these depots, or handing them over to states or private sector on service contracts, and by fixing a maximum limit on the incentives per person that will not allow him to work for more than say 1.25 times the work agreed with him. These depots should be put on priority for mechanization so that reliance on departmental labour reduces. If need be, FCI should be allowed to hire people under DPS/NWNP system. Further, HLC recommends that the condition of contract labour, which works the hardest and are the largest in number, should be improved by giving them better facilities. <br /> <br /> <em>On direct subsidy to farmers</em><br /> <br /> * Since the whole system of food management operates within the ambit of providing food security at a national as well as at household level, it must be realized that farmers need due incentives to raise productivity and overall food production in the country. Most of the OECD countries as well as large emerging economies do support their farmers. India also gives large subsidy on fertilizers (more than Rs 72,000 crores in budget of FY 2015 plus pending bills of about Rs 30,000-35,000 crores). Urea prices are administered at a very low level compared to prices of DAP and MOP, creating highly imbalanced use of N, P and K. HLC recommends that farmers be given direct cash subsidy (of about Rs 7000/ha) and fertilizer sector can then be deregulated. This would help plug diversion of urea to non-agricultural uses as well as to neighbouring countries, and help raise the efficiency of fertilizer use. It may be noted that this type of direct cash subsidy to farmers will go a long way to help those who take loans from money lenders at exorbitant interest rates to buy fertilizers or other inputs, thus relieving some distress in the agrarian sector.<br /> <br /> <em>On end to end computerization</em><br /> <br /> * HLC recommends total end to end computerization of the entire food management system, starting from procurement from farmers, to stocking, movement and finally distribution through TPDS. It can be done on real time basis, and some states have done a commendable job on computerizing the procurement operations. But its dovetailing with movement and distribution in TPDS has been a weak link, and that is where much of the diversions take place.<br /> <br /> <em>On the new face of FCI</em><br /> <br /> * The new face of FCI will be akin to an agency for innovations in Food Management System with a primary focus to create competition in every segment of foograin supply chain, from procurement to stocking to movement and finally distribution in TPDS, so that overall costs of the system are substantially reduced, leakages plugged, and it serves larger number of farmers and consumers. In this endeavour it will make itself much leaner and nimble (with scaled down/abolished zonal offices), focus on eastern states for procurement, upgrade the entire grain supply chain towards bulk handling and end to end computerization by bringing in investments, and technical and managerial expertise from the private sector. It will be more business oriented with a pro-active liquidation policy to liquidate stocks in OMSS/export markets, whenever actual buffer stocks exceed the norms. This would be challenging, but HLC hopes that FCI can rise to this challenge and once again play its commendable role as it did during late 1960s and early 1970s. <br /> <br /> </p> <p style="text-align:justify"> </p> <p style="text-align:justify">**page**</p> <p style="text-align:justify"><br /> The [inside]NSS Report: Household Consumption of Various Goods and Services in India (released in 2014)[/inside] is based on information collected during 2011-12 from 101651 households in 7469 villages and 5268 urban blocks spread over the entire country.<br /> <br /> According to the NSS Report no. 558 (68/1.0/2) entitled Household Consumption of Various Goods and Services in India 2011-12 (NSS 68th Round, July 2011-June 2012), which was released in June 2014 (please <a href="http://mospi.nic.in/Mospi_New/upload/Report_no558_rou68_30june14.pdf">click here</a> to download):<br /> <br /> • Per capita consumption of PDS rice has doubled in rural India and risen by 66% in urban India since 2004-05, implying that the share of PDS purchases in rice consumption has risen substantially.<br /> <br /> • In 2011-12, per capita consumption of PDS rice was 0.88 kg in urban India as compared to 1.67 kg in rural India (in a 30 day period). However, in 2004-05, per capita consumption of PDS rice was 0.53 kg in urban India as compared to 0.84 kg in rural India (in a 30 day period).<br /> <br /> • In 2011-12, 23.3 percent urban households consumed PDS rice as compared to 45.9 percent rural households (in a 30 day period). However, in 2004-05, 13.1 percent urban households consumed PDS rice as compared to 24.4 percent rural households (in a 30 day period).<br /> <br /> • As in case of rice, the share of PDS purchase in wheat consumption has increased considerably, per capita consumption of PDS wheat having more than doubled since 2004-05 in both sectors.<br /> <br /> • In 2011-12, per capita consumption of PDS wheat/atta was 0.41 kg in urban India as compared to 0.74 kg in rural India (in a 30 day period). However, in 2004-05, per capita consumption of PDS wheat/atta was 0.17 kg in urban India as compared to 0.31 kg in rural India (in a 30 day period).<br /> <br /> • In 2011-12, 19.0 percent urban households consumed PDS wheat/atta as compared to 33.9 percent rural households (in a 30 day period). However, in 2004-05, 5.8 percent urban households consumed PDS wheat/atta as compared to 11.0 percent rural households (in a 30 day period).<br /> <br /> • In 2011-12, 30.0 percent urban households consumed PDS kerosene as compared to 75.6 percent rural households (in a 30 day period).<br /> <br /> • In 2011-12, per capita consumption of PDS kerosene was 0.230 litre in urban India as compared to 0.431 litre in rural India (in a 30 day period).<br /> <br /> • In 2011-12, per capita consumption of PDS sugar was 0.084 kg in urban India as compared to 0.113 kg in rural India (in a 30 day period).</p> <p style="text-align:justify">**page** </p> <p style="text-align:justify">According to [inside]Report of the Comptroller and Auditor General of India on Performance Audit of Storage Management and Movement of Food Grains in Food Corporation of India[/inside], Report no.-7 of 2013-Union Government (Ministry of Consumer Affairs, Food and Public Distribution),<br /> <a href="http://saiindia.gov.in/english/home/Our_Products/Audit_Report/Government_Wise/union_audit/recent_reports/union_performance/2013/Civil/Report_7/Report_7.html">http://saiindia.gov.in/english/home/Our_Products/Audit_Report/Government_Wise/union_audit/recent_reports/union_performance/2013/Civil/Report_7/Report_7.html</a>:<br /> <br /> • Procurement of foodgrains increased from 343 lakh metric tonne (LMT) to 634 LMT during the period 2006-07 to 2011-12. As a result, stock of foodgrains in the Central Pool also went up from 259 LMT on 1 June 2007 to 824 LMT on 1 June 2012. Such a sharp increase in foodgrains stock raises issues relating to storage space and larger movement of foodgrains from procuring states to consuming states. Considering the widening gap between stock of foodgrains and available storage capacity as well as the constraints being faced in movement of foodgrains, Audit decided to examine the storage management and movement of foodgrains in Food Corporation of India (FCI).<br /> <br /> • The Audit revealed that average foodgrains procurement of 514 LMT during the period 2006-07 to 2011-12 was lower than the average allocation of 593 LMT made by the Government of India (GoI) to states for distribution under Targeted Public Distribution System (TPDS) and Other Welfare Schemes (OWS). The current procurement level of foodgrains by FCI, State Government Agencies (SGAs) and states undertaking decentralized procurement (DCP) would not be able to adequately meet the allocation and the future requirement of foodgrains estimated by the GoI.<br /> <br /> • The minimum buffer norms prescribed by the GoI did not clearly delineate individual elements of food security (e.g. emergency, price stabilization, food security reserve, TPDS, OWS) within the minimum buffer stock. The existing norms also did not specify the maximum and manageable level of stock to be maintained in the Central Pool and the components therein.<br /> <br /> • Under the existing buffer stock policy, the total stock of foodgrains held by FCI, State Governments and their agencies constitute the Central Pool. The policy does not indicate the agency which is primarily responsible for maintaining minimum buffer stock level for India as a whole. There are many agencies involved in storing foodgrains of the Central Pool which adversely affects accountability and transparency in the management of foodgrains.<br /> <br /> • No specific norm was followed for fixing of the Minimum Support Price (MSP) over the cost of production. Resultantly, it was observed that the margin of the MSP fixed over the cost of production varied between 29 percent and 66 percent in case of wheat, and 14 percent and 60 percent in case of paddy during the period 2006-07 to 2011-12. Increase in MSP had a direct bearing on statutory charges levied on purchase of foodgrains by different State Governments. There were also wide inter-state variations both in statutory and non-statutory charges being charged by the State Governments. All this resulted in the rising of the acquisition cost of foodgrains.<br /> <br /> • FCI owned storage capacity remained more or less constant ranging between 151 LMT and 156 LMT during the period 2006-07 to 2011-12. The foodgrains stock in the Central Pool steadily increased to 824 LMT on 1 June 2012. As a result, hiring of storage space by FCI increased from 100 LMT to 180 LMT during the period significantly adding to hiring charges from Rs. 322 crore in 2006-07 to Rs. 1119 crore in 2011-12. Further, due to constraints in available storage capacity, FCI could not take over stock of wheat procured by State Governments Agencies for the Central Pool within the prescribed time frame of June each year. This led to increase in payment of carry over charges to State Government Agencies from Rs. 175 crore in 2006-07 to Rs. 1635 crore in 2011-12 for holding of foodgrains beyond the prescribed time.<br /> <br /> • The storage gap in FCI against the Central Pool stock witnessed a steady increase during the period 2006-07 to 2011-12. Against the storage gap of 332 LMT (March 2012), GoI/ FCI envisaged capacity addition of only 163 LMT during the 6 year period under various augmentation programmes. Out of this, only 34 LMT was completed (March 2012).<br /> <br /> • FCI did not consider day-wise requirements and operational constraints of their own loading points in field offices in its monthly movement plan conveyed to the Railways in a number of cases. At the same time, due to operational constraints, Railways could not supply rakes as per plan of FCI and did not also adhere to the date-wise and destination-wise plan of FCI. Resultantly, during the period 2006-07 to 2011-12, the shortage of railway rakes with reference to planned ranged from 6 percent to 17 percent.<br /> <br /> • Internal audit and physical verification conducted by FCI was largely inadequate. Substantial shortfall of manpower in internal audit wing had adversely affected the internal audit system in FCI. Internal audit and physical verification arrangements followed by FCI lacked the requisite independence and effective follow up at the headquarters level.<br /> </p> <p style="text-align:justify">**page**</p> <p style="text-align:justify">The NSS 66th Round Report titled: Public Distribution System and Other Sources of Household Consumption is based on information collected during 2009-10 from 100794 households in 7428 villages and 5263 urban blocks spread over the entire country.<br /> <br /> According to the [inside]NSS 66th Round Report titled: Public Distribution System and Other Sources of Household Consumption (July 2009-June 2010)[/inside], MoSPI<br /> <a href="http://mospi.nic.in/Mospi_New/upload/nss_report_545.pdf">http://mospi.nic.in/Mospi_New/upload/nss_report_545.pdf</a>: <br /> <br /> <strong>TRENDS IN SHARE OF PDS IN CONSUMPTION OF SPECIFIC ITEMS</strong><br /> <br /> • The contribution of PDS purchases to total consumption in 2009-10 shows a considerable rise compared to 2004-05, particularly for rice and wheat/atta.<br /> <br /> • The share of PDS purchase in rice consumption in 2009-10 was about 23.5% in the rural sector (1.41 kg out of 6.00 kg per person) and about 18% in the urban (0.81 kg out of 4.52 kg per person). In 2004-05, the PDS share in rice consumption had been about 13% in the rural sector and 11% in the urban.<br /> <br /> • The share of PDS in wheat/atta consumption in 2009-10 was about 14.6% (0.62 kg out of 4.25 kg per person) in the rural sector, double what it was in 2004-05 (7.3%), and about 9% in the urban sector, compared to only 3.8% in 2004-05.<br /> <br /> • PDS purchase accounted for 14.7% of consumption of sugar in 2009-10 compared to 9.6% in 2004-05 in the rural sector. The corresponding percentages for the urban sector were 10.3 and 6.6, respectively.<br /> <br /> • For kerosene, the contribution of PDS purchase in 2009-10 was 86.3% in the rural and 63.6% in the urban sector, higher than the 2004-05 percentages by about 9 and 7 percentage points respectively.<br /> <br /> <strong>RISE IN INCIDENCE OF PURCHASE FROM PDS BETWEEN 2004-05 AND 2009-10</strong><br /> <br /> • The percentage of households reporting consumption of rice from PDS during a 30-day period rose sharply from 24.4% to 39% in rural India and from 13% to 20.5% in urban India between 2004-05 and 2009-10.<br /> <br /> • The increase in the percentage of households reporting consumption from PDS was even sharper for wheat/atta: from 11% to 27.6% in rural India and from 5.8% to 17.6% in urban India.<br /> <br /> • For sugar too, there was a sharp rise in the percentage of reporting households from under 16% to nearly 28% in rural India and from 11.5% to 18.7% in urban India.<br /> <br /> • For kerosene, whereas for rural India the percentage of households reporting consumption from PDS increased by 9 percentage points from 73% to 82% between 2004-05 and 2009-10, the corresponding percentage for urban India remained unchanged at 33%. Only 18% of rural households and 15% of urban households reported consumption of kerosene from other sources.<br /> <br /> <strong>RICE: UTILISATION OF PDS ACROSS STATES</strong><br /> <br /> • The major States with relatively high incidence of PDS purchase of rice in the rural sector were Tamil Nadu (91% households), Andhra Pradesh (84%), Karnataka (75%), and Chhattisgarh (67%), followed by Kerala and Odisha (51-54%), and Maharashtra (47%).<br /> <br /> • In the urban sector, Tamil Nadu (67% households) again had the highest proportion of households reporting purchase during a 30-day period, followed by Andhra Pradesh and Kerala (about 43%), Chhattisgarh (35%) and Karnataka (25%).<br /> <br /> • In quite a few States where rice is the main cereal item, very low proportions of households reported PDS purchase of rice. Examples are Bihar (rural: 12%, urban: 4%), West Bengal (rural: 26%, urban: 7%), and Jharkhand (rural: 26%, urban: 9%).<br /> <br /> • The contribution of PDS purchases to total rice consumption was highest in Tamil Nadu (rural: 53%, urban: 41%), followed by Karnataka (rural: 45%, urban: 18%), Chhattisgarh (rural: 41%, urban: 26%), Maharashtra (rural: 34%, urban: 7.5%), Andhra Pradesh (rural: 33%, urban: 21%), and Kerala (rural: 28%, urban: 24%).<br /> <br /> • Among States where rice is the main cereal item, the share of PDS purchases in consumption was low in Bihar (rural: 5%, urban: 2%), West Bengal (rural: 6%, urban: 3%), Assam (rural: 11%, urban: 5%), and Jharkhand (rural: 14%, urban: 7%).<br /> <br /> • In Tamil Nadu, the ratio of unit values (unit cost of rice from non-PDS sources to PDS unit cost) was 19.7 in the rural sector and 25.6 in the urban sector. In Kerala and rural Maharashtra, participation in PDS was high though the cost advantage of PDS was not very great. In West Bengal, on the other hand, the share of PDS in quantity of rice consumed was very low although the cost advantage of PDS was above average.<br /> <br /> <strong>WHEAT/ ATTA: UTILISATION OF PDS ACROSS STATES</strong><br /> <br /> • For the rural sector, among the major States for which wheat is the major item of cereal consumption, Madhya Pradesh had the highest incidence of consumption of PDS wheat/atta (46% households), followed by Maharashtra (44%) and Gujarat (35%). For Karnataka and Tamil Nadu, for which rice is the major cereal item, the corresponding incidences of consumption of PDS wheat/atta were 69% and 57%, respectively.<br /> <br /> • In the urban sector, Tamil Nadu had the highest incidence of consumption of PDS wheat/atta (51% households), followed by Kerala (29%), Chhattisgarh (25%), Madhya Pradesh (24%) and then Karnataka (23%).<br /> <br /> • The proportion of households reporting PDS purchase of wheat/atta was quite low for the urban sector of Haryana (9%), Punjab (10%) and Rajasthan (12%), where wheat is the main item of cereal consumption. The proportion was also quite low for urban Bihar (5%), for which wheat forms a large part of total cereal consumption. The corresponding incidences for the rural sector of these States were also below the all-India average.<br /> <br /> • The share of PDS purchases of wheat/atta in consumption was largest for Tamil Nadu (rural: 86%, urban: 65%). This share was also large for Karnataka, West Bengal, Kerala and Chhattisgarh, all States for which rice and not wheat is the main cereal item.<br /> <br /> • Among States for which wheat is an important cereal item, PDS share in consumption was relatively high in Maharashtra (rural: 33%, urban: 9%) and Madhya Pradesh (rural: 22%, urban: 13%), but elsewhere, below the all-India average of 14.6% for the rural sector and 9% for the urban sector. It was noticeably low in Bihar (rural: 5%, urban: 2%), rural Uttar Pradesh (7%), urban Gujarat (5%), and urban Rajasthan (6%).<br /> <br /> • The ratio of unit cost of wheat/atta obtained from other sources to unit cost of wheat/ atta obtained through PDS varied from 1.7 in Assam to 7 in urban Odisha. Tamil Nadu and rural Chhattisgarh, with a large share of PDS in wheat/atta consumption, showed a strong cost advantage for PDS. But there were a number of States where high or low incidence of PDS purchase was not in tune with the cost advantage of PDS.<br /> <br /> <strong>SUGAR: UTILISATION OF PDS ACROSS STATES</strong><br /> <br /> • The proportion of households reporting consumption of PDS sugar was highest in Tamil Nadu (rural: 86%, urban: 78%), followed by Andhra Pradesh (rural: 57%, urban: 32%), Chhattisgarh (rural: 54%, urban: 31%), Assam (rural: 53%, urban: 27%) and rural Karnataka (47%).<br /> <br /> • The incidence of PDS purchase was very low in both rural and urban areas of Punjab, Bihar and Rajasthan, and in urban Jharkhand (0-2% households), and also in both rural and urban Haryana, rural Jharkhand and urban areas of Uttar Pradesh, Gujarat and West Bengal (3-6%).<br /> <br /> • Among the major States, by far the largest share of PDS purchases in consumption was seen in Tamil Nadu (rural: 73%, urban: 63%). This was followed by Assam (rural: 53%, urban: 31%), Chhattisgarh (rural: 29%, urban: 11%), and Andhra Pradesh (rural: 24.5%, urban: 12%).<br /> <br /> • The share of PDS was as low as 0-2% in Punjab, Rajasthan, Bihar, Haryana, and urban areas of Jharkhand and Uttar Pradesh.<br /> <br /> <strong>KEROSENE: UTILISATION OF PDS ACROSS STATES</strong><br /> <br /> • In all major States except Punjab and Haryana, the proportion of households reporting consumption of kerosene from PDS purchase ranged from 72% to 94% in the rural sector and from 18% to 62% in the urban sector.<br /> <br /> • In urban India, use of kerosene from PDS was most widespread in West Bengal (61.5% households), Kerala (59%), Bihar (53%), and Uttar Pradesh (49%).<br /> <br /> • In the rural sector, the contribution of PDS purchases to total kerosene consumption was 80% or more in all but two major States: Jharkhand and Assam. In the urban sector, the share of PDS purchases varied much more: from 23.5% in Punjab to 90% in Kerala.</p> <p style="text-align:justify">**page**</p> <p style="text-align:justify">[inside]Chhattisgarh Food Security Act[/inside]</p> <p style="text-align:justify">The Chhattisgarh Food Security Act was passed on 21 December 2012 to ensure “access to adequate quantity of food and other requirements of good nutrition to the people of the state, at affordable prices, at all times to live a life of dignity”. The main provisions of the Act are as follows: </p> <p style="text-align:justify"><strong>Public Distribution System: </strong>The Act divides households into four groups: Antyodaya, Priority, General and Excluded households. The PDS entitlements of each group are given in the Annexure. The identification of different groups is left to the state government, but some eligibility criteria are specified in the Act.</p> <p style="text-align:justify"><strong>Other Entitlements:</strong> Aside from the PDS, the Act defines other entitlements for specific groups, as follows: </p> <p style="text-align:justify"><img alt="PDS1" src="tinymce/uploaded/PDS%201.bmp" /></p> <p style="text-align:justify"><strong>Other Significant Provisions of the Act: </strong></p> <p style="text-align:justify">1. PDS entitlements are household entitlements, not individual entitlements.</p> <p style="text-align:justify">2. The eldest adult woman of the family will be considered as the head of the household for the purpose of the ration card. If a household doesn’t have an adult woman, then the eldest man may be considered as head of the household. </p> <p style="text-align:justify">3. The Services under the Act are notified under the Chhattisgarh Lok Sewa Guarantee Act, 2011, and are subject to timely delivery and fines for erring officials. </p> <p style="text-align:justify">4. Grains will be delivered to the fair price shops, following “door-step delivery”, while end-to-end computerisation of records will be done. </p> <p style="text-align:justify">5. Preference will be given to public institutions and public bodies such as Gram Panchayats, Self-Help Groups and cooperatives, while private dealers are prohibited to run ration shops. </p> <p style="text-align:justify">6. The state government is responsible for procurement of grain and additional financial costs under the act, over and above what has been provisioned by the central government, even if central assistance is inadequate. </p> <p style="text-align:justify">7. Transparency and accountability provisions, such as formation of vigilance committees, social audits, and all documents to be in the public domain, are included. </p> <p style="text-align:justify">8. There is no limit or “cap” on the number of persons to be included in the various categories of inclusion under the priority and Antyodaya categories. </p> <p style="text-align:justify">9. The state government has to notify, within six months, schemes that will give effect to all the new entitlements defined under the Act.</p> <p style="text-align:justify">10. The Act is integrated with the Essential Commodities Act, the Chhattisgarh PDS (Control) Order, and also anticipates the possible enactment of a national food security act.</p> <p style="text-align:justify"><em><strong>Source:</strong> Right to Food Campaign</em></p> <p style="text-align:justify"><img alt="PDS2" src="tinymce/uploaded/PDS%202.bmp" /> </p> <p style="text-align:justify">Excluded households: Income tax payees; households in non-scheduled areas who own more than 4 hectares of irrigated land or 8 hectares of non-irrigated land; households in urban areas that own a pucca house with carpet area more than 1,000 sq. ft. and are liable to pay property tax.</p> <p style="text-align:justify">General households: Not specified in the act (this is a “default” category).</p> <p style="text-align:justify">Priority households: Not specified in the Act, but the following categories are to be included: landless labourers, small and marginal farmers (with land up to two hectare)s, workers in urban informal sector and households of construction workers.</p> <p style="text-align:justify">Antyodaya households: Not specified in the Act, but the following categories are to be included: Particularly Vulnerable Tribal Groups; households headed by terminally ill persons, widows or single women, physically challenged persons; households headed by a person of age sixty years or more with no means of subsistence; persons freed from bonded labour; and those who are currently entitled to the Mukhyamantri Khadyanna Sahayata Yojana.</p> <p style="text-align:justify"><em><strong>Source:</strong> Right to Food Campaign</em></p> <p style="text-align:justify">**page** </p> <p style="text-align:justify"> </p> <p style="text-align:justify">[inside]Public Distribution System in Delhi-Grievance Redressal and suo moto (proactive) disclosure of information by PDS outlets and circle offices[/inside]</p> <p style="text-align:justify"> </p> <p style="text-align:justify">According to the Consumer Protection Act, 1986, one who buys any goods or services for a consideration is a consumer. The user of such goods or services with the permission of the buyer is also a consumer.</p> <p style="text-align:justify"><em>According to the Delhi Citizens' Charter 2011 Department Of Food Supplies & Consumer Affairs, complaint can be lodged by:</em></p> <p style="text-align:justify">a. A Consumer</p> <p style="text-align:justify">b. Any Registered Voluntary Consumer Orgainisation</p> <p style="text-align:justify">c. Central Govt.</p> <p style="text-align:justify">d. State Govt./NCR</p> <p style="text-align:justify">e. One or more consumers having common aim.</p> <p style="text-align:justify"> </p> <p style="text-align:justify"><em>Complaint can be lodged when:</em></p> <p style="text-align:justify">a. An unfair trade practice or restrictive trade practice is adopted by any trader.</p> <p style="text-align:justify">b. Any defect in goods purchased</p> <p style="text-align:justify">c. Any deficiency in services purchased</p> <p style="text-align:justify">d Charging of price in excess of that stamped on the product.</p> <p style="text-align:justify">e. Sale of unsafe goods, which are hazardous to life and safety under the Rule/Act.</p> <p style="text-align:justify"> </p> <p style="text-align:justify"><em>The Procedure for lodging a complaint:</em></p> <p style="text-align:justify">The complaint can be lodged by the post or by the Complainant himself or by authorizing any person along with the case memo/bill etc. Generally, 4-6 copies of the complaint are necessarily required:</p> <p style="text-align:justify">a. Advocate is not required.</p> <p style="text-align:justify">b. Affidavit or stamp papers are not required.</p> <p style="text-align:justify"> </p> <p style="text-align:justify"><em>Compulsory points for a complaint:</em></p> <p style="text-align:justify">a. Name and complete address of the complainant.</p> <p style="text-align:justify">b. Name and compete address of opposition party/ parties.</p> <p style="text-align:justify">c. Date of sale of goods or service taken.</p> <p style="text-align:justify"> </p> <p style="text-align:justify"><em>Relief asked for by the consumers:</em></p> <p style="text-align:justify">Consumer Courts may grant one or more of the following reliefs:</p> <p style="text-align:justify">i) Repair of defective goods:</p> <p style="text-align:justify">ii) Replacement of defective goods;</p> <p style="text-align:justify">iii) Refund of price paid for the defective goods of service</p> <p style="text-align:justify">iv) Removal of deficiency in service.</p> <p style="text-align:justify">v) Refund of extra money charged.</p> <p style="text-align:justify">vi) Withdrawal of goods hazardous to life and safety.</p> <p style="text-align:justify">vii) Compensation for the loss or injury suffered by a consumer due to negligence of the opposite party.</p> <p style="text-align:justify">viii) Adequate cost of filing and pursuing the complaint.</p> <p style="text-align:justify"> </p> <p style="text-align:justify"><em>Complaint can be lodged at:</em></p> <p style="text-align:justify">Consumer can lodge a complaint under consumer Protection Act through the following Consumer Courts. These complaints should be lodged within 2 years from the date of incident:</p> <p style="text-align:justify">i. District Forum: For claims upto Rs 20 lac</p> <p style="text-align:justify">ii. State Commission: For claims above Rs 20 lacs and upto Rs 1 crore.</p> <p style="text-align:justify">iii. National Commission: For claims above Rs 1 crore.</p> <p style="text-align:justify"> </p> <p style="text-align:justify"><strong>Complaints against the PDS outlets & its redressel (according to the Delhi Citizens' Charter 2011 Department Of Food Supplies & Consumer Affairs)</strong></p> <p style="text-align:justify">Complaints against the PDS outlets regarding measurement, quality, excess charging or refusal to issue commodities, black marketing, can be made to the followings:</p> <p style="text-align:justify">o Concerned Circle FSO</p> <p style="text-align:justify">o Asstt .Commissioner of the concerned circle.</p> <p style="text-align:justify">o Spl./Addl. Commissioner, F&S Deptt, K-Block, Vikas Bhawan, I.P.Estate, New Delhi.</p> <p style="text-align:justify">o Commissioner, F&S Deptt., K-Block, Vikas Bhawan, I.P.Estate, New Delhi.</p> <p style="text-align:justify">o Control Room Ph No 23370841 ( Toll Free No: 1800-11-0841 )</p> <p style="text-align:justify">o By e-mail to the deptt at cfood@hub.nic.in</p> <p style="text-align:justify">o Concerned Vigilance Committee of the Circle.</p> <p style="text-align:justify">o Task force constituted under the chairmanship of Deputy Commissioner (Revenue) of the District.</p> <p style="text-align:justify"> </p> <p style="text-align:justify">In addition, complaint regarding adulteration in petrol, diesel or misuse of cooking gas etc can also made to the aforesaid and authorities.</p> <p style="text-align:justify">Complaints against the officials of the department against harassment can be made to the Spl./Addl. Commissioner or Commissioner, Food & supplies & Consumer Affairs Department, at K-Block, Vikas Bhawan, New Delhi.</p> <p style="text-align:justify">------------</p> <p style="text-align:justify"><em>According to the new citizen charter published by Government of NCT of Delhi, Department of Food and Supplies & Consumer Affairs, the following Information have to be displayed at the PDS outlets- </em></p> <p style="text-align:justify">1. Licence No./ Name of PDS outlets</p> <p style="text-align:justify">2. Stock as on date</p> <p style="text-align:justify">3. Weekly off.</p> <p style="text-align:justify">4. Rates of Commodities.</p> <p style="text-align:justify">5. Sample of Sugar, Wheat and Rice.</p> <p style="text-align:justify">6. Timing of PDS outlets Fair Price Shop/KOD i.e 9:00 am to 1:00 pm and 3:00 pm to 7 pm</p> <p style="text-align:justify">7. Complain Register is available.</p> <p style="text-align:justify"> </p> <p style="text-align:justify"><em>In PUCL vs Union of India case, Supreme Court has said that the license of any shopkeeper found to be indulging in any of the following activities should be cancelled: </em></p> <div style="text-align:justify"><br /> 1. If the shopkeeper keeps his shop closed during working hours<br /> 2. If he indulges in black marketing<br /> 3. If he keeps the cards of the people with himself<br /> 4. If he makes false entries in the card<br /> <br /> -----<br /> <br /> Mr. Shailesh Gandhi, Central Information Commissioner, called a meeting on 21/12/2009 at the Chief Information Commission’s office to discuss issues relating to disclosure of information on the Public Distribution System in Delhi. A notice dated 14/12/2009 was issued to all the Assistant Commissioners & PIOs of the Department and they were directed to attend this meeting. An Agenda of issues that were going to be discussed was enclosed along with the notice and the Assistant Commissioners were informed that appropriate directions will be issued by the Commissioner after giving the PIOs of every district/zone an opportunity to present his opinion.<br /> <br /> <em>Facts arising from the hearing held on 21/12/2009:</em><br /> <br /> The following persons were present:<br /> <br /> Complainant: Mr. Rajiv Kumar<br /> Respondent: Ms. Jayshree Raghuram, Secretary-cum-Commissioner (F&S); Mr. SS Rathi, Jt. Commissioner; Mr. Kishore, Addl. Commissioner; Mr. Mange Ram, AC (North); Mr. KD Trehan, AC; Mr. Ajay Arora, AC (West); Mr. MK Sharma, AC (South); Mr. GS DHodi, AC (SW); Mr. Subhash Chander, AC (NW); Mr. HP Meena, AC (New Delhi); Mr. Mehresh, Sysyem Analyst; Mr. PP Baruah, Programmer<br /> <br /> <em>After consultation with the Food Commissioner as well as others present, the Commission directs that the following information should be displayed at every Circle Office of the Department:</em><br /> <br /> i) Copy of all ration cards along with photographs of individual card holders in the circle offices of Food and Supply Department.<br /> ii) All citizens should have access to daily sale register, and stock register under suo moto disclosure of RTI Act.<br /> iii) Name and designation of each official in the Circle office along with their stated roles and responsibilities.<br /> iv) Name and contact details of PIO’s and FAA.<br /> v) Procedure to apply for new ration cards and the list of documents required.<br /> vi) Timeframe for disposal of various applications (new cards, renewal, change of address etc).<br /> vii) Date of the next Vigilance Committee meeting and names of the members of the Committee.<br /> viii) Rights and privileges of ration card holders as per Section 6(7) of Annexe to PDS Control Order 2001.<br /> ix) List of documents present in the Circle Offices.<br /> <br /> <em>The Complainant brought a sample display print of the information that may be displayed outside each Fair Price Shop. Keeping this is view, the Chief Information Commission directs that the following information will be displayed at the Fair Price Shops under the Department:</em><br /> <br /> i) Entitlement of essential commodities for all types of ration cards.<br /> ii) Scale of issue of each essential commodity for all types of ration cards.<br /> iii) Retail prices of each essential commodity for all types of ration cards.<br /> iv) Working hours of fair price shops.<br /> v) Stock of essential items received during the month.<br /> vi) Opening and closing stock of essential commodities.<br /> vii) Name, designation and contact numbers of officials for redressal of grievances with respect to quality and quantity of essential commodities.<br /> viii) Daily updation of stock position information<br /> ix) Information about inspection of records by any citizen on every Saturday except for second Saturday as per the PDS Control Order dated 15/06/2006.<br /> x) Display of samples of food grains being supplied through fair price shops.</div> <div style="text-align:justify"> </div> <div style="text-align:justify">The Food Commissioner has given a commitment to the Commission that she will ensure that the afore-mentioned information will be displayed before 31 January 2010.</div> <div style="text-align:justify"> </div> <div style="text-align:justify">**page**</div> <div style="text-align:justify"><br /> The Rozi Roti Adhikar Abhiyan, Delhi, which is a network of about thirty organisations, conducted a study entitled [inside]Survey on Preference between PDS and Cash Transfers in Delhi[/inside] (<a href="http://www.indiaenvironmentportal.org.in/reports-documents/survey-preference-between-pds-and-cash-transfers-delhi">http://www.indiaenvironmentportal.org.in/reports-documents/survey-preference-between-pds-and-cash-transfers-delhi</a>) in the backdrop of Delhi Government suggesting dismantling of the PDS in favour of a system of direct cash transfers/smart card system. The Delhi Government in partnership with SEWA and IDF did a pilot study with 100 families in Raghubir Nagar to test the feasibility and effectiveness of such a programme. After submitting Rs 1,000 in the bank accounts of the women members of each of selected households in the sample, a study was done to compare between families who opt for cash and those who prefer the ration system. Antyodaya cardholders get Rs 1,100 per month, while below poverty line cardholders get Rs 950 per month as cash transfers in the pilot study done by Delhi Government.<br /> <br /> While the results of this pilot study are awaited, the Rozi Roti Adhikar Abhiyan, Delhi conducted a survey in different parts of Delhi so as to understand people’s preference between PDS and cash transfer. It may be recalled from media reports that when the pilot survey was being conducted by the Delhi Government with funding from United Nations Development Programme (UNDP), several NGOs including Parivartan led by Arvind Kejriwal opposed it.<br /> <br /> Key findings of the study done by Rozi Roti Adhikar Abhiyan, Delhi:<br /> <br /> <em>Preference between reformed PDS and cash transfers</em><br /> <br /> • Only 27 per cent of the respondents were aware of the Government's proposal of replacing the PDS with cash transfers. Given a choice between a reformed and improved (“sudhar”) PDS or cash transfers in lieu of PDS foodgrains, over 90 per cent of the respondents in the sample said that they would prefer a reformed PDS over cash transfer, while 5 per cent felt the other way round. 3.6 per cent had no opinion. 94.5 percent of BPL respondents, 90.1 percent of APL respondents and 91.7 percent of respondents among Antyodaya card holders prefer improved and reformed PDS over cash transfers. 3.6 percent of BPL respondents, 7 percent of APL respondents and 5.8 percent of respondents among Antyodaya card holders prefer cash transfers over reformed PDS<br /> <br /> • It is mainly the daily wage earning households (almost 92.4 per cent) who preferred PDS over cash, while 90.4 percent of the salaried preferred the same<br /> <br /> <em>Type of Ration Card</em><br /> <br /> • Of all the respondents, 17.3 per cent had no ration cards and for 3 per cent the type of ration card was not known. 40 per cent of the respondents had Above Poverty Line (APL) cards, 24 per cent had (Below Poverty Line) BPL cards, 10 per cent had (Antyodaya) AAY cards, 2 per cent had Annapurna cards and 4 per cent had temporary cards. Among those who did not have any cards were also those who earlier had a ration card but it was cancelled recently.<br /> <br /> • It is seen that while there were more number of BPL card holders among the daily wage labourers, only 31.5 per cent of daily wage earners had BPL cards. 22.9 per cent of salaried households also had BPL cards. A large number of households headed by a self-employed person had no cards at all.<br /> <br /> <em>Access to PDS</em><br /> <br /> • Of those who had some kind of a ration card, 59.5 per cent said that they received rations regularly, while 23.1 per cent said that rations were supplied in an irregular manner and 15.8 per cent had no access to rations in spite of having a ration card.<br /> <br /> • Regarding the quantity of foodgrains received from the PDS, only 37.4 per cent said that they got the entire 35kg of foodgrains the last time they bought rations (a small percentage reported getting more than 35kg – this is probably because they got some of their previous month’s quota as well due to irregular functioning of ration shops). 22.5 per cent of the respondents got between 26 to 34kg and 30.8 per cent got between 15 to 25kg.<br /> <br /> • Among BPL card holders about half reported getting 35kg or more, whereas among APL card holders this figure is only about 20 per cent.<br /> <br /> • There were various reasons for not accessing rations, most common (29.9 per cent) being that the card was not ‘stamped’.<br /> <br /> • About 17 per cent said that they did not have access to rations because their collection of their biometrics was due. 8.2 per cent of the respondents said that their ration card had been cancelled and a further 15.7 per cent that their ration cards had not been reissued after expiry. 22.2 per cent said that the dealer refuses to give them any ration and about 7 per cent that the PDS shop was always closed.<br /> <br /> <em>PDS Reforms</em><br /> <br /> • Various suggestions for improvement of PDS were discussed with the people, ranging from action to be taken against fair price shop (FPS) dealers for malfunctioning to transparency and redressal measures. Most people agreed with all these suggestions. Interestingly, 87.4 per cent of the respondents also agreed with the suggestion that PDS should be universalised and there should be no distinction between those above poverty line and below poverty line. In the discussions it was clear that what people were most bothered with was the process of identification of BPL and the struggle to get included in the BPL list.<br /> <br /> <em>Uses of Ration Card</em><br /> <br /> • Even though ration is not regular, people use the ration card for many different purposes. For instance, almost three quarters of the respondents said that the ration card is useful as an identity card. A large proportion felt that the ration card is useful to access other Government schemes, to get an electric connection, to get a driving license, to open a bank account etc. The other purposes that people felt the ration card was useful for included getting Government health services, school admissions, a pan card or passport, for entering into a new job, mobile connection and even getting a birth certificate.</div> <div style="text-align:justify"> </div> <div style="text-align:justify">**page**</div> <div style="text-align:justify"> </div> <div style="text-align:justify">Key findings of the study titled: [inside]How Can Food Subsidies Work Better? Answers from India and the Philippines[/inside] by Shikha Jha and Bharat Ramaswami, No. 221, September 2010, Asian Development Bank, <a href="http://www.adb.org/documents/working-papers/2010/economics-wp221.pdf">http://www.adb.org/documents/working-papers/2010/economics-wp221.pdf</a>, are:<br /> <br /> • The present study estimates the effectiveness of targeting in terms of exclusion and inclusion errors; and the effectiveness of program delivery in terms of leakage from pilferage or illegal diversions, and leakage due to excess costs (relative to the private sector, or inefficiency of the public program).<br /> <br /> • The study informs that economic welfare of poor households in developing countries is sensitive to food prices. For many of the poor, food-based safety net programs provide their only hope of survival in the event of steep price rises. Such programs can protect poor segments of society from major shocks, insure them against risks and associated income losses, and provide consumption smoothing. However, the performance of such programs varies widely, reflecting a number of shortcomings that undermine their effectiveness. As they often consume substantial budgetary resources, food subsidies also become a source of anxiety to the government seeking to reign in budgetary deficits. This is especially so in times of rising food prices.<br /> <br /> • The academic and policy literature recognizes that the gains to the poor depend on targeting as well as program delivery. However, most of the studies have only evaluated the targeting performance of subsidies. From this literature, it is well known that most transfer programs are costly because of substantial non-target beneficiaries.<br /> <br /> • From a survey of universal food subsidy schemes, Coady (2002) finds that the median targeting performance implied that the government spent $3.40 to transfer $1.00 to the poor.<br /> <br /> • In their metasurvey of income transfer programs, Coady, Grosh, and Hoddinot (2004) conclude that interventions that use some methods of targeting (e.g., means testing, geographic targeting or self-selection in public works) result in the target group receiving a greater share of benefits.<br /> <br /> • A standard policy prescription, especially from multilateral institutions, is to recommend that governments target subsidies toward the poor and not waste resources subsidizing the nonpoor.<br /> <br /> • There is no generalized theoretical presumption that policy should always aim to reduce inclusion errors. The literature offers examples where targeting is costly both administratively as well as in economic terms because of incentive effects (Besley and Kanbur 1993, Kanbur 2009). In addition, Gelbach and Pritchett (2000) argued that programs that are tightly targeted toward the poor (i.e., low inclusion errors) do not receive political support from the nonpoor and thus are ultimately endangered. In addition, there are the practical difficulties of targeting.<br /> <br /> • In their metasurvey of studies that evaluate income transfer programs, Coady, Grosh, and Hoddinot (2004) found very few studies that looked at both program costs and benefits. And even such information consisted only of administrative costs, ignoring the costs due to corruption or theft.<br /> <br /> • The mandates of TPDS are multiple, including price stabilization, ensuring food access by the poor, and supporting farm prices. TPDS deliver in-kind subsidies. It offers subsidies on rice and wheat.<br /> <br /> • India has government agencies that source, store, transport, and distribute the grain to designated retail outlets. The TPDS primarily sources grain from domestic procurement.<br /> <br /> <em>About the TPDS</em><br /> <br /> • Volume of grain distributed between 2004-2008 via TPDS was 32 million tons. TPDS' budgetary allocation as a percentage of GDP between 2004 and 2007 was 0.72 percent. The quota of foodgrain distributed is fixed per household.<br /> <br /> • In India, the central and state governments together run a marketing channel solely devoted to the distribution of the subsidized food. At the retail level, this involves a network of “Fair Price Shops” (FPS) that sell subsidized grain to consumers. Subsidized grain is not accessible elsewhere. The FPS is usually run by private agents who receive a fixed percentage as commission for their efforts. The FPS is often restricted to selling only subsidized grain. The central government is responsible for procurement, storage, transportation, and bulk allocation of foodgrains to different states. The state government is responsible for transporting and distributing the grain within the state through the network of FPS.<br /> <br /> • India introduced targeted food subsidies in 1997. The current regime is called targeted public distribution system. Subsidies depend on whether the household is classified as above poverty line (APL), below poverty line (BPL), or poorest of the poor (POP or the Antayodaya Yojana program).<br /> <br /> • All households are entitled to a monthly quota of 35 kg of rice or wheat per month. In principle, the prices of subsidized grain are supposed to be fixed with reference to the government’s “economic cost”, i.e., the cost incurred by government agencies in procuring, storing, transporting, and distributing grain. BPL households are supposed to receive 50% subsidy (i.e., 50% of economic cost) while APL households are not supposed to be eligible for any subsidy at all. The prices for POP households are fixed below that of BPL households and not with reference to economic cost.<br /> <br /> • The APL households in 2008/2009 received a subsidy in excess of 50% of economic cost.<br /> <br /> • The list of BPL beneficiaries is prepared through a BPL census. In the latest census of 2002, households received scores based on 13 criteria. The BPL households were identified as those who fell below a cut-off score (decided by the respective state governments). If the total of BPL identified households exceeds that which is estimated by the central government, the subsidy on the excess households has to be borne by the state government.<br /> <br /> <em>Inclusion and Exclusion errors</em><br /> <br /> • The budgetary cost of food subsidy in India topped 1% of gross domestic product (GDP) in 2002 but later came down to around 0.65% toward the end of the decade. The decline happened because of the rapid growth in GDP since about 2003.<br /> <br /> • Inclusion errors do not differentiate households according to their distance from the poverty line. Furthermore, inclusion errors only tell us about how many recipients are nonpoor, not how much subsidies they get. If the inclusion error is zero then the poor receive the entire subsidy. At the other extreme, if the inclusion error is 100%, then the fraction of the subsidy reaching the poor is zero.<br /> <br /> • The share of the poor in the income transfer denoted by s is the targeting measure that is used most widely in studies evaluating income transfer programs and was therefore used by Coady, Grosh, and Hoddinot (2004) to compare targeting effectiveness across programs in a metasurvey of different studies. Ravallion shows that a targeting measure defined as the difference between the program’s participation rate for the poor and that for the nonpoor (called the targeting differential) performs better than the share measure.<br /> <br /> • Inclusion errors arise when a government spends $1 on provision of food subsidy, but poor households receive only a fraction of it. Such a diminution in the amount of subsidy that reaches households is called a targeting leakage. While it is generally agreed that a targeting leakage (due to inclusion errors) should be minimized, the debate in the income transfers literature is whether and how it can be done. The debate is enduring because minimizing inclusion errors can be costly administratively) and often leads to greater exclusion errors. With such a trade-off, optimal targeting depends on how much weight the government puts on inclusion error relative to exclusion error.<br /> <br /> • Evidence on the design and performance of social safety net programs from 47 countries across Africa, Asia, Eastern Europe, and Latin America shows that targeted programs achieve a high proportion of transfers to the poor, with the poor receiving, on average, around 25% more than they would without targeting (Coady 2003). In other words, the inclusion error in targeted programs is on average lower than in untargeted programs.<br /> <br /> • Based on the survey questions, a household is defined to be a recipient of food subsidies if it purchases subsidized rice or wheat or both during the survey reference period. While the targeted PDS was launched in 1997, it is generally agreed that targeting was not accomplished by 1999. Therefore the results from 1999/2000 (when the previous largescale expenditure survey was carried out) correspond to a pre-targeting regime, while those from 2004/2005 refer to a targeted subsidy regime.<br /> <br /> • Exclusion error in 1999-2000 was 64 percent and in 2004-05 was 70 percent. Inclusion error in 1999-2000 was 76 percent and in 2004-05 was 70 percent. Exclusion errors are uniformly high at 70% in both rural and urban areas while the inclusion errors are higher in rural areas (73 percent) as compared to urban areas (59 percent).<br /> <br /> • Exclusion errors could happen either because households chose not to participate in the program or because of mistargeting. Mistargeting could happen in two ways. First, a poor household may not be classified at all. In this case, the household does not receive the food eligibility card and cannot make purchases from the public distribution system. Second, even if a household receives a food eligibility card, it may be wrongly classified as an APL household and is not therefore entitled to the larger subsidy offered to households classified as BPL or POP.<br /> <br /> • For poor households in rural areas that hold either the BPL or POP eligibility card, the participation rate is 61%. This drops sharply to 13% for households with APL eligibility. For households without any eligibility, the participation rate is 4%. The associated weights are 0.4, 0.4, and 0.2 respectively. In other words, 60% of the poor are either classified incorrectly as APL or not classified at all (i.e., without eligibility to any subsidy).<br /> <br /> • If this kind of mistargeting is eliminated and all poor are classified as either BPL or POP, the participation rate would improve. If the participation conditional on eligibility remains invariant, then the participation rate would nearly double from 31% to 61% in the rural sector. Hence mistargeting is a major reason for the high exclusion error. Notice, however, that participation does not reach 100% because nearly 40% of poor households do not participate despite eligibility. This underscores the fact that there are factors other than eligibility that are also barriers to participation. The analysis for the urban sector is similar: here the gains from correct targeting are greater as the participation rate would rise from 30% to 77%.<br /> <br /> • As per capita grain consumption for all poor and nonpoor households varies between 10 and 12.5 kg per month, the TPDS on average accounts for about 40% of total grain consumption of the households that receive subsidies. Note also that for an average family of five, total household monthly consumption is nearly 20 kg, which is much less than the entitlement of 35 kg per month.<br /> <br /> • In the rural areas the share of poor in population is 28 percent and their share in subsidized food grains is 31 percent. In the urban areas the share of poor in population is 26 percent and their share in subsidized food grains is 46 percent. In aggregate, the share of poor in subsidized food grains is 33 percent whereas their share in total population is 27 percent.<br /> <br /> <em>Diversions and Leakages</em><br /> <br /> • Because of the price difference between subsidized grain and grain sold through regular marketing channels, there are powerful incentives to arbitrage and make illegal profits. Leakages are the illegal diversions of subsidized grain to regular market channels. They are typically estimated by comparing the distribution of subsidized grain from administrative records to the receipt of grain by households calculated from survey data.<br /> <br /> • For India, using data from 1986–1987, Howes and Jha (1992) estimated the average ratio of PDS consumption to supply in 18 major states to be 65%, ranging from 5% in Haryana to 94% in Jammu and Kashmir. That is, on an average there was 35% diversion. There does not seem to have been much of an improvement since then as similar estimates have been derived by other researchers. For example, Ahluwalia (1993) estimated that in 1986/1987, 37% of the supply of subsidized rice and 38% of the supply of subsidized wheat were illegally diverted. Dutta and Ramaswami (2001) estimated these figures for 1993/1994 for the states of Andhra Pradesh and Maharashtra. They found illegal diversions to be of the order of 15% for rice in Andhra Pradesh and 30% and 19% respectively, for rice and wheat in Maharashtra. A study by Tata Consultancy Services (1998) found illegal diversions to be 31% and 36% for rice and wheat at the all-India level in the late 1990s. The Planning Commission of India (2005) study that examined leakages in India after the implementation of the targeted PDS concludes that illegal diversions of rice and wheat at the all-India level in 2003/2004 was 37% of the total supply of subsidized grain meant for the BPL category.<br /> <br /> • In 2004-05, the per capita consumption of subsidized foodgrains was 1.03 kg per month while the per capita supply of subsidized food works out to be 2.27 kg per month. This works out to a leakage of 55% of subsidized foodgrains supply. In 1999/2000, these numbers were 1.01 kg and 1.61 kg per month, respectively. These discrepancies are large and suggest a serious problem with diversions.<br /> <br /> • In 2004-05, the aggregate leakage for rice is 40% and expectedly diversions are greatest from POP allocations (72 percent) and least for APL allocations (5 percent). The aggregate leakage for wheat is 73% and the diversions are high for all the categories. In 2004-05, the total cost of illegal diversion of rice was Rs. 38875.5 million and wheat was Rs. 48219.96 million.<br /> <br /> <em>Excess Costs</em><br /> <br /> • All government agencies incur costs in purchase, transport, and distribution of subsidized food. Since this is an activity also done by private agents, it is useful to compare government costs with private costs to ascertain the efficiency of government interventions. In their review of literature about distribution costs, Jha and Srinivasan (2004) show that private traders operate at costs lower than those incurred by the government agency in the areas of marketing, storage, trade, and transport despite several controls and restrictions imposed upon them.<br /> <br /> • Dutta and Ramaswami (2001) used the above methodology to demonstrate that in 1993/1994, 27% of government budgetary expenditure on food subsidy in the state of Andhra Pradesh was wasted by inefficiency of government agencies. The figure for the state of Maharashtra in the same year was 16%. A more recent study by the Planning Commission of India (2005) finds that in the year 2003/2004, delivery through the private sector was more efficient in all states except Kerala. The evidence indicates that at the all-India level, the government’s food subsidy costs would have been lower by 35% if the government costs matched that of the private sector.<br /> <br /> • In 2004/2005, the central government’s economic cost of distributing rice and wheat were Rs. 13.29 and Rs. 10.19, respectively. To this must be added margins for wholesalers and retailers and transportation charges at the retail level. We do not have estimates of these costs for 2004/2005. A comparison of economic costs with retail prices will therefore give a lower bound to the “excess” costs incurred by the government. The NSS consumption expenditure data for 2004/2005 provides information about quantities and expenditures on various items by households. A unit value can be derived from this information. As richer households buy higher-quality grain, their unit values are higher. Because of large quality variations in rice prices, purchase costs for rice are lowest for POP households and highest for APL households. In wheat, mean prices are about the same between BPL and APL households but are lower for POP households.<br /> <br /> • As TPDS grain quality is generally considered to be below average, we take the price paid by BPL households to be representative for such quality grain. Comparing with the economic costs of the state agencies in 2004/2005 (Rs. 13.29 per kg for rice and Rs. 10.19 for wheat) we obtain the difference as excess cost. The excess cost for rice is Rs. 2.80 per kg, and Rs. 0.85 per kg for wheat. The total excess cost of rice was Rs. 46033.34 million and of wheat was Rs. 10956.5 million.<br /> <br /> • It is interesting to note that India’s TPDS, despite being a targeted program, brings only one third of the total subsidy to the poor.<br /> <br /> • In 2004-05, total Income Transfer to Poor was Rs. 21351.55 million and to non-Poor was 38219.79 million. Total illegal diversion cost was Rs. 87095 million and excess cost was Rs. 56990. Total cost of subsidy in 2004-05 was Rs. 203657 (approx). <br /> <br /> • The share of subsidy going to the poor is 11% in India.<br /> <br /> <em>Conclusion</em><br /> <br /> • If inclusion errors were minimized to zero, the share of the poor would rise at most to 29 percent in India.<br /> <br /> • The debate on a targeted versus universal transfer scheme misses the point that there are huge savings to be had from trimming diversions and excess costs, i.e., program waste. The Indian state of Chhattisgarh has claimed significant reduction in corruption by computerizing the supply chain, from paddy procurement to the distribution of rice in 2007/2008; and by making public the movement of grain from warehouses to retail outlets. It is suggested that this has improved transparency and governance (Dhand et al. 2009).<br /> <br /> • An alternative to in-kind transfers are food coupons or restricted cash transfers. As opposed to general cash transfers, food coupons are conditional or tied grants that allow consumers to purchase limited quantity of foodgrains at a subsidized price.<br /> <br /> • In the Indian case, a food coupon alternative would eliminate the dual marketing system (of private and government), which would resolve the endemic issue of the viability of the government marketing system.<br /> <br /> • If there are staples other than rice (or wheat), a food coupon system could easily accommodate it without the need for physical and institutional infrastructure (procurement and distribution) that is specially set up for that purpose. In parts of India, poor consume “inferior” coarse grains such as sorghum and pearl millet, which are not subsidized by the current regime.<br /> <br /> • Food coupons could allow consumers to spend their budget on their preferred commodities and would therefore be less distortionary in consumption, reducing their costs of participation. This could also happen through improved economic access as consumers would be able to use these coupons at a more convenient retail outlet. While there are potential issues of fraud in food coupons as well in terms of counterfeiting and improper use, it seems far easier to track and audit numerically coded coupons than to do so for physical stocks of grain. Governments sometimes balk at the costs of investing in technologies such as smart cards. The payoffs must, however, be seen in relation to the resources lost in diversions and excess costs.<br /> <br /> • Conditional cash transfers are another alternative to food subsidies. Such transfers have been widely and successfully used in many Latin American countries. In these transfers, the conditionality is of a different form to that of food coupons—relating to the use of social programs of education and health. Here cash transfers are conditional on attendance in schools and health clinics. Program benefits are designed to contribute to long-term human capital development and to provide immediate poverty relief. These benefits are in effect like negative user fees that are paid instead of charged to program participants who attend schools or visit clinics.<br /> <br /> <strong><em>Note: </em></strong><br /> <br /> BPL: Below Poverty Line<br /> APL: Above Poverty Line<br /> POP: Poorest of the Poor<br /> <br /> <br /> According to the report titled: [inside]Social Protection for a Changing India[/inside], The World Bank, <a href="http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2011/04/20/000333037_20110420235516/Rendered/PDF/612750v10ESW0P1rt0Volume0I01PUBLIC1.pdf">http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2011/04/20/000333037_20110420235516/Rendered/PDF/612750v10ESW0P1rt0Volume0I01PUBLIC1.pdf</a>:<br /> <br /> • During 2009-10, Rs. 42490 crore was allocated for food and Rs. 2866 crore was allocated for kerosene/ LPG under the public distribution system (PDS). It covered 23.3 percent of all households (above poverty line-APL and below poverty line-BPL in 2004-05). Annapurna scheme covered 1.7 percent households with elderly.<br /> <br /> • While PDS consumes almost 1 percent of GDP and has wider coverage than other safety net programs – between 20-25 percent of the population in the mid-2000s based on actual drawing of grains by beneficiaries, and closer to 40 percent based on administrative numbers on BPL households - its impact on the poor is very limited in many states, particularly a number of lagging states.<br /> <br /> • This is due to a combination of high leakage of grains (estimated by the Planning Commission to be around 58 percent nationally in the early 2000s and even higher based on estimates using NSS data), a range of demand and supply side issues in program design and implementation, and considerable leakage of subsidies to the non-poor. Although many of the shortcomings of PDS and its very poor performance have been known for some time, it continues to absorb substantial public resources with limited benefits for the poor.<br /> <br /> • The percentage of BPL grain that got leaked (during early 2000s) in Andhra Pradesh, Assam, Bihar, Gujarat, Haryana, Himanchal Pradesh, Karnataka, Kerala, Madhya Pradesh, Maharastra, Orissa, Punjab, Rajasthan, Tamil Nadu, Uttar Pradesh, West Bengal and India are: 57.6, 53.7, 91.1, 47.1, 66.7, 45.9, 70.9, 39.0, 66.0, 34.5, 36.4, 89.5, 35.0, 65.6, 67.5, 27.0 and 57.9, respectively.<br /> <br /> • The percentage of BPL grain that got diverted (during early 2000s) in Andhra Pradesh, Assam, Bihar, Gujarat, Haryana, Himanchal Pradesh, Karnataka, Kerala, Madhya Pradesh, Maharastra, Orissa, Punjab, Rajasthan, Tamil Nadu, Uttar Pradesh and West Bengal are: 20.6, 41.7, 81.5, 42.1, 55.7, 31.4, 43.4, 21.7, 62.4, 26.5, 23.4, 76.5, 32.0, 15.7, 61.3, 19.2 and 36.4 respectively.<br /> <br /> • In Andhra Pradesh, it is estimated that the introduction of food coupons has reduced leakage in the PDS by up to 25 percent.<br /> <br /> • The poor long run performance of the PDS in many states suggests that the medium term vision of a reformed PDS for most groups should be cash-based, though this would face substantial resistance in light of the ongoing debate around the Right to Food legislation. A reformed PDS could still provide food-based support for specially vulnerable groups (consistent with Supreme Court orders), and in specific areas facing chronic or acute food shortages, but for most areas and most people, a cash-based social assistance system seems a more efficient and transparent means of providing an income floor.<br /> <br /> • An intermediate solution currently being mooted in the 2010 Economic Survey is to transfer the subsidy directly to households (rather than the PDS store owner) through food coupons with a lumpsum entitlement that can be exchanged at any PDS store.<br /> <br /> • Methods such as self-targeting (in public works), mixed methods of identifying the poor (as in social pensions) have notably better targeting efficiency and inclusion of the poorest, while some states rely on community wealth ranking and verification.<br /> <br /> • While the benefits of PDS to households are spread across India, the main beneficiaries of public procurement of grains to feed the PDS are concentrated among farmers in a few states: Punjab, Haryana, some parts of Uttar Pradesh, and Andhra Pradesh to a lesser extent.<br /> <br /> • While only around 60 percent of eligible households in Bihar had been provided with food coupons in the first year of implementation, access among them dramatically increased as a result of the reform, rising from only 2 percent to around half of BPL households. Bar coded coupons/ration cards have been introduced under TPDS in six states.<br /> <br /> **page**</div> <div style="text-align:justify"> </div> <div style="text-align:justify">According to the [inside]Public Distribution System (PDS) and Other Sources of Household Consumption, 2004-05[/inside], which has been produced by the National Sample Survey 61st Round, (July 2004 - June 2005), Volume I:<br /> <br /> * 81% of rural households and 67% of urban households held ration cards. [B]elow [P]overty [L]ine (BPL) cards were held by 26.5% of rural households and 10.5% of urban households. Antyodaya cardholders formed less than 3% of rural households and less than 1% of urban households. <br /> <br /> * In Andhra Pradesh, the proportion of BPL-card-holding households (rural: 54%; urban 27%) was more than double the national average. The proportion of BPL cardholders was above 40% in rural areas of Karnataka and Orissa as well. In urban Kerala, nearly 20% of households had BPL cards.<br /> <br /> * In rural areas, the percentage of households having Antyodaya cards was 5% for Scheduled Tribes (ST), about 4.5% for Scheduled Castes (SC), and 2% for the other groups – Other Backward Classes (OBC), and the rest. BPL cards were held by 40% of ST households, 35% for Scheduled Castes (SC), about 25% of OBC households, and 17% of other households. In urban areas, however, it was the Scheduled Castes, which had the highest percentage (17%) of households holding BPL cards, while ST and OBC households had about 14% each. In urban India the ST and SC groups had more than 1% of households with Antyodaya cards, while the other groups had less than 1%.<br /> <br /> * In rural areas BPL cards were held by 43% of “agricultural labour” households and 32% of “other labour” households.<br /> <br /> * 51% of households in the lowest size class of landholding “<0.01 hectares” had no ration card at all, while in all other size classes 77-86% households had a ration card of some kind. The highest proportion of households with ration cards was 86%, seen in the classes “0.41-1.00 hectares” and “1.01-2.00 hectares”. In respect of ration cards meant for the poor, the class “0.01-0.40 hectares” was the class of households with the highest proportion of cards for both BPL (32%) and Antyodaya (4%). It was followed by the class “0.41-1.00 hectares” (BPL, about 28%, Antyodaya, 3%). The bottom class “<0.01 hectares” had 22% of its members holding BPL cards, but this was smaller than the overall proportion of BPL cardholders taking all classes together (26.5%). Likewise, Antyodaya cards were held by 2.7% of households in the bottom class, compared to 2.9% for all households.<br /> <br /> * Among the top 5% of rural population ranked by monthly per capita expenditure (MPCE), an estimated 11% of households held BPL ration cards. Among the next 5% of rural population, 14% of households held BPL cards, and among the next 10% of rural population, 18% of households held BPL ration cards.<br /> <br /> * The major State where consumption of rice from PDS was most common was Tamil Nadu (rural: 79% households consuming from PDS; urban: 48%), followed by Andhra Pradesh (rural: 62%; urban: 31%), Karnataka (rural: 59%; urban: 21%) and Kerala (rural: 35%; urban: 23%). Even in Gujarat and Maharashtra, where rice is not the major cereal food, 32% and 28% households, respectively, consumed PDS rice. On the other hand, PDS rice was consumed by only a small proportion of households in West Bengal (rural: 13%; urban: 5%), Assam (rural: 9%; urban: 2%) and Bihar (rural: 1%; urban: 0.7%), though rice is the major cereal food in these States.<br /> <br /> * PDS consumption of wheat/atta was most common in Karnataka (rural: 46%; urban: 15%), rural areas of Gujarat (29%) and Maharashtra (26%), and in Madhya Pradesh (rural: 20%; urban: 10%).<br /> <br /> * PDS consumption of sugar was most prevalent in Tamil Nadu (rural: 65% households; urban: 64%), to be followed by Assam (rural: 40%; urban: 16%) and Andhra Pradesh (rural: 36%; urban: 15%). On the other hand, in both rural and urban areas, less than 1% households consumed PDS sugar in Punjab, Haryana, Bihar and Jharkhand, and fewer than 2% in Orissa and Uttar Pradesh. The all-India proportions of households were 16% for rural areas and 12% for urban.<br /> <br /> * Over 55% of rural households used PDS kerosene in all major States except Punjab and Haryana. Use of PDS kerosene was most common in West Bengal for both rural areas (91%) and urban areas (60%). <br /> <br /> * Among the four commodities, kerosene had a much larger share of quantity of consumption coming from PDS – 77% for rural and 57% for urban India. For rice the share of PDS in total quantity consumed was 13% for rural and 11% for urban; for wheat it was 7% for rural and 4% for urban, and for sugar, 9.5% for rural and about 6.5% for urban India.<br /> <br /> * Households holding a BPL or Antyodaya ration card exhibited a much greater degree of dependence on PDS than the population as a whole. This was most marked in case of wheat, where, for both rural and urban areas, as much as 28% of quantity consumed by such households came from PDS compared to 7% for the rural population as a whole and 4% for the overall urban population. For rice and sugar, the percentage contribution of PDS purchases to total consumption (in quantity terms) for these households was double the percentage share of PDS in consumption of the general population in rural areas and three times the percentage share of PDS for the general population in urban areas.<br /> <br /> * The Midday Meal scheme benefited children from an estimated 22.8% of rural households in 2004-05, the Integrated Child Development Scheme (ICDS) benefited 5.7% of rural households, the Food-for-Work Scheme, only 2.7%, and the Annapoorna scheme for the elderly, 0.9%. In urban India, while children from 8% of households benefited from the Midday Meal scheme, and the ICDS scheme benefited 1.8% households, only 0.2% urban households benefited from Annapoorna, and only 0.1% from Food for Work.<br /> <br /> * Among household occupational types in rural India, the (mostly manual) labour households – “agricultural labour” and “other labour” – had the highest proportions of households benefiting from each of the four schemes. Similarly, in urban India, “casual labour” households had the highest proportions of beneficiary households from each of the four schemes. <br /> <br /> * Among social groups, the Scheduled Tribes had the highest proportion of Food-for-Work beneficiary households in both rural and urban India, and also the highest proportion of ICDS beneficiaries.<br /> <br /> * Rural households possessing more than 0.40 hectares of land had a higher representation among recipients of benefits from the schemes than households possessing 0.40 hectares of land or less. The class of households possessing 0.41-1.00 hectares of land had the highest proportions of Food-for-Work and Midday Meal beneficiary households among six classes of rural households formed on the basis of size of land possessed.<br /> <br /> * In each of the top four classes among 12 classes of rural households formed on the basis of monthly per capita expenditure level (MPCE), 2-4% of households were ICDS beneficiaries.<br /> <br /> * The Midday Meal scheme benefited over 10% of rural households in most State/Uts (between 18% and 33%in 12 major States).<br /> <br /> * Among the major States, the highest proportions of (rural) Food for Work beneficiaries were found in Rajasthan (12%) and Orissa (8%).<br /> <br /> * As much as 62% of quantity of milk consumed in rural India came from home produce compared to 40% for wheat/atta, 30% for rice, and 11-18% for seven common pulse varieties. For eggs, 14% of consumption, and, for chicken, 13%, came from homegrown stock.<br /> <br /> * Among common vegetables and fruits, home produce was most important in case of coconuts (37% of quantity consumed in rural India), reported by as many as 28% of rural households. For arum and pumpkin, about a quarter of rural consumption came from homegrown stock.<br /> <br /> According to the [inside]11th Five Year Plan[/inside],<br /> <a href="http://planningcommission.gov.in/plans/planrel/fiveyr/11th/11_v2/11v2_ch4.pdf">http://planningcommission.gov.in/plans/planrel/fiveyr/11th/11_v2/11v2_ch4.pdf</a>:<br /> <br /> * The PDS is a major State intervention in the country aimed at ensuring food security to all the people, especially the poor. The PDS operates through a large distribution network of around 4.89 lakh fair price shops (FPS), and is supplemental in nature.<br /> <br /> * Under the PDS, the Central Government is responsible for the procurement and transportation of foodgrains up to the principal distribution centers of the FCI while the State Governments are responsible for the identification of families living below the poverty line, the issue of ration cards, and the distribution of foodgrains to the vulnerable sections through FPSs. PDS seems to have failed in serving the second objective of making foodgrains available to the poor. If it had, the consumption levels of cereals should not have fallen on average—as it has consistently over the last two decades.<br /> <br /> * With a view to improving its efficiency, the PDS was redesigned as TDPS with effect from June 1997. The TPDS envisages identifying the poor households and giving them a fixed entitlement of foodgrains at subsidized prices. Under the TPDS, higher rates of subsidies are being given to the poor and the poorest among the poor. The APL families are also being given foodgrains under TPDS but with lower subsidy. The scale of issue under TDPS for Antyodaya cardholders began with 10 kg per family per month, which has been progressively increased to 35 kg per family per month with effect from April 2002.<br /> <br /> * As identified by various studies, the major deficiencies of the TPDS include: (i) high exclusion and inclusion errors, (ii) non-viability of FPSs, (iii) failure in fulfilling the price stabilization objective, and (iv) leakages.<br /> <br /> <em>Performance Evaluation of TPDS</em><br /> <br /> * Only 22.7% FPSs (fair price shops) are viable in terms of earning a return of 12% on capital.<br /> * The offtake by APL cardholders was negligible except in Himachal Pradesh, Tamil Nadu, and West Bengal.<br /> * The offtake per BPL (below poverty line) card was high in WB, Kerala, Himachal Pradesh, and Tamil Nadu.<br /> * The offtake by the poor under TPDS was substantially higher than under universal PDS.<br /> * There are large errors of exclusion and inclusion and ghost cards are common.<br /> * High exclusion errors mean a low coverage of BPL households. The survey estimated that TPDS covers only 57% BPL families.<br /> * Errors of inclusion are high in Andhra Pradesh, Karnataka, and Tamil Nadu. This implies that the APL households receive an unacceptably large proportion of subsidized grains.<br /> * Leakages vary enormously between States. In Bihar and Punjab, the total leakage exceeds 75% while in Haryana and UP, it is between 50 and 75%.<br /> * Leakage and diversion imply a low share of the genuine BPL households of the distribution of the subsidized grains. During 2003–04, it is estimated that out of 14.1 million tonnes of BPL quota from the Central Pool, only 6.1 million tonnes reached the BPL families and 8 million tonnes did not reach the target families.<br /> * Leakage and diversion raised the cost of delivery. For every 1 kg that was delivered to the poor, GoI had to issue 2.32 kg from the Central Pool.<br /> * During 2003–04, out of an estimated subsidy of Rs 7258 crore under TPDS, Rs 4123 crore did not reach BPL families. Moreover, Rs 2579 crore did not reach any consumer but was shared by agencies involved in the supply chain.<br /> <br /> <em>Steps undertaken to strengthen the TPDS</em><br /> <br /> * A Citizens’ Charter has been issued in November 1997 for adoption by the State Governments to provide services in a transparent and accountable manner under PDS. Instructions have been issued for involvement of PRIs in identifications of BPL families and in Vigilance Committee.<br /> * The PDS (Control) Order 2001, inter alia, covers a range of areas relating to correct identification of BPL families, issue of ration cards, proper distribution, and monitoring of PDS-related operations.<br /> * A new scheme ‘Computerization of PDS Operations’ with a token provision of Rs 5 crore was introduced in 2006–07. The computerization of PDS operations would be an improvement on the existing system of ration cards, that is, the present manual system of making entries, etc. The new system will have personal details of all members of the family including their entitlement and the entire network of PDS from taluk to State level will be linked.<br /> * This is a new scheme introduced during the Eleventh Five Year Plan to strengthen the PDS. The scheme aims at taking effective measures to curb diversion and leakages through Global Positioning System, Radio Frequency Identification Device, etc.<br /> * The Village Grain Bank Scheme, which was hitherto with the Ministry of Tribal Affairs, has been transferred to the Department of Food and Public Distribution. The objective of the scheme is to establish Grain Banks in chronically food-scarce area and to provide safeguard against starvation during the lean period. The scheme is also to mitigate drought-induced migration and food shortages by making foodgrains available within the village during such calamities.<br /> * Construction of godowns was conceived during the Fifth Five Year Plan to build and increase the storage capacity available with FCI for storage of foodgrains.<br /> * A recommendation of the High-level Committee on Long Term Grain Policy (2000) was that instead of the current distinction between APL, BPL, and Antyodaya in terms of issue pricing for rice and wheat, there should be a single-issue price for grain issued by the FCI from its warehouses. This recommendation, sometimes identified with the return to universal PDS from TPDS adopted in 1997, has been criticized on a number of grounds. First, that if the same price for BPL and APL households was charged, this would not be financially viable for the BPL. If existing AAY and BPL cardholders were charged a higher price, there would be a diversion of benefits from the relatively poor to the relatively rich. Second, there might be pressure to keep the uniform CIP low as high common price for BPL and APL would have adverse consequences for the poor. On the other hand, a low CIP would increase even further the fiscal subsidy. Third, any widening in the effective reach of PDS due to its universalization would put unbearable pressures for the supply of grain into the PDS.</div> ', 'credit_writer' => '', 'article_img' => '', 'article_img_thumb' => '', 'status' => (int) 1, 'show_on_home' => (int) 1, 'lang' => 'EN', 'category_id' => (int) 10, 'tag_keyword' => '', 'seo_url' => 'pds-ration-food-security-42', 'meta_title' => '', 'meta_keywords' => '', 'meta_description' => '', 'noindex' => (int) 0, 'publish_date' => object(Cake\I18n\FrozenDate) {}, 'most_visit_section_id' => null, 'article_big_img' => null, 'liveid' => (int) 42, 'created' => object(Cake\I18n\FrozenTime) {}, 'modified' => object(Cake\I18n\FrozenTime) {}, 'edate' => '', 'category' => object(App\Model\Entity\Category) {}, '[new]' => false, '[accessible]' => [ '*' => true, 'id' => false ], '[dirty]' => [], '[original]' => [], '[virtual]' => [], '[hasErrors]' => false, '[errors]' => [], '[invalid]' => [], '[repository]' => 'Articles' } $imgtag = false $imgURL = '#' $titleText = 'PDS/ Ration/ Food Security' $descText = 'KEY TRENDS • During 2014-15, while procurement of foodgrains (rice and wheat) increased from 56.9 million tonnes to 60.2 million tonnes, offtake of foodgrains (rice and wheat) from the PDS decreased from 59.8 million tonnes to 55.9 million tonnes. 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Despite increased availability in the PDS and prevalence of high inflation in foodgrains, dependence on the PDS is reducing, suggesting that there may be issues of availability, timely availability and quality of the PDS foodgrains <strong>$*</strong><br /> </p> <p style="text-align:justify">• The PDS share in rice consumption in 2011-12 was about 27.9 percent in the rural sector and about 19.6 percent in the urban sector. The proportion of households reporting PDS purchase of rice during a 30-day period was 46 percent in the rural sector and about 23 percent in the urban sector <strong>**</strong><br /> <br /> • The share of PDS in wheat/atta consumption was about 17.3 percent in the rural sector and about 10.1 percent in the urban. The proportion of households reporting PDS purchase of wheat/atta during a 30-day period was about 34 percent in the rural sector and 19 percent in the urban sector <strong>**</strong> </p> <p style="text-align:justify"> </p> <p style="text-align:justify">• The per capita consumption of PDS rice has doubled in rural India and risen by 66% in urban India since 2004-05, implying that the share of PDS purchases in rice consumption has risen substantially. The share of PDS purchase in wheat consumption has increased considerably, per capita consumption of PDS wheat having more than doubled since 2004-05 in both sectors <strong>$</strong></p> <p style="text-align:justify"> </p> <p style="text-align:justify">• FCI owned storage capacity remained more or less constant ranging between 151 lakh metric tonne (LMT) and 156 LMT during the period 2006-07 to 2011-12. The foodgrains stock in the Central Pool steadily increased to 824 LMT on 1 June 2012. As a result, hiring of storage space by FCI increased from 100 LMT to 180 LMT during the period significantly adding to hiring charges from Rs. 322 crore in 2006-07 to Rs. 1119 crore in 2011-12. Further, due to constraints in available storage capacity, FCI could not take over stock of wheat procured by State Governments Agencies for the Central Pool within the prescribed time frame of June each year. This led to increase in payment of carry over charges to State Government Agencies from Rs. 175 crore in 2006-07 to Rs. 1635 crore in 2011-12 for holding of foodgrains beyond the prescribed time <strong>α</strong><br /> <br /> • The storage gap in FCI against the Central Pool stock witnessed a steady increase during the period 2006-07 to 2011-12. Against the storage gap of 332 LMT (March 2012), GoI/ FCI envisaged capacity addition of only 163 LMT during the 6 year period under various augmentation programmes. Out of this, only 34 LMT was completed (March 2012) <strong>α</strong><br /> <br /> • There has been a revival of the Public Distribution System in several states. The contribution of PDS purchases to total consumption in 2009-10 shows a considerable rise compared to 2004-05, particularly for rice and wheat/atta <strong>€</strong><br /> <br /> • The share of PDS purchase in rice consumption in 2009-10 was about 23.5% in the rural sector (1.41 kg out of 6.00 kg per person) and about 18% in the urban (0.81 kg out of 4.52 kg per person). In 2004-05, the PDS share in rice consumption had been about 13% in the rural sector and 11% in the urban <strong>€</strong><br /> <br /> • The share of PDS in wheat/atta consumption in 2009-10 was about 14.6% (0.62 kg out of 4.25 kg per person) in the rural sector, double what it was in 2004-05 (7.3%), and about 9% in the urban sector, compared to only 3.8% in 2004-05 <strong>€</strong><br /> <br /> • The Chhattisgarh Food Security Act was passed on 21 December 2012 to ensure “access to adequate quantity of food and other requirements of good nutrition to the people of the state, at affordable prices, at all times to live a life of dignity”.<br /> <br /> • Under the Consumer Protection Act, 1986 and Delhi Citizens' Charter 2011, consumers are empowered to file complaints in case of unfair trade practice of the PDS dealer/ trader, defect in goods, deficiency in services, sale of unsafe goods and overcharging in excess of that stamped on the product.<br /> <br /> • The Delhi Citizens' Charter 2011 makes it mandatory for the fair price shops to proactively display the following information: 1. License No./ Name of PDS outlets; 2. Stock as on date; 3. Weekly off; 4. Rates of Commodities; 5. Sample of Sugar, Wheat and Rice; 6. Timing of PDS outlets Fair Price Shop/KOD i.e. 9:00 am to 1:00 pm and 3:00 pm to 7 pm; 7. Complain Register is available. <br /> <br /> • The PDS operates through a large distribution network of around 4.89 lakh fair price shops (FPS), and is supplemental in nature <strong>**</strong><br /> <br /> • Access to ration card by the land poorest section in the rural areas is minimal. 51% of households in the lowest size class of landholding “<0.01 hectares” had no ration card at all <strong>*</strong><br /> <br /> • 81% of rural households and 67% of urban households held ration cards <strong>*</strong><br /> <br /> • Antyodaya cardholders formed less than 3% of rural households and less than 1% of urban households <strong>*</strong><br /> <br /> • In rural areas, the percentage of households having Antyodaya cards was 5% for Scheduled Tribes (ST), about 4.5% for Scheduled Castes (SC), and 2% for the other groups <strong>*</strong></p> <p style="text-align:justify"> </p> <p style="text-align:justify">$* Economic Survey 2015-16, Ministry of Finance, <a href="http://indiabudget.nic.in/es2015-16/echapter-vol1.pdf">Volume 1</a> and <a href="http://indiabudget.nic.in/es2015-16/echapter-vol2.pdf">Volume 2</a> </p> <p style="text-align:justify"> </p> <p style="text-align:justify">** NSS 68th Round report entitled: Public Distribution System and Other Sources of Household Consumption, 2011-12 (released in June 2015), please <a href="http://mospi.nic.in/Mospi_New/upload/report_565_26june2015.pdf">click here</a> to access </p> <p style="text-align:justify"> </p> <p style="text-align:justify">$ NSS Report entitled Household Consumption of Various Goods and Services in India 2011-12 (NSS 68th Round, July 2011-June 2012), released in June 2014 (please <a href="http://mospi.nic.in/Mospi_New/upload/Report_no558_rou68_30june14.pdf">click here</a> to download)</p> <p style="text-align:justify"> </p> <p style="text-align:justify">α Report of the Comptroller and Auditor General of India on Performance Audit of Storage Management and Movement of Food Grains in Food Corporation of India, Report no.-7 of 2013-Union Government (Ministry of Consumer Affairs, Food and Public Distribution),<br /> <a href="http://saiindia.gov.in/english/home/Our_Products/Audit_Report/Government_Wise/union_audit/recent_reports/union_performance/2013/Civil/Report_7/Report_7.html">http://saiindia.gov.in/english/home/Our_Products/Audit_Report/Government_Wise/union_audit/recent_reports/union_performance/2013/Civil/Report_7/Report_7.html</a><br /> </p> <p style="text-align:justify">€ NSS 66th Round Report titled: Public Distribution System and Other Sources of Household Consumption (July 2009-June 2010), <a href="http://mospi.nic.in/Mospi_New/upload/nss_report_545.pdf">http://mospi.nic.in/Mospi_New/upload/nss_report_545.pdf</a></p> <p style="text-align:justify"> </p> <p style="text-align:justify"><span style="font-family:arial,helvetica,sans-serif; font-size:small">* Public Distribution System (PDS) and Other Sources of Household Consumption, 2004-05, NSS 61st Round, (July 2004 - June 2005), Volume I</span></p> <p style="text-align:justify"> </p> <p style="text-align:justify"><span style="font-family:arial,helvetica,sans-serif; font-size:medium">Since the nineteenth Century, the British Raj had vast experience of facing droughts and famines, and very often helplessly. The British Famine Commission had estimated in the 1880s that “…in times of very great scarcity, prices of food grain rise to three times their ordinary amount” (B G Kumar, 1988). It is in this backdrop that the achievement of India’s imperfect Public Distribution System (PDS) become significant. According to the author, it was due to the PDS that the prices of food grain never rose beyond 10 per cent in the worst years of drought, scarcity and failed crops since independence. Compared to 1,50,000 deaths in the 1942 drought (Samra J S 2004), even the most uncharitable estimates of deaths in the 2002 drought, one of the worst in over four decades, were below 100. </span></p> <p style="text-align:justify"><span style="font-family:arial,helvetica,sans-serif; font-size:medium">It is well known that a large portion of food grain meant for the PDS is pilfered and sold in the black market, and that this sort of corruption is on the rise. However, what is equally true but not so well known is that in some of free India’s worst years of droughts and food scarcity the self sufficiency in food, adequate storage facilities and the PDS brought the country back from the brink. The PDS played three important functions, particularly during droughts and crop failures: a) distribution of food far and wide through fair-price outlets popularly known as the ‘ration’ shops, b) income generation through labour intensive food for work programmes, and c) price stabilization by augmenting availability in the market. </span></p> <p style="text-align:justify"><span style="font-family:arial,helvetica,sans-serif; font-size:medium">The big achievement of the PDS hence was to stop prices from spiraling to something like three times their normal price as was prevalent during the British Raj. It also played a role in controlling hoarding and black marketing. Within India the best example of public distribution having an impact on the state’s overall wellbeing comes from Kerala. Unlike most of India where the PDS is confined to the urban areas, in Kerala it penetrated the rural areas very well and emerged as an important instrument of public policy against hunger and deprivation. In terms of resources and prosperity Kerala is behind many other states like Punjab and Haryana but is ahead of most in terms of literacy, health services and many social indicators like the life expectancy.<br /> </span></p> <p style="text-align:justify"><span style="font-family:arial,helvetica,sans-serif; font-size:medium">**page**</span></p> <p style="text-align:justify">Please <a href="https://im4change.org/upload/files/Take-home-ration-report-30_06_2022.pdf">click here</a> to access the document titled [inside]Take Home Ration: Good Practices across the States/UTs (published in 2022)[/inside], which has been prepared jointly by NITI Aayog and UN World Food Programme.</p> <p style="text-align:justify">NITI Aayog and the UN World Food Programme have collaborated in bringing out good practices related to Take Home Rations (THR) prevalence across the States/UTs. There has been a lot of innovation in the field of THR in terms of production, distribution, quality control, monitoring, and use of technology. Such good practices is expected to help other States/UTs to further strengthen the effectiveness of their THR programmes.</p> <p style="text-align:justify">Within the food-based safety nets, the Integrated Child Development Services (ICDS) scheme seamlessly juxtaposes the ‘first 1000 days’ window of opportunity whilst aiming to address malnutrition among young children and pregnant/ lactating women through a host of services including provision of take-home rations (THR), nutrition health education, etc. Quality assured, safe and nutritious take-home rations delivered to the ICDS participants with appropriate messages on nutrition have the potential to prevent malnutrition in the communities.</p> <p style="text-align:justify"><strong>---</strong></p> <p style="text-align:justify">The first edition of ‘State Ranking Index for NFSA’ (please <a href="/upload/files/NFSA%20index%201st%20edition.pdf">click here</a> to access) was released on July 5, 2022 during the conference of Food Ministers of States/UTs on ‘Food Nutrition and Security in India’, which was organised by the Department of Food and Public Distribution. </p> <p style="text-align:justify">The [inside]State Ranking Index for NFSA - 1st edition (released on July 5, 2022)[/inside] attempts to document the status and progress of implementation of National Food Security Act and various reform initiatives across the country, post consultation with states. It highlights the reforms undertaken by states and UTs and create a cross-learning environment and scale-up reform measures by all states and Union Territories (UTs). The present 'State Ranking Index for NFSA' is largely focused on NFSA Distribution and will include procurement, PMGKAY Distribution in future. The Index for ranking the states and UTs is built on three key pillars which covers the end-to-end implementation of NFSA through TPDS. These pillars are: i) NFSA — Coverage, targeting and provisions of the Act; ii) Delivery platform; and iii) Nutrition initiatives.</p> <p style="text-align:justify">The main findings of the State Ranking Index for NFSA - 1st edition are as follows: </p> <p style="text-align:justify">• The top five states/ UTs in terms of index score and ranking (i.e., Comprehensive country level Index) are: Odisha (Score: 0.836; Rank: 1), Uttar Pradesh (Score: 0.797; Rank: 2), Andhra Pradesh (Score: 0.794; Rank: 3), Gujarat (Score: 0.790; Rank: 4), and Tripura (Score: 0.788; Rank: 5).</p> <p style="text-align:justify">• The bottom five states/ UTs in terms of index score and ranking (i.e., Comprehensive country level Index) are: Ladakh (Score: 0.412; Rank: 34), Meghalaya (Score: 0.512; Rank: 33), Manipur (Score: 0.522; Rank: 32), Andaman and Nicobar Islands (Score: 0.562; Rank: 31), and Jammu and Kashmir (Score: 0.564; Rank: 30).</p> <p style="text-align:justify">• The top five states/ UTs (belonging to special categories -- North Eastern states, Himalayan states, and the Island Regions) in terms of index score and ranking (based on complexity in providing services owing to geographical constraints) are: Tripura (Score: 0.788; Rank: 1); Himachal Pradesh (Score: 0.758; Rank: 2), Sikkim (Score: 0.710; Rank: 3), Nagaland (Score: 0.648; Rank: 4), and Uttarakhand (Score: 0.637, Rank: 5). </p> <p style="text-align:justify">• The bottom five states/ UTs (belonging to special categories -- North Eastern states, Himalayan states, and the Island Regions) in terms of index score and ranking (based on complexity in providing services owing to geographical constraints) are: Ladakh (Score: 0.412; Rank: 14), Meghalaya (Score: 0.512; Rank: 13), Manipur (Score: 0.522; Rank: 12), Andaman and Nicobar Islands (Score: 0.562; and Rank: 11), and Jammu & Kashmir (Score: 0.564; Rank: 10). </p> <p style="text-align:justify">• Among the 3 UTs where Direct Benefit Transfer (DBT)- Cash is operational, Dadra and Nagar Haveli & Daman and Diu is the top ranked UT.</p> <p style="text-align:justify">**page**</p> <p style="text-align:justify">The key findings of the report titled [inside]Fulfilling the promise of One Nation One Ration Card: A frontline perspective from 5 Indian states (released in April, 2022)[/inside], which has been prepared by Dalberg and Omidyar Network India, are as follows (please <a href="https://im4change.org/upload/files/Dalberg%20Report-Fulfilling-the-promise-of-One-Nation-One-Ration-Card-A-frontline-perspective-from-5-Indian-states.pdf">click here</a> to access):</p> <p style="text-align:justify">• The <a href="https://im4change.org/upload/files/Dalberg%20Report-Fulfilling-the-promise-of-One-Nation-One-Ration-Card-A-frontline-perspective-from-5-Indian-states.pdf">study</a> brings to light both demand and supply-side perspectives on the ONORC. The <a href="https://im4change.org/upload/files/Dalberg%20Report-Fulfilling-the-promise-of-One-Nation-One-Ration-Card-A-frontline-perspective-from-5-Indian-states.pdf">study</a> has been done by Dalberg in partnership with Kantar, and with support from Omidyar Network India. A mixed-methods, data-driven approach was used for the study.</p> <p style="text-align:justify">• Two key prerequisites for rolling out ONORC were largely fulfilled in the five study states (i.e., Andhra Pradesh, Karnataka, Rajasthan, Uttar Pradesh, and Jharkhand): more than 98 percent of beneficiaries’ ration cards in each of the Dalberg study states was seeded with Aadhaar (for biometric authentication), and 95 percent of Fair Price Shops had an electronic point of sale machine (ePoS) for authenticating and recording transactions.</p> <p style="text-align:justify">• A survey of 6,750 PDS beneficiaries was conducted along with a survey of 1,540 PDS dealers. The survey was conducted telephonically with all beneficiaries except women who were widowed, divorced or separated; for them, the researchers conducted the survey in person because they believed that such vulnerable beneficiaries would be difficult to reach or may be uncomfortable responding by phone. Interviews with PDS dealers were also conducted in person. Stakeholder interviews with government officials and researchers were also undertaken. </p> <p style="text-align:justify">• Both users and non-users of portability, including migrants and vulnerable populations, were interviewed. The sample included 25 percent migrants (N = 1703) who the Dalberg team expected to be the most impacted by the ONORC. In addition, the sample included 6 percent marginalized women (N = 377) who were widowed, divorced, or separated to understand if they faced any specific challenges. </p> <p style="text-align:justify"><strong><em>Ration card holders' experience in the five study states</em></strong> </p> <p style="text-align:justify">• Around 12 percent of households with a ration card tried to use PDS portability recently; 20 percent of migrant households with a ration card tried to use PDS portability recently.</p> <p style="text-align:justify">• Roughly 6 percent of all ration card holders who had not used PDS portability would like to do so in the future; at least one-fifth of them had not used it, because they were unaware of ration portability.</p> <p style="text-align:justify">• Nearly 12 percent of households that tried availing rations using portability experienced a transaction failure compared to 9 percent of households overall who experienced failures (for portability and non-portability transactions combined) when trying to collect their rations. </p> <p style="text-align:justify">• About 4 percent of households that tried to access rations under portability could not do so, as compared to 1 percent of households using PDS overall.</p> <p style="text-align:justify"><strong><em>Experience of PDS dealers</em></strong></p> <p style="text-align:justify">• About 97 percent of PDS dealers knew that ration portability was possible; nearly 73 percent knew that inter-state ration portability was allowed. </p> <p style="text-align:justify">• Nearly 66 percent of PDS dealers reported receiving ration card holders not registered to their FPS; approximately 28 percent of these PDS dealers were unable to serve at least some portability customers, primarily due to technology failures or because they feared running out of stocks. </p> <p style="text-align:justify">• Around 10 percent of PDS dealers ran out of stock at least once in the three months preceding the survey, often due to demand fluctuation under portability.</p> <p style="text-align:justify">• About 32 percent of PDS dealers felt that portability would make their business model unviable, at least some of the time.<br /> <br /> • Nearly 52 percent of PDS dealers did not use exception handling methods when ePoS-based transactions failed due to biometric authentication or connectivity failure</p> <p style="text-align:justify"><strong><em>About the ONORC</em></strong></p> <p style="text-align:justify">• The “One Nation One Ration Card (ONORC)” scheme is a one-of-its-kind citizen-centric initiative in the country, swiftly implemented in 34 states/ UTs in a short-span of time (as of August 2021), after being <a href="https://pib.gov.in/factsheetdetails.aspx?id=148563">sanctioned in 2018-19</a> and <a href="https://pib.gov.in/factsheetdetails.aspx?id=148563">implemented from August 2019</a>.</p> <p style="text-align:justify">• In a <a href="https://pib.gov.in/newsite/PrintRelease.aspx?relid=200525">written reply by the Minister for Consumer Affairs</a>, Food and Public Distribution, Shri Ramvilas Paswan, in Rajya Sabha on March 20, 2020, it <a href="https://pib.gov.in/newsite/PrintRelease.aspx?relid=200525">was said that</a> under the PDS reforms, a scheme on "Integrated Management of Public Distribution System (IM-PDS)" is being implemented w.e.f. April 2018 in all states/ UTs. The minister had stated that the main objective of the scheme is to introduce nationwide portability of ration card holders under NFSA (2013), through 'One Nation One Ration Card' system. This system enables the migratory ration card holders to lift their entitled food grains from any Fair Price Shop (FPS) of their choice in the country by using their existing/ same ration card issued in their home states/ UTs after biometric authentication on electronic Point of Sale (ePoS) devices installed at the Fair Price Shops.</p> <p style="text-align:justify">**page**</p> <p style="text-align:justify">Please <a href="/upload/files/Aatma%20Nirbhar%20Bharat%20presentation%20Part-2%2014-5-2020.pdf">click here</a> to access the [inside]Details of Second Tranche announced by Union Finance & Corporate Affairs Minister Smt. Nirmala Sitharaman (dated 14th May, 2020) under Aatmanirbhar Bharat Abhiyaan[/inside] to support Indian economy in fight against COVID-19, Ministry of Finance, Press Information Bureau.</p> <p style="text-align:justify">Please <a href="https://im4change.org/upload/files/Garib%20Kalyan%20Yojana%2026%20March%202020.pdf">click here</a> to access the [inside]Details of the Relief Package of Rs 1.70 Lakh Crore under Pradhan Mantri Garib Kalyan Yojana (dated 26th March, 2020)[/inside] for the poor to help them fight the battle against Coronavirus, Ministry of Finance, Press Information Bureau Delhi.</p> <p style="text-align:justify"><span style="font-family:arial,helvetica,sans-serif; font-size:medium">---</span></p> <p style="text-align:justify"><br /> As per the [inside]Economic Survey 2015-16[/inside], Ministry of Finance, <a href="http://indiabudget.nic.in/es2015-16/echapter-vol1.pdf">Volume 1</a> and <a href="http://indiabudget.nic.in/es2015-16/echapter-vol2.pdf">Volume 2</a> :<br /> <br /> • During 2014-15, while procurement of foodgrains (rice and wheat) increased from 56.9 million tonnes to 60.2 million tonnes, offtake of foodgrains (rice and wheat) from the PDS decreased from 59.8 million tonnes to 55.9 million tonnes. Despite increased availability in the PDS and prevalence of high inflation in foodgrains, dependence on the PDS is reducing, suggesting that there may be issues of availability, timely availability and quality of the PDS foodgrains.<br /> <br /> • Food subsidy in India has increased by more than 4 times from Rs. 23,071 crore in 2005-06 to Rs. 1,05,509.41 crore in 2015-16. PDS costs are high and increasing with leakages, high administrative costs, corruption and mismanagement. The costs including opportunity costs of resources diverted for subsidy are high in terms of the public investments in agriculture which are foregone and which can improve productivity.<br /> <br /> • The economic cost of foodgrains to the Food Corporation of India (FCI) comprises pooled cost of grain, procurement incidentals and distribution cost.<br /> <br /> • The pooled cost of grain (MSP and bonus) accounts for two-thirds of the economic cost of wheat and rice.<br /> <br /> • The procurement incidentals (i.e costs related to mandi charges and taxes, cost of gunny bags, arhatiya commission, mandi labour, forwarding charges, internal movement, storage charges, interest, administrative charges and others) constitute around 16-17 percent of total economic costs for both rice and wheat.<br /> <br /> • There has been a rise in the share of distribution cost in total economic cost for rice and wheat in the recent years.<br /> <br /> • According to the Commission for Agricultural Costs and Prices (CACP) report, the increasing economic costs of handling foodgrains through procurement, distribution and storage, large procurement in recent years and the widening gap between the economic cost of foodgrains and the central issue price have been the major factors leading to the ballooning food subsidy.<br /> <br /> • The Economic Survey 2015-16 informs that there has been a steady increase in the Minimum Support Price (MSP) of crops over the years since 2011-12.<br /> <br /> • Between 2015-16 and 2014-15, the MSP for paddy (common) and paddy (Grade A) increased by 3.7 percent and 3.6 percent, respectively. Between 2015-16 and 2014-15, the MSP for wheat increased by 5.2 percent.<br /> <br /> • The Economic Survey 2015-16 has suggested that there is a case for replacing the present system of MSP/procurement based PDS with DBT and freeing the market of all controls on domestic movement and import. The entire activity of changes in the policy parameters vitiates the concept of a market and needs to be discontinued to enhance productivity in agriculture, says the Survey.<br /> <br /> • Most states have now digitised their PDS. Agents along a commodity’s supply chain can obstruct the spread of JAM (Jan Dhan, Aadhaar and Mobile Phones) if their interests are threatened. The limited progress in getting Fair Price Shops in the Public Distribution System (PDS) to adopt Point-of-Sale (POS) machines for biometric authentication is suggestive of such resistance. Profits are required for FPS, fertiliser retail outlets and other distributors to remain viable, and ought to be seen as a feature, not a bug, in subsidy design. Rents must be shared for reform to proceed, and thus distributors need incentives before they invest in JAM infrastructure. The hold-up power of groups within the subsidy system is an example of the Indian’s economy exit problem.<br /> <br /> • Beneficiaries verify their identities through scanning their thumbprint on a POS machine while buying the subsidised product—say kerosene at the PDS shop. This is being successfully attempt by Krishna district in Andhra Pradesh, with significant leakage reductions.<br /> <br /> • Despite financial inclusion scores being low, if Fair Price Shops are equipped with POS machines beneficiaries can simply authenticate their identities while taking their rations as under the current system. BAPU—Biometrically Authenticated Physical Uptake preparedness is much better than for Rural DBT preparedness. The average state preparedness is 12 percent, but there are some states – like Andhra Pradesh (96 percent), Chhattisgarh (42 percent) and Madhya Pradesh (27 percent) – that with some policy push could be well-prepared for BAPU in the near future.<br /> <br /> • Kerosene makes up about 1 per cent of the consumption basket of the poor; however about 50 per cent of the Kerosene given under PDS is consumed by the well-off and the rest by the bottom 3 deciles, showing that half of the subsidy benefit goes to the well-off section.<br /> <br /> • Future prices are guaranteed by the government through the MSP. But while the government announces MSP for 23 crops, effective MSP-linked procurement occurs mainly for wheat, rice and cotton. While there is no government procurement per se in sugarcane, a crop with assured irrigation, mills are legally obligated to buy cane from farmers at prices fixed by government, an effective MSP-like engagement. But even for these crops MSP is restricted to a subset of farmers in a few states. This can be clearly observed in large gaps in the percentage of farmers who are even aware of the MSP policy.<br /> <br /> • In Punjab and Haryana, almost all paddy and wheat farmers are aware of the MSP policy. However, very few farmers who grow pulses are aware of an MSP for pulses. Even for paddy and wheat where active procurement occurs, there is a substantial variation across states – with only half or less paddy and wheat farmers reporting awareness of MSP, especially in states such as, Gujarat, Maharashtra, Rajasthan, Andhra Pradesh and Jharkhand. This points to the possibility that procurement in these states may be happening in some districts and not in others.<br /> <br /> • Public procurement at MSP has disproportionately focused on wheat, rice and sugarcane and perhaps even at the expense of other crops such as pulses and oilseeds. This has resulted in buffer stocks of paddy and wheat to be above the required norms, but also caused frequent price spikes in pulses and edible oils, despite substantial imports of these commodities.<br /> <br /> • The absence of MSP procurement for most crops in most states implies either that farmers are selling their products to private intermediaries above the MSP or the converse, i.e., farmers have little option but to sell their produce at prices below the MSP, resulting in a regional bias in farm incomes. There is a general sense that the latter is a more prevalent phenomenon, highlighting the need for reorienting agriculture price policies, such that MSPs are matched by public procurement efforts towards crops that better reflect the country’s natural resource scarcities.<br /> <br /> • One way of rationalizing MSP policy is to make these price signals reflect social rather than just private returns of production. The social returns to pulse production is higher than the private returns, because it not only uses less water and fertiliser but fixes atmospheric nitrogen naturally and helps keep the soil porous and well aerated because of its deep and extensive root systems. These positive social benefits should be incorporated into MSP estimates, says the Economic Survey 2015-16.<br /> <br /> • Farmers could also be assured a floor price for their crops through a “Price Deficiency Payment” (Niti Aayog, 2015). Under this system if the price in an Agriculture Produce Market Committee (APMC) mandi fell below the MSP then the farmer would be entitled to a maximum of, say, 50 percent of the difference between the MSP and the market price. This subsidy could be paid to the farmer via Direct Benefits Transfer (DBT). Such a system would keep the quantum of the subsidy bill in check and also be consistent with India’s obligations to the WTO.<br /> <br /> • The weaknesses of state agriculture universities (SAU) imply that extension systems critical for the diffusion of new agricultural innovations and practices, or even dissemination of information about public programs such as MSP, are unable to achieve their intended objectives.<br /> <br /> **page**</p> <p style="text-align:justify"><br /> The NSS Report no. 565: Public Distribution System and Other Sources of Household Consumption, 2011-12 is based on information collected through NSS Schedule 1.0 (Consumer Expenditure), Type 2, during July 2011-June 2012 from 101651 households (59683 rural and 41968 urban) in 7469 villages and 5268 urban blocks spread over the entire country.<br /> <br /> According to the [inside]NSS 68th Round report: PDS and Other Sources of Household Consumption, 2011-12 (released in June 2015)[/inside], please <a href="http://mospi.nic.in/Mospi_New/upload/report_565_26june2015.pdf">click here</a> to access:<br /> <br /> • The PDS share in rice consumption in 2011-12 was about 27.9% in the rural sector and about 19.6% in the urban sector. The share of PDS in wheat/atta consumption was about 17.3% in the rural sector and about 10.1% in the urban. PDS purchases accounted for 15.8% of consumption of sugar in the rural sector, and for 10.3% in the urban sector. For kerosene, on the other hand, the contribution of PDS purchase was 80.8% in rural areas and 58.1% in urban.<br /> <br /> <em>Rice:</em> <em>Utilisation of PDS across states</em><br /> <br /> • At the national level, the proportion of households reporting PDS purchase of rice during a 30-day period was 46% in the rural sector and about 23% in the urban sector.<br /> <br /> • The major States with relatively high incidence of PDS purchase of rice in the rural sector were Tamil Nadu (89% households), Andhra Pradesh (87%), Kerala (78%) and Karnataka (75%).<br /> <br /> • In the urban sector, Tamil Nadu (67% households) again had the highest proportion of households reporting purchase during a 30-day period, followed by Kerala (61%), Andhra Pradesh (about 45%) and Chhattisgarh (42%).<br /> <br /> • The contribution of PDS purchases was highest in Tamil Nadu (rural: 53%, urban: 43%), followed by Karnataka (rural: 45%, urban: 25%), Chhattisgarh (rural: 38%, urban: 30%), Kerala (rural: 36%, urban: 30%) and Andhra Pradesh (rural: 33%, urban: 22%). For West Bengal, where rice is the main item of cereal consumption, the share of PDS purchases in consumption was lowest (rural: 10%, urban: 6%).<br /> <br /> <em>Wheat/ Atta:</em> <em>Utilisation of PDS across states</em><br /> <br /> • At the all-India level, the proportion of households reporting PDS purchase of wheat/atta during a 30-day period was about 34% in the rural sector and 19% in the urban sector.<br /> <br /> • Among the major States where wheat is the major cereal food, the States with the highest incidence of PDS purchase of wheat/atta in the rural sector were Maharashtra (40%), Madhya Pradesh (36% households), and Gujarat (32%).<br /> <br /> • In the urban sector, among predominantly wheat-consuming States, Madhya Pradesh (23%) had the highest incidence of PDS purchase.<br /> <br /> • The contribution of PDS purchases was highest in Maharashtra (30%), followed by Gujarat and Madhya Pradesh (18%) among the predominantly wheat-consuming State in rural sector. In the urban sector, among States where wheat is an important cereal food, the PDS share in consumption was relatively high in Madhya Pradesh (14%).<br /> <br /> <em>Sugar:</em> <em>Utilisation of PDS across states</em><br /> <br /> • The proportion of households reporting PDS purchase was highest in Tamil Nadu (rural: 90%, urban: 77%), followed by Andhra Pradesh (rural: 82%, urban: 42%), Assam (rural: 71%, urban: 41%) Chhattisgarh (rural: 66%, urban: 36%), and Karnataka (rural: 67%, urban: 27%).<br /> <br /> • The incidence of PDS purchase was very low in Punjab, Jharkhand, Bihar and Rajasthan, urban areas of Maharashtra and Gujarat (0-5% households), and also low in Haryana, and urban areas of Uttar Pradesh and West Bengal (5-10%).<br /> <br /> <em>Kerosene: Utilisation of PDS across states</em></p> <p style="text-align:justify"><br /> • In both rural and urban sectors of each State, a considerably larger proportion of households reported consumption of kerosene from PDS purchase than from other sources. For India as a whole, 76% rural households and 30% urban households reported consumption of kerosene from PDS purchases, while 22% rural households and 16% urban households reported consumption of kerosene from other sources.<br /> <br /> • In all major States except Punjab and Haryana, the proportion of households reporting consumption of kerosene from PDS purchase ranged from 62% to 91% in the rural sector and from 10% to 59% in the urban sector.<br /> <br /> • Both in rural and urban India, use of kerosene from PDS was most widespread in West Bengal (91% of rural households, 59% of urban), followed by Bihar (88% rural, 53% urban), and Chhattisgarh (86% rural, 48% urban).<br /> <br /> <em>Consumption from Home-growth stock in rural India</em></p> <p style="text-align:justify"><br /> • About 29.4% of total cereal consumption and 10.3% of total pulse consumption in rural India in 2011-12 came from home-grown stock; this is not very different from the 2009-10 estimate.<br /> <br /> • For rice, the share of home produce in quantity of consumption increased from 25% in 2009-10 to 28% in 2011-12, whereas for wheat/atta, it decreased marginally from 37% to 36% during this period.<br /> <br /> • For pulses, as a whole, the share of home produce in quantity of consumption remained almost unchanged since 2009-10. The share increased for ‘moong’ and ‘split gram’; for the other varieties it either decreased or remained unchanged.<br /> <br /> • For milk, the share of home produce dropped by about 2 percentage points since 2009-10 to about 57%. The percentage of households reporting “only home consumption” of milk was around 33%.<br /> <br /> <em>Distribution of Households by type of Ration Card possessed</em></p> <p style="text-align:justify"> </p> <p style="text-align:justify">• At national level, 5% rural households possessed Antyodaya ration cards, 38% had BPL cards, 42% possessed cards other than BPL and Antyodaya, and the remaining 14% did not have any card. Among urban households, 2% had Antyodaya cards, 16% had BPL cards, 50% had other cards, and 33% had none.<br /> <br /> • Among the different household types in rural India, the proportion possessing Antyodaya was highest (7%) for casual labour in agriculture & non-agriculture households. For the ‘regular wage-salary earning’ category, the incidence was as low as 3%. BPL cards were possessed by 56% of households of the ‘casual labour in agriculture’ category.<br /> <br /> • In rural India, Antyodaya cards were possessed by 8% of SC households, 7% of ST households and 3% of households of the ‘Others’ category. BPL cards were possessed by 49% of ST and 47% of SC households, and by 26% households of the ‘Others’ category.<br /> <br /> • In urban India, on the other hand, possession of an Antyodaya card was rare for all the social groups: 3% for SC & ST, 2% for OBC and 1% for ‘Others’. Around 20% of ST, SC and OBC households, but only 8% of ‘Others’ had BPL cards. Scheduled Tribes had the highest proportion (41%) of households with no ration card.<br /> <br /> • At all-India level, incidence of possession of Antyodaya as well as BPL cards was seen to fall with increase in size of land possessed. At the same time, it is of interest to note that households belonging to the smallest size class of land possessed had the highest proportion (21%) of households with no ration card.<br /> <br /> • In rural areas, the percentage of households possessing Antyodaya cards exceeded 5% in nine out of seventeen major States. In urban India, on the other hand, the percentage possessing Antyodaya cards was low for all the major states, the highest being only 4% (Chhattisgarh).<br /> <br /> • In both rural and urban India, the incidence of possession of BPL cards was relatively high in Andhra Pradesh (85% rural, 49% urban), Karnataka (64% rural, 29% urban) and Chhattisgarh (59% rural, 33% urban).</p> <p style="text-align:justify"> </p> <p style="text-align:justify">**page**</p> <p style="text-align:justify"><br /> [inside]Recommendations of High Level Committee on restructuring of FCI[/inside] (Please <a href="tinymce/uploaded/Report%20of%20the%20High%20Level%20Committee%20on%20Reorienting%20the%20Role%20and%20Restructuring%20of%20FCI_English_1.pdf" title="Report of HLC on FCI reforms">click here</a> to access the report)<br /> <br /> High Level Committee (HCL) on restructuring of Food Corporation of India (FCI) has submitted its report to the Government. It was submitted by Shri Shanta Kumar, Chairman of the Committee to the Prime Minister, Shri Narendra Modi yesterday. The HCL was set up by the Government on 20th August, 2014.The major issue before the Committee was how to make the entire food grain management system more efficient by reorienting the role of FCI in MSP operations, procurement, storage and distribution of grains under Targeted Public Distribution System (TPDS).<br /> <br /> The Committee had wide consultations with several Chief Ministers, Food Secretaries and other stakeholders in various States. Suggestions from public were invited through various newspapers also. Executive Summary of the report is as follows-<br /> <br /> <strong>Backdrop</strong><br /> <br /> * Government of India (GoI) set up a High Level Committee (HLC) in August 2014 with Shri Shanta Kumar as the Chairman, six members and a special invitee to suggest restructuring or unbundling of FCI with a view to improve its operational efficiency and financial management. GoI also asked HLC to suggest measures for overall improvement in management of foodgrains by FCI; to suggest reorienting the role and functions of FCI in MSP operations, storage and distribution of foodgrains and food security systems of the country; and to suggest cost effective models for storage and movement of grains and integration of supply chain of foodgrains in the country.<br /> <br /> * The HLC had wide consultations with various stakeholders in its several meetings in different parts of the country. It also invited comments through advertisements in newspapers and electronic media. HLC would like to gratefully acknowledge that it has benefitted immensely from this consultative process, and many of its recommendations are based on very intensive discussions with stakeholders.<br /> <br /> * In order to conceive reorienting the role of FCI and its consequent restructuring, one has to revisit the basic objectives with which FCI was created, and what was the background of food situation at that time. It is against that backdrop, one has to see how far FCI has achieved its objectives, what the current situation on foodgrain front, what are the new challenges with regard to food security, and how best these challenges can be met with a reoriented or restructured institution like FCI.<br /> <br /> * FCI was set up in 1965 (under the Food Corporation Act, 1964) against the backdrop of major shortage of grains, especially wheat, in the country. Imports of wheat under PL- 480 were as high as 6-7 MMT, when country's wheat production hovered around 10-12 MMT, and country did not have enough foreign exchange to buy that much quantity of wheat from global markets. Self-sufficiency in grains was the most pressing objective, and keeping that in mind high yielding seeds of wheat were imported from Mexico. Agricultural Prices Commission was created in 1965 to recommend remunerative prices to farmers, and FCI was mandated with three basic objectives: (1) to provide effective price support to farmers; (2) to procure and supply grains to PDS for distributing subsidized staples to economically vulnerable sections of society; and (3) keep a strategic reserve to stabilize markets for basic foodgrains.<br /> <br /> * How far FCI has achieved these objectives and how far the nation has moved on food security front? The NSSO's (70th round) data for 2012-13 reveals that of all the paddy farmers who reported sale of paddy during July-December 2012, only 13.5 percent farmers sold it to any procurement agency (during January-June 2013, this ratio for paddy farmers is only 10 percent), and in case of wheat farmers (January-June, 2013), only 16.2 percent farmers sold to any procurement agency. Together, they account for only 6 percent of total farmers in the country, who have gained from selling wheat and paddy directly to any procurement agency. That diversions of grains from PDS amounted to 46.7 percent in 2011-12 (based on calculations of offtake from central pool and NSSO's (68th round) consumption data from PDS); and that country had hugely surplus grain stocks, much above the buffer stock norms, even when cereal inflation was hovering between 8-12 percent in the last few years. This situation existed even after exporting more than 42 MMT of cereals during 2012-13 and 2013-14 combined, which India has presumably never done in its recorded history.<br /> <br /> * What all this indicates is that India has moved far away from the shortages of 1960s, into surpluses of cereals in post-2010 period, but somehow the food management system, of which FCI is an integral part, has not been able to deliver on its objectives very efficiently. The benefits of procurement have not gone to larger number of farmers beyond a few states, and leakages in TPDS remain unacceptably high. Needless to say, this necessitates a re-look at the very role and functions of FCI within the ambit of overall food management systems, and concerns of food security.<br /> <br /> <strong>Major Recommendations of HLC</strong> <br /> <br /> Below is a summary of major recommendations of HLC keeping in mind how procurement benefits can reach larger number of farmers; how PDS system can be re-oriented to give better deal to economically vulnerable consumers at a lower cost and in a financially sustainable manner; and finally how stocking and movement operations can be made more efficient and cost effective in not only feeding PDS but also in stabilizing grain markets.<br /> <br /> <em>On procurement related issues</em><br /> <br /> * HLC recommends that FCI hand over all procurement operations of wheat, paddy and rice to states that have gained sufficient experience in this regard and have created reasonable infrastructure for procurement. These states are Andhra Pradesh, Chhattisgarh, Haryana, Madhya Pradesh, Odisha and Punjab (in alphabetical order). FCI will accept only the surplus (after deducting the needs of the states under NFSA) from these state governments (not millers) to be moved to deficit states. FCI should move on to help those states where farmers suffer from distress sales at prices much below MSP, and which are dominated by small holdings, like Eastern Uttar Pradesh, Bihar, West Bengal, Assam etc. This is the belt from where second green revolution is expected, and where FCI needs to be pro-active, mobilizing state and other agencies to provide benefits of MSP and procurement to larger number of farmers, especially small and marginal ones.<br /> <br /> * DFPD/FCI at the Centre should enter into an agreement with states before every procurement season regarding costing norms and basic rules for procurement. Three issues are critical to be streamlined to bring rationality in procurement operations and bringing back private sector in competition with state agencies in grain procurement: (1) Centre should make it clear to states that in case of any bonus being given by them on top of MSP, Centre will not accept grains under the central pool beyond the quantity needed by the state for its own PDS and OWS; (2) the statutory levies including commissions, which vary from less than 2 percent in Gujarat and West Bengal to 14.5 percent in Punjab, need to be brought down uniformly to 3 percent, or at most 4 percent of MSP, and this should be included in MSP itself (states losing revenue due to this rationalization of levies can be compensated through a diversification package for the next 3-5 years); (3) quality checks in procurement have to be adhered to, and anything below the specified quality will not be acceptable under central pool. Quality checks can be done either by FCI and/or any third party accredited agency in a transparent manner with the help of mechanized processes of quality checking. HLC also recommends that levy on rice millers be done away with. HLC notes and commends that some steps have been taken recently by DFPD in this direction, but they should be institutionalized for their logical conclusion.<br /> <br /> * Negotiable warehouse receipt system (NWRs) should be taken up on priority and scaled up quickly. Under this system, farmers can deposit their produce to the registered warehouses, and get say 80 percent advance from banks against their produce valued at MSP. They can sell later when they feel prices are good for them. This will bring back the private sector, reduce massively the costs of storage to the government, and be more compatible with a market economy. GoI (through FCI and Warehousing Development Regulatory Authority (WDRA)) can encourage building of these warehouses with better technology, and keep an on-line track of grain stocks with them on daily/weekly basis. In due course, GoI can explore whether this system can be used to compensate the farmers in case of market prices falling below MSP without physically handling large quantities of grain.<br /> <br /> * GoI needs to revisit its MSP policy. Currently, MSPs are announced for 23 commodities, but effectively price support operates primarily in wheat and rice and that too in selected states. This creates highly skewed incentive structures in favour of wheat and rice. While country is short of pulses and oilseeds (edible oils), their prices often go below MSP without any effective price support. Further, trade policy works independently of MSP policy, and many a times, imports of pulses come at prices much below their MSP. This hampers diversification. HLC recommends that pulses and oilseeds deserve priority and GoI must provide better price support operations for them, and dovetail their MSP policy with trade policy so that their landed costs are not below their MSP.<br /> <br /> <em>On PDS and NFSA related issues</em><br /> <br /> * HLC recommends that GoI has a second look at NFSA, its commitments and implementation. Given that leakages in PDS range from 40 to 50 percent, and in some states go as high as 60 to 70 percent, GoI should defer implementation of NFSA in states that have not done end to end computerization; have not put the list of beneficiaries online for anyone to verify, and have not set up vigilance committees to check pilferage from PDS.<br /> <br /> * HLC also recommends to have a relook at the current coverage of 67 percent of population; priority households getting only 5 kgs/person as allocation; and central issue prices being frozen for three years at Rs 3/2/1/kg for rice/wheat/coarse cereals respectively. HLC's examination of these issue reveals that 67 percent coverage of population is on much higher side, and should be brought down to around 40 percent, which will comfortably cover BPL families and some even above that; 5kg grain per person to priority households is actually making BPL households worse off, who used to get 7kg/person under the TPDS. So, HLC recommends that they be given 7kg/person. On central issue prices, HLC recommends while Antyodya households can be given grains at Rs 3/2/1/kg for the time being, but pricing for priority households must be linked to MSP, say 50 percent of MSP. Else, HLC feels that this NFSA will put undue financial burden on the exchequer, and investments in agriculture and food space may suffer. HLC would recommend greater investments in agriculture in stabilizing production and building efficient value chains to help the poor as well as farmers.<br /> <br /> * HLC recommends that targeted beneficiaries under NFSA or TPDS are given 6 months ration immediately after the procurement season ends. This will save the consumers from various hassles of monthly arrivals at FPS and also save on the storage costs of agencies. Consumers can be given well designed bins at highly subsidized rates to keep the rations safely in their homes.<br /> <br /> * HLC recommends gradual introduction of cash transfers in PDS, starting with large cities with more than 1 million population; extending it to grain surplus states, and then giving option to deficit states to opt for cash or physical grain distribution. This will be much more cost effective way to help the poor, without much distortion in the production basket, and in line with best international practices. HLC's calculations reveal that it can save the exchequer more than Rs 30,000 crores annually, and still giving better deal to consumers. Cash transfers can be indexed with overall price level to protect the amount of real income transfers, given in the name of lady of the house, and routed through Prime Minister's Jan-Dhan Yojana (PMJDY) and dovetailing Aadhaar and Unique Identification (UID) number. This will empower the consumers, plug high leakages in PDS, save resources, and it can be rolled out over the next 2-3 years.<br /> <br /> <em>On stocking and movement related issues</em><br /> <br /> * HLC recommends that FCI should outsource its stocking operations to various agencies such as Central Warehousing Corporation, State Warehousing Corporation, Private Sector under Private Entrepreneur Guarantee (PEG) scheme, and even state governments that are building silos through private sector on state lands (as in Madhya Pradesh). It should be done on competitive bidding basis, inviting various stakeholders and creating competition to bring down costs of storage.<br /> <br /> * India needs more bulk handling facilities than it currently has. Many of FCI's old conventional storages that have existed for long number of years can be converted to silos with the help of private sector and other stocking agencies. Better mechanization is needed in all silos as well as conventional storages.<br /> <br /> * Covered and plinth (CAP) storage should be gradually phased out with no grain stocks remaining in CAP for more than 3 months. Silo bag technology and conventional storages where ever possible should replace CAP.<br /> <br /> * Movement of grains needs to be gradually containerized which will help reduce transit losses, and have faster turn-around-time by having more mechanized facilities at railway sidings. <br /> <br /> <em>On Buffer Stocking Operations and Liquidation Policy</em><br /> <br /> * One of the key challenges for FCI has been to carry buffer stocks way in excess of buffer stocking norms. During the last five years, on an average, buffer stocks with FCI have been more than double the buffer stocking norms costing the nation thousands of crores of rupees loss without any worthwhile purpose being served. The underlying reasons for this situation are many, starting with export bans to open ended procurement with distortions (through bonuses and high statutory levies), but the key factor is that there is no pro-active liquidation policy. DFPD/FCI have to work in tandem to liquidate stocks in OMSS or in export markets, whenever stocks go beyond the buffer stock norms. The current system is extremely ad-hoc, slow and costs the nation heavily. A transparent liquidation policy is the need of hour, which should automatically kick-in when FCI is faced with surplus stocks than buffer norms. Greater flexibility to FCI with business orientation to operate in OMSS and export markets is needed.<br /> <br /> <em>On Labour Related Issues</em><br /> <br /> * FCI engages large number of workers (loaders) to get the job of loading/unloading done smoothly and in time. Currently there are roughly 16,000 departmental workers, about 26,000 workers that operate under Direct Payment System (DPS), some under no work no pay, and about one lakh contract workers. A departmental worker (loader) costs FCI about Rs 79,500/per month (April-Nov 2014 data) vis-a-vis DPS worker at Rs 26,000/per month and contract labour costs about Rs 10,000/per month. Some of the departmental labours (more than 300) have received wages (including arrears) even more than Rs 4 lakhs/per month in August 2014. This happens because of the incentive system in notified depots, and widely used proxy labour. This is a major aberration and must be fixed, either by de-notifying these depots, or handing them over to states or private sector on service contracts, and by fixing a maximum limit on the incentives per person that will not allow him to work for more than say 1.25 times the work agreed with him. These depots should be put on priority for mechanization so that reliance on departmental labour reduces. If need be, FCI should be allowed to hire people under DPS/NWNP system. Further, HLC recommends that the condition of contract labour, which works the hardest and are the largest in number, should be improved by giving them better facilities. <br /> <br /> <em>On direct subsidy to farmers</em><br /> <br /> * Since the whole system of food management operates within the ambit of providing food security at a national as well as at household level, it must be realized that farmers need due incentives to raise productivity and overall food production in the country. Most of the OECD countries as well as large emerging economies do support their farmers. India also gives large subsidy on fertilizers (more than Rs 72,000 crores in budget of FY 2015 plus pending bills of about Rs 30,000-35,000 crores). Urea prices are administered at a very low level compared to prices of DAP and MOP, creating highly imbalanced use of N, P and K. HLC recommends that farmers be given direct cash subsidy (of about Rs 7000/ha) and fertilizer sector can then be deregulated. This would help plug diversion of urea to non-agricultural uses as well as to neighbouring countries, and help raise the efficiency of fertilizer use. It may be noted that this type of direct cash subsidy to farmers will go a long way to help those who take loans from money lenders at exorbitant interest rates to buy fertilizers or other inputs, thus relieving some distress in the agrarian sector.<br /> <br /> <em>On end to end computerization</em><br /> <br /> * HLC recommends total end to end computerization of the entire food management system, starting from procurement from farmers, to stocking, movement and finally distribution through TPDS. It can be done on real time basis, and some states have done a commendable job on computerizing the procurement operations. But its dovetailing with movement and distribution in TPDS has been a weak link, and that is where much of the diversions take place.<br /> <br /> <em>On the new face of FCI</em><br /> <br /> * The new face of FCI will be akin to an agency for innovations in Food Management System with a primary focus to create competition in every segment of foograin supply chain, from procurement to stocking to movement and finally distribution in TPDS, so that overall costs of the system are substantially reduced, leakages plugged, and it serves larger number of farmers and consumers. In this endeavour it will make itself much leaner and nimble (with scaled down/abolished zonal offices), focus on eastern states for procurement, upgrade the entire grain supply chain towards bulk handling and end to end computerization by bringing in investments, and technical and managerial expertise from the private sector. It will be more business oriented with a pro-active liquidation policy to liquidate stocks in OMSS/export markets, whenever actual buffer stocks exceed the norms. This would be challenging, but HLC hopes that FCI can rise to this challenge and once again play its commendable role as it did during late 1960s and early 1970s. <br /> <br /> </p> <p style="text-align:justify"> </p> <p style="text-align:justify">**page**</p> <p style="text-align:justify"><br /> The [inside]NSS Report: Household Consumption of Various Goods and Services in India (released in 2014)[/inside] is based on information collected during 2011-12 from 101651 households in 7469 villages and 5268 urban blocks spread over the entire country.<br /> <br /> According to the NSS Report no. 558 (68/1.0/2) entitled Household Consumption of Various Goods and Services in India 2011-12 (NSS 68th Round, July 2011-June 2012), which was released in June 2014 (please <a href="http://mospi.nic.in/Mospi_New/upload/Report_no558_rou68_30june14.pdf">click here</a> to download):<br /> <br /> • Per capita consumption of PDS rice has doubled in rural India and risen by 66% in urban India since 2004-05, implying that the share of PDS purchases in rice consumption has risen substantially.<br /> <br /> • In 2011-12, per capita consumption of PDS rice was 0.88 kg in urban India as compared to 1.67 kg in rural India (in a 30 day period). However, in 2004-05, per capita consumption of PDS rice was 0.53 kg in urban India as compared to 0.84 kg in rural India (in a 30 day period).<br /> <br /> • In 2011-12, 23.3 percent urban households consumed PDS rice as compared to 45.9 percent rural households (in a 30 day period). However, in 2004-05, 13.1 percent urban households consumed PDS rice as compared to 24.4 percent rural households (in a 30 day period).<br /> <br /> • As in case of rice, the share of PDS purchase in wheat consumption has increased considerably, per capita consumption of PDS wheat having more than doubled since 2004-05 in both sectors.<br /> <br /> • In 2011-12, per capita consumption of PDS wheat/atta was 0.41 kg in urban India as compared to 0.74 kg in rural India (in a 30 day period). However, in 2004-05, per capita consumption of PDS wheat/atta was 0.17 kg in urban India as compared to 0.31 kg in rural India (in a 30 day period).<br /> <br /> • In 2011-12, 19.0 percent urban households consumed PDS wheat/atta as compared to 33.9 percent rural households (in a 30 day period). However, in 2004-05, 5.8 percent urban households consumed PDS wheat/atta as compared to 11.0 percent rural households (in a 30 day period).<br /> <br /> • In 2011-12, 30.0 percent urban households consumed PDS kerosene as compared to 75.6 percent rural households (in a 30 day period).<br /> <br /> • In 2011-12, per capita consumption of PDS kerosene was 0.230 litre in urban India as compared to 0.431 litre in rural India (in a 30 day period).<br /> <br /> • In 2011-12, per capita consumption of PDS sugar was 0.084 kg in urban India as compared to 0.113 kg in rural India (in a 30 day period).</p> <p style="text-align:justify">**page** </p> <p style="text-align:justify">According to [inside]Report of the Comptroller and Auditor General of India on Performance Audit of Storage Management and Movement of Food Grains in Food Corporation of India[/inside], Report no.-7 of 2013-Union Government (Ministry of Consumer Affairs, Food and Public Distribution),<br /> <a href="http://saiindia.gov.in/english/home/Our_Products/Audit_Report/Government_Wise/union_audit/recent_reports/union_performance/2013/Civil/Report_7/Report_7.html">http://saiindia.gov.in/english/home/Our_Products/Audit_Report/Government_Wise/union_audit/recent_reports/union_performance/2013/Civil/Report_7/Report_7.html</a>:<br /> <br /> • Procurement of foodgrains increased from 343 lakh metric tonne (LMT) to 634 LMT during the period 2006-07 to 2011-12. As a result, stock of foodgrains in the Central Pool also went up from 259 LMT on 1 June 2007 to 824 LMT on 1 June 2012. Such a sharp increase in foodgrains stock raises issues relating to storage space and larger movement of foodgrains from procuring states to consuming states. Considering the widening gap between stock of foodgrains and available storage capacity as well as the constraints being faced in movement of foodgrains, Audit decided to examine the storage management and movement of foodgrains in Food Corporation of India (FCI).<br /> <br /> • The Audit revealed that average foodgrains procurement of 514 LMT during the period 2006-07 to 2011-12 was lower than the average allocation of 593 LMT made by the Government of India (GoI) to states for distribution under Targeted Public Distribution System (TPDS) and Other Welfare Schemes (OWS). The current procurement level of foodgrains by FCI, State Government Agencies (SGAs) and states undertaking decentralized procurement (DCP) would not be able to adequately meet the allocation and the future requirement of foodgrains estimated by the GoI.<br /> <br /> • The minimum buffer norms prescribed by the GoI did not clearly delineate individual elements of food security (e.g. emergency, price stabilization, food security reserve, TPDS, OWS) within the minimum buffer stock. The existing norms also did not specify the maximum and manageable level of stock to be maintained in the Central Pool and the components therein.<br /> <br /> • Under the existing buffer stock policy, the total stock of foodgrains held by FCI, State Governments and their agencies constitute the Central Pool. The policy does not indicate the agency which is primarily responsible for maintaining minimum buffer stock level for India as a whole. There are many agencies involved in storing foodgrains of the Central Pool which adversely affects accountability and transparency in the management of foodgrains.<br /> <br /> • No specific norm was followed for fixing of the Minimum Support Price (MSP) over the cost of production. Resultantly, it was observed that the margin of the MSP fixed over the cost of production varied between 29 percent and 66 percent in case of wheat, and 14 percent and 60 percent in case of paddy during the period 2006-07 to 2011-12. Increase in MSP had a direct bearing on statutory charges levied on purchase of foodgrains by different State Governments. There were also wide inter-state variations both in statutory and non-statutory charges being charged by the State Governments. All this resulted in the rising of the acquisition cost of foodgrains.<br /> <br /> • FCI owned storage capacity remained more or less constant ranging between 151 LMT and 156 LMT during the period 2006-07 to 2011-12. The foodgrains stock in the Central Pool steadily increased to 824 LMT on 1 June 2012. As a result, hiring of storage space by FCI increased from 100 LMT to 180 LMT during the period significantly adding to hiring charges from Rs. 322 crore in 2006-07 to Rs. 1119 crore in 2011-12. Further, due to constraints in available storage capacity, FCI could not take over stock of wheat procured by State Governments Agencies for the Central Pool within the prescribed time frame of June each year. This led to increase in payment of carry over charges to State Government Agencies from Rs. 175 crore in 2006-07 to Rs. 1635 crore in 2011-12 for holding of foodgrains beyond the prescribed time.<br /> <br /> • The storage gap in FCI against the Central Pool stock witnessed a steady increase during the period 2006-07 to 2011-12. Against the storage gap of 332 LMT (March 2012), GoI/ FCI envisaged capacity addition of only 163 LMT during the 6 year period under various augmentation programmes. Out of this, only 34 LMT was completed (March 2012).<br /> <br /> • FCI did not consider day-wise requirements and operational constraints of their own loading points in field offices in its monthly movement plan conveyed to the Railways in a number of cases. At the same time, due to operational constraints, Railways could not supply rakes as per plan of FCI and did not also adhere to the date-wise and destination-wise plan of FCI. Resultantly, during the period 2006-07 to 2011-12, the shortage of railway rakes with reference to planned ranged from 6 percent to 17 percent.<br /> <br /> • Internal audit and physical verification conducted by FCI was largely inadequate. Substantial shortfall of manpower in internal audit wing had adversely affected the internal audit system in FCI. Internal audit and physical verification arrangements followed by FCI lacked the requisite independence and effective follow up at the headquarters level.<br /> </p> <p style="text-align:justify">**page**</p> <p style="text-align:justify">The NSS 66th Round Report titled: Public Distribution System and Other Sources of Household Consumption is based on information collected during 2009-10 from 100794 households in 7428 villages and 5263 urban blocks spread over the entire country.<br /> <br /> According to the [inside]NSS 66th Round Report titled: Public Distribution System and Other Sources of Household Consumption (July 2009-June 2010)[/inside], MoSPI<br /> <a href="http://mospi.nic.in/Mospi_New/upload/nss_report_545.pdf">http://mospi.nic.in/Mospi_New/upload/nss_report_545.pdf</a>: <br /> <br /> <strong>TRENDS IN SHARE OF PDS IN CONSUMPTION OF SPECIFIC ITEMS</strong><br /> <br /> • The contribution of PDS purchases to total consumption in 2009-10 shows a considerable rise compared to 2004-05, particularly for rice and wheat/atta.<br /> <br /> • The share of PDS purchase in rice consumption in 2009-10 was about 23.5% in the rural sector (1.41 kg out of 6.00 kg per person) and about 18% in the urban (0.81 kg out of 4.52 kg per person). In 2004-05, the PDS share in rice consumption had been about 13% in the rural sector and 11% in the urban.<br /> <br /> • The share of PDS in wheat/atta consumption in 2009-10 was about 14.6% (0.62 kg out of 4.25 kg per person) in the rural sector, double what it was in 2004-05 (7.3%), and about 9% in the urban sector, compared to only 3.8% in 2004-05.<br /> <br /> • PDS purchase accounted for 14.7% of consumption of sugar in 2009-10 compared to 9.6% in 2004-05 in the rural sector. The corresponding percentages for the urban sector were 10.3 and 6.6, respectively.<br /> <br /> • For kerosene, the contribution of PDS purchase in 2009-10 was 86.3% in the rural and 63.6% in the urban sector, higher than the 2004-05 percentages by about 9 and 7 percentage points respectively.<br /> <br /> <strong>RISE IN INCIDENCE OF PURCHASE FROM PDS BETWEEN 2004-05 AND 2009-10</strong><br /> <br /> • The percentage of households reporting consumption of rice from PDS during a 30-day period rose sharply from 24.4% to 39% in rural India and from 13% to 20.5% in urban India between 2004-05 and 2009-10.<br /> <br /> • The increase in the percentage of households reporting consumption from PDS was even sharper for wheat/atta: from 11% to 27.6% in rural India and from 5.8% to 17.6% in urban India.<br /> <br /> • For sugar too, there was a sharp rise in the percentage of reporting households from under 16% to nearly 28% in rural India and from 11.5% to 18.7% in urban India.<br /> <br /> • For kerosene, whereas for rural India the percentage of households reporting consumption from PDS increased by 9 percentage points from 73% to 82% between 2004-05 and 2009-10, the corresponding percentage for urban India remained unchanged at 33%. Only 18% of rural households and 15% of urban households reported consumption of kerosene from other sources.<br /> <br /> <strong>RICE: UTILISATION OF PDS ACROSS STATES</strong><br /> <br /> • The major States with relatively high incidence of PDS purchase of rice in the rural sector were Tamil Nadu (91% households), Andhra Pradesh (84%), Karnataka (75%), and Chhattisgarh (67%), followed by Kerala and Odisha (51-54%), and Maharashtra (47%).<br /> <br /> • In the urban sector, Tamil Nadu (67% households) again had the highest proportion of households reporting purchase during a 30-day period, followed by Andhra Pradesh and Kerala (about 43%), Chhattisgarh (35%) and Karnataka (25%).<br /> <br /> • In quite a few States where rice is the main cereal item, very low proportions of households reported PDS purchase of rice. Examples are Bihar (rural: 12%, urban: 4%), West Bengal (rural: 26%, urban: 7%), and Jharkhand (rural: 26%, urban: 9%).<br /> <br /> • The contribution of PDS purchases to total rice consumption was highest in Tamil Nadu (rural: 53%, urban: 41%), followed by Karnataka (rural: 45%, urban: 18%), Chhattisgarh (rural: 41%, urban: 26%), Maharashtra (rural: 34%, urban: 7.5%), Andhra Pradesh (rural: 33%, urban: 21%), and Kerala (rural: 28%, urban: 24%).<br /> <br /> • Among States where rice is the main cereal item, the share of PDS purchases in consumption was low in Bihar (rural: 5%, urban: 2%), West Bengal (rural: 6%, urban: 3%), Assam (rural: 11%, urban: 5%), and Jharkhand (rural: 14%, urban: 7%).<br /> <br /> • In Tamil Nadu, the ratio of unit values (unit cost of rice from non-PDS sources to PDS unit cost) was 19.7 in the rural sector and 25.6 in the urban sector. In Kerala and rural Maharashtra, participation in PDS was high though the cost advantage of PDS was not very great. In West Bengal, on the other hand, the share of PDS in quantity of rice consumed was very low although the cost advantage of PDS was above average.<br /> <br /> <strong>WHEAT/ ATTA: UTILISATION OF PDS ACROSS STATES</strong><br /> <br /> • For the rural sector, among the major States for which wheat is the major item of cereal consumption, Madhya Pradesh had the highest incidence of consumption of PDS wheat/atta (46% households), followed by Maharashtra (44%) and Gujarat (35%). For Karnataka and Tamil Nadu, for which rice is the major cereal item, the corresponding incidences of consumption of PDS wheat/atta were 69% and 57%, respectively.<br /> <br /> • In the urban sector, Tamil Nadu had the highest incidence of consumption of PDS wheat/atta (51% households), followed by Kerala (29%), Chhattisgarh (25%), Madhya Pradesh (24%) and then Karnataka (23%).<br /> <br /> • The proportion of households reporting PDS purchase of wheat/atta was quite low for the urban sector of Haryana (9%), Punjab (10%) and Rajasthan (12%), where wheat is the main item of cereal consumption. The proportion was also quite low for urban Bihar (5%), for which wheat forms a large part of total cereal consumption. The corresponding incidences for the rural sector of these States were also below the all-India average.<br /> <br /> • The share of PDS purchases of wheat/atta in consumption was largest for Tamil Nadu (rural: 86%, urban: 65%). This share was also large for Karnataka, West Bengal, Kerala and Chhattisgarh, all States for which rice and not wheat is the main cereal item.<br /> <br /> • Among States for which wheat is an important cereal item, PDS share in consumption was relatively high in Maharashtra (rural: 33%, urban: 9%) and Madhya Pradesh (rural: 22%, urban: 13%), but elsewhere, below the all-India average of 14.6% for the rural sector and 9% for the urban sector. It was noticeably low in Bihar (rural: 5%, urban: 2%), rural Uttar Pradesh (7%), urban Gujarat (5%), and urban Rajasthan (6%).<br /> <br /> • The ratio of unit cost of wheat/atta obtained from other sources to unit cost of wheat/ atta obtained through PDS varied from 1.7 in Assam to 7 in urban Odisha. Tamil Nadu and rural Chhattisgarh, with a large share of PDS in wheat/atta consumption, showed a strong cost advantage for PDS. But there were a number of States where high or low incidence of PDS purchase was not in tune with the cost advantage of PDS.<br /> <br /> <strong>SUGAR: UTILISATION OF PDS ACROSS STATES</strong><br /> <br /> • The proportion of households reporting consumption of PDS sugar was highest in Tamil Nadu (rural: 86%, urban: 78%), followed by Andhra Pradesh (rural: 57%, urban: 32%), Chhattisgarh (rural: 54%, urban: 31%), Assam (rural: 53%, urban: 27%) and rural Karnataka (47%).<br /> <br /> • The incidence of PDS purchase was very low in both rural and urban areas of Punjab, Bihar and Rajasthan, and in urban Jharkhand (0-2% households), and also in both rural and urban Haryana, rural Jharkhand and urban areas of Uttar Pradesh, Gujarat and West Bengal (3-6%).<br /> <br /> • Among the major States, by far the largest share of PDS purchases in consumption was seen in Tamil Nadu (rural: 73%, urban: 63%). This was followed by Assam (rural: 53%, urban: 31%), Chhattisgarh (rural: 29%, urban: 11%), and Andhra Pradesh (rural: 24.5%, urban: 12%).<br /> <br /> • The share of PDS was as low as 0-2% in Punjab, Rajasthan, Bihar, Haryana, and urban areas of Jharkhand and Uttar Pradesh.<br /> <br /> <strong>KEROSENE: UTILISATION OF PDS ACROSS STATES</strong><br /> <br /> • In all major States except Punjab and Haryana, the proportion of households reporting consumption of kerosene from PDS purchase ranged from 72% to 94% in the rural sector and from 18% to 62% in the urban sector.<br /> <br /> • In urban India, use of kerosene from PDS was most widespread in West Bengal (61.5% households), Kerala (59%), Bihar (53%), and Uttar Pradesh (49%).<br /> <br /> • In the rural sector, the contribution of PDS purchases to total kerosene consumption was 80% or more in all but two major States: Jharkhand and Assam. In the urban sector, the share of PDS purchases varied much more: from 23.5% in Punjab to 90% in Kerala.</p> <p style="text-align:justify">**page**</p> <p style="text-align:justify">[inside]Chhattisgarh Food Security Act[/inside]</p> <p style="text-align:justify">The Chhattisgarh Food Security Act was passed on 21 December 2012 to ensure “access to adequate quantity of food and other requirements of good nutrition to the people of the state, at affordable prices, at all times to live a life of dignity”. The main provisions of the Act are as follows: </p> <p style="text-align:justify"><strong>Public Distribution System: </strong>The Act divides households into four groups: Antyodaya, Priority, General and Excluded households. The PDS entitlements of each group are given in the Annexure. The identification of different groups is left to the state government, but some eligibility criteria are specified in the Act.</p> <p style="text-align:justify"><strong>Other Entitlements:</strong> Aside from the PDS, the Act defines other entitlements for specific groups, as follows: </p> <p style="text-align:justify"><img alt="PDS1" src="tinymce/uploaded/PDS%201.bmp" /></p> <p style="text-align:justify"><strong>Other Significant Provisions of the Act: </strong></p> <p style="text-align:justify">1. PDS entitlements are household entitlements, not individual entitlements.</p> <p style="text-align:justify">2. The eldest adult woman of the family will be considered as the head of the household for the purpose of the ration card. If a household doesn’t have an adult woman, then the eldest man may be considered as head of the household. </p> <p style="text-align:justify">3. The Services under the Act are notified under the Chhattisgarh Lok Sewa Guarantee Act, 2011, and are subject to timely delivery and fines for erring officials. </p> <p style="text-align:justify">4. Grains will be delivered to the fair price shops, following “door-step delivery”, while end-to-end computerisation of records will be done. </p> <p style="text-align:justify">5. Preference will be given to public institutions and public bodies such as Gram Panchayats, Self-Help Groups and cooperatives, while private dealers are prohibited to run ration shops. </p> <p style="text-align:justify">6. The state government is responsible for procurement of grain and additional financial costs under the act, over and above what has been provisioned by the central government, even if central assistance is inadequate. </p> <p style="text-align:justify">7. Transparency and accountability provisions, such as formation of vigilance committees, social audits, and all documents to be in the public domain, are included. </p> <p style="text-align:justify">8. There is no limit or “cap” on the number of persons to be included in the various categories of inclusion under the priority and Antyodaya categories. </p> <p style="text-align:justify">9. The state government has to notify, within six months, schemes that will give effect to all the new entitlements defined under the Act.</p> <p style="text-align:justify">10. The Act is integrated with the Essential Commodities Act, the Chhattisgarh PDS (Control) Order, and also anticipates the possible enactment of a national food security act.</p> <p style="text-align:justify"><em><strong>Source:</strong> Right to Food Campaign</em></p> <p style="text-align:justify"><img alt="PDS2" src="tinymce/uploaded/PDS%202.bmp" /> </p> <p style="text-align:justify">Excluded households: Income tax payees; households in non-scheduled areas who own more than 4 hectares of irrigated land or 8 hectares of non-irrigated land; households in urban areas that own a pucca house with carpet area more than 1,000 sq. ft. and are liable to pay property tax.</p> <p style="text-align:justify">General households: Not specified in the act (this is a “default” category).</p> <p style="text-align:justify">Priority households: Not specified in the Act, but the following categories are to be included: landless labourers, small and marginal farmers (with land up to two hectare)s, workers in urban informal sector and households of construction workers.</p> <p style="text-align:justify">Antyodaya households: Not specified in the Act, but the following categories are to be included: Particularly Vulnerable Tribal Groups; households headed by terminally ill persons, widows or single women, physically challenged persons; households headed by a person of age sixty years or more with no means of subsistence; persons freed from bonded labour; and those who are currently entitled to the Mukhyamantri Khadyanna Sahayata Yojana.</p> <p style="text-align:justify"><em><strong>Source:</strong> Right to Food Campaign</em></p> <p style="text-align:justify">**page** </p> <p style="text-align:justify"> </p> <p style="text-align:justify">[inside]Public Distribution System in Delhi-Grievance Redressal and suo moto (proactive) disclosure of information by PDS outlets and circle offices[/inside]</p> <p style="text-align:justify"> </p> <p style="text-align:justify">According to the Consumer Protection Act, 1986, one who buys any goods or services for a consideration is a consumer. The user of such goods or services with the permission of the buyer is also a consumer.</p> <p style="text-align:justify"><em>According to the Delhi Citizens' Charter 2011 Department Of Food Supplies & Consumer Affairs, complaint can be lodged by:</em></p> <p style="text-align:justify">a. A Consumer</p> <p style="text-align:justify">b. Any Registered Voluntary Consumer Orgainisation</p> <p style="text-align:justify">c. Central Govt.</p> <p style="text-align:justify">d. State Govt./NCR</p> <p style="text-align:justify">e. One or more consumers having common aim.</p> <p style="text-align:justify"> </p> <p style="text-align:justify"><em>Complaint can be lodged when:</em></p> <p style="text-align:justify">a. An unfair trade practice or restrictive trade practice is adopted by any trader.</p> <p style="text-align:justify">b. Any defect in goods purchased</p> <p style="text-align:justify">c. Any deficiency in services purchased</p> <p style="text-align:justify">d Charging of price in excess of that stamped on the product.</p> <p style="text-align:justify">e. Sale of unsafe goods, which are hazardous to life and safety under the Rule/Act.</p> <p style="text-align:justify"> </p> <p style="text-align:justify"><em>The Procedure for lodging a complaint:</em></p> <p style="text-align:justify">The complaint can be lodged by the post or by the Complainant himself or by authorizing any person along with the case memo/bill etc. Generally, 4-6 copies of the complaint are necessarily required:</p> <p style="text-align:justify">a. Advocate is not required.</p> <p style="text-align:justify">b. Affidavit or stamp papers are not required.</p> <p style="text-align:justify"> </p> <p style="text-align:justify"><em>Compulsory points for a complaint:</em></p> <p style="text-align:justify">a. Name and complete address of the complainant.</p> <p style="text-align:justify">b. Name and compete address of opposition party/ parties.</p> <p style="text-align:justify">c. Date of sale of goods or service taken.</p> <p style="text-align:justify"> </p> <p style="text-align:justify"><em>Relief asked for by the consumers:</em></p> <p style="text-align:justify">Consumer Courts may grant one or more of the following reliefs:</p> <p style="text-align:justify">i) Repair of defective goods:</p> <p style="text-align:justify">ii) Replacement of defective goods;</p> <p style="text-align:justify">iii) Refund of price paid for the defective goods of service</p> <p style="text-align:justify">iv) Removal of deficiency in service.</p> <p style="text-align:justify">v) Refund of extra money charged.</p> <p style="text-align:justify">vi) Withdrawal of goods hazardous to life and safety.</p> <p style="text-align:justify">vii) Compensation for the loss or injury suffered by a consumer due to negligence of the opposite party.</p> <p style="text-align:justify">viii) Adequate cost of filing and pursuing the complaint.</p> <p style="text-align:justify"> </p> <p style="text-align:justify"><em>Complaint can be lodged at:</em></p> <p style="text-align:justify">Consumer can lodge a complaint under consumer Protection Act through the following Consumer Courts. These complaints should be lodged within 2 years from the date of incident:</p> <p style="text-align:justify">i. District Forum: For claims upto Rs 20 lac</p> <p style="text-align:justify">ii. State Commission: For claims above Rs 20 lacs and upto Rs 1 crore.</p> <p style="text-align:justify">iii. National Commission: For claims above Rs 1 crore.</p> <p style="text-align:justify"> </p> <p style="text-align:justify"><strong>Complaints against the PDS outlets & its redressel (according to the Delhi Citizens' Charter 2011 Department Of Food Supplies & Consumer Affairs)</strong></p> <p style="text-align:justify">Complaints against the PDS outlets regarding measurement, quality, excess charging or refusal to issue commodities, black marketing, can be made to the followings:</p> <p style="text-align:justify">o Concerned Circle FSO</p> <p style="text-align:justify">o Asstt .Commissioner of the concerned circle.</p> <p style="text-align:justify">o Spl./Addl. Commissioner, F&S Deptt, K-Block, Vikas Bhawan, I.P.Estate, New Delhi.</p> <p style="text-align:justify">o Commissioner, F&S Deptt., K-Block, Vikas Bhawan, I.P.Estate, New Delhi.</p> <p style="text-align:justify">o Control Room Ph No 23370841 ( Toll Free No: 1800-11-0841 )</p> <p style="text-align:justify">o By e-mail to the deptt at cfood@hub.nic.in</p> <p style="text-align:justify">o Concerned Vigilance Committee of the Circle.</p> <p style="text-align:justify">o Task force constituted under the chairmanship of Deputy Commissioner (Revenue) of the District.</p> <p style="text-align:justify"> </p> <p style="text-align:justify">In addition, complaint regarding adulteration in petrol, diesel or misuse of cooking gas etc can also made to the aforesaid and authorities.</p> <p style="text-align:justify">Complaints against the officials of the department against harassment can be made to the Spl./Addl. Commissioner or Commissioner, Food & supplies & Consumer Affairs Department, at K-Block, Vikas Bhawan, New Delhi.</p> <p style="text-align:justify">------------</p> <p style="text-align:justify"><em>According to the new citizen charter published by Government of NCT of Delhi, Department of Food and Supplies & Consumer Affairs, the following Information have to be displayed at the PDS outlets- </em></p> <p style="text-align:justify">1. Licence No./ Name of PDS outlets</p> <p style="text-align:justify">2. Stock as on date</p> <p style="text-align:justify">3. Weekly off.</p> <p style="text-align:justify">4. Rates of Commodities.</p> <p style="text-align:justify">5. Sample of Sugar, Wheat and Rice.</p> <p style="text-align:justify">6. Timing of PDS outlets Fair Price Shop/KOD i.e 9:00 am to 1:00 pm and 3:00 pm to 7 pm</p> <p style="text-align:justify">7. Complain Register is available.</p> <p style="text-align:justify"> </p> <p style="text-align:justify"><em>In PUCL vs Union of India case, Supreme Court has said that the license of any shopkeeper found to be indulging in any of the following activities should be cancelled: </em></p> <div style="text-align:justify"><br /> 1. If the shopkeeper keeps his shop closed during working hours<br /> 2. If he indulges in black marketing<br /> 3. If he keeps the cards of the people with himself<br /> 4. If he makes false entries in the card<br /> <br /> -----<br /> <br /> Mr. Shailesh Gandhi, Central Information Commissioner, called a meeting on 21/12/2009 at the Chief Information Commission’s office to discuss issues relating to disclosure of information on the Public Distribution System in Delhi. A notice dated 14/12/2009 was issued to all the Assistant Commissioners & PIOs of the Department and they were directed to attend this meeting. An Agenda of issues that were going to be discussed was enclosed along with the notice and the Assistant Commissioners were informed that appropriate directions will be issued by the Commissioner after giving the PIOs of every district/zone an opportunity to present his opinion.<br /> <br /> <em>Facts arising from the hearing held on 21/12/2009:</em><br /> <br /> The following persons were present:<br /> <br /> Complainant: Mr. Rajiv Kumar<br /> Respondent: Ms. Jayshree Raghuram, Secretary-cum-Commissioner (F&S); Mr. SS Rathi, Jt. Commissioner; Mr. Kishore, Addl. Commissioner; Mr. Mange Ram, AC (North); Mr. KD Trehan, AC; Mr. Ajay Arora, AC (West); Mr. MK Sharma, AC (South); Mr. GS DHodi, AC (SW); Mr. Subhash Chander, AC (NW); Mr. HP Meena, AC (New Delhi); Mr. Mehresh, Sysyem Analyst; Mr. PP Baruah, Programmer<br /> <br /> <em>After consultation with the Food Commissioner as well as others present, the Commission directs that the following information should be displayed at every Circle Office of the Department:</em><br /> <br /> i) Copy of all ration cards along with photographs of individual card holders in the circle offices of Food and Supply Department.<br /> ii) All citizens should have access to daily sale register, and stock register under suo moto disclosure of RTI Act.<br /> iii) Name and designation of each official in the Circle office along with their stated roles and responsibilities.<br /> iv) Name and contact details of PIO’s and FAA.<br /> v) Procedure to apply for new ration cards and the list of documents required.<br /> vi) Timeframe for disposal of various applications (new cards, renewal, change of address etc).<br /> vii) Date of the next Vigilance Committee meeting and names of the members of the Committee.<br /> viii) Rights and privileges of ration card holders as per Section 6(7) of Annexe to PDS Control Order 2001.<br /> ix) List of documents present in the Circle Offices.<br /> <br /> <em>The Complainant brought a sample display print of the information that may be displayed outside each Fair Price Shop. Keeping this is view, the Chief Information Commission directs that the following information will be displayed at the Fair Price Shops under the Department:</em><br /> <br /> i) Entitlement of essential commodities for all types of ration cards.<br /> ii) Scale of issue of each essential commodity for all types of ration cards.<br /> iii) Retail prices of each essential commodity for all types of ration cards.<br /> iv) Working hours of fair price shops.<br /> v) Stock of essential items received during the month.<br /> vi) Opening and closing stock of essential commodities.<br /> vii) Name, designation and contact numbers of officials for redressal of grievances with respect to quality and quantity of essential commodities.<br /> viii) Daily updation of stock position information<br /> ix) Information about inspection of records by any citizen on every Saturday except for second Saturday as per the PDS Control Order dated 15/06/2006.<br /> x) Display of samples of food grains being supplied through fair price shops.</div> <div style="text-align:justify"> </div> <div style="text-align:justify">The Food Commissioner has given a commitment to the Commission that she will ensure that the afore-mentioned information will be displayed before 31 January 2010.</div> <div style="text-align:justify"> </div> <div style="text-align:justify">**page**</div> <div style="text-align:justify"><br /> The Rozi Roti Adhikar Abhiyan, Delhi, which is a network of about thirty organisations, conducted a study entitled [inside]Survey on Preference between PDS and Cash Transfers in Delhi[/inside] (<a href="http://www.indiaenvironmentportal.org.in/reports-documents/survey-preference-between-pds-and-cash-transfers-delhi">http://www.indiaenvironmentportal.org.in/reports-documents/survey-preference-between-pds-and-cash-transfers-delhi</a>) in the backdrop of Delhi Government suggesting dismantling of the PDS in favour of a system of direct cash transfers/smart card system. The Delhi Government in partnership with SEWA and IDF did a pilot study with 100 families in Raghubir Nagar to test the feasibility and effectiveness of such a programme. After submitting Rs 1,000 in the bank accounts of the women members of each of selected households in the sample, a study was done to compare between families who opt for cash and those who prefer the ration system. Antyodaya cardholders get Rs 1,100 per month, while below poverty line cardholders get Rs 950 per month as cash transfers in the pilot study done by Delhi Government.<br /> <br /> While the results of this pilot study are awaited, the Rozi Roti Adhikar Abhiyan, Delhi conducted a survey in different parts of Delhi so as to understand people’s preference between PDS and cash transfer. It may be recalled from media reports that when the pilot survey was being conducted by the Delhi Government with funding from United Nations Development Programme (UNDP), several NGOs including Parivartan led by Arvind Kejriwal opposed it.<br /> <br /> Key findings of the study done by Rozi Roti Adhikar Abhiyan, Delhi:<br /> <br /> <em>Preference between reformed PDS and cash transfers</em><br /> <br /> • Only 27 per cent of the respondents were aware of the Government's proposal of replacing the PDS with cash transfers. Given a choice between a reformed and improved (“sudhar”) PDS or cash transfers in lieu of PDS foodgrains, over 90 per cent of the respondents in the sample said that they would prefer a reformed PDS over cash transfer, while 5 per cent felt the other way round. 3.6 per cent had no opinion. 94.5 percent of BPL respondents, 90.1 percent of APL respondents and 91.7 percent of respondents among Antyodaya card holders prefer improved and reformed PDS over cash transfers. 3.6 percent of BPL respondents, 7 percent of APL respondents and 5.8 percent of respondents among Antyodaya card holders prefer cash transfers over reformed PDS<br /> <br /> • It is mainly the daily wage earning households (almost 92.4 per cent) who preferred PDS over cash, while 90.4 percent of the salaried preferred the same<br /> <br /> <em>Type of Ration Card</em><br /> <br /> • Of all the respondents, 17.3 per cent had no ration cards and for 3 per cent the type of ration card was not known. 40 per cent of the respondents had Above Poverty Line (APL) cards, 24 per cent had (Below Poverty Line) BPL cards, 10 per cent had (Antyodaya) AAY cards, 2 per cent had Annapurna cards and 4 per cent had temporary cards. Among those who did not have any cards were also those who earlier had a ration card but it was cancelled recently.<br /> <br /> • It is seen that while there were more number of BPL card holders among the daily wage labourers, only 31.5 per cent of daily wage earners had BPL cards. 22.9 per cent of salaried households also had BPL cards. A large number of households headed by a self-employed person had no cards at all.<br /> <br /> <em>Access to PDS</em><br /> <br /> • Of those who had some kind of a ration card, 59.5 per cent said that they received rations regularly, while 23.1 per cent said that rations were supplied in an irregular manner and 15.8 per cent had no access to rations in spite of having a ration card.<br /> <br /> • Regarding the quantity of foodgrains received from the PDS, only 37.4 per cent said that they got the entire 35kg of foodgrains the last time they bought rations (a small percentage reported getting more than 35kg – this is probably because they got some of their previous month’s quota as well due to irregular functioning of ration shops). 22.5 per cent of the respondents got between 26 to 34kg and 30.8 per cent got between 15 to 25kg.<br /> <br /> • Among BPL card holders about half reported getting 35kg or more, whereas among APL card holders this figure is only about 20 per cent.<br /> <br /> • There were various reasons for not accessing rations, most common (29.9 per cent) being that the card was not ‘stamped’.<br /> <br /> • About 17 per cent said that they did not have access to rations because their collection of their biometrics was due. 8.2 per cent of the respondents said that their ration card had been cancelled and a further 15.7 per cent that their ration cards had not been reissued after expiry. 22.2 per cent said that the dealer refuses to give them any ration and about 7 per cent that the PDS shop was always closed.<br /> <br /> <em>PDS Reforms</em><br /> <br /> • Various suggestions for improvement of PDS were discussed with the people, ranging from action to be taken against fair price shop (FPS) dealers for malfunctioning to transparency and redressal measures. Most people agreed with all these suggestions. Interestingly, 87.4 per cent of the respondents also agreed with the suggestion that PDS should be universalised and there should be no distinction between those above poverty line and below poverty line. In the discussions it was clear that what people were most bothered with was the process of identification of BPL and the struggle to get included in the BPL list.<br /> <br /> <em>Uses of Ration Card</em><br /> <br /> • Even though ration is not regular, people use the ration card for many different purposes. For instance, almost three quarters of the respondents said that the ration card is useful as an identity card. A large proportion felt that the ration card is useful to access other Government schemes, to get an electric connection, to get a driving license, to open a bank account etc. The other purposes that people felt the ration card was useful for included getting Government health services, school admissions, a pan card or passport, for entering into a new job, mobile connection and even getting a birth certificate.</div> <div style="text-align:justify"> </div> <div style="text-align:justify">**page**</div> <div style="text-align:justify"> </div> <div style="text-align:justify">Key findings of the study titled: [inside]How Can Food Subsidies Work Better? Answers from India and the Philippines[/inside] by Shikha Jha and Bharat Ramaswami, No. 221, September 2010, Asian Development Bank, <a href="http://www.adb.org/documents/working-papers/2010/economics-wp221.pdf">http://www.adb.org/documents/working-papers/2010/economics-wp221.pdf</a>, are:<br /> <br /> • The present study estimates the effectiveness of targeting in terms of exclusion and inclusion errors; and the effectiveness of program delivery in terms of leakage from pilferage or illegal diversions, and leakage due to excess costs (relative to the private sector, or inefficiency of the public program).<br /> <br /> • The study informs that economic welfare of poor households in developing countries is sensitive to food prices. For many of the poor, food-based safety net programs provide their only hope of survival in the event of steep price rises. Such programs can protect poor segments of society from major shocks, insure them against risks and associated income losses, and provide consumption smoothing. However, the performance of such programs varies widely, reflecting a number of shortcomings that undermine their effectiveness. As they often consume substantial budgetary resources, food subsidies also become a source of anxiety to the government seeking to reign in budgetary deficits. This is especially so in times of rising food prices.<br /> <br /> • The academic and policy literature recognizes that the gains to the poor depend on targeting as well as program delivery. However, most of the studies have only evaluated the targeting performance of subsidies. From this literature, it is well known that most transfer programs are costly because of substantial non-target beneficiaries.<br /> <br /> • From a survey of universal food subsidy schemes, Coady (2002) finds that the median targeting performance implied that the government spent $3.40 to transfer $1.00 to the poor.<br /> <br /> • In their metasurvey of income transfer programs, Coady, Grosh, and Hoddinot (2004) conclude that interventions that use some methods of targeting (e.g., means testing, geographic targeting or self-selection in public works) result in the target group receiving a greater share of benefits.<br /> <br /> • A standard policy prescription, especially from multilateral institutions, is to recommend that governments target subsidies toward the poor and not waste resources subsidizing the nonpoor.<br /> <br /> • There is no generalized theoretical presumption that policy should always aim to reduce inclusion errors. The literature offers examples where targeting is costly both administratively as well as in economic terms because of incentive effects (Besley and Kanbur 1993, Kanbur 2009). In addition, Gelbach and Pritchett (2000) argued that programs that are tightly targeted toward the poor (i.e., low inclusion errors) do not receive political support from the nonpoor and thus are ultimately endangered. In addition, there are the practical difficulties of targeting.<br /> <br /> • In their metasurvey of studies that evaluate income transfer programs, Coady, Grosh, and Hoddinot (2004) found very few studies that looked at both program costs and benefits. And even such information consisted only of administrative costs, ignoring the costs due to corruption or theft.<br /> <br /> • The mandates of TPDS are multiple, including price stabilization, ensuring food access by the poor, and supporting farm prices. TPDS deliver in-kind subsidies. It offers subsidies on rice and wheat.<br /> <br /> • India has government agencies that source, store, transport, and distribute the grain to designated retail outlets. The TPDS primarily sources grain from domestic procurement.<br /> <br /> <em>About the TPDS</em><br /> <br /> • Volume of grain distributed between 2004-2008 via TPDS was 32 million tons. TPDS' budgetary allocation as a percentage of GDP between 2004 and 2007 was 0.72 percent. The quota of foodgrain distributed is fixed per household.<br /> <br /> • In India, the central and state governments together run a marketing channel solely devoted to the distribution of the subsidized food. At the retail level, this involves a network of “Fair Price Shops” (FPS) that sell subsidized grain to consumers. Subsidized grain is not accessible elsewhere. The FPS is usually run by private agents who receive a fixed percentage as commission for their efforts. The FPS is often restricted to selling only subsidized grain. The central government is responsible for procurement, storage, transportation, and bulk allocation of foodgrains to different states. The state government is responsible for transporting and distributing the grain within the state through the network of FPS.<br /> <br /> • India introduced targeted food subsidies in 1997. The current regime is called targeted public distribution system. Subsidies depend on whether the household is classified as above poverty line (APL), below poverty line (BPL), or poorest of the poor (POP or the Antayodaya Yojana program).<br /> <br /> • All households are entitled to a monthly quota of 35 kg of rice or wheat per month. In principle, the prices of subsidized grain are supposed to be fixed with reference to the government’s “economic cost”, i.e., the cost incurred by government agencies in procuring, storing, transporting, and distributing grain. BPL households are supposed to receive 50% subsidy (i.e., 50% of economic cost) while APL households are not supposed to be eligible for any subsidy at all. The prices for POP households are fixed below that of BPL households and not with reference to economic cost.<br /> <br /> • The APL households in 2008/2009 received a subsidy in excess of 50% of economic cost.<br /> <br /> • The list of BPL beneficiaries is prepared through a BPL census. In the latest census of 2002, households received scores based on 13 criteria. The BPL households were identified as those who fell below a cut-off score (decided by the respective state governments). If the total of BPL identified households exceeds that which is estimated by the central government, the subsidy on the excess households has to be borne by the state government.<br /> <br /> <em>Inclusion and Exclusion errors</em><br /> <br /> • The budgetary cost of food subsidy in India topped 1% of gross domestic product (GDP) in 2002 but later came down to around 0.65% toward the end of the decade. The decline happened because of the rapid growth in GDP since about 2003.<br /> <br /> • Inclusion errors do not differentiate households according to their distance from the poverty line. Furthermore, inclusion errors only tell us about how many recipients are nonpoor, not how much subsidies they get. If the inclusion error is zero then the poor receive the entire subsidy. At the other extreme, if the inclusion error is 100%, then the fraction of the subsidy reaching the poor is zero.<br /> <br /> • The share of the poor in the income transfer denoted by s is the targeting measure that is used most widely in studies evaluating income transfer programs and was therefore used by Coady, Grosh, and Hoddinot (2004) to compare targeting effectiveness across programs in a metasurvey of different studies. Ravallion shows that a targeting measure defined as the difference between the program’s participation rate for the poor and that for the nonpoor (called the targeting differential) performs better than the share measure.<br /> <br /> • Inclusion errors arise when a government spends $1 on provision of food subsidy, but poor households receive only a fraction of it. Such a diminution in the amount of subsidy that reaches households is called a targeting leakage. While it is generally agreed that a targeting leakage (due to inclusion errors) should be minimized, the debate in the income transfers literature is whether and how it can be done. The debate is enduring because minimizing inclusion errors can be costly administratively) and often leads to greater exclusion errors. With such a trade-off, optimal targeting depends on how much weight the government puts on inclusion error relative to exclusion error.<br /> <br /> • Evidence on the design and performance of social safety net programs from 47 countries across Africa, Asia, Eastern Europe, and Latin America shows that targeted programs achieve a high proportion of transfers to the poor, with the poor receiving, on average, around 25% more than they would without targeting (Coady 2003). In other words, the inclusion error in targeted programs is on average lower than in untargeted programs.<br /> <br /> • Based on the survey questions, a household is defined to be a recipient of food subsidies if it purchases subsidized rice or wheat or both during the survey reference period. While the targeted PDS was launched in 1997, it is generally agreed that targeting was not accomplished by 1999. Therefore the results from 1999/2000 (when the previous largescale expenditure survey was carried out) correspond to a pre-targeting regime, while those from 2004/2005 refer to a targeted subsidy regime.<br /> <br /> • Exclusion error in 1999-2000 was 64 percent and in 2004-05 was 70 percent. Inclusion error in 1999-2000 was 76 percent and in 2004-05 was 70 percent. Exclusion errors are uniformly high at 70% in both rural and urban areas while the inclusion errors are higher in rural areas (73 percent) as compared to urban areas (59 percent).<br /> <br /> • Exclusion errors could happen either because households chose not to participate in the program or because of mistargeting. Mistargeting could happen in two ways. First, a poor household may not be classified at all. In this case, the household does not receive the food eligibility card and cannot make purchases from the public distribution system. Second, even if a household receives a food eligibility card, it may be wrongly classified as an APL household and is not therefore entitled to the larger subsidy offered to households classified as BPL or POP.<br /> <br /> • For poor households in rural areas that hold either the BPL or POP eligibility card, the participation rate is 61%. This drops sharply to 13% for households with APL eligibility. For households without any eligibility, the participation rate is 4%. The associated weights are 0.4, 0.4, and 0.2 respectively. In other words, 60% of the poor are either classified incorrectly as APL or not classified at all (i.e., without eligibility to any subsidy).<br /> <br /> • If this kind of mistargeting is eliminated and all poor are classified as either BPL or POP, the participation rate would improve. If the participation conditional on eligibility remains invariant, then the participation rate would nearly double from 31% to 61% in the rural sector. Hence mistargeting is a major reason for the high exclusion error. Notice, however, that participation does not reach 100% because nearly 40% of poor households do not participate despite eligibility. This underscores the fact that there are factors other than eligibility that are also barriers to participation. The analysis for the urban sector is similar: here the gains from correct targeting are greater as the participation rate would rise from 30% to 77%.<br /> <br /> • As per capita grain consumption for all poor and nonpoor households varies between 10 and 12.5 kg per month, the TPDS on average accounts for about 40% of total grain consumption of the households that receive subsidies. Note also that for an average family of five, total household monthly consumption is nearly 20 kg, which is much less than the entitlement of 35 kg per month.<br /> <br /> • In the rural areas the share of poor in population is 28 percent and their share in subsidized food grains is 31 percent. In the urban areas the share of poor in population is 26 percent and their share in subsidized food grains is 46 percent. In aggregate, the share of poor in subsidized food grains is 33 percent whereas their share in total population is 27 percent.<br /> <br /> <em>Diversions and Leakages</em><br /> <br /> • Because of the price difference between subsidized grain and grain sold through regular marketing channels, there are powerful incentives to arbitrage and make illegal profits. Leakages are the illegal diversions of subsidized grain to regular market channels. They are typically estimated by comparing the distribution of subsidized grain from administrative records to the receipt of grain by households calculated from survey data.<br /> <br /> • For India, using data from 1986–1987, Howes and Jha (1992) estimated the average ratio of PDS consumption to supply in 18 major states to be 65%, ranging from 5% in Haryana to 94% in Jammu and Kashmir. That is, on an average there was 35% diversion. There does not seem to have been much of an improvement since then as similar estimates have been derived by other researchers. For example, Ahluwalia (1993) estimated that in 1986/1987, 37% of the supply of subsidized rice and 38% of the supply of subsidized wheat were illegally diverted. Dutta and Ramaswami (2001) estimated these figures for 1993/1994 for the states of Andhra Pradesh and Maharashtra. They found illegal diversions to be of the order of 15% for rice in Andhra Pradesh and 30% and 19% respectively, for rice and wheat in Maharashtra. A study by Tata Consultancy Services (1998) found illegal diversions to be 31% and 36% for rice and wheat at the all-India level in the late 1990s. The Planning Commission of India (2005) study that examined leakages in India after the implementation of the targeted PDS concludes that illegal diversions of rice and wheat at the all-India level in 2003/2004 was 37% of the total supply of subsidized grain meant for the BPL category.<br /> <br /> • In 2004-05, the per capita consumption of subsidized foodgrains was 1.03 kg per month while the per capita supply of subsidized food works out to be 2.27 kg per month. This works out to a leakage of 55% of subsidized foodgrains supply. In 1999/2000, these numbers were 1.01 kg and 1.61 kg per month, respectively. These discrepancies are large and suggest a serious problem with diversions.<br /> <br /> • In 2004-05, the aggregate leakage for rice is 40% and expectedly diversions are greatest from POP allocations (72 percent) and least for APL allocations (5 percent). The aggregate leakage for wheat is 73% and the diversions are high for all the categories. In 2004-05, the total cost of illegal diversion of rice was Rs. 38875.5 million and wheat was Rs. 48219.96 million.<br /> <br /> <em>Excess Costs</em><br /> <br /> • All government agencies incur costs in purchase, transport, and distribution of subsidized food. Since this is an activity also done by private agents, it is useful to compare government costs with private costs to ascertain the efficiency of government interventions. In their review of literature about distribution costs, Jha and Srinivasan (2004) show that private traders operate at costs lower than those incurred by the government agency in the areas of marketing, storage, trade, and transport despite several controls and restrictions imposed upon them.<br /> <br /> • Dutta and Ramaswami (2001) used the above methodology to demonstrate that in 1993/1994, 27% of government budgetary expenditure on food subsidy in the state of Andhra Pradesh was wasted by inefficiency of government agencies. The figure for the state of Maharashtra in the same year was 16%. A more recent study by the Planning Commission of India (2005) finds that in the year 2003/2004, delivery through the private sector was more efficient in all states except Kerala. The evidence indicates that at the all-India level, the government’s food subsidy costs would have been lower by 35% if the government costs matched that of the private sector.<br /> <br /> • In 2004/2005, the central government’s economic cost of distributing rice and wheat were Rs. 13.29 and Rs. 10.19, respectively. To this must be added margins for wholesalers and retailers and transportation charges at the retail level. We do not have estimates of these costs for 2004/2005. A comparison of economic costs with retail prices will therefore give a lower bound to the “excess” costs incurred by the government. The NSS consumption expenditure data for 2004/2005 provides information about quantities and expenditures on various items by households. A unit value can be derived from this information. As richer households buy higher-quality grain, their unit values are higher. Because of large quality variations in rice prices, purchase costs for rice are lowest for POP households and highest for APL households. In wheat, mean prices are about the same between BPL and APL households but are lower for POP households.<br /> <br /> • As TPDS grain quality is generally considered to be below average, we take the price paid by BPL households to be representative for such quality grain. Comparing with the economic costs of the state agencies in 2004/2005 (Rs. 13.29 per kg for rice and Rs. 10.19 for wheat) we obtain the difference as excess cost. The excess cost for rice is Rs. 2.80 per kg, and Rs. 0.85 per kg for wheat. The total excess cost of rice was Rs. 46033.34 million and of wheat was Rs. 10956.5 million.<br /> <br /> • It is interesting to note that India’s TPDS, despite being a targeted program, brings only one third of the total subsidy to the poor.<br /> <br /> • In 2004-05, total Income Transfer to Poor was Rs. 21351.55 million and to non-Poor was 38219.79 million. Total illegal diversion cost was Rs. 87095 million and excess cost was Rs. 56990. Total cost of subsidy in 2004-05 was Rs. 203657 (approx). <br /> <br /> • The share of subsidy going to the poor is 11% in India.<br /> <br /> <em>Conclusion</em><br /> <br /> • If inclusion errors were minimized to zero, the share of the poor would rise at most to 29 percent in India.<br /> <br /> • The debate on a targeted versus universal transfer scheme misses the point that there are huge savings to be had from trimming diversions and excess costs, i.e., program waste. The Indian state of Chhattisgarh has claimed significant reduction in corruption by computerizing the supply chain, from paddy procurement to the distribution of rice in 2007/2008; and by making public the movement of grain from warehouses to retail outlets. It is suggested that this has improved transparency and governance (Dhand et al. 2009).<br /> <br /> • An alternative to in-kind transfers are food coupons or restricted cash transfers. As opposed to general cash transfers, food coupons are conditional or tied grants that allow consumers to purchase limited quantity of foodgrains at a subsidized price.<br /> <br /> • In the Indian case, a food coupon alternative would eliminate the dual marketing system (of private and government), which would resolve the endemic issue of the viability of the government marketing system.<br /> <br /> • If there are staples other than rice (or wheat), a food coupon system could easily accommodate it without the need for physical and institutional infrastructure (procurement and distribution) that is specially set up for that purpose. In parts of India, poor consume “inferior” coarse grains such as sorghum and pearl millet, which are not subsidized by the current regime.<br /> <br /> • Food coupons could allow consumers to spend their budget on their preferred commodities and would therefore be less distortionary in consumption, reducing their costs of participation. This could also happen through improved economic access as consumers would be able to use these coupons at a more convenient retail outlet. While there are potential issues of fraud in food coupons as well in terms of counterfeiting and improper use, it seems far easier to track and audit numerically coded coupons than to do so for physical stocks of grain. Governments sometimes balk at the costs of investing in technologies such as smart cards. The payoffs must, however, be seen in relation to the resources lost in diversions and excess costs.<br /> <br /> • Conditional cash transfers are another alternative to food subsidies. Such transfers have been widely and successfully used in many Latin American countries. In these transfers, the conditionality is of a different form to that of food coupons—relating to the use of social programs of education and health. Here cash transfers are conditional on attendance in schools and health clinics. Program benefits are designed to contribute to long-term human capital development and to provide immediate poverty relief. These benefits are in effect like negative user fees that are paid instead of charged to program participants who attend schools or visit clinics.<br /> <br /> <strong><em>Note: </em></strong><br /> <br /> BPL: Below Poverty Line<br /> APL: Above Poverty Line<br /> POP: Poorest of the Poor<br /> <br /> <br /> According to the report titled: [inside]Social Protection for a Changing India[/inside], The World Bank, <a href="http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2011/04/20/000333037_20110420235516/Rendered/PDF/612750v10ESW0P1rt0Volume0I01PUBLIC1.pdf">http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2011/04/20/000333037_20110420235516/Rendered/PDF/612750v10ESW0P1rt0Volume0I01PUBLIC1.pdf</a>:<br /> <br /> • During 2009-10, Rs. 42490 crore was allocated for food and Rs. 2866 crore was allocated for kerosene/ LPG under the public distribution system (PDS). It covered 23.3 percent of all households (above poverty line-APL and below poverty line-BPL in 2004-05). Annapurna scheme covered 1.7 percent households with elderly.<br /> <br /> • While PDS consumes almost 1 percent of GDP and has wider coverage than other safety net programs – between 20-25 percent of the population in the mid-2000s based on actual drawing of grains by beneficiaries, and closer to 40 percent based on administrative numbers on BPL households - its impact on the poor is very limited in many states, particularly a number of lagging states.<br /> <br /> • This is due to a combination of high leakage of grains (estimated by the Planning Commission to be around 58 percent nationally in the early 2000s and even higher based on estimates using NSS data), a range of demand and supply side issues in program design and implementation, and considerable leakage of subsidies to the non-poor. Although many of the shortcomings of PDS and its very poor performance have been known for some time, it continues to absorb substantial public resources with limited benefits for the poor.<br /> <br /> • The percentage of BPL grain that got leaked (during early 2000s) in Andhra Pradesh, Assam, Bihar, Gujarat, Haryana, Himanchal Pradesh, Karnataka, Kerala, Madhya Pradesh, Maharastra, Orissa, Punjab, Rajasthan, Tamil Nadu, Uttar Pradesh, West Bengal and India are: 57.6, 53.7, 91.1, 47.1, 66.7, 45.9, 70.9, 39.0, 66.0, 34.5, 36.4, 89.5, 35.0, 65.6, 67.5, 27.0 and 57.9, respectively.<br /> <br /> • The percentage of BPL grain that got diverted (during early 2000s) in Andhra Pradesh, Assam, Bihar, Gujarat, Haryana, Himanchal Pradesh, Karnataka, Kerala, Madhya Pradesh, Maharastra, Orissa, Punjab, Rajasthan, Tamil Nadu, Uttar Pradesh and West Bengal are: 20.6, 41.7, 81.5, 42.1, 55.7, 31.4, 43.4, 21.7, 62.4, 26.5, 23.4, 76.5, 32.0, 15.7, 61.3, 19.2 and 36.4 respectively.<br /> <br /> • In Andhra Pradesh, it is estimated that the introduction of food coupons has reduced leakage in the PDS by up to 25 percent.<br /> <br /> • The poor long run performance of the PDS in many states suggests that the medium term vision of a reformed PDS for most groups should be cash-based, though this would face substantial resistance in light of the ongoing debate around the Right to Food legislation. A reformed PDS could still provide food-based support for specially vulnerable groups (consistent with Supreme Court orders), and in specific areas facing chronic or acute food shortages, but for most areas and most people, a cash-based social assistance system seems a more efficient and transparent means of providing an income floor.<br /> <br /> • An intermediate solution currently being mooted in the 2010 Economic Survey is to transfer the subsidy directly to households (rather than the PDS store owner) through food coupons with a lumpsum entitlement that can be exchanged at any PDS store.<br /> <br /> • Methods such as self-targeting (in public works), mixed methods of identifying the poor (as in social pensions) have notably better targeting efficiency and inclusion of the poorest, while some states rely on community wealth ranking and verification.<br /> <br /> • While the benefits of PDS to households are spread across India, the main beneficiaries of public procurement of grains to feed the PDS are concentrated among farmers in a few states: Punjab, Haryana, some parts of Uttar Pradesh, and Andhra Pradesh to a lesser extent.<br /> <br /> • While only around 60 percent of eligible households in Bihar had been provided with food coupons in the first year of implementation, access among them dramatically increased as a result of the reform, rising from only 2 percent to around half of BPL households. Bar coded coupons/ration cards have been introduced under TPDS in six states.<br /> <br /> **page**</div> <div style="text-align:justify"> </div> <div style="text-align:justify">According to the [inside]Public Distribution System (PDS) and Other Sources of Household Consumption, 2004-05[/inside], which has been produced by the National Sample Survey 61st Round, (July 2004 - June 2005), Volume I:<br /> <br /> * 81% of rural households and 67% of urban households held ration cards. [B]elow [P]overty [L]ine (BPL) cards were held by 26.5% of rural households and 10.5% of urban households. Antyodaya cardholders formed less than 3% of rural households and less than 1% of urban households. <br /> <br /> * In Andhra Pradesh, the proportion of BPL-card-holding households (rural: 54%; urban 27%) was more than double the national average. The proportion of BPL cardholders was above 40% in rural areas of Karnataka and Orissa as well. In urban Kerala, nearly 20% of households had BPL cards.<br /> <br /> * In rural areas, the percentage of households having Antyodaya cards was 5% for Scheduled Tribes (ST), about 4.5% for Scheduled Castes (SC), and 2% for the other groups – Other Backward Classes (OBC), and the rest. BPL cards were held by 40% of ST households, 35% for Scheduled Castes (SC), about 25% of OBC households, and 17% of other households. In urban areas, however, it was the Scheduled Castes, which had the highest percentage (17%) of households holding BPL cards, while ST and OBC households had about 14% each. In urban India the ST and SC groups had more than 1% of households with Antyodaya cards, while the other groups had less than 1%.<br /> <br /> * In rural areas BPL cards were held by 43% of “agricultural labour” households and 32% of “other labour” households.<br /> <br /> * 51% of households in the lowest size class of landholding “<0.01 hectares” had no ration card at all, while in all other size classes 77-86% households had a ration card of some kind. The highest proportion of households with ration cards was 86%, seen in the classes “0.41-1.00 hectares” and “1.01-2.00 hectares”. In respect of ration cards meant for the poor, the class “0.01-0.40 hectares” was the class of households with the highest proportion of cards for both BPL (32%) and Antyodaya (4%). It was followed by the class “0.41-1.00 hectares” (BPL, about 28%, Antyodaya, 3%). The bottom class “<0.01 hectares” had 22% of its members holding BPL cards, but this was smaller than the overall proportion of BPL cardholders taking all classes together (26.5%). Likewise, Antyodaya cards were held by 2.7% of households in the bottom class, compared to 2.9% for all households.<br /> <br /> * Among the top 5% of rural population ranked by monthly per capita expenditure (MPCE), an estimated 11% of households held BPL ration cards. Among the next 5% of rural population, 14% of households held BPL cards, and among the next 10% of rural population, 18% of households held BPL ration cards.<br /> <br /> * The major State where consumption of rice from PDS was most common was Tamil Nadu (rural: 79% households consuming from PDS; urban: 48%), followed by Andhra Pradesh (rural: 62%; urban: 31%), Karnataka (rural: 59%; urban: 21%) and Kerala (rural: 35%; urban: 23%). Even in Gujarat and Maharashtra, where rice is not the major cereal food, 32% and 28% households, respectively, consumed PDS rice. On the other hand, PDS rice was consumed by only a small proportion of households in West Bengal (rural: 13%; urban: 5%), Assam (rural: 9%; urban: 2%) and Bihar (rural: 1%; urban: 0.7%), though rice is the major cereal food in these States.<br /> <br /> * PDS consumption of wheat/atta was most common in Karnataka (rural: 46%; urban: 15%), rural areas of Gujarat (29%) and Maharashtra (26%), and in Madhya Pradesh (rural: 20%; urban: 10%).<br /> <br /> * PDS consumption of sugar was most prevalent in Tamil Nadu (rural: 65% households; urban: 64%), to be followed by Assam (rural: 40%; urban: 16%) and Andhra Pradesh (rural: 36%; urban: 15%). On the other hand, in both rural and urban areas, less than 1% households consumed PDS sugar in Punjab, Haryana, Bihar and Jharkhand, and fewer than 2% in Orissa and Uttar Pradesh. The all-India proportions of households were 16% for rural areas and 12% for urban.<br /> <br /> * Over 55% of rural households used PDS kerosene in all major States except Punjab and Haryana. Use of PDS kerosene was most common in West Bengal for both rural areas (91%) and urban areas (60%). <br /> <br /> * Among the four commodities, kerosene had a much larger share of quantity of consumption coming from PDS – 77% for rural and 57% for urban India. For rice the share of PDS in total quantity consumed was 13% for rural and 11% for urban; for wheat it was 7% for rural and 4% for urban, and for sugar, 9.5% for rural and about 6.5% for urban India.<br /> <br /> * Households holding a BPL or Antyodaya ration card exhibited a much greater degree of dependence on PDS than the population as a whole. This was most marked in case of wheat, where, for both rural and urban areas, as much as 28% of quantity consumed by such households came from PDS compared to 7% for the rural population as a whole and 4% for the overall urban population. For rice and sugar, the percentage contribution of PDS purchases to total consumption (in quantity terms) for these households was double the percentage share of PDS in consumption of the general population in rural areas and three times the percentage share of PDS for the general population in urban areas.<br /> <br /> * The Midday Meal scheme benefited children from an estimated 22.8% of rural households in 2004-05, the Integrated Child Development Scheme (ICDS) benefited 5.7% of rural households, the Food-for-Work Scheme, only 2.7%, and the Annapoorna scheme for the elderly, 0.9%. In urban India, while children from 8% of households benefited from the Midday Meal scheme, and the ICDS scheme benefited 1.8% households, only 0.2% urban households benefited from Annapoorna, and only 0.1% from Food for Work.<br /> <br /> * Among household occupational types in rural India, the (mostly manual) labour households – “agricultural labour” and “other labour” – had the highest proportions of households benefiting from each of the four schemes. Similarly, in urban India, “casual labour” households had the highest proportions of beneficiary households from each of the four schemes. <br /> <br /> * Among social groups, the Scheduled Tribes had the highest proportion of Food-for-Work beneficiary households in both rural and urban India, and also the highest proportion of ICDS beneficiaries.<br /> <br /> * Rural households possessing more than 0.40 hectares of land had a higher representation among recipients of benefits from the schemes than households possessing 0.40 hectares of land or less. The class of households possessing 0.41-1.00 hectares of land had the highest proportions of Food-for-Work and Midday Meal beneficiary households among six classes of rural households formed on the basis of size of land possessed.<br /> <br /> * In each of the top four classes among 12 classes of rural households formed on the basis of monthly per capita expenditure level (MPCE), 2-4% of households were ICDS beneficiaries.<br /> <br /> * The Midday Meal scheme benefited over 10% of rural households in most State/Uts (between 18% and 33%in 12 major States).<br /> <br /> * Among the major States, the highest proportions of (rural) Food for Work beneficiaries were found in Rajasthan (12%) and Orissa (8%).<br /> <br /> * As much as 62% of quantity of milk consumed in rural India came from home produce compared to 40% for wheat/atta, 30% for rice, and 11-18% for seven common pulse varieties. For eggs, 14% of consumption, and, for chicken, 13%, came from homegrown stock.<br /> <br /> * Among common vegetables and fruits, home produce was most important in case of coconuts (37% of quantity consumed in rural India), reported by as many as 28% of rural households. For arum and pumpkin, about a quarter of rural consumption came from homegrown stock.<br /> <br /> According to the [inside]11th Five Year Plan[/inside],<br /> <a href="http://planningcommission.gov.in/plans/planrel/fiveyr/11th/11_v2/11v2_ch4.pdf">http://planningcommission.gov.in/plans/planrel/fiveyr/11th/11_v2/11v2_ch4.pdf</a>:<br /> <br /> * The PDS is a major State intervention in the country aimed at ensuring food security to all the people, especially the poor. The PDS operates through a large distribution network of around 4.89 lakh fair price shops (FPS), and is supplemental in nature.<br /> <br /> * Under the PDS, the Central Government is responsible for the procurement and transportation of foodgrains up to the principal distribution centers of the FCI while the State Governments are responsible for the identification of families living below the poverty line, the issue of ration cards, and the distribution of foodgrains to the vulnerable sections through FPSs. PDS seems to have failed in serving the second objective of making foodgrains available to the poor. If it had, the consumption levels of cereals should not have fallen on average—as it has consistently over the last two decades.<br /> <br /> * With a view to improving its efficiency, the PDS was redesigned as TDPS with effect from June 1997. The TPDS envisages identifying the poor households and giving them a fixed entitlement of foodgrains at subsidized prices. Under the TPDS, higher rates of subsidies are being given to the poor and the poorest among the poor. The APL families are also being given foodgrains under TPDS but with lower subsidy. The scale of issue under TDPS for Antyodaya cardholders began with 10 kg per family per month, which has been progressively increased to 35 kg per family per month with effect from April 2002.<br /> <br /> * As identified by various studies, the major deficiencies of the TPDS include: (i) high exclusion and inclusion errors, (ii) non-viability of FPSs, (iii) failure in fulfilling the price stabilization objective, and (iv) leakages.<br /> <br /> <em>Performance Evaluation of TPDS</em><br /> <br /> * Only 22.7% FPSs (fair price shops) are viable in terms of earning a return of 12% on capital.<br /> * The offtake by APL cardholders was negligible except in Himachal Pradesh, Tamil Nadu, and West Bengal.<br /> * The offtake per BPL (below poverty line) card was high in WB, Kerala, Himachal Pradesh, and Tamil Nadu.<br /> * The offtake by the poor under TPDS was substantially higher than under universal PDS.<br /> * There are large errors of exclusion and inclusion and ghost cards are common.<br /> * High exclusion errors mean a low coverage of BPL households. The survey estimated that TPDS covers only 57% BPL families.<br /> * Errors of inclusion are high in Andhra Pradesh, Karnataka, and Tamil Nadu. This implies that the APL households receive an unacceptably large proportion of subsidized grains.<br /> * Leakages vary enormously between States. In Bihar and Punjab, the total leakage exceeds 75% while in Haryana and UP, it is between 50 and 75%.<br /> * Leakage and diversion imply a low share of the genuine BPL households of the distribution of the subsidized grains. During 2003–04, it is estimated that out of 14.1 million tonnes of BPL quota from the Central Pool, only 6.1 million tonnes reached the BPL families and 8 million tonnes did not reach the target families.<br /> * Leakage and diversion raised the cost of delivery. For every 1 kg that was delivered to the poor, GoI had to issue 2.32 kg from the Central Pool.<br /> * During 2003–04, out of an estimated subsidy of Rs 7258 crore under TPDS, Rs 4123 crore did not reach BPL families. Moreover, Rs 2579 crore did not reach any consumer but was shared by agencies involved in the supply chain.<br /> <br /> <em>Steps undertaken to strengthen the TPDS</em><br /> <br /> * A Citizens’ Charter has been issued in November 1997 for adoption by the State Governments to provide services in a transparent and accountable manner under PDS. Instructions have been issued for involvement of PRIs in identifications of BPL families and in Vigilance Committee.<br /> * The PDS (Control) Order 2001, inter alia, covers a range of areas relating to correct identification of BPL families, issue of ration cards, proper distribution, and monitoring of PDS-related operations.<br /> * A new scheme ‘Computerization of PDS Operations’ with a token provision of Rs 5 crore was introduced in 2006–07. The computerization of PDS operations would be an improvement on the existing system of ration cards, that is, the present manual system of making entries, etc. The new system will have personal details of all members of the family including their entitlement and the entire network of PDS from taluk to State level will be linked.<br /> * This is a new scheme introduced during the Eleventh Five Year Plan to strengthen the PDS. The scheme aims at taking effective measures to curb diversion and leakages through Global Positioning System, Radio Frequency Identification Device, etc.<br /> * The Village Grain Bank Scheme, which was hitherto with the Ministry of Tribal Affairs, has been transferred to the Department of Food and Public Distribution. The objective of the scheme is to establish Grain Banks in chronically food-scarce area and to provide safeguard against starvation during the lean period. The scheme is also to mitigate drought-induced migration and food shortages by making foodgrains available within the village during such calamities.<br /> * Construction of godowns was conceived during the Fifth Five Year Plan to build and increase the storage capacity available with FCI for storage of foodgrains.<br /> * A recommendation of the High-level Committee on Long Term Grain Policy (2000) was that instead of the current distinction between APL, BPL, and Antyodaya in terms of issue pricing for rice and wheat, there should be a single-issue price for grain issued by the FCI from its warehouses. This recommendation, sometimes identified with the return to universal PDS from TPDS adopted in 1997, has been criticized on a number of grounds. First, that if the same price for BPL and APL households was charged, this would not be financially viable for the BPL. If existing AAY and BPL cardholders were charged a higher price, there would be a diversion of benefits from the relatively poor to the relatively rich. Second, there might be pressure to keep the uniform CIP low as high common price for BPL and APL would have adverse consequences for the poor. On the other hand, a low CIP would increase even further the fiscal subsidy. Third, any widening in the effective reach of PDS due to its universalization would put unbearable pressures for the supply of grain into the PDS.</div> ', 'credit_writer' => '', 'article_img' => '', 'article_img_thumb' => '', 'status' => (int) 1, 'show_on_home' => (int) 1, 'lang' => 'EN', 'category_id' => (int) 10, 'tag_keyword' => '', 'seo_url' => 'pds-ration-food-security-42', 'meta_title' => '', 'meta_keywords' => '', 'meta_description' => '', 'noindex' => (int) 0, 'publish_date' => object(Cake\I18n\FrozenDate) {}, 'most_visit_section_id' => null, 'article_big_img' => null, 'liveid' => (int) 42, 'created' => object(Cake\I18n\FrozenTime) {}, 'modified' => object(Cake\I18n\FrozenTime) {}, 'edate' => '', 'category' => object(App\Model\Entity\Category) {}, '[new]' => false, '[accessible]' => [ '*' => true, 'id' => false ], '[dirty]' => [], '[original]' => [], '[virtual]' => [], '[hasErrors]' => false, '[errors]' => [], '[invalid]' => [], '[repository]' => 'Articles' } $imgtag = false $imgURL = '#' $titleText = null $descText = 'KEY TRENDS • During 2014-15, while procurement of foodgrains (rice and wheat) increased from 56.9 million tonnes to 60.2 million tonnes, offtake of foodgrains (rice and wheat) from the PDS decreased from 59.8 million tonnes to 55.9 million tonnes. Despite increased availability in the PDS and prevalence of high inflation in foodgrains, dependence on the PDS is reducing, suggesting that there may be issues of availability, timely availability and quality of the PDS foodgrains...' $foundposition = false $startp = (int) 0 $endp = (int) 200preg_replace - [internal], line ?? include - APP/Template/SearchResult/index.ctp, line 35 Cake\View\View::_evaluate() - CORE/src/View/View.php, line 1413 Cake\View\View::_render() - CORE/src/View/View.php, line 1374 Cake\View\View::render() - CORE/src/View/View.php, line 880 Cake\Controller\Controller::render() - CORE/src/Controller/Controller.php, line 791 Cake\Http\ActionDispatcher::_invoke() - CORE/src/Http/ActionDispatcher.php, line 126 Cake\Http\ActionDispatcher::dispatch() - CORE/src/Http/ActionDispatcher.php, line 94 Cake\Http\BaseApplication::__invoke() - CORE/src/Http/BaseApplication.php, line 235 Cake\Http\Runner::__invoke() - CORE/src/Http/Runner.php, line 65 Cake\Routing\Middleware\RoutingMiddleware::__invoke() - CORE/src/Routing/Middleware/RoutingMiddleware.php, line 162 Cake\Http\Runner::__invoke() - CORE/src/Http/Runner.php, line 65 Cake\Routing\Middleware\AssetMiddleware::__invoke() - CORE/src/Routing/Middleware/AssetMiddleware.php, line 88 Cake\Http\Runner::__invoke() - CORE/src/Http/Runner.php, line 65 Cake\Error\Middleware\ErrorHandlerMiddleware::__invoke() - CORE/src/Error/Middleware/ErrorHandlerMiddleware.php, line 96 Cake\Http\Runner::__invoke() - CORE/src/Http/Runner.php, line 65 Cake\Http\Runner::run() - CORE/src/Http/Runner.php, line 51
