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Public Distribution System

Public Distribution System

The public distribution system is a chain of government-sponsored shops. These shops are responsible for the distribution of basic food and non-food commodities at very cheap rates. The target group is the disadvantaged sections of society.

India has one of the largest public distribution systems in the world. Wheat, rice, kerosene, sugar, etc. are a few major commodities distributed by this network.

Objectives

  • It aims to bring about distributive justice in society.

  • PDS plays a role of buffer between the downtrodden and price fluctuations of the free market.

  • PDS seeks to eradicate poverty, malnutrition, and hunger. Thus it improves the health and standards of living of poor people.

Evolution of PDS

  • PDS was adopted after the Second world war due to severe food shortages in the country. Originally, the subsidy was common to all.

  • In the 1990s, PDS was restructured to cover backward  regions.

  • Revamped Public Distribution System (RPDS) was launched in 1992 in 1775 backward blocks. Aim of RPDS was to focus on poor and stop leakages.

  • Finally, Targeted PDS (TPDS) was launched in 1997. Poor families were classified as BPL and APL. The BPL families receive commodities at one-half of the price than APL families.

  • The union government launched Antodaya Anna Yojana in 2000. Under this, the bottom most 2.5 crore BPL families receive 35 kg of rice at  ₹3/kg and wheat at  ₹2/kg through the same fair price shop.

  • The National Food Security Act (NFSA), 2013 has the objective of covering overall 67 percent of the population (75 percent of rural and 50 percent urban). This promised to give people rice/wheat/coarse cereals at Rs. 3/2/1/ Kg through Public Distribution System (PDS).

  • Pradhan Mantri Garib Kalyan Anna Yojana (PM-GKAY)-  Aim of this scheme is to ensure food security in COVID 19 crisis. Through this, the government is providing additional free-of-cost foodgrains (Rice/Wheat). This will help about 81 Crore beneficiaries covered under NFSA, 2013.

Functioning

  • PDS is operated under the shared responsibility of the Central and the State Governments.

  •  Role of the Union government

  • Through the Food Corporation of India (FCI), the Central Government is responsible for procurement, storage, and bulk allocation of food grains to the State Governments.

  • Role of State government

  • The State government is responsible for allocation within the State, identification of eligible families, issue of Ration, supervision of the operation of Fair Price Shops.

Limitations of PDS

  • Lack of efficiency

  • Rural-urban bias

  • PDS leakages because of corruption and black marketing

  • Exclusion and inclusion errors in the identification of the beneficiaries

  • Lots of fake and shadow ration cards are available in the market. As per recent government survey, more than 1.75 crore cards are bogus.

  • Fair Price Shop owners use fake ration cards and sell the food grains in the open market.

  • Often good quality food grains are replaced with low quality food grains.

  • The eligibility criteria for inclusion in BPL list is solely economical. It is often under reported or understated because of lack of national income data.

  • In the existing system, there is ‘no exit but entry’ only. Even if families income increases, it continues to be BPL on paper. This becomes an ever increasing liability to the government.

Revamping

  • Direct benefit transfer

  • The direct benefit transfer in the bank account of beneficiaries empowers the beneficiaries to execute the economic decisions in the free market.

  • In the face of competition from the free market, the public distribution system also gets improved.

  • Aadhaar enabled authentication of beneficiaries

  • It can help curb the duplication of beneficiaries.

  • It can remove the misuse of subsidy and improve the PDS supply chain efficiency. However, there are challenges to this like biometric failures.

  • Coupon system

  • Under this, grains will not be given at a subsidized rate to the PDS stores. Instead, beneficiaries can use food coupons to buy food grains from retailers/PDS stores.

  • Retailers shall take these coupons to the local bank and shall be paid back with money. This coupon returned to the state agency, which is then compensated by the government as per the value of the coupon.

  • Food coupons decrease corruption and improve accountability.

  • GPS tracking of stocks, SMS alerts to beneficiaries, CCTV monitoring of fair price shops

  • These tools can improve the general efficiency and monitoring of PDS.

  • Decentralized procurement and distribution of locally produced food grain

  • It would ensure the diversity of food grains requirements.

  • Other steps

  • Proper beneficiary identification and classification under APL, BPL, or AAY household categories.

Success stories

  • Tamil Nadu follows a universal PDS system. Women-SHGs participation in this initiative has ensured safety, transparency, and accessibility in the program along with a transaction costs reduction.

  • Arun ePDSIn Arunachal Pradesh, ICTs and process re-engineering are used for an efficient distribution of commodities under PDS. It has minimized the pilferage of food rations. The program has resulted in rapid redressal of grievances and addressing exclusion and inclusion errors.

  • Dilli Annashree Yojana – This is a pioneering initiative using the Direct Benefit Transfer (DBT) mechanism. The eldest woman of a disadvantaged family is made the beneficiary. Thus this scheme provides a gender-equity.

  • e-PDS project of ChhattisgarhReal-time GPS monitoring from depots to the FPSs. has shown an encouraging result.

  • e-Uparjan – This is an initiative of the Madhya Pradesh Government. It uses technological innovations for speedy and transparent transfer of MSP dues into the accounts of farmers and strengthening procurement operations.

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