By Shruti Appalla
Seven decades post independence starvation deaths, chronic hunger and malnourishment exist as results of a paradox created by poverty and inequitable distribution of resources, wealth and capabilities among some of the most disenfranchised, marginalised, socially boycotted communities in our country. India does much worse than Sub-Saharan Africa in terms of general undernourishment. Protein energy malnutrition in India is twice as high in India than in Sub-Saharan Africa despite recurring famines in the latter.
Amartya Sen points to two main causes of this problem. First, smugness based on ignorance among the general public that derives itself from confusing famine prevention (which is a simple achievement) with the avoidance of endemic undernourishment and hunger, which is a more complex task. Second, the problem-solution mismatch existing in public policy that confuses self-sufficiency with accessibility. A stark example is the food security laws of India of which the Public Distribution System (PDS) is the largest welfare scheme.
Tracing the evolution and importance of PDS
PDS is a common food subsidy mechanism where food grains are provided to targeted groups by government run shops at a price less than the market rate. Under the scheme, beneficiaries are provided essential commodities such as rice, wheat, sugar, edible oil, soft cake and kerosene oil. State governments are often said to also supply pulses, salt and coarse clothing. It has been in operation since the interwar period in some form or another.
Evolution of public distribution in India has its origin in the rationing system introduced by the British during World War II. It started in 1939 in Bombay and extended to other presidency towns and cities. Public distribution of food grains was retained as a deliberate social policy by India after independence and in 1951, PDS was officially included in the Five- year plans.
Before the 1960s, distribution through PDS was generally dependant on imports of food grains, majorly from the US. It was expanded in the 1960s as a response to the severe food shortages of the time caused by famine. Further, the government set up the Agriculture Prices Commission (APC) and the Food Corporation of India (FCI) to improve domestic procurement and storage of foodgrains for PDS. By the 1970s, PDS had evolved into a major welfare scheme aimed at providing easy access to food supplies. In the 1990s, the scheme was revamped to improve access to food grains to people in hilly and other inaccessible areas, and to target the poor.
Subsequently, in 1997, the government launched the Targeted Public Distribution System (TPDS), with a focus on the poor. TPDS aims to provide subsidised food and fuel to the poor through a network of ration shops. Food grains such as rice and wheat that are provided under TPDS are procured from farmers, allocated to states and delivered to the ration shop where the beneficiary buys his entitlement. The centre and states share the responsibilities of identifying the poor, procuring grains and delivering food grains to beneficiaries.
In September 2013, the Parliament enacted the National Food Security Act (NFSA), 2013. The Act relies largely on the existing TPDS to deliver food grains as legal entitlements to poor households. It marks the significant shift in perspective of the policy by making the right to food a justiciable right. Poor households are further divided into categories like Priority Households, Priority+Sugar Households and Antyodaya Anna Yojana (AAY) households.
PDS was continued as a deliberate social policy of the government with the objectives of:
- Providing food grains and other essential items to vulnerable sections of the society at reasonable (subsidised) prices;
- To have a moderating influence on the open market prices of cereals, the distribution of which constitutes a fairly big share of the total marketable surplus; and
- To attempt socialisation in the matter of distribution of essential commodities.
Although a well-organized PDS for agricultural produce has helped achieve self-sufficiency in India and helped get more girls into education in Bangladesh, Cambodia and Pakistan, the scheme itself is economically unsustainable, doesnt cure malnutrition and is extremely tedious to implement.
Reasons behind inefficiencies
The economic costs of maintaining and successfully running a PD system are disproportionately high compared to the benefits derived from the scheme. Governments are often burdened into maintaining high subsidy rates and high Minimum Support Prices despite a bad harvest. The food subsidy has only increased over the years, having more than quadrupled from Rs 21,200 crore in 2002-03 to Rs 85,000 crore in 2012-13.
Carrying costs of transporting the grain, delivering it, storing it, are also extremely high. Improper storage silos allow for the grain to catch rust and become unfit for consumption. In August 2010, in the case of PUCL vs. The Union of India, the Supreme Court found that food grains were rotting due to inadequate storage. There still exists a shortage of space in consuming states, such as Rajasthan and Maharashtra, which together account for 13 percent of the total capacity of the FCI.
Fair price shops are contracted out to local persons whose shops meet the specifications mentioned under the NFSA. Most owners have to pay for electricity, water, labour and rent, among other expenses from the profit generated by the sale of food supplies to beneficiaries. Very often the shops run on losses. Under such circumstances, the owners prefer to keep the shops closed on most days and cases of black market sale of government grains increases. On most occasions, beneficiaries find fair price shops closed and simply have to pay market prices to procure grain. Even if shops are open, in poorer states like Bihar, Chhattisgarh and Madhya Pradesh, cases of underselling and over-pricing are common.
Targeting mechanisms such as TPDS are prone to large inclusion and exclusion errors. This implies that entitled beneficiaries are not getting food grains while those that are ineligible are getting undue benefits. An expert group set up in 2009 to advise the Ministry of Rural Development estimated that about 61% of the eligible population was excluded from the Below Poverty Line (BPL) list while 25% of non-poor households were included in the BPL list.
Based on 2009-10 data from the National Sample Survey, consumption under TPDS was only 60% of the total off-take. This implies that nearly 40% of off-take was leaked into the open market. In an evaluation of TPDS, the Planning Commission found 36% leakage of PDS rice and wheat at the national level.
The National Food Security Act (NFSA), 2013 lays out a comprehensive framework for establishing accountability and transparency at the ground level. Section (15) stipulates the designation of a District Grievance Redressal Officer (DGRO) to implement the timely redressal of complaints and to ensure beneficiaries their entitlements. However, very few circles have appointed DGROs and other dont have a system of checks.
Recent alternate solutions
Most scholars believe that theoretically PDSs are imperative to a developing economy and cannot be replaced by a coupon system or a direct-benefit cash transfer. The JAM trinity (Jan Dhan, Aadhar and Mobile networks) had been promoted as a less radical but more effective way of making the PDS system digitized and efficient. However, with very few bank branches in rural areas, concerns about privacy violation surrounding Aadhar and mobiles being still out of the reach of the poorest sections of society, faith is fast disappearing in this solution too.
The Delhi government had recently installed Point of Sale (POS) machines as part of a pilot in 23 fair price shops in Delhi. POS machines are a point of sale instruments that track biometric data like fingerprints to identify the ration card holder and discern their entitlements depending on the category. This system too has faced severe challenges with internet networks being down most of the time, fingerprints not being recognized and maintenance costs being high. Additionally, in this system, the person on whose name the ration card is registered is the only one who can collect the rations. Although it solves the problem of ghost cards, most families have a single ration card and the card holder in many cases cannot make it to the shop to buy the grains.
Direct Benefit cash transfers (DBT) have till date been implemented in Puducherry and Chandigarh. On one hand, they solve the problem of transporting and storing grains and subsequently its leakage. Yet, on the other hand, it requires complete financial inclusion and leaves people prone to adverse effects of inflation and markets. Organisations like SEWA have campaigned still in favour of a phase-wise roll back of PDS while slowly scaling the reach of DBT.
Nutrition has always been the most basic of bodily demands. In light of its influence on the socio-economic and political progress of a person, it becomes imperative for the government to utilise all means possible to fast track reforms in the sector with the help of state governments, civil society and the responsive citizenry.
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