Events & Issues
New Delhi, 25 October 2010
PDS A Sacred Cow?
TIME TO CONSIDER
ALTERNATES
By Dharmendra Nath,
IAS (Retd)
Over the years the Public Distribution System (PDS) has
become some kind of an article of faith with us. In the public mind it might be
synonymous with corruption but for the policy makers it is a sacred cow, some
thing beyond question, irrespective of whether it delivers or not. It could be
revamped and re-targeted but its essentials must remain the same. Whereby, this
mind set is blinding us to alternative approaches to meet the same objective.
True, our goal is food security. But the PDS in its current
form cannot be the only approach. If in all these years it has not performed (according
to a widely publicized estimate it delivers only 30 paise out of one rupee) we
should be seriously considering other alternatives.
Importantly, men will never be angels to make the PDS work. Nor
will any amount of vigorous re-loading ever fill such a leaky pot. It will only
oblige the beneficiaries of the spillage. The leaks are too many and too wide-spread
to be amenable to any cure and they cover the entire gamut of the Government
from the Centre to the States to the local bodies and their agents. Clearly, if
we are not interested in the spillage it is time to roll back and finally wind
up the scheme.
The PDS, as it exists today, aims to provide some minimum
quantity of food grains at subsidized rates through Government licensed shops
to the weaker sections of society who are spread out far and wide. They hold
BPL (below poverty line) Cards. These Cards co-exist with a large number of
unauthorized Cards. No amount of checking and re-checking has been able to
eliminate ghost BPL Cards and other BPL Cards held by persons not entitled to
them.
Food grains flow from a Central agency to a State agency
which then transports them to far flung areas of the State and makes them
available to its licensed shops for distribution. At all these levels the
supply chain is impacted by powerful political and administrative influences.
There are hardly any effective checks and balances. In the circumstances neutralising
these influences has never been possible.
The intended ultimate beneficiary is largely ignorant and
sits at some remote place. He is in no position to stand up for his rights. All
others involved in the process are smarter than him. Knowing these limitations
it should be our effort in the interim, to devise a mechanism that is not
purely a Government show but has some reasonable checks and balances built into
it.
Today, the entire PDS show is Government run; it is essentially
politico-administrative and monopolistic. The Government handles the grains,
selects the shopkeepers and fixes the timings of the shops. There is just one
licensed shop for an area. Other shopkeepers and the beneficiaries have no choice.
Thus, a Government licensed shop fully exploits this situation.
More often than not, the shopkeeper is a party worker whose main job is to
arrange party shows. And the PDS grains are his wherewithal. He is also hand in
glove with the official machinery or if he is powerful enough the official
machinery is mortally afraid of him and his lobby.
Undoubtedly, there is talk of public-private partnership in various
spheres nowadays. Yet that does not touch the PDS. Hence there is a pressing need
to involve private initiative in this massive task. The Government could
continue to be in the business of the minimum support price (MSP) based
procurement and storage. That would assure the Government’s position as a market
leader.
However, there are problems galore on the distribution side and
most of the mischief takes place there. To begin with, instead of the Government
licensing the shops, all shops should be made eligible. They could still be supervised
by Government agencies. Beneficiary entitlements could also be decided by the Government.
Whereby these shops would supply Government fixed quantities
to the beneficiaries at Government fixed rates (call the scheme a variation of
the Food Stamps scheme, if you will) and recover the difference in price from
the Government. Thus, much casual handling, diversion and wastage of stocks could
be avoided as the stocks would belong to the shopkeeper and he would take
proper care of them.
Besides, many more distribution points would become
available to the beneficiary. The beneficiary would have the freedom to retain
his relationship with his current or chosen shop. In addition, the problem of
viability of PDS shops could vanish as an existing shopkeeper would be taking on
this responsibility. There might be some competition but the whole thing would become
people-friendly.
Needless to say, it might not have been possible to adopt
this approach in the early years of the PDS as the financial, commercial and
physical infrastructures to run it would not have been adequately available.
But today, with increased availability of banking, better transport and
communication facilities and a broad expansion of the retail sector the picture
has changed. We should be utilizing this resource for running a better PDS.
Significantly, this could be the first stage of the
change-over. And gradually we should be moving towards a full wage system. Given
that many Government schemes these days offer wages. The Government fixes the minimum
wages too.
Questionably, what is the point if after receiving minimum
wage one is still poor? Why pay less and then subsidise rations? Why not be more
direct and pay full wages --- a living wage --- in the first instance.
If we start moving in this direction our wage bill would go
up but our subsidy bill with all its problems and leakages would go down. Moreover,
the exercise would be budget neutral. As higher wages would have a multiplier effect
on rest of the economy. Even incomes of the self-employed would go up as wages
and incomes would get spent and re-spent.
Further, this would also assure true honour to the worker
and establish dignity of work. Think. What kind of honour is it, when after
putting in an honest day’s work the worker still finds himself in a queue for
subsidy? It is unfair and demoralizing to the worker and his family. The sooner
we get out of it the better. As at this stage the PDS would become irrelevant.
In sum, the only losers would be those who profess to serve the
poor and their hangers-on. Whom will they serve if there are no poor? It is a
testimony to the strength of this lobby that so little real reform of the PDS
has taken place in all these years. ----- INFA
(Copyright,
India News and Feature Alliance)
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