Economic Highlights
New Delhi, 17 May 2007
Tackle Leakage
Problem
Revamp
Public Distribution System
By Dr. Vinod Mehta
India’s Public Distribution System (PDS)
as it has grown over the years has become at times ineffective. One can still read reports about grains not
reaching the targeted people, leading to starvation deaths. The implementation
of the PDS has not measured up to the public’s expectation. The system does not
seem to be working well in many places, especially in the rural North and north-eastern
States. Leakages are quite rampant.
At
the national level leakages from the PDS amount to nearly 1.5 times the actual
amount of grain needed. A Planning Commission
report on the PDS states: “In the year 2003-04, out of 14.07 million tonnes of
foodgrain issued to 16 States at BPL
(below poverty line) prices from the central pool, only around 5.93 million
tonnes were delivered to the poor families.”
Some leaders have expressed their concern over peculiar dilemma of excess food and low consumption. In the past one decade,
the production of foodgrain has gone up and India has started exporting
foodgrains and yet there are many people in certain areas who are reported to
have died of hunger. With comfortable grain production there is every reason to
ensure that every poor household gets adequate grain at reasonable prices.
The need for
PDS was felt when the food production had dropped in 1958. Earlier there was
rationing system introduced during the Second World War to manage limited food
stock but discontinued in 1943. It was again introduced in 1950 to regulate
public distribution of foodgrain as a deliberate social policy. The main idea
behind public distribution system was: a) to provide foodgrain and other items
of daily necessities to the poorer
sections of the society at affordable (subsidized) price; b) to influence the
market prices of cereals to keep them under control and c) to ensure equity in
the matter of distribution of essential
commodities. In other words PDS from rationing evolved into national food
security system.
The System was
established during the period when India was facing shortages of essential agricultural commodities. For a number of
years it served the purpose well for which it was introduced. However, a
situation has reached where there is no shortage of foodgrain etc., but still
some of the poorer sections of the society are not getting the foodgrain they
need. It has been attributed to various factors. Firstly, the PDS itself leaves
much to be desired. The grain, though available in godowns, is unable to reach
those sections of the society, which need them, the most. The district
administration has been found wanting in transporting the grain to the poorest
of the people.
Secondly, even
after subsidies the price of grain is so high that many poor people in the
target group cannot afford to buy it. It is common knowledge that approximately
36% of the population lives below the poverty line, which means that their
income is not sufficient to buy adequate quantity of food. About 80% of the
poor people live in rural and tribal areas. One reason for the relatively high
price of subsidized food is the regular increase in the procurement price of
grain as well as rising components of cost of the Food Corporation of India.
Another
reason that the poorest sections of the society are not able to meet their food
requirements is that our public distribution system concentrates heavily on
rice and wheat and leaves out coarse grain like maize, barley, millet, and
sorghum. Government’s support to rice and wheat has led to neglect of these
grains, which are not only relatively cheaper but staple diet of many of the
rural people. Since there is no support
price for them the farmers are shifting to the production of wheat and rice.
Hence the situation when the government policy has favoured wheat and rice at
the cost of poor peoples’ staple diet.
However, as things stand, there is a
surplus of grain but people do not have sufficient purchasing power to meet
their requirements from market. The country needs to approach this problem at
various levels. Firstly the employment opportunities for these people will have
to be increased so that they earn enough to buy their grain requirement from
the market. What they need is remunerative employment on a regular basis. Food for work programme is not enough. It
needs to be strengthened.
Secondly, we should look at the
institutional arrangements to distribute the foodgrain directly to the starving
people. In such cases there is no need of selling them any grain as they can’t
afford to buy but institutions like Panchayat should see to it that these
people do not go hungry. The district administration should help Panchayat
organize community kitchens and the cost for giving food to them should be
borne by the government itself.
Thirdly, the emphasis should be
shifted from production of rice and wheat to production of coarse grain, which
is cheaper and affordable, by many of the poorer sections of the society. Unlike
rice and wheat, coarse grains do not need lot of water and fertilizer and are
cheaper to grow in areas of scarce water. PDS based on wheat and rice does not
serve the purpose.
In States where wheat is not a
staple diet diversion of wheat to channels other than household is quite
natural. “Up to 100% of the wheat in six of the eight
northeastern states is being diverted from the Public Distribution System
(PDS),” admitted the Minister of Agriculture in reply to a question in the Lok
Sabha. A survey has indicated that the
average diversion of wheat and rice in India from the PDS scheme is 53%
and 39%, respectively. These leakages
need to be plugged.
Since the output of grain has
reached comfortable level, one may ask if it is essential
to keep large quantities of grain in state godowns beyond a certain level. The cost of storing
so much grain is also responsible for keeping issue
prices very high. We may have to think of alternative ways so that costs of
storing grains become lower. Keeping in view the costs involved, it is
uneconomical to store grain by the state beyond a certain level. One way could
be to issue food coupons so that the
poorest people may buy their food requirements from the market and the state
reimburses the money to the shopkeeper.
But it will be difficult to
implement this in tribal and remote areas. However, the nation must find a way
out to balance the grain storage requirement of the nation from the security
point of view and need of the poorest people to get food. The money saved on
storage costs could perhaps be used to give free grain to the poorest people in
times of distress. The long term
solution however, is to generate jobs and give adequate purchasing power to the
poorest of the people so that they can purchase their own food from the
market.---INFA
(Copyright,
India News and Feature Alliance)
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