PUBLIC DISTRIBUTION SYSTEM

 Public distribution system (PDS)

 Click upon to enlarge 
Food supply chain

Topics- (upsc GS-3 paper) : PDS,  MSP, buffer stocks, food security, subsidy

Objectives :

• To address anemia and micronutrient deficiency
• Fortification of rice and its distribution by mixing normal rice to add ( iron,  folic acid, v-b-12)
• To eliminate malnutrition 
• To provide food security 
• To remove problems of stunting 

Historical travel of PDS: Public distribution system first emerged in India during the world War 2 in 1940s as a rationing measure as a general entitlement  scheme. 

Before 1960s, it was dependent on imported food grains. There was extreme shortage of food  grains so that government setup "Agriculture price commission" and "Food Corporation of India" to improve domestic procurement and storage of food grains for public distribution.

By the 1970s, PDS had evolved into universal scheme from general scheme for the distribution of subsidised food.

In the1990, the scheme was revamped to improve access of food to people of hilly areas and inaccessible areas to target the poor.

Subsequently, in 1997s, the government launched the "Targeted Public Distribution System (TPDS) " with aim to target poor households only to provide subsidised food and fuel ( i.e., kerosene) to the poor through the a network of ration shops ( fair price shops). For this government procure food from farmers and allocated to states to distribute through ration shops to beneficiaries.

In 2001, government declared PDS control order 2001 to administer the PDS, under the essential commodities act 1955 (ECA). ECA regulates the production, supply,  prices and distribution of essential commodities including edible oils, food crops  such as wheat, rice and sugar among others. 

In the same year 2001, the people's union for civil liberties filed a writ petition in the Supreme Court(SC). And SC ruled that the "Right to Food" is essential to the "Right to Life" as provided in article 21 of the constitution therefore Right to food became a fundamental right of the people.

In 2002, government launched a new scheme to target "the poorest of the poor" called Antyodaya Anna yojana (AAY) and people were entitled AAYcard. These beneficiaries are:

1. Landless agricultural labour 
2. Marginal farmers 
3. Rural artisans and craftsmen such as potters and tanners
4. Slum dwellers 
5. Persons earning their livelihoods on daily basis in informal sectors such rickshaw pullers cobblers, porters
6. Destitute 
7. Households headed by widow or terminally I'll Persons
8. Disabled persons 
9. People aged 60 years or more with no assured means of subsistence
10. All primitive tribal Households are eligible for AAY.

In 2008, 

During ongoing litigation of PUCL, Supreme Court order that all families below poverty line be entitled to 35kg of food grains per month at subsidised rates. 

National food security act 2013

In 2013,

Parliament enacted the "National food security act 2013, (NFSA). That marks a shift by making 'the right to food a justiciable rights. NFSA relies on the network of existing targeted public distribution system to deliver food grains as legal entitlement  to the poor households.

NFSA gives statutory backing to the TPDS, this legislation marks a shift in the right to food as a legal right rather than a general entitlement.

This act classified the population into 3 categories:

1. Excluded (i.e., no entitlement) 
2. Priority (entitlement) 
3. Antyodaya Anna yojana ( higher entitlement) 

Categorisation of beneficiaries: the above entitled beneficiaries are divided into two categories  on the basis of poverty.

1. BPL -  households 'below poverty line' and were entitled to receive 'BPL ration card'
• AAY - the poorest of the poor households  of below poverty line were entitled a special card AAY ration card 
2. APL - households 'above poverty line' and were recieved 'APL ration card'

Entitlement: on the order of SC of 2008, government divided to give grains at subsidised rates to poor.

AAY           35kg  per family 

BPL           35kg  per family 

APL          15-35 kg per family 

Functioning of PDS.

Centre procures food grains from farmers at Minimum Support Prices (MSP) and  sell  to states at central issues prices (CIP)to distribute to beneficiaries at this price. 

Centre is responsible for transporting the grains to the godowns of each state and union territory. FOOD CORPORATION OF INDIA is the nodal agency of central government that is responsible for transportation of food grains to state godowns.

Responsibility of FCI: 

• Procuring food grains at MSP fro farmers 
• Maintaining operational and buffer stock to ensure food security 
• BUFFER STOCK:  the FCI maintains minimum  reserve food grains stock always to meet the contingencies/ emergency situations.
• Allocating grains to states 
• Distribution and transportation of grains to states depots 
• Selling grain to states at the central issues prices  to be  eventually passed to the beneficiaries 
• Meeting emergency situation arising out of unexpected crops failure,  natural disaster like Covid-19 pandemic 
• Selling through open Market sale (OMS) scheme which was launched in 1993 to sell food grains in the open market to augment the supply of grains to moderate to stabilise open market prices.

Procurement:  grains are procured in two ways 

Centralised  procurements - FCI buys grains directly from farmers at MSP. 

Decentralised procurement -  Decentralise procurement system is a central scheme under which 10 states/ union territories procure foods on behalf of FCI from farmers for central pool. Thse states directly store and distribute the grains to beneficiaries in  the state.  In case of surplus handed over to FCI.

In case of shortfall in procurement against allocation made by the Centre, FCI meets the deficit out of the central pool.

Allocation of food grains:  

 Central Government allocated foods to each state/union territory from Central pool to distribute BPL,AAY,and APL beneficiaries at central issues prices. 

Responsibility of state government:

• State government identifies poor households for entitlement as BPL and AAY 
• State buys food grains from central pool of FCI at Central issues prices 
• States transport food grains allocated to it to each district and then within the first week of the month district administration transport to each fair price shop (Ration Shop) via state facilitated vehicles. 

Note - APL: allocations of above poverty line families are made on various basis :

1. Availability of food grains in central pool 
2. The past offstage or lifting of food grains by the state from the central pool
3. Centre discretion to allocate more grains to states on an ad-hoc basis, such as in case of flood,  droughts and festivals plplspl

Distribution of foods from ration shops :

Licensing of ration shop: ration shops are licensed under the public distribution system control order 2001 to sell essential commodities at central issues prices (CIP).

Ration Shop can be owned privately by cooperative societies or  the government.

Responsibility of ration shops owner: 

1. Sale of commodities as per central issues prices or retail price fixed by  the state government  whichever is minimum. 
2. Maintain the records 
3. Display of information such as:
• List of BPL card holders 
• List  of AAY card holders
• Entitlement of essential commodities 
• Timing of shops 
• Opening stock and closing stock 
4. Maintenance of accounts of actual distribution of essential commodities and the balance stocks at the end of month to Gram Panchayat and Government officials.

Pricing of food grains:

1. MSP: is the price at which Centre buys food grains from farmers. Typically it is higher than the market price and is intended to incentivise production. It is fixed by the government of India based on the rates recommended by the commission on agricultural costs and prices (CACP). MSP includes costs of cultivation plus incentives.
2. CIP- the rate at which Central government sold grains to states or fair price shops sell food grains to beneficiaries.
• Currently CIP value are:
• Rice.         ₹3 per kg
• Wheat.     ₹2 per kg
3.  Food subsidy- it is the difference between the cost (MSP +handling costs +transportation costs of grains) and the Central issues price CIP.

Issues:

There are several issues relating to the public distribution system such as:

1. Identification of eligible households which is great challenge 
2. Trends in procurement vis-a-vis production of food grains 
3. Storage of food grains: SC order to tackle the problem to central government: 
• to increase the allocation to BPL 
• Opening ration shops all the days in the month 
• Distributing food grains to beneficiaries at low cost or no costs 
• Increasing capacity of FCI, state and division 
• Using covered and plinth (CAP)
4. Food subsidy 
5. Leakage of food grains : 
• from ration shops into market 
• During transportation 
• Night Selling by owner of ration shop
• Ghost card: Ghost card is made in the name of non existing person and grains of that person is sold in open. 

Revamping: 

The government of India to reduce the challenges included few improvements with the help of technology.

1. End to end computerization of TPDS 
2. The digitization o f ration card: to improve the efficiency and transparency in the distribution process 
3. Direct benefit transfer (DBT): it enable the beneficiaries to receive their food subsidy in form of cash un the bank accounts directly. 
4. Computerization of supply chain management : GPS enabled vehicle.
5. Installation of electronic point of sell (e-Pos) device for ration shops 
6. Aadhar verification:  now food grains are given after verification through Aadhar connected with digital ration card
7. Mobile number registration 
8. SMS alert on recieved 
9. Door step delivery system: earlier food grains were delivered in to stages- from FCI to the block godowns and from block godowns to ration dealers. Now, in this new system FCI delivers directly to the ration dealers. And government has been benefited in saving of expenses and from Curbing of Leakages. 

Integrated management of PDS: 

For stablishing PDS network to national level portability with theme 

"One nation one ration card"it is an scheme of government of India to connect each state to one another to facilitate the beneficiaries to lift their entitlements any where in the country.

Supreme Court said,"one nation one ration card scheme is an important citizen centric reform" to extend food security to migrants who were covered under the national food security act scheme as it emphasised that providing food security to impoverished persons was the bounden duty of all states and governments

The scheme is currently functional in 32 states and union territories and allows eligible beneficiaries to get food grain under the national food security act from fair price shops across India without securing a new ration card. 3 States-- west Bengal,  Assam, and Chhattisgarh are still not implemented and Delhi had not fully implemented it.

1. Intra-state portability of ration cards: it, in  the state, enables the beneficiaries to lift their entitled food grains from any fair price shop where e-Pos has been installed. 
2. Inter-state/ national/  nationwide portability of ration cards: it enables beneficiaries to lift their entitlements from anywhere in the country where e-Pos has been installed. 

dated 29 June 2021

Supreme Court ordered:

1. the centre to make the national portal for registration of unrecognized workers operational by July 31, 2021 so that various benefits can flow to marginalised section. 
2. secretary and ministry of labour,  to ensure that the national portal commences by July 31, and called for a compliance report bythe end of August 2021.
3. all states and union territories to implement the "one nation one ration card" scheme by July 31, 2021 to help beneficiaries, specially migrant workers,  to avail of subsidised food commodities from any where in the country. 
4. the states are duty bound to implement this scheme,  which is a welfare scheme in the interest of poor and marginal sections of the society. 
5. that states and union territories to cooperate with the centre and upload the  data with the centre and upload the data of the workers on the portal at the earliest,  bot not later than December 31, 2021.
6. states and union territories to register all establishments and license all contractors who must furnish particulars(details) of the migrant workers employed with them.

Fortification of rice and distribution : 

National family health survey 2015-16 data shows in India people are affected/suffered with anemia 

• 58.5% population of young children aged 6-59 Months 
• 53% of women within reproductive age groups 
• 22.7% of all men aged 15-49 years of age 

Fortification of rice and distinction is a cost effective and complementary strategy to increase vitamins and minerals contents in diets a step towards nutritional security and to fight anemia and malnutrition in country.  For this purpose efforts are being taken to increase its capacity from current 15000 MT TO 3.5 lakh MT by incetivising and and awareness among rice millers. 

 Currently in India FCI along with ministry of food and public distribution, started distributing fortified rice in 6 states 

1. Uttar Pradesh 
2. Andhra-pradesh 
3. Tamilnadu 
4. Maharashtra 
5. Gujrat 
6. Chhattisgarh 

Reference-

https://pib.gov.in/PressReleasePage.aspx?PRID=1761752

https://dfpd.gov.in/public-distribution-reforms.htm

https://pib.gov.in/PressReleasePage.aspx?PRID=1731144