Public Distribution System
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Public Distribution System

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Economics

Public Distribution System

Introduction:

The public distribution system (PDS) is an Indian food Security System established under the Ministry of Consumer Affairs, Food, and Public Distribution.

PDS evolved as a system of management of scarcity through the distribution of food grains at affordable prices.

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

The Central Government, through the Food Corporation of India (FCI), has assumed the responsibility for procurement, storage, transportation, and bulk allocation of food grains to the State Governments.

The operational responsibilities including allocation within the State, identification of eligible families, Issue of Ration Cards, and supervision of the functioning of Fair Price Shops (FPSs), etc., rest with the State Governments.

Under the PDS, presently the commodities namely wheat, rice, sugar, and kerosene are being allocated to the States/UTs for distribution. 

Evolution of PDS:

The concept of a Public Distribution System in India emerged during 1942 for the first time as a result of a shortage of food grains during World War.

subsequently, the government set up the Agriculture Prices Commission and the FCI to improve domestic procurement and storage of food grains for PDS.

By the 1970s, PDS had evolved into a universal scheme for the distribution of subsidized food and  Till 1992, PDS was a general entitlement scheme for all consumers without any specific target.

The Revamped Public Distribution System (RPDS) was launched in June 1992 to strengthen and streamline the PDS as well as to improve its reach in the far-reaching, hilly, remote, and inaccessible areas.

In June 1997, the Government of India launched the Targeted Public Distribution System (TPDS) with a focus on the poor.

Under TPDS, beneficiaries were divided into two categories: Households below the poverty line (BPL); and Households above the poverty line (APL).

Antyodaya Anna Yojana(AAY) was launched in 2000 to make TPDS more focussed on the poorest segment in the BPL category.

In September 2013, Parliament enacted the National Food Security Act, 2013. 

The Act relies largely on the existing TPDS to deliver food grains as legal entitlements to poor households. This marks a shift by making the right to food a justiciable right.

How PDS Works:

The center procures food grains from farmers at a minimum support price (MSP) and sells it to states at central issue prices. It is responsible for transporting the grains to godowns in each state.

States bear the responsibility of transporting food grains from these godowns to each fair price shop (ration shop), where the beneficiary buys the food grains at the lower central issue price. Many states further subsidize the price of food grains before selling it to beneficiaries.

Farmer --> Procurement at MSP by Centre(FCI) -->Allocation of Central Issue Price to State Govts.-->Distribution to fair price shops by State Govts-->Sales of grains to beneficiaries

Importance of PDS:

1. Ensuring food and nutritional security

2. Stabilising food price and insulation against inflation

3. Maintaining buffer stock for crisis

4. Govt. procurement and minimum support price has contributed to food production and farmer income.

5. Ensuring redistribution of food grain and availability of food in deficit regions

6.   Being instrumental in avoiding hunger and famine

7.  Providing income security to farmers

Issues with the PDS system:

Error in the identification of beneficiaries. Studies show that around 25% inclusion and exclusion error.

Leakages of food grain during transportation and black marketing and hoarding by Fair Price Shop owners.

Procurement issues include over procurement of food grains due to various causes and wastage.

Inadequate storage facility.

MSP on certain crops has discouraged crop diversification and water-intensive farming leading to Dropping of the groundwater table, overuse of fertilizer, reduction of soil fertility, and other environmental issues.

Reforms in the PDS System:

Linking of Aadhar No. to the PDS system may help in better identification of beneficiaries and will reduce the issue of ghost beneficiaries.

Technology-based reforms across India like digitization of the TPDS system, GPS tracking of delivery, and SMS confirmation with the mobile of the beneficiary will improve productivity.

Creation of web portal and customer service center to address the issues immediately.

Issue of the chip-based smart card instead of the ration card.

Quality of food grains should be improved by FCI

Few experts suggest that cash transfer to the beneficiary through DBT will be better than providing food grains as it will provide the flexibility to choose his/her food basket. 

Frequent raids and surprise checks should be provisioned.

Strengthening of the existing TPDS system by capacity building and training of the implementing authorities along with efforts to plug leakages is the best way forward.

It can be further strengthened by the increased public participation through social audits and participation of SHGs, Cooperatives, and NGOs in ensuring the transparency of the PDS system at ground level.

To enhance the nutritional level of masses, bio-fortified foods need to be distributed through the PDS that will make it more relevant in the backdrop of prevalent malnutrition in India.

PDS is one of the biggest welfare programs of the government, helping farmers sell their produce at remunerative prices as well as the poorer sections of society to buy food grains at affordable rates. There is a lot of scope for improvement, which govt. should think about it.