In order to provide food security to the poorest of the poor, Government of India established Public Distribution System under Ministry of Consumer Affairs, Food, and Public Distribution and is managed jointly with state governments in India, it distributes subsidized food and non-food items to India's poor. Major commodities distributed include staple food grains, such as wheat, rice, sugar, and kerosene, through a network of Public distribution shops, also known as Ration shops and Fair Price Shops (FPS) established in several states across the country. Food Corporation of India (FCI), a Government-owned corporation, procures, maintains the Public Distribution System. India’s Public Distribution System (PDS) with a network of 4.78 Lakh Fair Price Shops (FPS) is perhaps the largest retail system of its type in the world. 

 

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Since 1951 public distribution of food grains has been retained as deliberate social policy by India with the objectives of (i) Providing food grains and other essential items to vulnerable sections of the society at reasonable (subsidized) prices (ii) To put an indirect check on the open market prices of various items and (iii) To attempt socialization in the matter of distribution of essential commodities in order to build up the food grain stocks for distribution through FPS, FCI procures food grains through the farmers at procurement price and distributes to the consumers at issue price at Issue Price. Apart from procurement price and issue price minimum support price (MSP) also forms an important part of the agriculture price policy. 

 

MSP is the price of agriculture produce, say wheat at the beginning of the sowing season to ensure that farmers produce wheat even if market price of wheat is too low. It means that government will purchase any amount of wheat at MSP. The procurement price is the price at which government purchase wheat at the time of buying wheat while issue price is the price at which it sells the food grains to the poor. Now a days, it is seen that procurement price and MSP remains at same level i.e. government procures food grains at procurement price. Rice and wheat are the most state-protected crops and livelihoods of many farmers are dependent on incomes from these crops, grown in an area of nearly 75 million hectares or more than 40% of the gross sown area. 

 

Distribution of food grains is more criticized than its procurement due to following reasons –

 

• A large number of families living below the poverty line have not been enrolled and therefore do not have access to ration cards

• A number of bogus ration cards which do not correspond to real families, exist in the BPL & AAY categories. Food drawn on the basis of these bogus cards is a significant leakage from the system, as it does not reach the intended beneficiaries. Additionally, these extra cards inflate the number of BPL and AAY cards in circulation and further reduce the amount of food available to every rightful beneficiary family.

• The scale of issue and the quality of food grains delivered to the beneficiary is rarely in conformity with the policy. Many FPS are open only for a few days in a month and beneficiaries who do not visit the FPS on these days are denied their right.

• The most serious flaw plaguing the system at present is the lack of transparency and accountability in its functioning. The system lacks transparency and accountability at all levels making monitoring the system extremely difficult.

• There are numerous entities like Vigilance Committee, Anti-Hoarding Cells constituted to ensure smooth functioning of the PDS system. Their impact is virtually non-existent on the ground and as a result, malpractices abound to the great discomfiture of the common man.

 

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However, few changes are proposed by the government to improve the country’s public distribution system –

 

• Providing roaming ration cards which will provide an opportunity to short-term migrants to move their ration cards to their new area or work.

• Under Direct Cash Transfer Program the subsidy will be transferred into the bank account of the beneficiary. 

• Choice of Fair Price Shops should improve quality of service and this solution allows the incorporation of either limited or full choice of FPS.

• Food Stamps can be introduced allowing competition from existing food shops and increasing the reach of the TPDS network 

• If the bogus cards can be substantially weeded out and a mechanism put in place to positively confirm and track the individual beneficiary off take on a monthly basis, the problems relating to PDS leakages, Transparency and Transportation would get resolved, as leakage would become more difficult to hide.

 

 

Direct cash transfer and Unique Identification (UID) are supposed to improve the food grain distribution in the country. The UID program has the specific objective of creating a unique database of residents in India and will put together the best technologies and processes for this purpose. 

 

UID can share the burden of PDS reform by assisting in the positive identification of unique individuals and families. This can lead to a high-quality beneficiary database without duplicate and ghost cards, improving the targeting of benefits. The government plans to introduce direct cash transfer for food subsidy in six Union Territories and 'willing states' for PDS scheme, taking a key step to plug leakages in welfare schemes.

 

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