THE CONTEXT: The Public Distribution System (PDS) in India has long been plagued by “leakages” where a substantial portion of grains released by the Food Corporation of India fails to reach the intended consumers. In 2011-12, these leakages were 42% at national level. This inefficiency seriously threatened food security, leading to the enactment of the National Food Security Act (NFSA) in 2013.
THE FINDINGS:
- Reduction in PDS Leakages Due to NFSA and Reforms: There has been a significant reduction in PDS leakages, which refers to the proportion of grain released by the Food Corporation of India that fails to reach consumers. The leakages decreased from approximately 42% in 2011-12 to 22% in 2022-23. This improvement is attributed to reforms mandated by the National Food Security Act (NFSA) of 2013, which aimed to enhance food security through better PDS management.
- Role of Early Reforming States in Setting Precedents: Early reforming states like Bihar, Chhattisgarh, and Odisha demonstrated that significant reductions in PDS leakages were achievable, setting examples for other states. These states implemented measures like deprivatizing PDS outlets, ensuring doorstep delivery, and reducing prices. The success stories influenced the NFSA’s inclusion of similar reforms, aiming for nationwide improvements.
- Bihar: Reduced leakages from 91% in 2004-05 to 24% in 2011-12; 26.5% in 2022-23.
- Chhattisgarh: Reduced from 52% in 2004-05 to 9% in 2011-12; 14.8% in 2022-23.
- Odisha: Reduced from 76% in 2004-05 to 25% in 2011-12; 13.7% in 2022-23.
- Coverage Increase: PDS usage increased from 21% to 63% between 2004-05 and 2011-12 in Chhattisgarh.
- Expansion of PDS Coverage Under NFSA: The NFSA’s expansion of PDS coverage has significantly reduced exclusion errors and reduced leakages. Households accessing the PDS rose from 24% in 2004-05 to 70% in 2022-23. NFSA Mandate aims to cover 66% of the population (75% rural, 50% urban). Despite improvements, the shortfall in NFSA coverage indicates the need for ongoing efforts to reach all eligible individuals.
- Effects of Ad-Hoc Extensions of PMGKAY on PDS Leakages: The Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) extensions may have inadvertently increased PDS leakages due to beneficiaries’ lack of awareness about their entitlements. Unclear entitlements enable corrupt dealers to divert grains, increasing leakages.
- Importance of Adjusting Leakage Estimates for State Contributions: Initial estimates of 17.6-18.2% leakages only considered central contributions. Accounting for state contributions raises the all-India leakage estimate to 22%. States like Chhattisgarh run expanded PDS programs using local procurement to support non-NFSA beneficiaries. Ignoring state contributions underestimates the total grain offtake and overstates efficiency.
- Role of Aadhaar-Based Biometric Authentication (ABBA) in Reducing Leakages: Contrary to popular belief, integrating Aadhaar and ABBA may not be the primary factor in reducing PDS There are similar Purchase-Entitlement Ratios (PER) in ABBA (93%) and non-ABBA villages (94%). Studies found little evidence of ‘ghost’ ration cards. Other reforms like digitization, transparency measures, and administrative efficiency likely played more substantial roles. Overreliance on biometric solutions may overlook systemic issues and lead to exclusion due to authentication failures.
- Increase in Leakages in Traditionally Better-Performing States: Unexpected PDS leakages in states like Tamil Nadu increased from 12% in 2011-12 to 25% in 2022-23. This highlights the challenges even in well-functioning systems. Success can lead to complacency, allowing inefficiencies to creep in over time. Regular monitoring and updates are essential to maintain system integrity.
THE WAY FORWARD:
- Implement End-to-End Computerization: The Government of India’s End-to-End Computerization of PDS Operations scheme aimed to digitalize the entire supply chain. Establish and maintain state-level PDS portals that provide information on allotments, offtake, and distribution, accessible to the public. According to the Ministry of Consumer Affairs, Food & Public Distribution, as of 2020, 100% digitization of ration cards has been achieved, and 91% of fair price shops (FPS) are automated with electronic Point of Sale (ePoS) devices.
- Enhance Social Audits and Community Monitoring: The Shanta Kumar Committee (High-Level Committee on Reorienting the Role and Restructuring of Food Corporation of India, 2015) recommended social audits to improve transparency in PDS operations. In states like Chhattisgarh, involving gram panchayats in monitoring PDS shops has led to increased accountability.
- Foster Inter-State Learning and Adoption of Best Practices: The Ministry of Consumer Affairs has previously organized workshops for states to share best practices (2018-19). Such initiatives can help states like Uttar Pradesh and Bihar adopt strategies from Chhattisgarh and Odisha, which have shown remarkable improvements. NITI Aayog’s report on “Best Practices in the Performance of PDS” (2016) recommends creating a repository of successful interventions for states to emulate.
- Facilitate Technical Assistance and Capacity Building: The Standing Committee on Food, Consumer Affairs, and Public Distribution (2018) emphasized the need for capacity building at the state level. The central government can provide technical support to states lagging in PDS reforms, aiding in technology adoption and management practices.
- Standardize Leakage Estimation Methods Including State Contributions: The CAG report on PDS (2016) highlighted inconsistencies in data reporting and recommended standardized accounting practices. States like Chhattisgarh and Tamil Nadu procure additional grains for PDS. This data provides a complete picture of PDS operations. Gujarat’s “Integrated Management of PDS” system allows real-time tracking of grain movement, reducing discrepancies between offtake and distribution.
- Ensure Clarity and Stability in PDS Entitlement Schemes: The Economic Survey of India (2020-21) suggests relief measures should be integrated into existing frameworks for swift activation during emergencies. Regular third-party evaluations can identify implementation gaps. The International Food Policy Research Institute (IFPRI) conducted assessments showing that timely evaluation helps refine program delivery.
THE CONCLUSION:
Despite initial apprehensions, implementing PDS reforms under the NFSA has led to notable improvements. By 2022-23, leakages had been reduced to 22%, demonstrating the positive impact of systematic reforms such as digitization, price reductions, and improved management practices. Continued focus on leveraging technology for better tracking and distribution can further reduce inefficiencies and ensure that food security objectives are met effectively.
UPSC PAST YEAR QUESTIONS:
Q.1 What are the major challenges of Public Distribution System (PDS) in India? How can it be made effective and transparent? 2022
Q.2 What are the reformative steps taken by the government to make food grain distribution system more effective? 2019
MAINS PRACTICE QUESTION:
Q.1 Discuss the effectiveness of the National Food Security Act (NFSA) 2013 in reducing Public Distribution System (PDS) leakages in India. Critically analyze the role of state-specific reforms and central policies in achieving these outcomes.
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