Corruption rendering PDS ineffective

What is ailing India's Public Distribution System
(PDS)? "Corruption" is the one and only answer to that
question. Even the Central government's new Targeted
Public Distribution System (TPDS) is in no way helping
to weed out graft in the entire sector.

Fair price shops and PDS have been the breeding ground
for corruption right from its inception.

Results of a study conducted by Delhi-based research
firm Centre for Media Studies and Transparency
International are enough to conclude that PDS needs a
total overhaul to get rid of its dubious distinction
of being one of the most corrupt sectors in the
country.

The study on corruption in India's Public Distribution
System covered 4,405 respondents over 20 states and
found that the chain of ration shops provide supplies
to only 10 per cent of the country's population.
However, the government claims it supplies goods to 16
per cent of the people.

PDS � evolved as a major instrument of the
government's economic policy for ensuring food
security for the poor � is arguably the largest
distribution network of its kind in the world with
4.89 lakh fair price shops.

The government woke up to the reality a bit too late.
Realising that PDS has failed to serve poor people,
the government started issuing distinctive ration
cards to families living Below Poverty Line. From June
1997, the Centre introduced Targeted Public
Distribution System (TPDS).

Under this scheme, the states are required to
formulate and implement foolproof arrangements for
identification of the poor.

The main users for PDS goods are rural poor families
of six crore for whom about 72 lakh tonnes of
foodgrains were earmarked during 2006.

However, the survey has found out that 60 per cent
households using PDS are not getting ration supplies.
The survey further said in high-poverty states,
'out-of-stock' scenarios were as high as 80%. And, 34%
of those visiting PDS offices had to make four or more
visits before their voice could be heard and suitable
action was taken. Moreover, nearly 50% of them paid
bribe for obtaining a new and legitimate ration card.

Even though the fair price shop owners are blamed for
corrupt practices, their plight is also not very
hunky-dory. Low margins in the business lead to low
profitability, especially after the launch of targeted
public distribution system; credit provided is so low
that they cannot lift enough stock from government
godowns; they have no control over quality of grains;
they too may have to pay bribe to PDS officials to get
their quota of supplies.

The government-owned Food Corporation of India
procures foodgrains for PDS from farmers. At times,
the support price is so low that FCI can only attract
low quality grains, the rest goes to the open market.

The study reveals that in Nagaland 100 per cent of the
grain procured ends up in the open market. The figure
is 70 per cent for Punjab.

It's not that Centre is not aware of the problem.
Minister of state for consumer affairs and food
Akhilesh Prasad Singh said an action plan has been
prepared by the central government on ways to curb
leakages, diversions under the TPDS after consulting
state governments.

CPI general secretary D Raja said the present system
should be disbanded and the government should come up
with a new policy so that the poor are able to get the
benefits.

Corruption is more prevalent in the Delhi and Bihar
PDS, while Kerala and Himachal Pradesh are considered
less corrupt states.

The main reason for short supply of ration is
diversion of grains to open market. Registering
complaints against the shop owner is a complicated
task. Again, consumer is unaware that he/she is being
overcharged.

About 60% of the respondents to the survey felt that
corruption increased in 2006 in high poverty states
and people paid Rs 50-500 as bribe to get new ration
cards.

About 19% respondents who used PDS relied on
alternative means (bribe, repeated requests and
middlemen) to procure rations. In Bihar (32%),
Rajasthan (37%) and Delhi (44%), meanwhile persons
sought external means, the report claimed.

According to the survey, possible solution to check
this loot is to hand out food vouchers or stamps to
enable them encash it for goods at any fair price
shop. Another point is to develop local production and
distribution systems to reduce dependence on existing
distribution chains which breed corruption.

PDS: Other Side of the Story

While corruption rules the roost in TPDS, Kerala state
paints a different picture. Here, the aggrieved lot is
fair price shop owners.

The implementation of the TPDS and the consequent
collapse of the efficient statutory distribution
system in the food-deficit Kerala have driven around
50,000 families depending on the ration business for
their livelihood into a miserable existence. Of a
total of nearly 15,000 ration dealers, many have quit
in search of other profitable business and some 1000
outlets have been attached by the government.

Almost all fair price shop owners in Kerala are in the
grip of debt. In Kozhikode district alone, 10 dealers
have committed suicide. And, two of them hanged
themselves in their own ration shops.

Kerala, a food-deficit state which boasted of the most
successful PDS in the country and which provided
access to foodgrains for almost the entire population,
is the worst hit by the shift in the food policy of
the Central government in the late nineties.

Till then, the PDS served the whole population
equally. But with the shift in food policies at the
Centre and the decisions of the central government to
restrict the coverage of the subsidised PDS to what it
considered to be poor and to unilaterally increase the
prices of the food grains, Kerala too was forced to
follow the national pattern. Before the TPDS, on an
average 1,85,000 tonnes of foodgrains, including
1,55,000 tonnes of rice and 35000 tonnes of wheat,
were sold through the PDS in Kerala every month.

But now the off-take of rice, which is the staple diet
of the population, has come down to 4000-50000 tonnes
per month. The sales turnover of the Kerala State
Civil Supplies Corporation has fallen drastically
since 1999-2000. The main reason for the fall has been
the heavy drop of the sale of PDS items.



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