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ISSUES IN FOOD SECURITY AND RELATED ISSUES IS ANOTHER

IMPORTANT TOPIC WHICH COVERS WIDE RANGE OF TOPICS
BROADLY IT INCLUDES
1] CONCEPT OF FOOD SECURITY
2] FOOD SELF SUFFICIENCY IN INDIA
3] DIFFERENT MEASURES TAKEN BY GOVERNMENT
4] PUBLIC DISTRIBUTION SYSTEM IN INDIA
5] FOOD SECURITY ACT THE PROVISIONS IN BRIEF
6] DEBATE IN REGARD TO FOOD SECURITY , WHERE THE PRESENT
GOVERNMENT WANT TO DELAY - GOVERNMENTS VIEW
7] VIEW OF ECONOMISTS WHO DO NOT TOTALLY AGREE WITH
GOVERNMENT
8] PDS VERSUS CASH GRANT
9] RECENT EFFORTS WITH RESPECT TO REFORMS IN PDS
IT IS HUGE VOLUME BUT NEEDS TO BE PRIORITIZED FROM EXAM
VIEWPOINT

DEFINITIONS AND CONCEPT

DEFINITIONS:1.AccordingtotheOrganizationforFoodandAgriculture
(FAO)oftheUnitedNations,foodsecurityexistswhenallpeople,atall
times,havephysicalandeconomicaccesstosufficient,safeand
nutritiousfoodtomeettheirdietaryneedsandfoodpreferencesforactive
livingandhealthylife.
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2.AccordingtotheEuropeanCropProtectionAssociation,foodsecurity
oftenreferstofoodavailabilityandanindividualsaccesstofood.A
personcanbeconsideredfoodsecureiftheydonotliveinhungeror
fearofstarvation.Inadditiontohungerandstarvation,foodsecuritycan
alsorefertotheavailabilityofasufficientnutritiontoensureahealthydiet,
avoidingthehealthimpactsofmalnutrition.

3.MHSuryanarayana(1997)observesalthoughassessmentsby
conventionalmacromeasuresshowconsiderableimprovementinfood
securityinIndia,thelevelsofcerealconsumptionandcalorieintakeof
eventhegeneralpopulationarestillbelowthenormativethresholdlimits.

4.MSSwaminathan(2011)hassuggestedapackageofmeasuresto
ensurefoodsecuritytoallasbelow.1.Revisitinginternationaltraderules,
inordertopromoteafoodsecurityorientedtradingsystem.2.Creating
abettermarketinformationsystem,inclusiveonthelevelofstocks,to
helprestoreconfidenceininternationalmarkets.3.Tighteningup
speculationonthefuturesmarkettoavoidpricemanipulations.4.
Reviewingsupporttobiofuels,exceptwhenthereisawinwinsituation
forbothfoodandenergysecurity.5.Reducingfoodwasteand
postharvestlossesandensuringfoodsafety.6.Increasinginvestmentin
evergreenagricultureandinagriculturalresearch.7.Givinggreater
attentiontothenetincomeofsmallholderfarmers.

5.KCSAcharya(1983)discussesevolutionoftheconceptoffoodgrain
reserveinthefoodpolicyofIndia.Accordingtohim,whatiscentraltothe
conceptoffoodsecurityismanagementoffoodeconomyinamanner
societydoesnothavetodependuponexternalassistancetomeetthe
normalcyclicalshortagesthatoccurintheagriculturaleconomy.

6.ManojPanda,GaneshKumar(2009),observethatfoodsecurity
2

/nutritionalstatusoutcomewithregardtoindividualnutrientsdepends
cruciallyonmovementsintherelativepricesofdifferentcommodities
alongwithchangesinincomelevels.Theseresultsshowthattradepolicy
analysisshouldconsiderindicatorsoffoodsecurityinadditiontothe
overallgrowthandpovertymeasurestraditionallyconsideredinsuch
studies.

7.SujoyChakravarty,SejalADand(2005)observethatthemain
determinantsoffoodinsecurityinIndiatodayaretheshrinkingofagrarian
andinformalsectorincomesandfailures(bothduetopolicyframingas
wellasimplementation)ofsupportledmeasurestocombatpoverty.

8.MHSuryanarayana(1997)observesalthoughassessmentsby
conventionalmacromeasuresshowconsiderableimprovementinfood
securityinIndia,thelevelsofcerealconsumptionandcalorieintakeof
eventhegeneralpopulationarestillbelowthenormativethresholdlimits.

STATUS OF FOOD SECURITY

1]Foodavailabilityismeantbythephysicalexistenceoffoodeitherfrom
ownproductionorfromthemarket.Atthenationallevel,foodavailability
derivesfromthecombinationofdomesticfoodstocks,commercialfood
imports,foodaidanddomesticfoodproduction.Percapitaavailabilityof
thefoodgrainsinIndia,intheyear1951was144.1kg.After56yearsi.e.
in2006percapitaavailabilityoffoodgrainswentupbyjust18kg.It
meansincreaseinfoodgrainsisverylessthantherateofincreasein
population.

2]TheStatusandTrendsinFoodProductionandAvailabilityNational
selfsufficiencyinfoodgrainhasbeenamajorachievementin
postIndependenceIndia.Havingremainedaseverelyfooddeficit
economyovertwodecadesafterIndependence,Indiamanagedto
achieveselfsufficiencyinfoodgrainproductionatthemacroornational
level.

3]Thegreenrevolutionusheredinadramaticandsteadyincreasein
domesticfoodgrainproductionpracticallyeliminatingtheneedforfood
imports,excepttoaverylimitedextentintimesofextremeemergencies
suchasdroughtsandseriouscropfailure.Foodgrainproductioninthe
countryregisteredasteadyincreaseovertwodecadesfromonly50
milliontonnesin195051to244.5milliontonnesin201011.Thegrowth
rateinfoodgrainhasbeenabout2.5percentperannumduringthepost
Independenceperiod.Moreovertheproductionofoilseeds,sugarcane,
fruits,vegetablesandmilkhasalsoincreasedsignificantly.Acloserlook
attheexperienceinthelasttwodecadeshoweverindicatesataperingoff
ordeclineinbothproductionandyields.

4]Ithasbeenobserved(S.MahendraDev,andA.Sharma2011)that
duringtheperiod19962008ascomparedtotheyears198697,the
growthrateinfoodgrainproductiondeclinedverysharplyfromnearly3
percenttoaround0.93percent.Moreoverthegrowthinproductionwas
muchlessthanthegrowthinpopulationinthelatterperiod,havinga
seriousimpactonpercapitaavailability.Thegrowthrateofyieldsinfood
grainalsodeclinedfrom3.21percentto1.04percent.Therewasthusa
4

declineinratesofproductionandyieldsforcereals,pulses,oilseeds,rice
andwheat.

5.PerCapitaAvailabilityofFoodGrainsAtthemacroleveltheavailability
offoodgrainiscalculatedas87.5percentofthegrossproduction(with
therestaccountingforseeds,farmanimalfeedandwaste)plusimports
minusthechangesinstocksheldbythegovernment.Assumingnonet
changeinprivatestocksthiscanbetreatedasrepresentingtheoverall
foodgrainconsumptioninthecountry.Thepreindependenceperiod
witnessedarapiddeclineinpercapitaavailabilityoffoodgrainsfrom
about545gmperdaytoalevelaslowas407gmperday.Thiswas
largelyonaccountofthepoliciesofthecolonialgovernment.Howeveron
thebasisoffiveyearaveragesIndiawitnessedasignificantriseinnet
availabilityfromalevelof416gmperdayin195055toalevelof485gm
perdayduringtheperiod198991(Patnaik,2004).

Howeversincetheearly1990stherehasbeenasignificantfallinfood
grainavailabilitytoalevelof445gmperdaybytheyear200607
(SaxenaN.C.,2011).Thepercapitanetavailabilityisestimatedtohave
increasedbyamere10percentovera56yearperiodfrom1951to2007.
However,thenetavailabilityoffoodgrainhasdeclinedifonecompares
thelevelof469gmperdayin1960withamere443gmperdayas
reportedintheyear2007.

Thisimpliesthatsignificantincreasesinfoodgrainproductionhavenot
beenabletokeepupwiththeincreaseinpopulation.Itisimportantto
mentionherethattherehasbeenasteadydeclineinnetpercapitafood
grainavailabilityintheposteconomicreformsperiodof1991to2007,
withthelevelsfallingfrom501gmperdayin1991toonly443gmperday
in2007.Accordingtosomeanalysts,thiswasalsoonaccountofthe
exportofnearlysevenmilliontonnesoffoodgrainperannumduringthe
period2002to2007.

Thisexportoffoodgrainathighlysubsidizedpricestotacklethelow
worldpriceswaspreferredoverundertakingwidespreadinternal
distributionoffoodgraintothoseinneed(SaxenaN.C.,2011).Itmay
alsobeseenfromTable2belowthatwhilenetavailabilityofcereals
declinedfromalevelof468.5gmperdayin1991toalevelof407.4gm
perdayin2007,thenetavailabilityofpulseswhichisamajorprotein
sourceintheIndiandietdeclinedsignificantlyduringthesameperiod.
Whileitwas41.6gmperdayin1991,itfelltoalevelaslowas31.5gm
perdayin2005butimprovedsignificantlyto35.5gmperdayinthenext
twoyearsthoughitisstillbelowthestipulatednorms.

6.Ontheotherhandthepercapitanetavailabilityofedibleoilsandsugar
hasincreasedovertheyears,moreduetoanincreasinglevelofimports
thanonaccountofanyimpressiveincreaseindomesticoilseed
production.

7.ChangesinConsumptionPatternsThoughtherewasamarkedrisein
percapitarealexpenditurefrom197273to200405,thepercapitacereal
intakedeclinedinbothruralandurbanareas.Thisfallincereal
consumptionwashoweveraccompaniedbyanincreaseinthe
consumptionofnoncerealfood.Itisclearlyevidentthatinthepostgreen
revolutionperiodtherehasbeendiversificationinthefoodconsumption
patterns,andtheshareofcerealconsumptionintotalhousehold
consumptionhasdeclinedinruralandurbanareas

8.ECONOMICSURVEY201213

Netavailabilityandpercapitaavailability8.63Thenetavailabilityof
foodgrainshasincreasedin2013at229.1milliontonnesshowinga15
percentincreaseoverlastyear.Thepercapitanetavailabilityof
foodgrainsspurtedto186.4kgperyearfrom164.3kgperyear,andthe
netavailabilityofedibleoilsalsoincreasedfrom12.7kgperyearto15.8
kgperyearoverthesameperiod.

Thepercapitaavailabilityofmilkat295gperdayishigherthanthe
worldaverage,whilethatofeggsisaround55eggsperyear.Theper
capitaavailabilityoffruitsrosefrom114gramsperdayin200102to172
gramsperdayin201112whilethatofvegetablesincreasedfrom236
gramsperdayto350gramperdayoverthesameperiod.8.64

FOODSECURITYININDIA:GovernmentofIndiahastakenseveral
stepstoincreaseproductivityofagriculture.Theseincludeschemeslike
1]RashtriyaKrishiVikasYojana(RKVY)
,
2]NationalFoodSecurityMission(NFSM),

3]DevelopmentandStrengtheningofInfrastructurefacilitiesforProduction
andDistributionofQualitySeed,

4]NationalHorticultureMission(NHM),RainfedAreaDevelopment
Programme(RADP),

5]IntegratedSchemeofOilseeds,
Pulses,OilPalmandMaize(ISOPOM),

6]GraminBhandaranYojanaetc.

7]Inaddition,Governmenthasalsoimprovedtheavailabilityoffarm
creditimplementeddebtwaiverintroducedbettercropinsurance
schemes

8]increasedMinimumSupportPrice(MSP),improvedmarketing
infrastructure,etc.Furtherinordertoprovidefoodsecuritytothepeople
byensuringavailabilityoffoodataffordableprices,Governmenthas
enactedNationalFoodSecurityAct,recently.

8]
The National Food Security Act is a historic initiative for

ensuring food and nutritional security to the people

.
I
tgivesrighttothepeopletoreceiveadequatequantityoffoodgrainsat
affordableprices.Salientfeaturesoftheactare:

Salient features of the act are:

1.Upto75%oftheruralpopulationandupto50%oftheurbanpopulation
willhaveuniformentitlementof5kgfoodgrainspermonthathighly
subsidizedpricesofRs.3,Rs.2,andRs.1perkg.Forrice,wheat,
coarsegrainsrespectively.Itwillentitleabout81crorepeoplewhileunder
theexistingTargetedPublicDistributionSystemonly2.5croreAntyodaya
AnnaYojana(AAY)familiesorabout32.5crorepersons(assuming5as
theaveragehouseholdsize)aregettingfoodgrainsattheseprices.Thus,
populationgettingfoodgrainsatthesehighlysubsidizedpricesastheir
legalrightwillincreaseto67%fromexisting27%.
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2.Thepoorestofpoorhouseholdswouldcontinuetoreceive35kgfood
grainsperhouseholdpermonthunderAntyodayaAnnaYojanaat
subsidizedpricesofRs3,Rs2andRe1.

3.Pregnantwomenandlactatingmothers,besidesbeingentitledto
nutritiousmealsaccordingtonutritionalstandardsprescribedalsoreceive
maternitybenefit.

4.ThecentralgovernmentwillprovidefundstoStates/Unionterritories,
incaseofshortageofgrainfromthecentralpool.Incaseoffailureto
supplyfoodgrainsormealstoentitledpeople,theconcernedstate/UT
governmentsarerequiredtoprovidesuchallowanceoffoodsecurityas
maybeprescribedbytheCentralGovernmenttobeneficiaries.

5.CentralgovernmentwillprovideassistancetoStatestowardscostof
intrastatetransportation,handlingoffoodgrainsandFPSdealers
margin.Thiswillensuretimelytransportandefficienthandlingoffood
grains.

6.Reformshavebeenundertakenforhomedeliveryofgrain,the
applicationofinformationandcommunicationtechnologies(ICT),
includingendtoendcomputerization,diversificationofproductscovered
byTPDSetc.foreffectiveimplementationfoodsecurityAct

7.WomenEmpowerment:Eldestwomanof18yearsoldandabovewill
betheheadofhouseholdfortheissuanceofrationcard,andifnot
available,theeldestmalememberistobetheheadofthefamily.
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8.Grievanceredressalmechanism:Therewillbethestateanddistrict
levelredressalmechanismwithdesignatednodalofficers.Stateswillbe
allowedtouseexistingmechanismsforDistrictGrievanceRedressal
Officer(DGRO),NationalFoodCommission,iftheywish,tosavethe
costsofcreatingnewredressalsetup.GrievanceRedressalMechanism
mayalsoincludecallcenters,telephonesupport,etc.

9.Ontheissueofredressofgrievancesthatmayariseinthe
implementationofsuchaprogramofmasssocialjustice,itisexpectedto
giveagreaterroleforPanchayatiRajinstitutionsandtoselfhelpgroups
ofwomeninprogrammonitoringandsocialaudit.

10.WiththismegaschemeofStrengtheningthefoodsecurityofthepoor,
destitutebillions,withanEstimatedannualfoodgrainrequirementof
612.3lakhtonnesandCorrespondingEstimatedfoodsubsidyofabout
Rs.1,24,724crore,during201415,anewbeginningisbeingmade
towardswelfareofcitizens.Afoodsecurenationcanonlybe
economicallyandsociallysteady.

FOODGRAINSREQUIREDUNDERNFSA2013:TheNFSBenvisages
distributionofabout61.2mtofcereals,primarilyriceandwheat,though
theexistingPDSandotherwelfareschemes,costingtheexchequerabout
Rs.125000Croreannually.

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Food Grains Requirement under National Food Security Act, 2013

in
(MillionTonnes)
a]WheatRiceTotalRequirementforbeneficiarypopulation(67%of
1.215billion@5kgperpersonwheat22.0rice26.8total48.8

b]AdditionalrequirementforAAY@2kgfor2.5Crorehouseholdsof5
personsperhousehold)wheat1.4rice1.6total3.0

cEstimatedrequirementforotherwelfareschemeswheat2.9rice3.6
total6.5

d]Additionalrequirementforprotectingtheaverageannualofftakeof
stateswheat1.3rice1.6total2.9

e]Totalannualrequirementwheat27.6rice33.6total61.2

CHALLENGES OF FOOD SECURITY:

ThechallengesIndiafacestomeetits
foodsecurityare
1.ProductivityincreaseofIndianagricultureusinghighyieldingseeds
andmoderntechnology.
2.Changesinfoodconsumptionpatternduetochangesindietaryhabits
ofthepopulation
3.MalnutritioninIndia,especiallyinchildrentobereducedtozero

4.Developmentofsupplychainsofhighvaluetocoverthelastrecipient
intime.
5.Foodsecurityisarightanditisprerequisitetoenjoyotherrights
availabletoanindividual.

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6.Hungerandpovertymustbereducedtoensurefoodsecurityforall
beneficiaries.
7.MoreinvestmentinagricultureisneededwithinandoutsideIndia.
8.Governmentneglectofagricultureisreflectedinthesuicideofthe
farmer.
9.Researchonnewchallengesthatfarmersfacelikeclimatechange,
droughtsandfloods.

BENEFITSOFNFSA:TheGovernmentofIndiahasrecentlypassed
NationalFoodSecurityAct,2013,whichwouldofferfollowingbenefits.
1.NFSAhaskeptthepoorasitstoppriority.
2.FoodsecurityActwillhelpplug30%leakageinPDS.
3.FoodsecurityActisachanceforIndiatotakefullresponsibilityoffood
securityofitscitizens.
4.Thelegislationwillprovidehighlysubsidizedfoodtotwothirdofthe
countryspopulation.
5.Anopportunitytoensurethatnochildismalnourishedinthecountry.
6.Statesareaskedtoidentifythebeneficiariesofthefoodscheme.
7.LoopholesunderPDSschemewouldbetakencareofintheFood
Securityact.
8.FoodsecurityActisahistoricachievementforeveryone.
9.Itisbeginningofthefighttoeradicatepovertyandmalnutritioninthe
country.

CRITICISMOFTHENFSA:NFSAiscriticizedbystakeholdersasbelow
1.Itisanincompletelawoffoodsecuritywithoutprovisionsforthe
constructionofinfrastructure.
2.ThetargetedapproachNFSAexcludesmarginalizedandmayleadto
corruption.

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3.CentreonlywantstomovetheburdenofFoodSecurityActtostates.
4.LawonFoodSecuritywouldbeafailureifitdoesnottakecareofthe
interestsoffarmers.
5.LawonFoodSafetydoesnothaveuniversalapplication,andis
unclearoncertainaspects.
6.FoodsecurityActhasinherentflawsanddeficiencies,sinceitfailsto
addressbothcaloricandnutritionalsecurityofthepoor
7.Thetaskofobtaining,storage,transport,deliveryiswiththebureaucrat
andnotwiththeelected.

SUGGESTIONS:Followingsuggestionsareofferedforthesuccessof
foodsecurityprogramme.
1.ThereisaneedtoimprovethePDSandplugleakageforsuccessof
NationalFoodSecurityAct.
2.Alongwithrice,wheatandcoarsegrains,thegovernmentmust
providesalt,edibleoilandpulsesatreasonableprices,especiallyfor
peoplefrombackwardcommunities.
3.FoodSecurityBillshouldgiveflexibilitytostatesonhowtodistribute
foodgrainstotheactualbeneficiaries.
4.TheverypoorpeopleshouldnotbechargedevenRs.3perkg,but
offeredfreefood.
5.TheCentreandtheStatewillhavetoworkhandinhandforthe
successofFoodSafetyprogramme.
6.Unlessanduntil,thePanchayatsandMunicipalitiesaregivenmore
powerstheFoodSafetyActwillnotdeliverwiththedesiredresults.
7.Althoughtherearesomeflawsinthelaw,itcanbeimproved,basedon
experience,afteritsapplication.
8.Toaddresstheproblemsrelatedtofoodinsecurityandmalnutrition,
goodcoordinationandcooperation
9.Overall,itmaybeconcludedthatfoodsecurityinIndiacanbe
achievedbypayinghigherattentiontoissuessuchasclimatechange,
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integratedwatermanagement,agriculturalpricingandcropinsurance.
TheimpactofglobalizationintheformofSEZsandotherfactorshas
beenbothpositiveandnegativeintermsofagriculturalprosperityand
thereisastrongneedtoregulatethepoliciesrelatedtoglobalizationfor
reducingitsnegativeeffectsonfoodsecurityinIndia.

RECENT POLICY CHANGE UNDER NEW BJP GOVERNMENT

1]
TherecentlyreleasedWorldBankreportentitled
AddressingInequality
inSouthAsia,
basedonvariousstudies,hasfoundthatillegaldiversion
andleakagesfromthepublicdistributionsystem(PDS)inIndiadeclined
fromabove50percentin200405toabout44percentbytheendof
200708andfurthertonearly35percentin201112.

2] However, the
Report of the High level Committee on Reorienting the
Role and Restructuring of Food Corporation of India
, written under the
chairpersonship of BJP MP Shanta Kumar, considers the leakage figure
to be much higher (almost 47 percent), based on calculations of offtake
from central pool and the National Sample Survey (NSS) Organisation's
68thRoundconsumptiondatafromPDS.
TheHighLevel Committee(HLC)reportfurthersaysthatincertainstates,
leakage ranges between 70 percent and 90percent and basedonthese
figures, suggests that the PDS needs to be radically restructured and
replacedgraduallywithcashtransfers.

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It also suggests that the coverage under the National Food Security Act
2013 (NFSA) should be confined to just 40 percent of the overall
population instead of 67 percent, as entitled under the original Right to
FoodAct

HOWEVER THERE ARE SEVERAL ECONOMISTS WHO DISAGREE WITH

THE GOVERNMENTs VIEW :
1] A microlevel survey done under the auspices of Dr Reetika Khera of
IIT Delhi and development economist Jean Dreze during 2013 in 10
states, popularly known as the PEEP survey, shows improvementsin the
functioning ofthe PDS in certain statessuchasOdisha,Chhattisgarhetc.
inthelastfewyears.
The Public Evaluation of Entitlement Programmes or PEEP survey
focused on two of the poorest districts in the 10 states and covered five
entitlement programmes, namely, ICDS, MDMS, PDS, MGNREGA and
social security pensions. The PEEP survey in Bihar found that leakages
from the below poverty line (BPL) quota of PDS was 31 percent during
2013,whilebasedonthe National SampleSurvey(NSS)data,Kheraand
Dreze found leakages to be as high as 75 percentfor the overall PDS in
Biharduring200910.

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2] The HLC report, on the other hand, finds that the overall diversion of
foodgrains (wheat and rice) from the PDS amounted to 46.7 percent in
201112, which contradicts the declining trend of diversionsasshownby
otherstudies.
It must be mentioned that the HLC has not calculated this figure on its
own, but rather relies on the estimate given in a paper by Ashok Gulati
andShweta Saini,titledLeakages from thepublic distributionsystemand
the way forward Leakages from the Public Distribution System (PDS)
and the way forward, which got published from the Indian Council for
Research on International Economic Relations(ICRIER)earlierthis year.
Itmay benoted thatAshokGulati was also a member in the HLC on FCI
reforms.
3] Khera and Dreze, by using the data of the IndiaHumanDevelopment
Survey by theNational CouncilofApplied Economic Research(NCAER),
show anevenlowerlevelofleakagesanddiversionfromthePDS:around
32 percent in 201112, as against 49 percent in 200405. They have
argued that the biggest source of continuing leakage in the PDS is the
APL (above poverty line) quotaand also the
ad hoc
quotas,duetowhich
leakagescouldbefoundforevensouthernstateslikeKerala.

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4] It must be noted here that earlier the Independent Evaluation Office

(IEO) that was created at the Planning CommissioninAugust2013found
that approximately 40 percent of the foodgrain allocated under PDS did
not reach the intended beneficiaries, which too is a much lower figure
thantheHLC's.

CashtransferversusPDS
a] HLC suggests gradual introduction of cash transfers in PDS, starting
with large cities with a population of more than 1 million, extending it to
grain surplus states, and then giving an option to deficit states to opt
eitherforcashorphysicalgraindistribution.
The Committee recommends that cash transfers be indexed with the
overall price level to protect theamount ofreal incometransfers, given in
the name of a female head of the family, and routed through the Prime
Minister's JanDhan Yojana (PMGSY), dovetailing Unique Identification
(UID) numbers. The mechanism is expected to empower theconsumers,
plughighleakagesinPDSandsaveresources.
b] The HLC has calculated that by directly transferring cash to potential
beneficiaries of NFSA at the rate of about Rs. 700 per month per family
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for Antyodaya households and Rs. 500 per month (for a family of 5) for
priority households, it cangive thema deal that is25to30percentbetter
than physically distributing grains to them. This restructuring isexpected
to save public resources to the tune of about Rs. 30,000 to Rs. 35,000
crores, whichthe HLC recommends, canbe ploughed back to agriculture
through investments in irrigation and building better roads and
marketnetworks.
c] It must, however, be noted that the 2011 PDS survey by Khera and
Dreze shows that in eight out of nine states, a majority of the sampled
households preferred food instead of cash transfers. Overall, more than
twothirds of the respondents expressed a clearpreference forfoodover
cashlessthanonefifth(18percent)wereinfavourofcashoverfood.
Given a choice, people were found to prefer food over cash transfers
because of erosion of purchasing power with inflation, lack offaithin the
ability and intention of the government to index the cash amount to
inflation rates, poor access to markets and banking/post office
infrastructure, increase intheirtransactioncosts (forexample,trips to the
bankandmarkettowithdrawcashandbuyfood)etc.
d]Since thePDShasastrongimpactonruralpoverty,ithasbeenargued
thatreplacingthe PDS with cash transfers may not bea good idea.Even
the India Human Development Survey cautions that any reforms in the
PDSwouldaffect50percentoftheentirepopulation.
Opponents of cash transfers also argue that leakages will continue to
exist even when a system of cash transfers is in place, thanks to the
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corruption in the banking system. If PDS is replaced by cash transfers,

than procurementfromthe farmers willbe adverselyaffected.Dilutingthe
PDS means more dependence on market food price vagaries, contends
theRighttoFoodCampaign.
e] It is essential to see what works and what doesn't before the PDS is
entirely replaced by cash transfers.Acashtransfersystemcanbestarted
on a pilot basis in richer regions to gauge its impact. The approach to
deciding whether the PDS shouldbe replaced by cash transfers must be
peoplecentric.

Instead of diluting the PDS altogether, the Central Government would also do
well to first take a look at the success stories of states such as Bihar,
Chhattisgarh and Odisha, and introduce similar measures by taking other state
governments into confidence. Even the BJPs own manifesto during the 2014 Lok
Sabha election read:
"review the successful PDS models, and incorporate the

best practices to revise the existing PDS, for benefitting the common man".

In Chhattisgarh's capital, Raipur, smart cards are helping plug pilferage and
weed out corruption from the Public Distribution System

government
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launched an innovative scheme that aims to revamp the public

distribution system, or PDS,and,intheprocess,weedoutpilferages
to the black market,remove corruption and makelife hasslefree for
poor folkslike Jagat. The schemeiscalled CORE PDS,andisbased
on the latest information technology tools: smart cards, handheld
pointofsale devices at ration shops and servers that store all data
and monitor all transactions. It is the brainchild of a technical
directorwiththe National InformaticsCentrewhoiscurrentlyposted
atRaipur.
Heres how it works. Instead of a traditional ration card made of
paper, people like Jagat have been issued smart cards which carry
his personal details and also his ration entitlement. Every time his
card is swiped at a ration shop, the state knows how much he has
drawn visvis his quota. All the ration shops have been linked by
satellite.So,ifthereisaqueueofpeopleatoneshop,Jagatisfreeto
go to another shop. It is like modern banking customers are no
longer tied down to one branch or shop. The pilot is running
successfully in Raipur where 72,000smartcardshavebeenissued,
andwill beextended toRajnandgaonandDurgfromNovember1.By
June next year, it will be in operation in all the towns and cities of
thestate.

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Thisworksindifferentways.
One, therationshop hastoelectronically inform how muchstockit
has received, which can be matched instantly with what was
despatched from the governments warehouse. Earlier, when all
recordswereoffline,muchoftherationwasstolenintransit,andthe
work of matching despatches and receipts was enormous, and
thereforeseldomundertaken.So,thatleakagehasbeenplugged.

Two, the government knows precisely how much of the ration

received byeachshophasbeensoldtothecardholders.Inthepast,
unscrupulousshopkeeperswouldshowonpaperthattherationwas
sold to the poor and then sell large quantities in the open market.
(Halwais,forinstance,areknowntobebigbuyersofsugarmeantfor
PDS).Thatcannot be donenow, unless theshopkeepergiveslesser
to the buyer than what is swiped on the card. Actually, it is now in
the shopkeepers interest to see that his stocks are full and not
leaked to nonentitled buyers. Or else, the smartcard holders will
justgotothenextshop.

Officers of the Chhattisgarh government are satisfied withthe outcomes,

though they dont have apreciseideaofhowmuchoftherationmeantfor
PDS was getting stolen. But the numbers could be substantial. Consider
this. In Delhi, half the petrol sold in fuel stations is believed to be

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adulterated withkerosenemeantforPDS.Atleast40percentofthegrain
meant for the poor gets diverted to the market. Economists have
estimated that the national scam here could be to the tune of Rs 16,000
croreinayear.Itsasmallbeginningtosolveamonumentalproblem.

HowtoimprovePDSfunctioning?
The difference in estimates notwithstanding, it is a fact that leakages do
exist within the PDS. In order to plug these leakages, the recently
released HLC reporthas recommendedthat thegovernmentshoulddefer
implementation of NFSA in states that have not done endtoend
computerization, notput thelist ofbeneficiariesonlineforanyonetoverify
andnotsetupvigilancecommitteestocheckpilferagefromthePDS.
In a large number of studies on PDS done previously by various
researchers, it has been shown that apart from endtoend
computerisation, thereare manyfactorsthatarecrucialforthesuccessof
PDSinvariousstatessuchas:
deprivatisationoffairpriceshops
doorstepdeliveryofgraintofairpriceshops
politicalwill
universalandaffordablePDS
modest budgetary allocations for PDS strict action against
corruptionandcorruptindividuals
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proper mechanism for grievance redressal (such as toll free

numbersformakingcomplaints)
constantmonitoring
provision of other essential commodities like iodized salt, edible
oil,pulsesetc.apartfromfoodgrains
fixing a roleforgram panchayats for accountability/transparency
ofthefairpriceshops/PDS
GPStotrackvehiclescarryingPDSfoodgrains
naming andshaminghouseholdsthatavailedAntyodayafacilities
despitenotbeingeligible
introductionofthesystemoftrackingcoupons(suchasinBihar)
transparencyofBPLlists
SMSalertaboutavailablePDSstocksonrequestetc.
In fact, states such as Bihar, Odisha and Chhattisgarh which have
undertaken such reforms are now showing lower leakage than others,
claims the Right to Food Campaign in its press note dated 25 January
2015. According to Khera and Dreze, the extent of leakage in the Bihar
PDS has declined from around 75 percent in 200910 to 24 percent in
201112(basedonNSSdata).
Ina previous PDS survey donein ninestatesduring2011,whichcovered
two districts in each state and a total of nearly 1200 households, Khera
and Dreze found that the sample households had received 85 percent of
their official quota of PDS grain (measured as purchasetoentitlement
ratio) during the three months immediately preceding the survey, which

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contradicted the widely held perception that most of the grain meant for
poorhouseholdsgotsoldoffintheopenmarket.

PREPAREDBYNARESHSEHDEV
nareshsehdev200789@gmail.com
contactno981094538743104668
POCKETC2/FLAT8C,
KESHAVPURAM,LAWRENCEROAD
NEWDELHI35

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