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
distribution of food grains at affordable prices

Evolution of PDS in India

 PDS was introduced around World War II as a war-time rationing

measure. Before the 1960s, distribution through PDS was generally
dependant on imports of food grains.
 It was expanded in the 1960s as a response to the food shortages of the
time; 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 subsidised food
 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 with a view to strengthen and streamline the PDS as well as
to improve its reach in the far-flung, hilly, remote and inaccessible areas
where a substantial section of the underprivileged classes lives.
 In June, 1997, the Government of India launched the Targeted Public
Distribution System (TPDS) with a focus on the poor.

o Under TPDS, beneficiaries were divided into two categories:

Households below the poverty line or BPL; and
Households above the poverty line or APL.
  Antyodaya Anna Yojana (AAY): AAY was a step in the direction of
making TPDS aim at reducing hunger among the poorest segments of
the BPL population.

o A National Sample Survey exercise pointed towards the fact

that about 5% of the total population in the country sleeps
without two square meals a day. In order to make TPDS
more focused and targeted towards this category of
population, the "Antyodaya Anna Yojana” (AAY)
was launched in December, 2000 for one crore poorest of
the poor families.
 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 system functions?

 The Central and State Governments share responsibilities in order to

provide food grains to the identified beneficiaries.
 The centre 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 subsidise the price of food grains before selling it to
beneficiaries.

Importance of PDS

 It helps in ensuring Food and Nutritional Security of the nation.

 It has helped in stabilising food prices and making food available to
the poor at affordable prices.
 It maintains the buffer stock of food grains in the warehouse so that
the flow of food remain active even during the period of less
agricultural food production.
  It has helped in redistribution of grains by supplying food from
surplus regions of the country to deficient regions.
 The system of minimum support price and procurement has contributed
to the increase in food grain production.

PDS Reforms

 Role of Aadhar: Integrating Aadhar with TPDS will help in better

identification of beneficiaries and address the problem of inclusion
and exclusion errors. According to a study by the Unique
Identification Authority of India, using Aadhaar with TPDS would help
eliminate duplicate and ghost (fake) beneficiaries, and make
identification of beneficiaries more accurate.
 Technology-based reforms of TPDS implemented by states:
Wadhwa Committee, appointed by the Supreme court, found that
certain states had implemented computerisation and other technology-
based reforms to TPDS. Technology-based reforms helped plug
leakages of food grains during TPDS.

o Tamil Nadu implements a universal PDS, such that every

household is entitled to subsidised food grains.
o States such as Chhattisgarh and Madhya Pradesh have
implemented IT measures to streamline TPDS, through the
digitisation of ration cards, the use of GPS tracking of
delivery, and the use of SMS based monitoring by citizens.

What is Targeted PDS?

Targeted Public Distribution System (TPDS) is jointly operated by Central and
State Governments. The Targeted Public Distribution System (TPDS) came into
operation in June 1997 under the Government of India with a focus on the poor.
Under the operations of TPDS, the beneficiaries were divided into two categories:

1. Households Below the poverty line (BPL)

2. Households Above the poverty line (APL)
Central Government is responsible for

1. Procurement of food grains

 2. Allocation of food grains
3. Transportation of food grains to designated depots of Food Corporation of
India (FCI).
State Government is responsible for

1. Allocation and Distribution of foodgrains within the state.

2. Identification of eligible beneficiaries.
3. Issuance of ration cards.
Advantages of PDS System in India
 Protects recipients from inflation and price fluctuations
 Ensures that benefits are exclusively used for the food grains
 It provides food security for the poor in India.
 The program contributes to reducing poverty levels in India.
 The program provides that no one dies from hunger.
 It provides the availability of food at affordable and subsidized rates.
 The poor have more choices when they have cash in their hands.
Disadvantages of PDS System in India
 Low food grain consumption per household
 Subsidized food grain is highly leaking and being diverted.
 Ration shops do not supply enough food grains to meet the needs of the
poor.
 There is a lack of quality in the food grains.
 As a result, the PDS does not reach the needy poor sections of society
because corruption is involved in identifying low-income families.
 Ration shop managers sell the food grains on the black market at higher
prices than they supply to the poor.

Significance of TPDS
In the People’s Union for Civil Liberties v. Union of India case, the Supreme
Court contended that the “right to food” is essential to the right to life as provided
in Article 21 of the Constitution.

In line with this Parliament passed the National Food Security Act (NFSA) in
2013. The NFSA seeks to make the right to food a legal entitlement by providing
subsidized food grains to almost two-thirds of the population.
It relies on the existing Targeted Public Distribution System (TPDS) mechanism to
deliver these entitlements

How does the Public Distribution System (PDS) function?

The steps involved are

(1) Procurement of food grains

(2) Storage of food grains

(3) Allocation for families

(4) Transportation of food grains.

Revamped Public Distribution System (RPDS)

 The Revamped Public Distribution System (RPDS) was launched in June
1992 with the goal of strengthening and streamlining the PDS as well
as improving its reach in remote, hilly, and inaccessible areas where a
significant portion of the poor life.
 It covered 1775 blocks where area-specific programs such as the Drought
Prone Area Programme (DPAP), Integrated Tribal Development Projects
(ITDP), Desert Development Programme (DDP), and certain Designated
Hill Areas (DHA) were identified for special focus in consultation with State
Governments.
 Food grains for distribution in RPDS areas were issued to states at a 50-
paise discount from the Central Issue Price. The issue scale was up to 20 kg
per card.
 The RPDS included an area approach to ensuring the effective reach of PDS
commodities, their delivery by State Governments at the doorsteps of FPSs
in identified areas, additional ration cards to excluded families, infrastructure
requirements such as additional Fair Price Shops, storage capacity, and so
on, and additional commodities such as tea, salt, pulses, soap, and so on for
distribution through PDS outlets.
Issues Related to PDS
 Beneficiaries' identification: Research has shown that targeting
mechanisms such as TPDS are prone to large inclusion and exclusion errors.
 This implies that entitled beneficiaries are not receiving food grains, whereas
ineligible beneficiaries are receiving undue benefits.
o According to an expert group formed in 2009, the PDS suffers from
nearly 61% exclusion error and 25% inclusion error, i.e.
misclassification of the poor as non-poor and vice versa.
 Food grain leakage: TPDS suffers from significant leakages of food grains
into the open market during transportation to and from ration shops.
 Procurement issue: Open-ended procurement, which accepts all incoming
grains even if buffer stock is full, creates a shortage in the open market.
 Storage issues: A CAG performance audit revealed a significant shortfall in
the government's storage capacity. Given the increased procurement and
rotting food grain incidents, the lack of adequate covered storage is bound to
be a source of concern.
 The imposition of a minimum support price (MSP) has encouraged
farmers to shift land away from the production of coarse grains consumed by
the poor and toward rice and wheat, discouraging crop diversification.
 Environmental issues: The overemphasis on achieving self-sufficiency and
a surplus in water-intensive food grains has been found to be
environmentally unsustainable.
o Procuring states such as Punjab and Haryana are facing environmental
challenges such as rapid groundwater depletion and deteriorating soil
and water conditions caused by excessive fertiliser use.