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Public Distribution System in India: Objectives, Flaws in the Food Security System

06-NOV-2015 15:58

    The public distribution system means the system of management of food economy and distribution of food grains at affordable price. This scheme provides staple food grains, such as wheat rice, sugar & kerosene through a network of public distribution shops in the whole country. This scheme is run by ministry of consumer affairs, food and public distribution. Basic motive behind this scheme is to provide food the weaker section of the country at the cheaper/affordable rates.

    Objectives and Expansion of PDS

    The basic objective of the public distribution system in India is to provide essential consumer goods at cheap and subsidised prices to the consumers so as to insulate them from the impact of rising prices of these commodities and maintain the minimum nutritional status of our population. To run this system, the government resorts to purchases a part of the marketable surplus with traders/millers and producers at procurement prices. The grain (mainly wheat and rice) thus procured, is used for distribution to the consumers through a network of ration fair price shops and/or for building up buffer stocks. In addition to food grains, PDS has also been used in India for the distribution of edible oils, sugar, coal, kerosene and cloth. The most important items covered under PDS in India have been rice, wheat, sugar and kerosene.

    PDS in India covers the whole population as no means of direct targeting are employed. The criterion is to issue ration cards to all those households that have proper registered residential addresses.

    PDS distributes commodities worth more than Rs. 30,000 crore annually to about 160 million families and is perhaps the largest distribution network of its kind in the world.

    The main agency providing food grains to the PDS is the Food Corporation of India (FCI) set up in 1965. The primary duty of the Corporation is to undertake the purchase, storage, movement, transport, distribution and sale of food grains and other foodstuffs. It ensures on the one hand that the farmers get remunerative prices for their produce and on the other hand, the consumers get food grains from the central pool at uniform prices fixed by the Government of India.

    Flaws in Food Security System

    The PDS in India has been criticised on various counts. The main criticisms are as follows:

    1. Limited Benefit to Poor from PDS. Many empirical studies have shown that the rural poor have not benefited much from the PDS as their dependence on the open market has been much higher than on the PDS for most of the commodities."The cost-effectiveness of reaching the poorest 20 per cent of households through PDS cereals is very small. For every rupee spent, less than 22 paise reach the poor in all States, excepting in Goa, Daman and Din where 28 paise reach the poor.
    2. Regional Disparities in PDS Benefits. There are considerable regional disparities in the distribution of PDS benefits. For example, in 1995, the four Southern States of Andhra Pradesh, Karnataka, Kerala and Tamil Nadu accounted for almost one-half (48.7 per cent) of total PDS off take of food grains in the country while their share in all India population below the poverty line in 1993-94 was just 18.4 per cent. As against this, the four Northern States of Bihar, Madhya Pradesh, Rajasthan, Uttar Pradesh and Odisha (or BIMAROU States) having as much as 47.6 per cent of the all- India population below the poverty line in 1993-94 accounted for just 10.4 per cent of all India off take of food grains from PDS in 1995.
    3. The Question of Urban Bias. A number of economists have pointed 'out that PDS remained limited mostly to urban areas for a considerable period of planning while the coverage of rural areas was very insufficient.
    4. The Burden of Food Subsidy. PDS is highly subsidised in India and this has put a severe fiscal burden on the government. From Rs. 662 crore in 1980-81, food subsidy rose to Rs. 2,850 crore in 1991-92, Rs. 62.930 crore in 2010-11 and further to Rs. 72,823 crore in 2011-12.
    5. Inefficiencies in the Operations of FeI. The Bureau of Industrial Costs and Prices (BICP) of the Government of India and some researchers have pointed out a number of inefficiencies in the operations of the Food Corporation of India. The economic cost of food grains operations has been rising on account of increase in procurement prices and 'other costs' (which include procurement incidentals, distribution cost and carrying cost).
    6. PDS Results in Price Increases. Some economists have pointed out that the operations of the PDS have, in fact, resulted in an all-round price increase. This is due to the reason that large procurement of food grains every year by the government actually reduces the net quantities available in the open market.
    7. Leakages from PDS. Another criticism of PDS relates to the problem of leakages from the system in the form of losses in the transport and storage and diversion to the open market. The major part of the leakage is due to diversion of food grains to the open market because of the widespread prevalence of corrupt practices.

    DISCLAIMER: JPL and its affiliates shall have no liability for any views, thoughts and comments expressed on this article.

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