Monday, March 22, 2010

PDS: The grain-drain

Now it’s official that PDS is in a shambles and gone cancerous with the findings of the Supreme Court constituted one man panel under Justice DP Wadhwa, and this has not come as major surprise to a common man as this is an age old mis-happening throughout the country, but now only accepted by the court/ Govt about the inefficiency and corrupt practices in the whole system.
The Centre was giving whopping subsidy of Rs 28,000 crore to the states on food items to be distributed to poor through the PDS but a strong nexus of corrupt officials, dishonest fair price shop (FPS) owners, treacherous transporters engaged by state governments to carry the goods to the shops and unscrupulous mill owners has virtually crippled the system. There was large-scale diversion of foodgrains supplied to the PDS; black marketing by FPS dealers; a strong nexus between them and officials of the department; improper record-keeping; false entries in registers; and above all political influence and interference hampering public distribution. Most of the functionaries under the food and civil supply department were found to be typically callous and resort to corrupt practices. It is in fact a cancerous growth and has to be chopped off as patch work will not do, said the panel in its voluminous report analysing the functioning of PDS in all the states. Subsidised PDS foodgrains do not reach the poor who desperately need the same. These poor people never get the PDS foodgrains in proper quantity and quality.
The PDS was set up as a major component of our food security programme in the context of a shortage economy when we used to import foodgrains. But over the years, the system took on additional responsibilities such as fighting hoarding and blackmarketing. Later still, it became a convenient tool for ad-hoc fixing of agricultural prices through the MSP mechanism. Hence, from time to time the PDS has tried to address several political concerns in addition to its primary responsibility, but never has it experienced serious reforms to make it more effective. The entire system has been politically exploited to the hilt. The categorization of the beneficiaries and further issuance of ration cards in the name of APL and BPL is made by the state govt’s only as a vote- bank policy, and nothing vie for the pity hungry bellies.
Justice Wadhwa was very critique about the PDS mal-functioning for different states: PDS in the Rajasthan has completely collapsed, in Jharkhand PDS system is glaring example of what the system ought not to be, Beneficiaries in Bihar get ration of a month after a delay of 3-4 months, Fair price shop owners admitted they bribe officials even to get FPS licence and pay monthly bribe in Gujarat. Foodgrain sold at excessive prices at the fair price shops in Uttarakhand, in Orissa appointment of grain storage agents susceptible to high political influence, and for Karnataka the enforcement lax, collusion between officials, investigating agencies, dealers, wholesalers and other vested interests is rampant. It also slammed other state Govts, departments and officials for the rampant corruption in it the system and their high handedness/ surrender to the caveat.
In National Food Security Bill Govt is about to set up a Central Food Security Fund to monetarily compensate the BPL beneficiaries of the Targeted PDS, who fail to get the proposed mandatory 25 kgs of wheat or rice per family per month at a subsidised rate of Rs. 3 per kg with state governments has to bear the costs for compensating, as they avail the foodgrains allocation from Centre but failed to provide the mandatory grains to an entitled BPL family.
The report lambasted Govt. and other agencies for the gross mismanagement in the entire chain/ network and even suggested for total scrapping of the system in place or else brings about the wholesome revamp. As the Wadha report reiterated that it would be criminal to continue with a food security mechanism that has failed to achieve its basic objective and is losing the Government huge resources.
The entire PDS model can be scrapped in favour of an effective food coupon or direct subsidy system wherein the intended beneficiaries would receive coupons or cash to purchase a certain quantity of foodgrains every month from the open market or designated shops. This is something that the Chief Economic Adviser has also hinted in this year’s Economic Survey. The strength of this proposal lies in the fact that it completely cuts out the middleman in the distribution system, thereby, drastically reducing the rampant siphoning of foodgrains that takes place. The end result is a clean, efficient food subsidy mechanism that directly benefits those targeted. Correct recognition and categorization of the beneficiaries is also a big question, as still it is going in the man in power/ influential persons in a village/ locality.
Bi-furcation of the grand ministry of Agriculture, Food supply and consumer affairs can be given a throught, as it’s no where to the expectations of the public and to re-energize the chain of production and distribution.
State govt and local governing bodies might have hand in gloves in the entire nexus and it is the utter waste of public’s hard-earned money and a burden on the national exchequer. Govt. audits have time and again found that there is significant potential for improving the efficiency and effectiveness of the PDS. What is most disturbing about the failure of the PDS is its inability to reach out to the really impoverished. There has been total absence of any sort of watchdog for the transparency and monitoring of the whole operations. In this regard, the possibility of effectively empowering panchayati raj institutions to oversee the functioning of PDS can be looked into. But the key ingredient that is required to put such reforms in motion is determination. Unless concrete remedial measures were immediately taken, the poor will go on suffering at the hands of this unholy nexus.

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