How PDS can be made Effective through Better Governance

India’s public distribution system (PDS) is the largest food security programme in the world, which covers nearly 60% of the population and costs Rs 1.45 trillion—close to 1.4% of the national income. PDS has often been criticised for its structure, incessant corruption and leakages, and inclusion and exclusion errors in identifying the beneficiaries. The rolling out of the National Food Security Act (NFSA), 2013, and the overhauling of PDS in some states has created an aspiration that the system can be made effectual in making the households not only food secure, but also nutrition secure.

Among the states, Odisha, Tamil Nadu, Rajasthan, Chhattisgarh, Madhya Pradesh, Telangana and Gujarat have intensified reforms in PDS using latest technology and ensuring community participation—they have taken steps such as computerisation of offtake of grains, recording of procurement, storage and distribution, installation of electronic point of sale machines in fair price shops, and regular monitoring at every stage. The digitisation of beneficiaries’ database and verification of their identities through Aadhaar have resulted in scraping of over 23 million fake ration cards and savings of Rs 14,000 crore of annual food subsidy.

Amid serious discussions on replacing the in-kind transfers with cash transfers, with pilots carried out in Chandigarh, Pondicherry, and Dadra and Nagar Haveli, it appears difficult to let go of PDS, at least in the short run. The political sensitivities, complexity in dismantling the massive system built over time, and inadequate infrastructure to transfer money to beneficiaries may act as barriers. Whether a revamped PDS, undoubtedly backed by strong political will and good governance, would pay off across the country is yet to be seen. We gauge its possibility by looking at the stellar performance of PDS in Odisha—a state marred with high incidence of poverty, hunger and malnutrition.

 

Odisha began with a state-of-the-art e-PDS from 2004 onwards to cover the entire network for greater transparency and accountability. PDS coverage in terms of population was expanded, grain prices were lowered, and entitlements were simplified and rationalised. The outlets were largely brought under the ambit of community, presently managed by gram panchayats, self-help groups (SHGs), cooperatives and non-governmental organisations, which ensured participatory management and transparency in administration. The entire distribution system was computerised and vans were mobilised to reach distant places that were otherwise disconnected from the mainstream distribution network. The movement of food grains from the warehouses to fair prices shops was monitored and tracked with GPS systems. The weighing scales were digitised, transport agencies were separated from distribution agencies and fixed distribution schedules were introduced. In fact, the overall system was strengthened with provisions for a grievance redressal mechanism.

A remarkable turnaround was visible in due course in terms of better coverage of eligible beneficiaries from 6.4% in 1993-94 to more than 58% in 2011-12, along with minimal targeting errors and plugging grain leakages. Some more statistics from the NSS showed an increase in the contribution of PDS grains in calorie intake from less than 2.4% to over 19.5% during this period, with larger benefits accruing to the rural households (21.3%). The consumption of cereals among weaker sections increased at a much faster rate than that for other privileged social groups. The estimates reveal that PDS contributed 34%, 32% and 26% of cereal consumption of SC, ST and OBC households, respectively, compared to 19% of general caste households. An increased access to subsidised cereals led to a decline in the share of cereal expenditure in total expenditure, which could be used for purchase of other commodities.

The incidence of calorie deficiencies in 2011-12 would have been 48.9% in a business-as-usual scenario, but the turnaround has been able to contain it to 17.2%. In absolute terms, nearly 14 million people could escape the curse of hunger due to revamped PDS. This translates to 31.7% reduction in calorie-deficient population in the state.

Perhaps an increasing divergence between market price and PDS price of grains made the latter more lucrative. The growing price advantage pushed the households to claim their eligibility which created demand-side pressures on the system to function better. The estimated grain leakages were capped to 11.4 % in 2011-12 from a staggering 85.8% in 1993-94 and 73.4% in 2004-05.

The functioning of PDS can be improved further. Firstly, nearly 16% of the below poverty line households were non-beneficiaries as they did not possess ration cards. Such unintended omissions could be minimised by strengthening the identification mechanism. Second, the density of fair price shops is still lower compared to many other states and efforts are needed to widen the distribution network to remote corners to enhance access.

Thirdly, there is still room for minimising wastage and losses resulting from poor handling and storage of grains. Continued research and improvements in logistics throughout the distribution chain is imperative. Lastly, appropriate choice of food including biofortified food, if distributed, can help in addressing recalcitrant micronutrient deficiencies such as vitamin A and anaemia.

The Cabinet has approved the setting up of the National Nutrition Mission (NNM) with a budgetary allocation of `9,046.17 crore for the next three years. NNM will cover all the districts in three years beginning with 315 high-burden districts. The aim is to reduce stunting by 2% annually, anaemia in young children, women and adolescent girls by 3%, and undernutrition and low birth weight among 100 million people.

Since each state has invested heavily in PDS and revamping is already under way, it would be cost-effective to make it as a platform to achieve some of the proposed goals under NNM. The respective states can provide necessary nutrients such as pulses and millets to women along with grains and possibly promote dietary diversification as per the culture, tastes and preferences of people. The ministry of women and child development has advocated bringing convergence with other ministries for the success of this mission. Clearly, PDS can play a pivotal role in bringing convergence and making India’s two important missions—food and nutrition security—successful in a short time.

Anjani Kumar and Seema Bathla are agricultural economists with the International Food Policy Research Institute and Jawaharlal Nehru University, New Delhi. This article was originally published in Financial Express

Best Practices in Food and Livelihood Security in India

Cross-posted from the FSP India website written by Jaspreet Aulakh

Delegates at the CSD-IFPRI workshop, New Delhi
Delegates at the CSD-IFPRI workshop, New Delhi

A recent conference organized jointly by the Council for Social Development (CSD) and the International Food Policy Research Institute (IFPRI) explored research gaps on food and livelihood security and existing models that could be used for successful change.

To ignore current food security issues facing India can be likened to a doctor refusing to perform surgery because the future will offer better methods, said Muchkund Dubey of the CSD.

The conference was held 14 July at the India International Centre in New Delhi, and brought together members of government and the private sector to discuss models and processes that are scalable as well as their applicability in particular situations.  The discussion also centered on topics associated with existing practices that demand more research.

Four technical sessions covered best practices related to the Public Distribution System (PDS), the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGA), food security and self-help groups, and civil society organisations. The conference closed with a panel discussion on “Learning Lessons for Up-Scaling Best Practices.”

There was unanimous consensus on the definitions of best practices, food security, and livelihood security: best practices (BPs) in agriculture were defined as norms which help rural agricultural systems to self-sustain, ensuring food as well as livelihood security; food security should incorporate food availability, food access, food safety, and food nutrition; and livelihood security means income generation for the rural and urban population.

Several points were highlighted during the course of the conference. First, each state in India varies greatly in terms of socioeconomic makeup and politics, which makes the cross-implementation and upscaling of best practices based on case studies alone difficult. Second, the government and political system can make a huge difference in creating success stories. Third, the use of information technology in management of any agricultural system is necessary for creating a success story. Capacity building and diversification within agricultural systems is also necessary to protect them from shocks.

During the final discussion, Former Secretary to the Government of India Alok Sinha noted that Indian agriculture has reached a plateau; half of the population is engaged in agriculture, but it contributes to only 2-3 percent of the country’s GDP. Small projects scattered over India cannot represent the country as a whole, he said, and PDS needs to become a transparent public system where the beneficiaries know their rights. Since Minimum Support Price (MSP) and PDS are closely interlinked, the cash transfer policy can adversely affect MSP and PDS and should therefore be tested before implementation. Digital tracking is also important for procurement to end in PDS.

Agriculture impacts a large percentage of the Indian population—47 percent of the population was employed in agriculture and related activity in 2012, according to the World Bank-- and civil society has an important role serving the rural poor.

For additional coverage and lessons-learned from the conference, check out our blogs on:

Civil Society Organizations in India-- how they make a difference

Growing together, gaining together-- case studies of self-help groups

 

Food Security in Bihar: The State of Things Looking Ahead

Konark Sikka is an intern with IFPRI- South Asia office

Women Farmer Winnowing Rice, Bihar. Source (Flickr) Divya Pandey, IFPRI
Women Farmer Winnowing Rice, Bihar. Source (Flickr) Divya Pandey, IFPRI

Over the years investments in food and nutritional security have shown significant improvement in Bihar, but year-to-year fluctuations in agricultural production aggravated due to climate change, infrastructure problems, and slow progress in nutrition improvement have hampered the translation of investments into Continue reading "Food Security in Bihar: The State of Things Looking Ahead"

The Importance of a Strong Public Distribution System

 Konark Sikka is an intern with IFPRI- South Asia office

Participants at the Conference in Udaipur
Participants at the Conference in Udaipur

Despite being self-sufficient in food production, access and distribution of food pose a major challenge for the food security of the country. An efficient public distribution system goes a long way in moving surplus to regions with demand, thus avoiding wastage of resources and working towards food security.

IFPRI’s, Research Fellow Dr. Anjani Kumar gave a presentation on the Public Distribution System (PDS) in India, at the 97th Annual Conference of Indian Economic Association recently. He talked about the PDS system and how it effects poverty alleviation and food security.

In order for the National Food Security Act to be a success, a strong PDS is crucial.  From the National Sample Survey Organization, the data regarding production, consumption and nourishment values of food were analyzed. It was found that the percentage of population which was undernourished had fallen across both rural and urban lines, as well as along the dimensions of calories, proteins and fats. Meanwhile, over the past 20 years, there had been an increase in the extension and outreach of the PDS across states. Furthermore, in the last 20 years, the access to the PDS by SC, ST, OBC and other disadvantaged groups have significantly increased.

Statistics collected also show a general increase in income transfer in the last two decades. . This clearly seems to have a positive impact on poverty alleviation, since projections of poverty, with and without the PDS, show a slash in poverty rates in the scenario with the PDS. These projections when applied to different groups show the same as well. For instance, amongst people below the poverty line. Projections for calorie deficient populations yield a similar result.

In conclusion, an analysis of data and statistics over the past decades shows an impact of the PDS in cutting down poverty numbers and improving food security. This impact cut across rural and urban lines and across disadvantaged groups as well. Furthermore, the scope and reach of the PDS also increased in this timeframe. The author’s recommendation is that the PDS should not be ignored or sidelined, but given a major role in achieving food security and poverty alleviation in the future.

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