PDS Irregularities: Losses of Rs 1,738 crore a year in Karnataka

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  1. nrj

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    DESPITE WHAT our reel-life heroes have shown us, perhaps it’s only possible to fight one villain at a time. Still, in his last few days on the job, Karnataka Lokayukta Santosh Hegde tried to battle two evils, with two reports that presented damning evidence of corruption in the BJP government. The first report, on illegal mining, had enough firepower to systematically dig holes in the state government. The second report, unfortunately, has been overshadowed by the sheer political drama of getting the otherwise immovable CM BS Yeddyurappa to resign.

    Submitted to the chief secretary a day before the mining report, a probe into the public distribution system (PDS) in the state shows massive corruption and inefficiency in the distribution of foodgrain. While the state lost about Rs 1,800 crore per year through illegal iron ore trading, it also lost about Rs 1,738 crore a year through the PDS.

    In September 2010, Hegde appointed Mysore-based anti-corruption activist and founder of Swami Vivekananda Youth Movement Dr R Balasubramaniam to probe the alleged irregularities in the PDS. By collecting secondary data and doing field investigations in all 30 districts, Balasubramaniam found that a little above 49 percent of those receiving subsidised rice and wheat under the below poverty line (BPL) quota, were ineligible. Every month, an average of Rs 54.4 crore subsidy was spent on families that no longer existed, foodgrain amounting to Rs 56.6 crore was lost in leakages and Rs 24.5 crore was spent on people who weren’t poor at all.

    This staggering diversion of funds cannot be explained simply by inefficiency and systemic corruption. The devil lies in the dirty policy. In December 2008, the government announced a short-term programme: anyone producing a self-declared affidavit of poverty by March 2009 would be given BPL cards. If a person stood in line at the district Nemmadi Kendras (relief centres) and said he was poor, he would receive a BPL card. Without proof of income, possessions or calorie intake. The BJP government had simply bypassed every single method of determining poverty.

    A Department of Food and Civil Supplies official admits that they were to verify the poverty claims later, but this was not followed through. “What’s the point when the cards are already given?” he contests.

    Balasubramanian points out that the BPL cards were given out just a few months before the 2009 Lok Sabha election. “The whole process of identifying the poor was reduced to political gimmickry,” he says.

    Nemmadi Kendras are set up by the eGovernance department for providing 43 kinds of services including widow pension, birth and death certificates, domicile certificates, etc. The 136-page PDS irregularities report explains that these centres gave out 1.6 crore cards (APL + BPL), while the state’s population is only 1.2 crore families. This means subsidies were drawn and foodgrain accounted against 40 lakh ghost cards for families that do not exist.


    It gets worse. Even the number of poor families is an overestimation, thanks to the randomness of a self-declaration. The probe calculates that the number of BPL families according to Karnataka’s official poverty assessment criteria is 44 lakh. This is far below the 96 lakh BPL cards the state has given out. The inclusion error was thus 49 percent — every second person who received subsidised foodgrain shouldn’t have.

    THE CENTRAL government, on the other hand, according to methods stipulated by the Planning Commission, estimates that there are 31.29 lakh BPL families in Karnataka. Central funds and foodgrain from the Food Corporation of India are allotted accordingly to the state. As the state claims it has 65 lakh more BPL families (it calls it Extra BPL), it must dip into its own funds to meet the excess food security it wants to extend. So when the Centre gives rice at Rs 5.40 per kg to the state, Karnataka further subsidises this by Rs 2.40, so that it can sell rice to the BPL cardholders at Rs 3 per kg. The Centre also gives rice at Rs 8.30 a kg to above poverty line families, but since Karnataka has slotted most of the APL families also as BPL, it is bound to give them rice at Rs 3 a kg too. It does this by spending another Rs 5.30 a kg for APL families. In other words, Karnataka subsidises the rich far more than it does its really poor.


    The takeaway from the PDS irregularities report is not only that undeserving people are accessing subsidies, but also that the really poor are being shortchanged. In fact, there’s an exclusion error of 5 percent. This may seem low but the PDS deprives the poor in another way too.

    Since there is only a constant amount of ration (rice, wheat, sugar, kerosene) from the central PDS, the Karnataka government devised a new system to be able to distribute ration to the about 80 percent of its population it had declared BPL. Instead of the per family norm followed in every Indian state, Karnataka introduced a new unit system. One unit is any person who is above 10 years of age. Every unit was entitled to 4 kg of rice, and no family was allowed to claim rice for more than five units, or five family members.

    This meant the government never gave more than 20 kg per month to a family, even though the Central law stipulates that every family should get 29 kg rice per month, whether it has five or two members. The Karnataka chapter of the People’s Union for Civil Liberties has challenged this in the Karnataka High court. Last year, the court declared the unit system illegal, but the state has shown no sign of reverting to the family system of food security.

    Every month, about Rs 54.4 crore subsidy was spent on families that existed only on paper

    The 9 kg extra due to every BPL family does not always fund the extra BPL cardholders in the state either. The PDS report finds that 73 percent of the people surveyed paid bribes to get foodgrain. Fair price shops charged higher rates from the cardholders, and many of them found the shops open only for 5-6 days a month. Even when open, close to 70 percent of the ration shops did not display stock positions on a board outside, as they are supposed to. In a state that considers itself the IT hub of the nation, neither the food distribution nor the inventory is computerised.

    Food minister Shobha Karandlaje and Department of Food and Civil Supplies Secretary BA Harish Gowda refused to respond to TEHELKA’s queries.

    As he steps down after a turbulent last phase, Hegde says that while the illegal mining report indicts politicians and corporates, the PDS graft should be given equal attention. Both scams have caused huge losses to the exchequer, but “the frauds and wrong decisions in the PDS are being further funded by people’s taxes,” he says.

    The graft in Karnataka’s PDS is just the sort of callousness in governance that allows a regime to claim that it cares for its poor, when it does nearly the opposite.

    Tehelka - India's Independent Weekly News Magazine
     
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  3. nrj

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    PDS leakages: the plot thickens

    While diversion rates still remain high, evidence seems to point to substantial improvements in the public distribution system around the country.



    It is well understood that a substantial proportion of the grain, mainly wheat and rice, that is meant to be distributed to eligible families under the Public Distribution System (PDS) ends up being sold in the open market by corrupt intermediaries, including some dealers who manage PDS outlets. The extent of this “diversion” of PDS grain has been a matter of speculation for some time. Two recent surveys shed further light on the matter.


    The diversion ratio (proportion of PDS grain “diverted” to the open market) has been estimated by several researchers in the past by matching National Sample Survey (NSS) data on household purchases with Food Corporation of India (FCI) data on “offtake.” The former tell us how much grain people are buying from the PDS. The latter tell us how much grain has been lifted by State governments from FCI godowns under the PDS quota. The difference is a rough estimate of the extent of diversion.


    Based on this method, the estimated diversion ratio was around 54 per cent in 2004-05, the last year for which detailed data are available from a “thick round” of the NSS. Needless to say, this is an alarming figure. Tamil Nadu had the lowest diversion rate (around 7 per cent); the rate was well below the national average in the other southern States also (around 25 per cent in each case). By contrast, the estimated diversion rates ranged between 85 and 95 per cent in Bihar, Jharkhand, Assam, and Rajasthan. These estimates, if proved correct, suggest a comprehensive breakdown of the PDS in these States at that time.


    Having said this, the reliability of NSS figures with respect to PDS purchases is not clear. There are two reasons to assume that they are not wildly off the mark. First, the State-wise averages for 2004-05 are broadly consistent with corresponding figures from the India Human Development Survey (IHDS) for the same year. Second, the inter-State patterns are more or less as one would expect, with, for instance, very little diversion in Tamil Nadu and a huge amount of it in Bihar. Nevertheless, this approach requires independent corroboration, not just because of the uncertain accuracy of NSS data, but also because of other difficulties in this method. Incidentally, among these difficulties is the utter lack of transparency in data on “offtake”: both the FCI and the Food Ministry seem to be doing their best to divulge as little as possible of it — they would do well to read Section 4 of the Right to Information Act.


    Further evidence on these matters is available from a recent survey, conducted in June 2011 by student volunteers under our guidance (hereafter “PDS Survey”). The survey covered about 1,200 randomly-selected BPL households in nine sample States (Andhra Pradesh, Bihar, Chhattisgarh, Himachal Pradesh, Jharkhand, Orissa, Rajasthan, Tamil Nadu and Uttar Pradesh). The investigators were carefully trained to record the respondents' PDS purchases, in three different ways. The purchases were then compared with “entitlements” — what BPL households are supposed to get from the PDS in different States. For instance, BPL households are entitled to 25 kg of grain a month in Orissa and Rajasthan, and 35 kg a month in Chhattisgarh and Jharkhand. It turned out that in most States (with the notable exception of Bihar), BPL households were getting the bulk of their entitlements. The ratio of purchases to entitlements was 84 per cent in the sample as a whole. Here again, there were significant inter-State variations: this ratio was above 90 per cent in Andhra Pradesh, Chhattisgarh, Himachal Pradesh, Orissa and Tamil Nadu, but as low as 45 per cent in Bihar. The sample average of 84 per cent, however, suggests much lower rates of diversion (even in Bihar) than emerged from the earlier method — at least under the BPL quota.


    The findings of this survey confirm other recent evidence of substantial improvements in the PDS around the country. In most of the sample States, there have been major initiatives in the recent past to improve the PDS, and it seems these efforts are showing results.


    Also of interest are provisional figures on PDS purchases for 2009-10 (the latest “thick round” of the NSS) computed by the National Sample Survey Organisation. Starting with the good news, these figures suggest that on average PDS purchases of wheat and rice have more or less doubled between 2004-05 and 2009-10. This, again, is consistent with independent evidence of a revival of the PDS in recent years.


    NSS-based estimates of diversion rates, however, remain high. Applying the method described earlier to these provisional figures, the diversion rate for 2009-10 seems to be around 41 per cent. This is 13 percentage points lower than in 2004-05, but still very high. The diversion rates improved (that is, declined) in almost every State, with big improvements in some States: down from 23 per cent to 8 per cent in Andhra Pradesh, from 85 to 47 per cent in Jharkhand, from 76 to 30 per cent in Orissa, and from 52 to 11 per cent in Chhattisgarh. Interestingly, these are four States where the PDS Survey also found evidence of major improvements. In 2009-10, none of India's major States had an estimated diversion rate higher than 75 per cent (the top rate, found in Bihar), in contrast with 2004-05 when as many as eight major States had that distinction.


    This broad-based improvement is good news, but needless to say diversion rates remain unacceptably high. The question remains how these high diversion rates (41 per cent at the national level) square with the fact that BPL households in the PDS Survey were able to secure 84 per cent of their PDS entitlements. Even if the comparison is restricted to the nine sample States, a similar contrast applies.


    There are at least two possible explanations. First, the PDS Survey is more recent: it took place two years after the NSS survey. And as mentioned earlier, there is consistent evidence of steady improvement in the PDS in recent years in many States. However, it is difficult to believe that progress has been so rapid as to explain, on its own, the full contrast between the two surveys. Second, the PDS Survey is restricted to BPL households in rural areas.
    Diversion rates may be higher (possibly much higher) under the APL quota, and perhaps also in urban areas. Indeed, the APL component of the PDS, which has expanded steadily since 2004-05 (with a big upward jump in 2009-10), is devoid of any transparency. There are no specific entitlements for APL households, and no clear allocation norms. This segment of the PDS remains highly vulnerable to corruption, as it is possible for large quantities of grain to disappear without anyone feeling the pinch.


    If this tentative line of explanation is correct, two conclusions can be drawn. First, both surveys (the PDS Survey, and the 66th Round of the NSS) add to growing evidence of steady improvements in the PDS in recent years. There is still a long way to go in achieving anything like acceptable levels of functionality, especially under the APL quota, but recent progress shows that the PDS is not a “lost cause” — far from it. Second, one thing that really helps to prevent corruption is to give people a strong stake in the system (large quantities, low prices), and make sure that they are clear about their entitlements. That has already happened, to a large extent, with the BPL quota: it has become much harder to cheat the recipients, because they know their due and clamour for it if need be. As Bhukhan Singh, a resident of Kope gram panchayat in Jharkhand, put it, when the price of PDS rice for BPL households in Jharkhand was slashed to Re. 1 a kg, awareness of the new entitlements spread quickly and people made up their mind that they “would not let this go.”



    The recent turnaround of the PDS in Chhattisgarh (or, for that matter, Orissa) also built largely on this simple insight, as well as on the related fact that broad coverage strengthens public pressure for a functional PDS. There is an important lesson here for the proposed National Food Security Act.



    The Hindu : Opinion / Lead : PDS leakages: the plot thickens
     
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    PDS: Signs of revival

    Obituaries for the PDS system are a bit premature, based as they are on outdated data and presumptions. Despite flaws like pilfering and leakages, the system shows signs of improvement in certain states.




    Cash transfers (CTs) are increasingly advocated as an alternative to the Public Distribution System (PDS). The proponents of cash transfers typically begin from the assumption that the PDS is a proven and irreversible failure. This assumption, however, is based on outdated or selective estimates of PDS leakages derived from National Sample Survey (NSS) data for 2004-5 or earlier, or worse, no data at all. For instance, Pranab Bardhan declares that the PDS is “dysfunctional” on the grounds that less than a quarter of PDS grain reaches the poor, but provides no source for this “rough estimate”. Citing a paper that estimates leakages in 2001-2 for rice and wheat separately, Kaushik Basu focuses on diversion of wheat alone, conveniently ignoring rice (with a much lower diversion rate) even though rice accounts for the bulk of all PDS grain.



    Recent field reports suggest that these obituaries for the PDS might be premature. Some of the signs of revival are discussed below, including declining leakages in some states. Though much of the evidence of revival pertains to the period since 2007, NSS data for 2007-8 (the latest available round) do capture some of these improvements.
    First, access to the PDS has been rising steadily. “Access” depends on the proportion of households that the government is willing to subsidise (i.e., proportion of BPL, or “below poverty line”, households) and on whether the PDS delivers to BPL households. Between 2004-5 and 2007-8, the proportion of households getting any grain from the PDS has progressively risen, from about a quarter of rural households (27 per cent) to just over one-third (35 per cent). In several states, this proportion increased by more than 10 percentage points (e.g., from six per cent to 18 per cent in Uttar Pradesh (UP), from 22 per cent to 36 per cent in Orissa, from 25 per cent to 47 per cent in Chhattisgarh and from 40 per cent to 59 per cent in Kerala). In addition, in states such as Andhra Pradesh (AP), Himachal Pradesh (HP) and Tamil Nadu (TN) access was high to start with — 81, 69 and 88 per cent respectively.
    Increasing off-take

    Second, per capita purchase of grain from the PDS has also been increasing. Apart from the four southern states, where per capita grain purchase has been relatively high (between 2.2 kg per month in Karnataka and 4.98 kg per month in TN in 2007-8), there are some surprises among the Hindi-speaking states too. In Chhattisgarh, per capita purchase witnessed a five-fold increase between 2004-5 and 2007-8, from a measly 600 grams to 3.2 kg per month. Uttarakhand's performance is similar — up from 640 grams to 2.15 kg. Another fact that has gone unnoticed is the performance of HP and Jammu and Kashmir, where per capita purchases are higher than in some of the southern states. These two indicators suggest that in 2007-8, on average, more people were getting more grain per capita from the PDS than before.


    Of course, not all is well with the PDS — far from it. Focussing on purchase alone presents an incomplete picture. To get the full story, one needs to look at the difference between offtake by the states and per capita purchases. Leakages, thus estimated, are the sum of transport and storage losses on the one hand, and illegal diversion on the other. At the all India level (rural and urban areas combined), in 2007-8, 44 per cent of the PDS grain did not reach entitled households. State patterns in diversion rates are plausible. Not surprisingly, the lowest diversion rate is in TN (four per cent) and the highest in Bihar (90 per cent).



    There are interesting surprises in the state trends, which are consistent with field reports. Three states — Chhattisgarh, Orissa and UP — usually considered “basket cases”, are beginning to show signs of revival. In Chhattisgarh, leakages of around 50 per cent in 2004-5 were much lower by 2007-8, even virtually eliminated according to one estimate. In Orissa and UP, states that are notorious for corruption, leakages came down from a whopping 76 per cent to 50 per cent and from 58 per cent to 27 per cent respectively. While leakages from the PDS remain unacceptably high, these states show that the situation is not irreversible.
    Continuing improvements

    NSS data beyond 2007-8 are not yet available. This is unfortunate, because recent field evidence suggests that these improvements have been consolidated since then. The most impressive example is Chhattisgarh: Ration shops open regularly in the first week of each month and most people get their full quota of 35kg at the right price. In Orissa, two field studies conducted in 2010 point to a drastic improvement: In both, 75 per cent of the respondents reported getting their full quota. Even in one of the most dysfunctional blocks of Jharkhand (Manika Block, Latehar District), informal investigations in eight villages earlier this year revealed that BPL cardholders get between 30-32 kg/month. Though this is less than their entitlement (35 kg/month), it is a huge improvement. Earlier, supplies were so unpredictable that people find it hard to recall how much they were getting! A similar picture emerged from enquires in Khunti District too.


    Much of this revival can be attributed to a renewed political interest in the PDS which has manifested itself in an expansion of PDS coverage and a reduction in PDS prices. Many states have been emulating a policy associated with Chhattisgarh, but originally traceable to Tamil Nadu and Andhra Pradesh. This is the “populist” promise of one rupee rice for all. The popularity and electoral payoffs of PDS reforms in Chhattisgarh provided the necessary nudge in several other states, including Jharkhand, Kerala, Madhya Pradesh, Orissa and Rajasthan.
    In 2007, PDS coverage in Chhattisgarh was extended to 80 per cent of rural households, well beyond the Planning Commission's stingy poverty estimates (45 per cent). The expansion makes a lot of sense, since the Central government's attempt to target the poor by identifying “below poverty line” (BPL) households failed miserably. In 2004-5, half of the poorest 20 per cent of rural households did not have a BPL card. Further, in a country where the proportion of under-nourished far exceeds the proportion of poor, linking PDS coverage to official poverty estimates does not make sense in the first place.
    Further, many states have also reduced PDS prices below the centre's prices. In AP, Chhattisgarh, Orissa and Kerala, rice is given at Rs. 2/kg; in Rajasthan wheat is sold at Rs. 2/kg since May 2010; in TN and Jharkhand, rice is currently priced at Re 1/kg. Lower PDS prices combined with rising market prices have dramatically raised people's stake in the PDS.
    Lessons for the future

    What lessons can we draw from all this for the Food Security Act? First, PDS coverage must be delinked from poverty estimates. Linking the two leads to large exclusion errors and hardship for the rural poor. The NAC proposal, where the coverage of “priority” households is effectively pegged to poverty estimates, is a step backward — several states have already expanded coverage. This is all the more worrying as recent pilots to test the proposed methodology of the next BPL Census (based on the Saxena Committee's recommendations) confirm the danger of large exclusion errors.



    Two, since 2007, states have demonstrated the political will to invest in the PDS, by putting in state resources to make it work. Measures that enhance voice (e.g., expanded coverage and reduced PDS prices) combined with other measures such as computerising records, improving grievance redressal procedures and so on, have begun to show results.
    Three, whatever the possible merits of cash transfers, the system is not ready for that: Opening of bank accounts is incomplete and access to banks remains very poor for large sections of the population. The UID infrastructure, which is necessary for a cash-transfers regime, is also far from ready — in the first six months of enrolment, only three million residents had been enrolled.



    The bottom line is that the PDS can deliver. In TN, where rice is sold at Re. 1/kg, some households are able to meet their basic monthly food needs (including dals and edible oil) for Rs. 100! Other states are moving in that direction: In HP and AP, rural residents can now buy subsidised grain, pulses and oil at the local PDS outlet. Importantly, the signs of revival are not restricted to the usual suspects, but include “basket cases” like Orissa and UP. The PDS is a system that people have learnt to use. Foisting a completely new regime of cash transfers on them without first putting systems in place would be very dangerous.


    The Hindu : Arts / Magazine : PDS: Signs of revival
     
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    Evaluation of Targeted PDS carried out by plan body, World Bank: Thomas

    Minister of state for consumer affairs, food & public distribution K V Thomas in written reply to a question in Lok Sabha on Tuesday informed that evaluation studies of Targeted Public Distribution System (TPDS) have been done by several agencies including the Planning Commission and World Bank.

    He added that as per the report of the Programme Evaluation Organisation (PEO) of the Planning Commission on Performance Evaluation of TPDS (2005), the implementation of TPDS is hampered due to targeting errors, prevalence of bogus cards and diversion of food grains from the supply chain. The World Bank has prepared a report titled Social Protection for a Changing India (2011), which deals with key safety net, social assistance and social security programmes including the PDS. The report indicates that there is a gap between the release of food grains by the Food Corporation of India (FCI) and the offtake of food grains by the households, which is due to leakages / diversion of allocated food grains.

    The minister said that TPDS was operated under the joint responsibility of Central government and state / UT governments. The Central government is responsible for procurement, allocation and transportation of food grains upto the designated depots of the FCI. The operational responsibilities for lifting and distributing the allocated food grains within the states / UTs, identification of eligible BPL families, issuance of ration cards to them and supervision over distribution of allocated food grains to eligible card-holders through the Fair Price Shops (FPSs) are of the state / UT governments.

    Government closely monitors the action taken by state / UT governments in respect of irregularities noticed in the implementation of TPDS. Complaints as and when received by government from individuals and organisations, as well as through press reports are sent to the concerned state / UT governments for inquiry and action.

    “During the year 2010, 174 complaints relating to implementation of TPDS were received, which have been sent to the states / UTs. Government also regularly issues advisories to state / UT governments and reviews their performance during meetings and conferences. Periodic reporting has been prescribed and utilisation certificate for the food grains allocated are obtained from the state / UT governments,” Thomas added.

    The minister said that strengthening and streamlining of TPDS is a continuous process. In consultation with the state / UT governments, a Nine Point Action Plan was evolved in 2006, which inter-alia includes continuous review of BPL / AAY list and to eliminate bogus / ineligible ration cards along with strict action to be taken against the guilty to ensure leakage free distribution of food grains. To improve functioning of TPDS, states / UTs have also been advised to ensure timely availability of food grains at FPSs, greater transparency in functioning of TPDS, improved monitoring and vigilance at various levels and introduction of new technologies such as computerisation of TPDS operations at various levels.

    Food & Beverage News: Top Stories - Evaluation of Targeted PDS carried out by plan body, World Bank: Thomas
     
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    Shivraj orders action against PDS offenders

    Madhya Pradesh Chief Minister Shivraj Singh Chouhan has directed officials not to spare those involved in irregularities in the Public Distribution System (PDS) in the state.
    Addressing collectors and commissioners Sunday evening at the conclusion of a two-day meeting, the chief minister said the officers were free to conduct raids as the government would back them.
    Reviewing the law and order situation, he said criminal were getting bail early, and the public prosecutors must take this seriously.
    The habitual offenders should be externed and action should be taken against them under the National Security Act, he said.


    Shivraj orders action against PDS offenders - Indian Express
     
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    Policing PDS with right to information weapon

    Gujarat has become the first state in the country where disclosure of all stocks has been made compulsory at fair price shops. This became possible due to the efforts of an 18-year-old in a Gujarat village and his use of the Right to Information Act.



    The teenager, Bhadresh Wamja, filed an RTI application seeking details of the stocks dispatched from the public distribution system (PDS) to the fair price shops. A second year B Com student, who heads a movement called Youth Against Corruption in his area, Wamja came to know through newspapers that APL (above poverty line) cardholders were eligible to get rations under the public distribution arrangement through fair price shops.



    Himself an APL card holder, Bhadresh was in for a surprise when he enquired about it from his village fair price shop. He was flatly turned down and informed that there were no such provisions for APL card holders. So he was forced to purchase his requirements at prevailing market prices. In a quandary, he called up the 'mahiti adhikar' (information rights) helpline and was told that the department of food and civil supplies of the Gujarat government dispatches foodgrains and assorted supplies every month for BPL (below poverty line), APL and Antyodaya cardholders.
    Bhadresh filed an RTI application on 11 February 2011, seeking details of the stock dispatched and received by the shop. "This brought problems for me and my family and we began receiving threats from the local village functionaries as the PDS shopkeeper and the gram sevak were all involved in the irregularities", he pointed out.


    Undeterred, Bhadresh contacted the whistleblower helpline of the Mahiti Adhikar Gujarat Pahel which helps and guides all such RTI Activists. The helpline immediately wrote to the food and civil supplies department of the government, the RTI chief and the relevant police station. This resulted in arrest of Paresh Jaiswal who operated the PDS shop. Jaiswal however secured bail in two days and the vicious circle of threats and warnings began all over again, alleged Bhadresh.


    "I was threatened several times, but I did not give up and kept up the fight. However, some of my relatives intervened to bring about a compromise", Bhadresh said.



    He, however, filed an RTI application against the civil supplies department on March 1. The continuing crusade finally bore results and on April 30, the state government passed an order under section 4(1)(b), making it compulsory for all fair price shops in the state to disclose all the details about rations received and kept in the shop. "This is a just reward for the initiative of the young lad which will prove a boon for all ration cardholders in the state", said Pankti Jog of Pahel here on Tuesday.


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    Revamping PDS: a tale of two States

    Tired of its own inefficiency in plugging leaks and ensuring timely delivery of ration, the Madhya Pradesh government has decided to take the privatisation route to improve its ailing Public Distribution System.
    The new system is being put in place by a corporate consortium led by HCL Infosystems with Edenred India Private Ltd ― a subsidiary of corporate meal voucher provider and multinational hospitality giant Accor ― and Virgo Softech Pvt. Ltd, an Indore-based IT firm as the other two members.



    HCL will put in place a system to computerise the PDS apparatus and register beneficiaries to be linked with UID, while Edenred will print and provide the food coupons.



    Virgo Softech will provide the IT manpower and enrolment teams for door to door registration, biographic and biometric data capturing.



    With this, Madhya Pradesh will become the first State in the country to link its PDS to the UID with private participation on such a massive scale.
    The State government’s move needs to be seen in the context of the larger national picture to scrap the existing Targeted Public Distribution System altogether and replace it with food coupons or cash transfers. The UPA government’s Chief Economic Advisor Kaushik Basu has vociferously advocated the deregulation of the PDS and moving to cash transfers or food coupons.



    Interestingly in Madhya Pradesh’s case, HCL infosystems has provided highly inflated figures about the scope and coverage of the project on its website.



    According to HCL, the contract would involve setting p an efficient food distribution system with “over 10 million expected transactions per month at Rs. 10.98 (per transaction per family) spread over 78 months”.
    Based on these figures, the government ought to be paying the consortium Rs. 131.76 crore per year and over Rs.850 crore for the entire 78-month duration.



    However, Dipali Rastogi, Commissioner, Food and Civil Supplies department corrects the figures provided by HCL thus.



    “The total cost of implementation for a period of sixty months (not 78) comes to Rs. 454 crore or Rs.98 crore a month but we will be saving Rs. 420 crore by eliminating duplicate ration cards. So the cost to the government is next to nil. What HCL write on their website is their call,” says Ms. Rastogi.
    But why privatise?



    “Look, plugging leakages and rooting out corruption has proved to be beyond our core-competency. If we can have someone else provide these services on our behalf in a better and cost-effective manner, where is the problem? I admit it is a brave step, but necessary nonetheless,” says Ms. Rastogi.



    However, the fact that UID can cure the problem of beneficiaries being left out of the PDS net is contested.
    “UID can, at the most, address the problem of duplication of cards. But misclassification of families in the “BPL census” has little to do with identity fraud or “duplication”. Misclassification can occur when the criteria used for identification of BPL families are incorrect,” says development economist Reetika Khera.



    “As for food coupons, they can be an important “last mile” authentication measure. However, the Bihar experience shows how this accountability measure can be undermined. For instance, in many cases, the coupons never reached card holders, they went straight into the hands of dealers; or dealers “charged” two months worth of coupons, while distributing only one month’s grains. The accountability measures can only work along with other safeguards, most importantly a good vigilance system, which in turn depends on political will,” says Ms. Khera.
    According to UIDAI chairperson Nandan Nilekani the UID card will be voluntary but the MP government is going to make UID mandatory for PDS beneficiaries.



    Chhattisgarh

    While the Madhya Pradesh government has set an example of sorts by privatising the bulk of its PDS service, neighbouring Chhattisgarh achieved its much celebrated PDS revamp for a mere Rs. 4 crore.
    How?



    “We had our entire beneficiary database digitised by the National Informatics Centre (NIC). For better monitoring, we put in place a system of doorstep delivery of ration at the fair price shop and intimated people of it by SMS alerts. We also set up a dedicated call centre to receive complaints and grievances. Finally, we brought the supply chain under online monitoring to plug leakages,” says Rajeev Jaiswal, Joint Director, Chhattisgarh food and civil supplies department.



    And why did Chhattisgarh decide to skip UID and food coupons?



    “Look, the system that is in place is not faulty, its implementation is. We thought messing with the existing system would create a new set of problems. For instance, old or disabled people often have neighbours or relatives bring them their ration. That is not possible with the UID or food coupons. As for bogus cards, we eliminated over 2.5 lakh bogus cards through door-to-door physical verification,” says Mr. Jaiswal.

    The Hindu : States / Other States : Revamping PDS: a tale of two States
     
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    State launches toll-free PDS complaint service

    The state Civil Supplies department has launched a statewide toll-free helpline service to deal with complaints regarding the Public Distribution System (PDS). The service (18002335500) will be monitored by the director, civil supplies, in Gandhinagar.

    “All district and taluka offices have been instructed to designate a special officer in their respective jurisdictions to ensure that the complaints received over the toll-free number get resolved within reasonable time,” said a senior department official.

    The official added that the service will guide the callers, take their complaints and pass it to the officials concerned.

    The department recently passed an order observing that the food supply given to the PDS shops are misused and often diverted to open markets.

    To stop this, the department has asked taluka and zonal civil supply officials to take photo and record biometric details of all the shopkeepers and forward it to store managers to cross check their details.

    http://www.indianexpress.com/news/state-launches-tollfree-pds-complaint-service/830350/
     
    Last edited: Aug 13, 2011
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    Poor want reformed PDS, not cash transfers

    New Delhi : A majority of Delhi's poor prefer a reformed Public Distribution System (PDS) over cash transfers, a survey by NGO Rozi Roti Adhikar Abhiyan (RRAA) said Thursday.

    The survey was conducted in July in slums and resettlement colonies across Delhi, covering 4,005 households.
    "We found that about 91.4 percent respondents were strictly against the concept of cash subisidies," said Dipa Sinha, research scholar at the Jawaharlal Nehru University (JNU) here.

    Among the PDS reforms suggested in the survey is the system's universalisation, an idea which 87.4 percent agreed to, states the survey.

    "Universalisation will ensure distinction between above poverty line (APL) and below poverty line (BPL) families is done away with," Sinha said.

    "Three quarters of respondents did not want to do away with the PDS because they felt the ration card doubles up as an identity proof, especially in times of death, birth, marriage and employment," said Sehba Farooqui, another member of RRAA.

    "Secondly they feel that it will take away their food security that the PDS ensures, for the money might be used for other needs," she added.

    Poor want reformed PDS, not cash transfers | TwoCircles.net

    Dharmendra Yadav, another member of the RRAA, added: "It is our demand that the issue be placed in the public domain and not forcefully thrust by the government.

    "The government must ensure the people a reformed PDS which the people desire. It is not an impossible goal and is merely a matter of political will," he added.
     
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    States with poor off-take of special PDS food grains may lose quota

    ‘If the lifting is not at least 50 per cent, we will allocate the remaining quantity to those States where offtake is better'

    States which do not lift their special allocation of food grains will lose their quota, warned Minister of State (Independent Charge) K.V. Thomas here on Wednesday.

    In his meeting with the Food Ministers of seven States, the Minister said the lifting of 15 million tonnes of specially allocated food grains since January was only 40 per cent in these States. “I have told the State representatives that if the lifting is not at least 50 per cent, we will allocate the remaining quantity to those States where offtake is better.”
    Reviewing the procurement of food grains and the storage capacity, the Minister asked the States to be ready for implementation of the proposed Food Security Bill. The Bill is likely to be introduced in the monsoon session of Parliament.

    The Food Ministers and Food Secretaries of Andhra Pradesh, Haryana, Madhya Pradesh, Orissa, Punjab, Rajasthan and Uttar Pradesh were present.

    Storage problem

    Faced with the storage of a bumper harvest this year, the Minister emphasised the need for higher lifting of allotments under the targeted public distribution system. The Centre wants creation of storage spaces by faster movement of food grains and higher consumption. Since January, the Central government has allocated 5 million tonnes of food grains each for the below poverty and above poverty line categories. Another 5 million tonnes was allocated to 150 poorer districts on the orders of the Supreme Court

    The Minister sought to temper his warning with the assurance that if a State government required more food grains it would be allocated under various schemes. At the same time, he asked them to take measures to bring down damage of food grains during procurement, storage and transportation.

    According to him, the damage to food grains had come down from 2.5 per cent in 2007-08 to 0.07 per cent this year.
    The Minister pointed out that of the 73 lakh tonnes of food grains storage capacity approved under the Private Entrepreneurs Guarantee Scheme (PEG), 63 lakh tonnes worth of capacity has been sanctioned in the eight States. Punjab and Andhra Pradesh were asked to expedite the creation of extra storage capacity for 15.2 million tonnes of food grains.

    At present the government has a storage capacity of 62.23 million tonnes of food grains as against burgeoning stocks at 65 million tonnes. As a result, a significant quantity is stored in the open.

    Nilakeni's proposal

    Making a presentation on IT for PDS and cash transfer for food, Unique Identification Authority of India (UIDAI) chairman Nandan Nilakeni proposed the setting up of a National Information Utility through Aadhar infrastructure with States as partners.

    In answer to a question, Mr. Thomas said the Empowered Group of Ministers had postponed a decision on the proposal to export 2 million tonnes of wheat “as international price of the commodity has dipped”.
    Most of the Ministers sought early settlement of their claims for procurement of food grains from the Food Corporation of India. Punjab, Andhra Pradesh, Chhattisgarh and Madhya Pradesh also requested for quick movement of surplus food grains to consuming States to free up storage spaces.

    The Hindu : News / National : States with poor off-take of special PDS food grains may lose quota
     
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