PDS/ Ration/ Food Security

PDS/ Ration/ Food Security

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According to the Public Distribution System (PDS) and Other Sources of Household Consumption, 2004-05, which has been produced by the National Sample Survey 61st Round, (July 2004 - June 2005), Volume I:

*    81% of rural households and 67% of urban households held ration cards. [B]elow [P]overty [L]ine (BPL) cards were held by 26.5% of rural households and 10.5% of urban households. Antyodaya cardholders formed less than 3% of rural households and less than 1% of urban households. 

*    In Andhra Pradesh, the proportion of BPL-card-holding households (rural: 54%; urban 27%) was more than double the national average. The proportion of BPL cardholders was above 40% in rural areas of Karnataka and Orissa as well. In urban Kerala, nearly 20% of households had BPL cards.

*    In rural areas, the percentage of households having Antyodaya cards was 5% for Scheduled Tribes (ST), about 4.5% for Scheduled Castes (SC), and 2% for the other groups – Other Backward Classes (OBC), and the rest. BPL cards were held by 40% of ST households, 35% for Scheduled Castes (SC), about 25% of OBC households, and 17% of other households. In urban areas, however, it was the Scheduled Castes, which had the highest percentage (17%) of households holding BPL cards, while ST and OBC households had about 14% each. In urban India the ST and SC groups had more than 1% of households with Antyodaya cards, while the other groups had less than 1%.

*    In rural areas BPL cards were held by 43% of “agricultural labour” households and 32% of “other labour” households.

*    51% of households in the lowest size class of landholding “<0.01 hectares” had no ration card at all, while in all other size classes 77-86% households had a ration card of some kind. The highest proportion of households with ration cards was 86%, seen in the classes “0.41-1.00 hectares” and “1.01-2.00 hectares”. In respect of ration cards meant for the poor, the class “0.01-0.40 hectares” was the class of households with the highest proportion of cards for both BPL (32%) and Antyodaya (4%). It was followed by the class “0.41-1.00 hectares” (BPL, about 28%, Antyodaya, 3%). The bottom class “<0.01 hectares” had 22% of its members holding BPL cards, but this was smaller than the overall proportion of BPL cardholders taking all classes together (26.5%). Likewise, Antyodaya cards were held by 2.7% of households in the bottom class, compared to 2.9% for all households.

*    Among the top 5% of rural population ranked by monthly per capita expenditure (MPCE), an estimated 11% of households held BPL ration cards. Among the next 5% of rural population, 14% of households held BPL cards, and among the next 10% of rural population, 18% of households held BPL ration cards.

*    The major State where consumption of rice from PDS was most common was Tamil Nadu (rural: 79% households consuming from PDS; urban: 48%), followed by Andhra Pradesh (rural: 62%; urban: 31%), Karnataka (rural: 59%; urban: 21%) and Kerala (rural: 35%; urban: 23%). Even in Gujarat and Maharashtra, where rice is not the major cereal food, 32% and 28% households, respectively, consumed PDS rice. On the other hand, PDS rice was consumed by only a small proportion of households in West Bengal (rural: 13%; urban: 5%), Assam (rural: 9%; urban: 2%) and Bihar (rural: 1%; urban: 0.7%), though rice is the major cereal food in these States.

*    PDS consumption of wheat/atta was most common in Karnataka (rural: 46%; urban: 15%), rural areas of Gujarat (29%) and Maharashtra (26%), and in Madhya Pradesh (rural: 20%; urban: 10%).

*    PDS consumption of sugar was most prevalent in Tamil Nadu (rural: 65% households; urban: 64%), to be followed by Assam (rural: 40%; urban: 16%) and Andhra Pradesh (rural: 36%; urban: 15%). On the other hand, in both rural and urban areas, less than 1% households consumed PDS sugar in Punjab, Haryana, Bihar and Jharkhand, and fewer than 2% in Orissa and Uttar Pradesh. The all-India proportions of households were 16% for rural areas and 12% for urban.

*    Over 55% of rural households used PDS kerosene in all major States except Punjab and Haryana. Use of PDS kerosene was most common in West Bengal for both rural areas (91%) and urban areas (60%). 

*    Among the four commodities, kerosene had a much larger share of quantity of consumption coming from PDS – 77% for rural and 57% for urban India. For rice the share of PDS in total quantity consumed was 13% for rural and 11% for urban; for wheat it was 7% for rural and 4% for urban, and for sugar, 9.5% for rural and about 6.5% for urban India.

*    Households holding a BPL or Antyodaya ration card exhibited a much greater degree of dependence on PDS than the population as a whole. This was most marked in case of wheat, where, for both rural and urban areas, as much as 28% of quantity consumed by such households came from PDS compared to 7% for the rural population as a whole and 4% for the overall urban population. For rice and sugar, the percentage contribution of PDS purchases to total consumption (in quantity terms) for these households was double the percentage share of PDS in consumption of the general population in rural areas and three times the percentage share of PDS for the general population in urban areas.

*    The Midday Meal scheme benefited children from an estimated 22.8% of rural households in 2004-05, the Integrated Child Development Scheme (ICDS) benefited 5.7% of rural households, the Food-for-Work Scheme, only 2.7%, and the Annapoorna scheme for the elderly, 0.9%. In urban India, while children from 8% of households benefited from the Midday Meal scheme, and the ICDS scheme benefited 1.8% households, only 0.2% urban households benefited from Annapoorna, and only 0.1% from Food for Work.

*    Among household occupational types in rural India, the (mostly manual) labour households – “agricultural labour” and “other labour” – had the highest proportions of households benefiting from each of the four schemes. Similarly, in urban India, “casual labour” households had the highest proportions of beneficiary households from each of the four schemes. 

*    Among social groups, the Scheduled Tribes had the highest proportion of Food-for-Work beneficiary households in both rural and urban India, and also the highest proportion of ICDS beneficiaries.

*    Rural households possessing more than 0.40 hectares of land had a higher representation among recipients of benefits from the schemes than households possessing 0.40 hectares of land or less. The class of households possessing 0.41-1.00 hectares of land had the highest proportions of Food-for-Work and Midday Meal beneficiary households among six classes of rural households formed on the basis of size of land possessed.

*    In each of the top four classes among 12 classes of rural households formed on the basis of monthly per capita expenditure level (MPCE), 2-4% of households were ICDS beneficiaries.

*    The Midday Meal scheme benefited over 10% of rural households in most State/Uts (between 18% and 33%in 12 major States).

*    Among the major States, the highest proportions of (rural) Food for Work beneficiaries were found in Rajasthan (12%) and Orissa (8%).

*    As much as 62% of quantity of milk consumed in rural India came from home produce compared to 40% for wheat/atta, 30% for rice, and 11-18% for seven common pulse varieties. For eggs, 14% of consumption, and, for chicken, 13%, came from homegrown stock.

*    Among common vegetables and fruits, home produce was most important in case of coconuts (37% of quantity consumed in rural India), reported by as many as 28% of rural households. For arum and pumpkin, about a quarter of rural consumption came from homegrown stock.

According to the 11th Five Year Plan,

*    The PDS is a major State intervention in the country aimed at ensuring food security to all the people, especially the poor. The PDS operates through a large distribution network of around 4.89 lakh fair price shops (FPS), and is supplemental in nature.

*    Under the PDS, the Central Government is responsible for the procurement and transportation of foodgrains up to the principal distribution centers of the FCI while the State Governments are responsible for the identification of families living below the poverty line, the issue of ration cards, and the distribution of foodgrains to the vulnerable sections through FPSs. PDS seems to have failed in serving the second objective of making foodgrains available to the poor. If it had, the consumption levels of cereals should not have fallen on average—as it has consistently over the last two decades.

*    With a view to improving its efficiency, the PDS was redesigned as TDPS with effect from June 1997. The TPDS envisages identifying the poor households and giving them a fixed entitlement of foodgrains at subsidized prices. Under the TPDS, higher rates of subsidies are being given to the poor and the poorest among the poor. The APL families are also being given foodgrains under TPDS but with lower subsidy. The scale of issue under TDPS for Antyodaya cardholders began with 10 kg per family per month, which has been progressively increased to 35 kg per family per month with effect from April 2002.

*    As identified by various studies, the major deficiencies of the TPDS include: (i) high exclusion and inclusion errors, (ii) non-viability of FPSs, (iii) failure in fulfilling the price stabilization objective, and (iv) leakages.

Performance Evaluation of TPDS

*    Only 22.7% FPSs (fair price shops) are viable in terms of earning a return of 12% on capital.
*    The offtake by APL cardholders was negligible except in Himachal Pradesh, Tamil Nadu, and West Bengal.
*    The offtake per BPL (below poverty line) card was high in WB, Kerala, Himachal Pradesh, and Tamil Nadu.
*    The offtake by the poor under TPDS was substantially higher than under universal PDS.
*    There are large errors of exclusion and inclusion and ghost cards are common.
*    High exclusion errors mean a low coverage of BPL households. The survey estimated that TPDS covers only 57% BPL families.
*    Errors of inclusion are high in Andhra Pradesh, Karnataka, and Tamil Nadu. This implies that the APL households receive an unacceptably large proportion of subsidized grains.
*    Leakages vary enormously between States. In Bihar and Punjab, the total leakage exceeds 75% while in Haryana and UP, it is between 50 and 75%.
*    Leakage and diversion imply a low share of the genuine BPL households of the distribution of the subsidized grains. During 2003–04, it is estimated that out of 14.1 million tonnes of BPL quota from the Central Pool, only 6.1 million tonnes reached the BPL families and 8 million tonnes did not reach the target families.
*    Leakage and diversion raised the cost of delivery. For every 1 kg that was delivered to the poor, GoI had to issue 2.32 kg from the Central Pool.
*    During 2003–04, out of an estimated subsidy of Rs 7258 crore under TPDS, Rs 4123 crore did not reach BPL families. Moreover, Rs 2579 crore did not reach any consumer but was shared by agencies involved in the supply chain.

Steps undertaken to strengthen the TPDS

*    A Citizens’ Charter has been issued in November 1997 for adoption by the State Governments to provide services in a transparent and accountable manner under PDS. Instructions have been issued for involvement of PRIs in identifications of BPL families and in Vigilance Committee.
*    The PDS (Control) Order 2001, inter alia, covers a range of areas relating to correct identification of BPL families, issue of ration cards, proper distribution, and monitoring of PDS-related operations.
*    A new scheme ‘Computerization of PDS Operations’ with a token provision of Rs 5 crore was introduced in 2006–07. The computerization of PDS operations would be an improvement on the existing system of ration cards, that is, the present manual system of making entries, etc. The new system will have personal details of all members of the family including their entitlement and the entire network of PDS from taluk to State level will be linked.
*    This is a new scheme introduced during the Eleventh Five Year Plan to strengthen the PDS. The scheme aims at taking effective measures to curb diversion and leakages through Global Positioning System, Radio Frequency Identification Device, etc.
*    The Village Grain Bank Scheme, which was hitherto with the Ministry of Tribal Affairs, has been transferred to the Department of Food and Public Distribution. The objective of the scheme is to establish Grain Banks in chronically food-scarce area and to provide safeguard against starvation during the lean period. The scheme is also to mitigate drought-induced migration and food shortages by making foodgrains available within the village during such calamities.
*    Construction of godowns was conceived during the Fifth Five Year Plan to build and increase the storage capacity available with FCI for storage of foodgrains.
*    A recommendation of the High-level Committee on Long Term Grain Policy (2000) was that instead of the current distinction between APL, BPL, and Antyodaya in terms of issue pricing for rice and wheat, there should be a single-issue price for grain issued by the FCI from its warehouses. This recommendation, sometimes identified with the return to universal PDS from TPDS adopted in 1997, has been criticized on a number of grounds. First, that if the same price for BPL and APL households was charged, this would not be financially viable for the BPL. If existing AAY and BPL cardholders were charged a higher price, there would be a diversion of benefits from the relatively poor to the relatively rich. Second, there might be pressure to keep the uniform CIP low as high common price for BPL and APL would have adverse consequences for the poor. On the other hand, a low CIP would increase even further the fiscal subsidy. Third, any widening in the effective reach of PDS due to its universalization would put unbearable pressures for the supply of grain into the PDS.


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