Mentor’s comment

• In the intro, mention the importance of PDS for the country.
• In the body, significant steps taken by the government to stop the leakage and increase the efficiency can be mentioned-Automation of Fair Price Shop, direct benefit transfer, use of Aadhaar seeding, deletion of duplicate entries, etc.
•  Conclude stating the need to reform the PDS and bringing down the coverage under it to make it more effective.

Answer:

The Centre is proposed food subsidy allocation for 2019-20 is Rs 1.84 lakh crore. In spite of such high expenditure, according to the 2019 Global Hunger Index, India ranks 102nd out of 117 qualifying countries. With a score of 30.3, India suffers from a level of hunger that is a very serious concern. It shows how the PDS system has failed to meet its objectives. 

What is the Public Distribution System?

The public distribution system (PDS) is an Indian food Security System established under the Ministry of Consumer Affairs, Food, and Public Distribution. PDS was introduced around World War II as a war-time rationing measure but has evolved into a universal scheme for the distribution of subsidized food.

With the coming of the National Food Security Act (NFSA), 2013 providing for the Right to Food as a legal entitlement by providing subsidized food grains to nearly two-thirds of the population PDS has expanded exponentially.

Objectives of the Public distribution system

There are three basic objectives of the public distribution system in India: 

• Provide essential food grains at cheap and subsidized prices to the consumers so as to insulate them from the impact of rising prices of these commodities.
• To maintain a buffer stock so as to meet any exigencies in food production.
• Maintaining the minimum nutritional status of our population.

Issues with the Food Grain Distribution System:

• Inaccurate identification of households: Presence of inclusion and exclusion errors in identification of beneficiaries.
• Leakages in the delivery system: This takes place during the transportation of food grains to ration shops and from there to the open market.
• Financially inefficient: The center bears a large financial burden of the food subsidy as the cost of procuring and delivering food grains is about six times its sale price.
• The shortfall in the storage capacity: It leads to the rotting of food grains.
• The provision of minimum support price (MSP) has encouraged farmers to divert land from production of coarse grains that are consumed by the poor, to rice and wheat and thus, discourages crop diversification.
• Environmental issues: The over-emphasis on attaining self-sufficiency and a surplus in food grains, which are water-intensive, has been found to be environmentally unsustainable.

Reformative steps that were taken by the Government

• Automation of Fair Price Shops
• Direct Benefit Transfer (Cash): where food subsidy is directly credited to the account of the beneficiaries. 
  • Aadhaar Seeding in PDS: To weed out duplicate/in-eligible/bogus ration cards and to enable rightful targeting
  • Deletion of ration cards: As an outcome of digitization of Ration Cards/beneficiary records, de-duplication due to Aadhaar seeding, transfer/migration/deaths, change in the economic status of beneficiaries.
• Digital/Cashless/Less-cash Payments in fair price shops.
• Food Corporation of India(FCI) Reforms: Shanta Kumar Committee was formed to look into the functioning of FCI and suggest reforms.
• End to end computerization of food grain procurement, storage, transport, and distribution.
• Silos: Use of modern technology in storage
  • Online Depot System – To bring all operations of FCI Godowns online and to check leakages and automate operations at depot level
• Supporting the Farmers – FCI has initiated special efforts for procurement in the Eastern States of India, where there were frequent complaints of distress sale of paddy and procurement system was ineffective.

Way forward:

Measures to make the PDS system more efficient and transparent can be:

• Decentralized procurement operations by leading states that have gained sufficient experience in this regard. This would help the Food Corporation of India (FCI) to focus on lagging states.
• Home delivery of food grains can help in increasing last-mile connectivity.
• Shanta Kumar Committee recommendations should be fully implemented.
• Engagement of the private sector can help to modernize stocking and warehousing facilities.

The government initiatives for reform are in the right direction but can be further strengthened by the increased public participation through social audits and participation of SHGs, Cooperatives, and NGOs in ensuring the transparency of the PDS system at ground level.