Public Distribution System

(PDS)
By- Shreet Mishra

Public Distribution System

(PDS)

Areas covered

Evolution of Present
Procurement
Distribution
Scenario of public distribution system

A detailed study

Evaluation of Public Distribution System

Suggestions / Possible solutions

Evolution of PDS in India

Rationing was first introduced in Bombay in

1939 by British Govt. so as to ensure equitable

food grain to urban consumer in face of rice
prices.

The concept (PDS) was brought up in the year

1942 during second world war due toshortage

of food grains.

Basic objective was price stabilization.

Food grain policy committee (1943) introduced

rationing system exclusively for urban

consumers

Evolution of PDS in India

Till late 1960s, govt. focus was on cheapprocurement of food.

Imposition of levies, regulation on interstate movement (surplus to

deficit), restriction on exports etc.

Food Corporation Of India(FCI) was established in 1965 as an

autonomous body working on purchase, storage, transportation,

distribution and sale of food grains.

In 1970s, focus shifted to support to farm-gate prices, stabilization and

subsidy for lower income group.

After undergoing several changes under five year plans, PDS role

became crucial when the entire population of country was brought

under it in the seventh five year plan.

In 1984, GoI created department of food and department of civil

supplies, later being in-charge of PDS headed byminister of food and

civilsupplies

Evolution of PDS in India

By 1984, there were 320 thousand fair price shops all

over India. wheat, rice, sugar, kerosene, edible oil and

soft coke were supplied as essential commodities.

Distribution of these commodities was made possible by

multifaceted coordination of different government

agencies such as FCI for food grains, FCI / Civil Supplies
corporation for sugar, edible oil by State trading
corporation and soft coke by Coal India Limited.

However, studies show that major weakness is in

operational inadequacy in irregular supply to FPS and

poor quality leading ton on drawl.

PDS, till 1992, was a general entitlement scheme for all

consumers without any specific targets.

Evolution of PDS in India

Essential supply programme gave way to
Revamped public distribution system (RPDS)
in1992, under which 1775 blocks were identified as

economically and socially backward.

It was launched so as to improve reach of PDS to far- flung, hilly,

remote and inaccessible areas where substantial section of poor

live.

The scheme involved development of infrastructure such as

additional fair price shops & storage capacity and facility of door
delivery for FPS.

Despite several efforts, PDS was widely criticized for its failure

to serve population BPL, its urban bias, negligible coverage in

states with highest concentration of poor people, lack of
transport and accountable arrangements for delivery.

Procurement
Food grains are procured at minimum support price

(MSP),by the govt.

Decentralized procurement scheme.

Central government meet the entire expenditure

incurred in the process by the state government as per

the approved costing.

Total
procurement of rice
including paddy during kharifmarketing season (KMS) in

2008-09 was 336.85 lakh tonnes.Andhra Pradesh,

Chattisgarh, Orissa, Punjab and Uttar Pradesh together
contribute about 80% to this.

Procurement
A total of 226.89 lakh tonnes ofwheat
Wheat was procured in therabi marketing season (RMS)

during 2008-09. Haryana, M.P., Punjab and U.P. together

contribute about 90% to this.

Figures show that more than 80% of total wheat and rice

procurement is done by state agencies (SWC, CSC, STC etc.).

The average buffer stock of food grains with FCI was

10.66mT in 2006-07 and utilization of storage capacity was

only54% as on March 2007.

The carrying cost of buffer stock per quintal was Rs. 407 /-,

the procurement cost for wheat and rice ranges between Rs.
180 200 /- and the distribution cost is about Rs. 280 /- per
quintal of food grain.

Distribution
Food grains as per allocation to state government are further

distributed to district and block level. From there food grains

are delivered to fair price shops as per their demands.

There are around 5 lakhs FPSs across India. Food grains are

either door delivered to or are procured by, FPS and are

finally sold to targeted end consumers at subsidized prices
as per entitlements.

For people under APL, common grade rice is sold at a central

issue price of Rs. 790 /- per quintal whereas grade A rice is

sold at Rs.895 /- per quintal and wheat is sold at Rs. 610 /per quintal.

For people under BPL category, both common grade and

grade A rice is sold at a central issue price of Rs. 565 /- per

quintal and wheat is sold at Rs. 415 /- per quintal.

Distribution
In addition to distribution of food grain to population under BPL and APL,

allocation is made to population identified undervarious schemes such as:

Antyodaya Ann YoJna

Mid day meal scheme

Annapurna Scheme

Wheat based nutrition programme

Food grains to adolescent girls and lactating mothers nutrition programme

SC/ST/OBC Hostels& welfare institutions

EVALUATION OF PDS
According to an independent study carried out by the Program

Evaluation Organization (PEO) of Planning Commission, it is

found that about 58 per cent of the subsidized food grains
issued from the Central Pool do not reach the BPLfamilies.
According to this study, for one rupee worth of income transfer
to the poor, the GoI spends Rs.3.65, indicating that one rupee of
budgetary consumer subsidy is worth only 27 paisa to the poor.
This study also reveals that over36% of the budgetary subsidies
on food are siphoned off the supply chain. The Government
spends around Rs. 30,000 crore per annum for subsidy. That
means Rs. 10,800 crore ends up in wrong hands. According to
this study, leakages and diversions raised the delivery cost in
the sense that for every kilogram of food grains delivered to the
poor, the GOI had to issue 2.4 kg. ofsubsidized grains from the
Central Pool. In other words, the amount of implicit subsidy per
kilogram of food grains delivered to the poor is more than the
difference between the Economic Cost and Central Issue Price.

States Running PDS Better

Andhra Pradesh Tamil Nadu are two states who have

taken initiatives to make PDS e-governed.

Andhra Pradesh
now has electronic based solution toTPDS wherein

movement of food grains from FCI godown still FPS,

sale of food grains at FPSs (through barcodedration cards) and payment to dealers at
different levels are monitored online.

The information on lifting, receipt and issue of food

grain sat different levels is transferred to concerned

people and to central hub using hand-held device
using SMS

States Running PDS Better

Tamil Nadu and Karnataka also have vehicle

tracking system wherein the details such as

vehicle details, quantity, destination, date of
delivery etc. can be tracked online.

Though Himachal Pradesh is not having any

electronic PDS monitoring system, the

leakage, diversion and targeting errors are
among the lowest across the country

Shortcoming of PDS
Non availability of food grains at FPSs.

Poor quality of food grains

Irregular opening of FPSs.

Lack of training of FPS dealers.

Lack of information.

Suggestions
Food consumption pattern should be given due

weightage while deciding composition of food

grains .

Sale of food grains to beneficiaries via biometric

system.(transaction done on acceptance by

beneficiaries).

Ensure sufficient income at all levels in the

system.

Training on duties and obligations to all the

people in the system.

Easy to access complaint redresser system.

THE
END

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