one-nation-one-ration-card-scheme-and-pds-reforms

Context: Finance Minister Nirmala Sitharaman on Thursday announced the national rollout of a ‘One Nation, One Ration Card’ system in all states and Union Territories by March 2021. 

Background

  • A new Central Sector Scheme on "Integrated Management of Public Distribution System (IM-PDS)" was launched by the Department of Food and Public Distribution mainly for the implementation of National Portability for the beneficiaries to lift the foodgrains from any FPS in the country.  
  • It was initially proposed to nationally roll out the ‘One Nation, One Ration Card’ scheme by June 1, 2020.
  • The scheme will help resolve the migrants crisis as migrants are facing a severe hunger crisis due to the Coronavirus lockdown.

How is the scheme different from the PDS scheme?

  • In the present system, a ration cardholder can buy food grains only from a Fair Price Shop (FPS) that has been assigned to her in the locality in which she lives. 
  • In the new scheme, a person can buy her share of foodgrains as per her entitlement under the NFSA, wherever she is based. The rest of her family members can purchase subsidised foodgrains from their ration dealer back home.

About the ‘One Nation, One Ration Card’ scheme

  • It will enable migrant workers and their family members to access PDS benefits from any Fair Price Shop in the country.
  • Under this initiative, there is no added burden on any State/UT, as the quota of foodgrains distributed to other States’/UTs’ beneficiaries through national portability, shall be periodically reconciled and adjusted between concerned States/UTs. 
    • Existing system of foodgrains distribution by States/UTs to own beneficiaries remains same/ unaltered, as this system intends to largely benefit the migratory beneficiaries under NFSA who frequently change their place of dwelling in search of employment, etc. across the country.
    • The new system, based on a technological solution, will identify a beneficiary through biometric authentication on electronic Point of Sale (ePoS) devices installed at the FPSs, and enable that person to purchase the quantity of foodgrains to which she is entitled under the NFSA.

Technology platforms of the scheme:

  • Platform for interstate portability: The Integrated Management of Public Distribution System (IM-PDS) portal (http://www.impds.nic.in/) provides the technological platform for the inter-state portability of ration cards, enabling a migrant worker to buy foodgrains from any FPS across the country.
  • Platform for distribution of grains: The other portal (annavitran.nic.in) hosts the data of distribution of foodgrains through E-PoS devices within a state.
  • The Annavitran portal enables a migrant worker or his family to avail the benefits of PDS outside their district but within their state. 

About Public distribution system 

  • It is a government-sponsored chain of shops entrusted with the work of distributing basic food and non-food commodities to the needy sections of the society at very cheap prices.
  • It is established under the Ministry of Consumer Affairs, Food, and Public Distribution.
  • PDS is operated under the joint responsibility of the Central and the State Governments. 
    • The Central Government, through Food Corporation of India (FCI), has assumed the responsibility for procurement, storage, transportation and bulk allocation of food grains to the State Governments. 
    • The difference between the economic cost of food grains and Issue Prices is incurred by the Central Government as consumer subsidy. 
    • The Central Government is also under obligation to procure food grains for meeting the requirements of the buffer stock to ensure food security of the country. 
    • The operational responsibility including allocation within State, identification of eligible families, issue of Ration Cards and supervision of the functioning of Fair Price Shops (FPSs) etc., rest with the State Governments.     
  • Under the PDS, presently the commodities namely wheat, rice, sugar and kerosene are being allocated to the States/UTs for distribution. Some States/UTs also distribute additional items of mass consumption through the PDS outlets such as pulses, edible oils, iodized salt, spices, etc.  

Govt. initiatives for PDS reforms

  • Aadhar Based Biometric Authentication (ABBA) - AADHAR seeding:: Seeding is the next step after receiving an Aadhaar number to check duplicity. 
    • The names, ages and details of individuals must match all other documents, which will in turn combine to form a coherent database.
  • Digitization 
    • Besides, several states have now installed electronic point of sale (ePOS) devices at their fair price shops to track the sale of foodgrains to actual cardholders on a real-time basis.
  • Direct Benefit Transfer (DBT scheme) for subsidies has resulted in significant savings across welfare schemes, including Rs 27,000 crore in PDS, LPG distribution and Mahatma Gandhi National Rural Employment Guarantee Act.
  • The 2015 Targeted PDS (TDPS) order requires a dealer to produce a monthly utilisation certificate of food allocation before claiming the allocation for subsequent months.
  • Integrated Management of Public Distribution System (IM-PDS) scheme
    • The main objective of the scheme is to introduce nation-wide portability of ration card holders under National Food Security Act, 2013 (NFSA), through 'One Nation One Ration Card' system. 
  • 'One Nation One Ration Card' system: Once 100 per cent of Aadhaar seeding and 100 per cent installation of PoS devices is achieved, the national portability of ration cards will become a reality.

Concerns with PDS: The system is often blamed for its inefficiency and rural-urban bias. Moreover, it has frequently been criticized for instances of corruption, black marketing, Ghost Subscribers, Leakages, Pilferage Lack of digitization.

  • Corruption: The most common and rampant form of irregularity in PDS is katauti – fraudulence by a dealer, wherein beneficiaries receive less than their sanctioned allowance.
    • E.g. in Jharkhand, the closing balance of food grain quantity of all districts is zero for every month. However, the dealers usually possess positive physical stock.
  • People left out of PDS Coverage: India’s population was about 121 crore in 2011 and so PDS covered approximately 80 crore people. 
    • However, applying the 67% ratio to a projected population of 137 crore for 2020, PDS coverage today should be around 92 crore.
    • Hunger deaths: Between 2015 and 2019, Jharkhand has recorded 23 deaths due to starvation and non-availability of subsidised food grains, according to The Right To Food campaign that works on food security.
  • No update of PDS coverage: The Centre’s calculation of the actual number of people to be covered in each State has remained “frozen.” 
    • Many State governments are reluctant to issue new ration cards beyond the numbers that will be provided for by the Central quota, making it difficult to reduce exclusion errors in the PDS.
    • Delay in 2021 census: With the 2021 census process being delayed due to the COVID-19 pandemic, any proposed revision of PDS coverage using that data could now take several years. 
  • The costs of food subsidy 
  • A Central food subsidy bill budgeted at Rs 1,84,220 crore for 2019-20 and the FCI’s rice and wheat stocks of 56.5 mt as on January 1 being way above the required 21.4 mt for this date, even after providing for the NFSA.
  • An analysis of FCI costs spanning 2001-16 suggests, however, that on average about 60% of the costs of acquisition, procurement, distribution and carrying stocks are in fact transfers to farmers
  • At the same time, the government needs to address the FCI’s mounting debts — an estimated 2.55 lakh crore in March 2020 in the form of National Small Saving Funds Loan alone — and revisit its current preference for not liquidating these in order to contain the Union government’s fiscal deficit. 
  • Depressing food prices: Extended food distribution of subsidised grain is akin to dumping and depresses food prices locally, in turn affecting farmers.
  • One nation, one ration card scheme: The scheme, as implemented now, has been utilised only sparingly by migrants, and concerns from States like Tamil Nadu where PDS is near-universal are yet to be addressed. 
  • Digital exclusion, Aadhar vs. right to food: People with incorrect names, mismatching dates of birth, end up unable to avail any welfare scheme that they are otherwise eligible for.
    • Jharkhand government’s own data shows that out of about 2.3 crore covered under the PDS, only 1.7 crore people have their Aadhaar seeded.
    • ABBA: For it to work smoothly, the machine has to access to the internet, biometric authentication is required. It risks excluding many people who do not have access to material availability.
    • Failures in checking corruption: ABBA simply could not check the unaccounted excess food grains left with dealers after the distribution of a month’s quota.

Way forward: 

  • The central vigilance committee led by D. P. Wadhwa has made several useful suggestions including automation of the weighing system
    • Doorstep delivery of food grain to fair-price shops
    • Speeding up cases pending in courts under the Essential Commodities Act and setting up inspection squads. 
  • The Shanta Kumar committee set up to look into the restructuring of the Food Corporation of India has recommended reducing the number of beneficiaries under the Food Security Act—from the current 67 per cent to 40 per cent. 
    • It has also recommended allowing private players to procure and store food grains, stopping bonuses on minimum support price (MSP) paid by states to farmers, and adopting a cash transfer system  so that MSP and food subsidy amounts can be directly transferred to the accounts of farmers and food security beneficiaries. 
  • Checking digital exclusion: The government can make progress on leakage without excluding beneficiaries by introducing reconciliation but not holding dealers accountable for past diversion as was done in Jharkhand.
    • There is a need to directly and regularly measure beneficiaries outcomes and  to understand how they are impacted by well-intentioned reforms and to motivate beneficiary-centric design of those reforms. 
  • Improving FCI: The Shanta Kumar report recommended repurposing the organisation as an “agency for innovations in Food Management System” and advocated shedding its dominant role in the procurement and distribution of grain.
    • The committee recommended creating competition in every segment of the food grain supply chain, from procurement to stocking to movement and finally distribution in TPDS, so that overall costs of the system are substantially reduced, leakages plugged, and it serves a larger number of farmers and consumers.
    • This could be done by bringing in investments, and technical and managerial expertise from the private sector.
    • FCI will be more business oriented with a pro-active liquidation policy to liquidate stocks in OMSS/export markets, whenever actual buffer stocks exceed the norms.
    • Revamping FCI’s transportation Network:
      • The FCI is overwhelmingly reliant on rail, which has several advantages over road transport.In 2019-2020 (until February) only 24% of the grain moved was by road. 
      • The FCI has, however, long recognised that road movement is often better suited for emergencies and for remote areas ,therefore it is imperative to focus on this mode of transportation.
    • Pre Positioning Strategy for disaster management: It would be useful for the State government and the FCI to maintain stocks at block headquarters or panchayats in food insecure or remote areas, in small hermetic silos or containers allowing State governments to respond rapidly.
    • There is a strong case for the central government to release stocks over and above existing allocations, but at its own expenses rather than by transferring the fiscal burden to the States. 
    • It also allows freedom to panchayats, for example, to sell grain locally at pre-specified prices until supply is restored. 
  • Relaxing the FIFO Principle:
    • The FCI’s guidelines follow a first in, first out principle (FIFO) that mandates that grain that has been procured earlier needs to be distributed first to ensure that older stocks are liquidated, both across years and even within a particular year. 
    • It is time for the FCI to relax this strategy in case of disasters, if it has not already, that enables movement that costs least time, money and effort.
  • Strengthening the Supply Chain: The FCI should consider expanding its role to support FPOs and farmer groups, to move a wider range of commodities including agricultural inputs such as seeds and fertilizers, packing materials and so on. 
  • Deprivatization of ration shops: The central govt. should take cue from the Chhattisgarh govt. which put Gram Panchayats, Self-Help Groups, Van Suraksha Samitis and other community institutions in charge of the ration shops. Aside from bringing ration shops closer to people's homes, this helped to impart some accountability in the PDS.
  • Bihar PDS model: Bihar has been a pioneer in terms of the implementation of the National Food Security Act (NFSA),
    • The new list of ration cards (and of household members on each ration card) is linked to the Socio-Economic and Caste Census, making it possible, in principle, for anyone to verify his or her status.

State and constitutional bodies must concern themselves with seriously overhauling the concept of Public Distribution Systems at the earliest. This reorientation must include: an increase in the coverage of Antyodaya Anna Yojana (AAY), as most families eligible for the scheme are not a part of it and; an inclusion of oil and pulses in monthly ration quotas at the earliest, which will ensure the availability of nutritious food to a bulk of rural households.

NFSA, 2013

About 

  • National Food Security Act, 2013 came into being with the objective to provide for food and nutritional security in human life cycle approach, by ensuring access to adequate quantity of quality food at affordable prices to people to live a life with dignity.
  • It converts entitlements of existing food security programmes of the Central Government including the Midday Meal Scheme, Integrated Child development scheme and PDS into legal entitlements.

Coverage

  • The NFSA aims to provide subsidized food grains to approximately two thirds (67%) of the population (75% in rural areas and 50% in urban areas; 81.31 cr beneficiaries).

Women Empowerment

  • The head of every eligible household shall be a woman(18 years of age or above) for the purpose of issuance under this act.

Entitlements

  • Grains like wheat, rice and coarse grain will be distributed at the subsidized price of Rs. 3, Rs. 2 and Rs. 1 and uniform entitlement of 5 kg per person per month is provided.
  • Antyodaya Anna Yojana (AAY) (poorest of the poor) households will be protected at 35 kg per household per month.

Nutritional support to Women and Children

  • Pregnant women and lactating mothers and children are entitled to get meals under the prescribed nutrition by MDM and ICDS.
  • Pregnant women and lactating mothers will be entitled to get maternity benefit of Rs.6000.
  • NFSA 2013 will provide high nutrition food to children from the age group of 6 months to 14 years.

Bodies under NFSA

  • Under NFSA, there is no provision for any Commission at the national level or District level. The Act provides for a State Food Commission (SFC) in every State/UT, for the purpose of monitoring and review of implementation of the Act.

A paradigm shift -Right based approach

  • The act also provides for the payment of food security allowance to entitled persons by State Government in case of non-supply of entitled quantities of foodgrains, within such time and manner as may be prescribed by the Central Government. Accordingly, the Government has notified the Food Security Allowance Rules, 2015.

Food Corporation of India

About

  • FCI was set up under the Food Corporations Act 1964, in order to fulfil following objectives of the Food Policy.

Objective

  • Effective price support operations for safeguarding the interests of the farmers.
  • Distribution of food grains throughout the country for the public distribution system.
  • Maintaining satisfactory level of operational and buffer stocks of food grains to ensure National Food Security.