PDS Chhattisgarh

Anubhav Sood- 12PGP009 Vikas Kashyap- 12PGP050 Umang Agarwal- 12PGP111

PDS OVERVIEW
Commodities namely wheat, rice, sugar and kerosene distributed
Some States/UTs also distribute additional items such as cloth, exercise books, pulses, salt and tea. Consumes around 1% of the countrys GDP Covers upto 25 % of the poor households Only 41 % of the food grains released by the government reach their target, Nov 2012 WB report TARGETING

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ROLES
CENTRAL GOVT.
Obtaining supplies, procurement &imports Procurement price, issue prices to the state & subsidies;

STATE GOVT.
Receipts of central allocations; Procurement in the state; Purchases from other states; Warehousing; Determination of: Consumer issue price; Commodity coverage; Ration scales; Rules for issue of ration cards; FPS license; Profit margins to FPS; Periodicity of sale; Allotment to district and transport arrangements.

LOCAL AGENCIES
Lifting stocks, warehousing Issue of ration cards; Licensing of FPS dealers; Arranging lifting by FPS dealers; Enforcement, inspection, vigilance

Guidelines to states on the design of PDS;

Allotment to states

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DECISIONS
CENTRAL GOVT.
Commodity Coverage; Total PDS supplies, procurement by imports/exports+ inventories; Size of covered population: exclusions; Nature of PDS supporttotal or supplementary; Preferential treatment to area or population group; Difference between open market price by PDS issue price; Size of subsidy.

STATE GOVT.
Matching of supplies with needs by intrastate procurement; Adequate and well-dispersed warehousing; Capacity to buy from other states; Inclusion of additional goods; Appropriation of issue price in relation to open market price; Commodity Coverage; Periodicity; Ration scale; Cost by ease of getting ration card; Location and behavior of FPS; Adequacy and profit margin; Adequacy and regularity of allotment; Public, private or cooperative transport of stocks to FPS; and Transport charges, zoning for the purpose.
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LOCAL AGENCIES
Delivery to FPS of assured quality and quantity; Proper storage by FPS; Cost and case of betting; Variation in state govt. determined scales; Ensuring regularity in lifting of stocks by FPS for round the year availability; Need for reserve stocks; ; rate to state deliveries to FPS; and Govt. monitoring of stocking and sales performance of FPS.

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KEY STAKEHOLDERS IN INITIATIVE

NATIONAL INFORMATICS CENTRE (NIC): ICT partner in development and implementation PRIMARY AGRICULTURAL COOPERATIVE SOCIETIES (PACS) and Central Cooperative Bank: responsible for operating procurement centres across the state and issuing cheques to farmers. MARKETING FEDERATION (MARKFED): responsible for overall monitoring of paddy procurement, payment to farmers, and storage of commodities and granting of inter-district permission for milling. DEPARTMENT OF FOOD: responsible for conducting physical verifications, registration of mills and granting permission for milling. CHHATTISGARH STATE CIVIL SUPPLIES CORPORATION (CGSCSC) AND FOOD CORPORATION OF INDIA (FCI): The CGSCSC on behalf of the State Government and the FCI on behalf of the Central Government run distribution centres across the state, which receive the custom milled rice. CGSCSC and FCI determine the amount to be allocated to FPS and then transport the allocated commodities.

FAIR PRICED SHOPS (FPS): sell commodities to consumers at government subsidised rates
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General Challenges

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Errors of exclusion that result in beneficiaries falling out of the state safety net. Corruption by private dealers running the Fair Price Shops under the PDS. Corruption and leakages in the paddy procurement process and Leakages during the transportation of food grains to the Fair Price Shops. Limited reach Delay in monthly allocation Delay in lifting and transportation Diversion/leakages Fake ration cards Lack of accountability at all levels Lack of community participation Unviable to run FPS- unviable self sustainability Lack of transparency
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CHHATTISGARH STATS
Delivery to 34.53 lac cardholders (per month)
1,26,000 tons of Rice 41,700 tons of Wheat 15.5 million litres of kerosene 7000 tons of iodized salt 4,600 tons of sugar

20th DEC12- Food Security Bill 2012

Enabling around 42 lakh families to access quality subsidised food grains Cost of Rs. 2311 crore on the state exchequer Around 90% of state households covered Divided into three groups: Antyodaya, Priority and General

Increase in the Central govt. mandated figure of 42 % ( 19 lakh BPL households) to 74 percent (over 36 lakh households)

1532 paddy procurement centres of the Central Cooperative Bank Cooperative Societies (PACS) 50 storage centres of Marketing Federation (MARKFED) 100 Civil Supplies Corporation distribution centres 35 FCI Rice receiving centres
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and

Primary

Agricultural

Paddy Procurement at MSP

The main crop in Chhattisgarh is paddy. The state government procures paddy on behalf of the Government of India at MSPs. This procurement takes place through 1333 Primary Agricultural Cooperative Societies (PACS) After converting procured paddy into rice by millers, handed over to Chhattisgarh State Civil Supplies Corporation (CGSCSC) for distribution under PDS. Chhattisgarh government gives 35 kilogrammes of rice at Rs. 3 per month to all BPL families through 1058 Fair Priced Shops Prior to 2007, operations at each level from the purchase of paddy at procurement centres, to the issuance of the paddy to the millers, its transportation to the warehouses of the CGSCSC and from there to the FPSs, was recorded manually
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Objective of Initiative
Enhance transparency in operations to mitigate leakages and diversion of funds. Improve the delivery mechanism so PDS commodities reach the target population Involve citizens in the monitoring process to enhance accountability

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Initiative: DIGITISED PROCUREMENT PROCESS 5 servers maintained by (NIC) for hosting all concerned applications and
managing the entire database. Farmers are registered online and once paddy is procured from them, they are given computer generated receipts. Paddy procurement & issuing is electronic
Procured paddy is transferred to the 50 computerised storage centres of MARKFED, Receipts of paddy are entered on the online interface. MARKFED issues the paddy to millers, FCI and other storage centres. All issuance is done through online method

Registration of mills in online system to avoid the issuance of paddy to dummy mills. Cheques for payment to farmers and delivery orders for movement of paddy from the procurement centres to the miller and storage centres of MARKFED and FCI, are printed in real time.

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Initiative: TRAINING & DATA COMMUNICATION

Workshops were held every 15 days during the initial stages of the project to train data entry operators in basic computing. To solve internet connectivity problems at the village procurement centres the unique approach is followed
Around Two hundred and fifty motorcyclists have been hired to carry data everyday from the procurement centre computers to block headquarters, where they upload the data onto the central server. They also download, from the server at the block level, any new software or additional information and carry it to the procurement centres. (But this initiative was increasing overall cost because transport cost was increasing)

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Initiative: UNIFIED RATION CARD DATABASE

All old ration cards were cancelled in 2007 & new centrally printed ration cards were issued
A unified computerised database of ration cards was maintained New cards have two unique identifiers a numeric code and a barcode. All details including the name of the head of the family, his caste, address, entitlements, ration shop etc. are printed on the card.

With computerisation of ration cards, shop-wise allocations have also become automated. Per card allocations are fed into the computer at the State level.
Amount of PDS commodities to be delivered is calculated on the basis of: Allotment of ration cards in that FPS stock and sale figures of the previous month To increase transparency- signs painted outside every house, with the details about familiy. This was an innovative approach to name and shame households that had Antyodaya ration cards but did not belong to the category of the poorest of the poor

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Initiative: COMMUNITY PARTICIPATION

Management of ration shops from private dealers to community-based organisations such as gram panchayats, women self-help groups (SHGs) and cooperatives A citizen interface website has been created for citizen awareness and participation in the smooth functioning of PDS.

The portal contains all information related to the scheme including a list of ration card holders, FPSs, and details of transport and sales of PDS commodities.
Information on paddy procurement is also made available on the website, which includes farmer-wise data detailing the amount of paddy procured from each farmer and money paid.

Citizens can register as active monitors by submitting their e-mail ids and/or mobile numbers online.
An e-mail/ SMS is sent to all registered citizens. Each message contains
Truck number Quantity of PDS commodities being sent by the truck Date and time of dispatch & expected date of arrival

If commodities do not arrive at the FPS in full within a reasonable time period, citizens can register their complaint on the website or call center

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Initiative: OTHER INITIATIVES

GRIEVANCE REDRESSAL Grievances registered on the website are tracked through a web application Dedicated call centre has also been introduced for registering and disposing of complaints.
GPS tracking of the dispatched trucks

Special, yellow painted trucks are used; identification and monitoring by villagers

the bright colour allows for

easy

Mandatory for food grains to reach ration shops by the 6th of every month & celebration of Chawal Utsav on 7th, helped plug leaks as well as ensure the timely distribution of rations

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Room for Improvement

Ration shops are still out of reach for some locations.
Extension counters are vital for improving the outreach of the PDSas some of the most vulnerable groups, such as the so-called primitive tribal groups, often live in areas that are not easily accessible.

Many households felt that in addition to the foodgrains provided at their ration shops, the government should also supply subsidised dal (lentils) and cooking oil. As rice is the staple food in Chhattisgarh, many households were unhappy with the 10 kg of wheat that is provided as part of the 35 kg food grain entitlement and wanted it to be replaced with rice. Households with more than four members suggested that food grain entitlements should be based on the number of individuals because 35 kg was not adequate for their monthly consumption

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Debatable Issues
Use Cash Transfer Instead of PDS Advantages of cash Transfer
Independence Cost of overall system will be reduced

Counter Points
Remoteness of banks and markets Lack of trust in cash transfer due to delay in payment;not good experience in scheme like MNREGA. During the lean season, prices of foodgrains in the open market rise due to erratic supply and the local ration shop is often the only hope for many What bothered most respondents was the thought of giving up the food security offered by the PDSfor unpredictable cash transfers. This was particularly true of women, who worried that they would lose control over household budgets because it would be men who travel outside the village to withdraw money from the bank and buy things for the house. Many felt that the money intended for buying food would be spent on non-food items, particularly alcohol
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Recommendations
Linking TPDS with UAID (Aadhar). Use of Biometric Ration Card to prevent forgery. Coupon based transfer of subsidy by using Direct Cash Transfer through Post Offices & Banks using internet banking. Deployment of auto scalable Cloud Solution, which guarantees unlimited resources allocated as per the need.

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Semi-Privatisation of PDS

ROLE OF IRA NUMBER (INTERACTIVE RATION ACCOUNT NUMBER)

The purpose of introducing IRA number is to keep a record of all transactions between the consumer and fair price shop Every consumer is issued a particular unique account number through which transparency is maintained The main concept is to introduce e-commerce in our current system through setting up a mobile portal The mobile portal will act as a hub between all the consumers Instant confirmation of transactions through SMS Alerts
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SEMI-PRIVATISATION OF PDS

ADVANTAGES

In present scenario government is the main controlling body in the existing PDS system In our concept we introduce a private company which acts as medium between the consumers and the government Its functions are as follows: 1. Maintenance of mobile portal 2. Provision of subsidy 3. Management of funds 4. Quality control 5. EAAY Scheme( Extreme Antayodaya Scheme)

Cut down on Corruption: By introducing a private company we provide transparency and cut down corruption Employment: The company employs people which create a great opportunity for unemployed Subsidy control: The regulation of subsidy is done to relieve the government from unwanted losses Quality Control: Food grains are given a quality check and are distributed under a standard label

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EXISTING SYSTEM

PROPOSED SYSTEM

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Government Reforms
1.Food products packagers, especially those food products that contains necessary nutrients for sustaining a good health e.g. wheat, rice, sugar, wheat flour etc., should be given subsidy or asked to give (under a proper body) by relieving taxes. For example manufacturing taxes, service taxes etc.

2.A government body must be formed to manage and control these manufacturers.
3.Conduct tenders to give control to private companies.

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 The Private Company in association with an NGO will conduct this programme.

EAAY (Extreme Antyodaya Anna Yojana Scheme)

The Private Company must employ a group of people to provide a specific amount of grains to those who does not hold even an AAY card.

This amount of grain is that which is prescribed by government under AAY scheme.
These employed people must be given salary via Private Company . Private Company must provide the list of families/peoples covered under EAAY scheme on their website. The government could also employ the workers who work under NREGA or other government scheme which could help the government to cut the costs and invest more in the P.D.S.

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Record Keeping
Every BPL and AAY card holder must be given a unique account number IRA (Interactive Ration Account). Through such record keeping system we can record the information of the families who are part of such scheme and also hold a ration card. The Private Company must recharge every IRA number with money per month per family. Private Company must use Fair Price Shops or the companys Regional Offices for creating their area of work for supplying the grain. It must include IT services to provide accessibility to the system. This recharge is calculated on the basis of difference between market and fair price that government provide to the people. At present the government tries to lowers the bar by providing subsidies to the ration card holder . But what we are doing is that the subsidy must be directly provided to the people in form of their recharge and they can easily purchase only food items from it.

Market Price of goods - Ration Card Rates = Subsidy by Govt. = Recharge of IRA
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Quality Control and Availability

As people can buy anything they want and from and shop. So quality control and availability problem is resolved. The Private company must provide Mobile bill to maximum shopkeepers in their area . In Mobile bill the consumers had to enter the I.R.A number and password and the like mobile recharge ;but in the reverse process of it; the money will be deducted from users account.

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CONCEPT RISKS

SOLUTIONS

Why would Government allow this proposal?

The government would have to only relieve some figures of taxes from the manufacturing and packaging companies and provide a start up cost and the rest work would be done by the Private Company.

Why would private companies involve in such tie up?

In our system we have given a good offer to Private Companies to start their business.

Why would shopkeepers be a part of such scheme?

Shops are given benefits on products they purchase as well as target completion wages.

Quality control?

It would not be a problem as buyers can purchase any brand of their choice. Also the Government Body would keep a check of the quality of products distributed.
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Replicating Amul Cooperative Model

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Salient Features of the Model

This model can be extremely effective in case of agriculture. Instead of selling the produces to the middle men at low rates, the farmers can sell them to the government at reasonable rates which will then carry out effective sales of the produce. Abhijit Sen a member of the planning commission has called for mobilization of petty and subsistence farmers in the country into cooperatives so they could be in a bargaining position to sell their produce on favorable terms.

The Amul cooperative model could be followed in the agricultural sector as it could trigger a big upswing in agricultural development.
Small farmers through their co-operativisation could easily transform the agricultural economy. Moreover, there will be no wastage of food grains and other commodities which at present goes up to the tune of one-third of the total produced in India.

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THANK YOU

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