Thoughts on Implementation of PDS and Food Security

The Tendulkar committee report says that 37% of the Indian population is below the poverty line, a figure accepted by the Planning Commission of India and going by this figure, the number of poor in India easily exceeds the poor in the poorest of African countries which is around 410million. Therefore, it is absolutely essential that the government must step in to ensure the basic necessities of life to all its citizens. But recently, we have been dithering on providing the most essential of survival needs, namely food to our people. For 64 years, we have tried various ways to ensure we have enough food production to meet the needs of our population and we succeeded in that and now we even export food grains. We currently have buffer stock far exceeding our requirement, but unfortunately grain is rotting due to lack of storage facilities and lying in warehouses far beyond their period of safe consumption. The Hon'ble Supreme court observed that rather than letting grains rot, it would be better to distribute it for free to the needy(1) (2).

Our current debate on food security revolves around two aspects, the much criticised Public Distribution System (PDS) and the proposed National Food Security Bill. PDS is implemented by various state governments with financial assistance from the central government and various states vary in its implementation. Kerala provides, atleast on paper, food grains to its entire population regardless of their economic status and although the need for subsidised grains even to the rich or even the middle class is debatable, this ensures that no one among the needy is left out of this absolutely essential safety net. In states with targetted PDS, it is plagued by leakages and duplication of ration cards that are essential to prove ones entitlement to subsidised grain. This means that grains can be diverted and sold to open markets with the help of forged ration cards and the really needy are left out either because they don't have the ration card or the grains have been already diverted.

As the benefits do not reach the intended target population which has lead several states to try out direct cash transfers and coupons that can be used in any PDS outlet. But these too are facing several issues as several shops provide less than the entitled quantity of grains and do not accept coupons*. Direct cash transfer is also not preferred since these can be misused by other members in the family. Even direct bank transfers (they need to open a bank account first) is not preferred by the poor because these places do not have access to banks. The only solution we have right now is the current system of subsidies through PDS which has to be modified to ensure fair distribution of items especially to the most vulnerable in the society. The proposed food security bill intends to make the same mistake of targeting those eligible for food security and this can only lead to misuse of food grains and the intended beneficiaries being left in the lurch. Many of the poor are migrant labourers with their families in the villages in another part of the country and so providing ration cards for the entire family will leave the migrants out if targeting is made the norm.

What we need is universal coverage which will ensure that none of the more than 450million poor in India are denied access to this essential necessity. We have the working model in Kerala which has drawn positive response from all households in the state and we need to extend it to the whole country. This will involve the government increasing its grain procurement monumentally and we also need to build from scratch the infrastructure to transport and store large quantities of grain and ensure they are not wasted and do not go bad. We need cold storages and transport facilities and this is not just for our food grains but also for our vegetables and fruits-a third of produce is wasted due to absence of such facilities(3)- which can be achieved by partnering with railways and inviting private investors that include retailers and large farmers or their co-operatives. Implementation of supply-chain mechanism is absolutely essential to ensure our population has access to food grains as well as vegetables and fruits and this will also provide enhanced income to our farmers who toil in the sun to feed our nation. Innovations like real time tracking of movement of goods as the ones implemented by courier services will be cheap cheap and effective. Technology like Radio Frequency Identification  (the access cards of almost all employees in IT companies use this) are cheap and can be easily implemented, anti-theft devices are installed in even the smallest items of clothing in most major retail outlets, barcodes have been in use for a long time and this shows it is possible to implement technology on a large scale in a cost effective manner.

Such massive changes will involve naturally a few conflicts and these have to be solved before we can roll out such an ambitious programme. As the government increases its procurement, it will lead to shortage of grains available for the open market. It is the open market that the rest of  our population depends on and this is because grains available in PDS shops are of not of unquestionable quality. Even in Kerala with universal coverage of PDS, those who can afford it, buy their grains from the open market because of issues with quality and timely availability. Hence, it must be ensured that grains are of good quality, are available for sale all the time and open market prices do not spiral out of control and if it does, government must release its own stock from warehouses to bring down prices. It is also possible to try direct transfer of cash to bank accounts, not just for subsidy in food grains but also in fuel, education and healthcare but then they could still be misused even if access to banking is improved. There is also the question of money as the government might not be able to procure the entire amount necessary for the population, but the fact that food grains are rotting in government warehouses is appalling and so the attempt is to distribute already procured grain to the needy.

The issue of subsidy is still a raging debate- whether the government should have direct involvement or should it just provide direct benefits to the needy. On paper, the UIDAI project will identify every citizen and whether they require welfare assistance and then government will provide direct cash to these individuals for food grains, education, healthcare and whatever necessity including disaster relief. They can then use the services of whichever provider they deem suitable and this will remove the need for leaky dysfunctional government organisations like teacher less schools, PDS shops that never open and doctorless hospitals.


Such an implementation is still a long way away as we still have not figured out the way to implement the UID project and its nuances. The government should not quit from providing these essential services completely but should stay on as a benchmark, a low-cost option and there is also the issue of accessibility in many places as private enterprises and individuals may not be interested in working in far flung areas.
The goal of a hunger free nation is within our reach, is well within our resources and it is our moral responsibility to bring such a future to reality and erase the ignominy of a new economic power that sends satellites to space but still has the highest population of poor in the world



http://www.thehindu.com/news/national/article617813.ece - 1
http://www.thehindu.com/news/national/article605557.ece - 2


http://www.business-standard.com/india/news/india-wastes-59-mt-fruits-vegetables-every-year/119841/on -3





http://www.frontlineonnet.com/fl2827/stories/20120113282710100.htm - *

Solutions

As I hadn't suggested any solutions in the previous post, but merely problems which all are aware of and quite obvious, I did think about how these issues can be tackled. They may or may not work, but no one can say for sure what will happen.

The government must act as protector and trustee of the resources (spectrum or minerals) and dispense them keeping the public good in mind, not how much money will come to the government itself or Swiss bank accounts of individuals.

The government must get out of most economic activities like aviation and hotel running and be involved only in essential and basic ones like defense, power and water supply, atomic energy, public transport, space etc. This is because these are absolutely essential to the country and only the government can invest massive amount of money and also engage in sectors that may not generate huge profits but are absolute necessities for the people  and serve strategic purposes too.

In certain sectors like communication, transport, education etc it can have a presence to make sure that private enterprises do not engage in unfair practices like price-fixing or predatory pricing and provide a benchmark.

The government must appoint independent regulators in all sectors ranging from education to environment protection, consisting of experts in the field to make sure no one engages in unfair practices and the interests of the people are protected. It is here that civil society and activists have a role to play, it is here that informed citizens have a part to  play and that is why we all have a role to play in a democracy as we need to keep  ourselves informed of the state of affairs in our nation and not just the state of 'affairs' among celebrities. We need to raise our voice and that does not always have to mean getting on the road and shouting slogans but just voting properly and expressing opinion.

Our local self governing bodies must make sure that government funds are utilised properly, conduct surprise inspections on their implementation whether it be road or canal construction or teaching at schools or public health centres and check whether they are not functioning, those affected by them must find out how their grievances can be redressed and that is why awareness, literacy and discussions are important- only informed citizens can make sure they get what is due to them as rights, entitlements and facilities. This coupled with legislation like the citizen's charter and strong grievance redressal mechanisms and the lokpal or lokayukta that is in the offing can create a better country for future generations.

The best cure for bad democracy is a democracy where people are well informed, politically active and demand what is due to them which will make their representatives answerable to them directly. We have even now people who ask why read the newspaper or why should I keep myself aware of what is happening in this country, they have no right to blame a government, they only come out to express their emotions and wear a gandhi cap when it is fashionable to do so. We need to first rise up from our own slumber and then make demands from our government for fair, equitable development and a clean environment in all senses for us to live in.

CAPITALIST Matters

The purpose of capitalism is to make profit and generate dividends to shareholders and keep this going for as long as possible. Capitalism is not concerned about generating employment or preserving the environment because these only reduce profit or in other words, being concerned about the environment or generating employment does not make more money. It is the same with worrying about rehabilitating and compensating those displaced by a factory or a mine since it is too cumbersome and expensive. What is done when faced with such a situation- Cut corners? Make deals with those in power? Turn a blind eye to environment and good of the people? All of it is happening in our country.

These are issues with unbridled capitalism and capital will flow out once it has exhausted all resources in a particular region or resources become too expensive, whether it be labour or minerals and once it leaves, only then does the true cost of their operations come into full view. This is why we need some regulation and control over the functioning of capitalism. Communism and socialism as a pure concept may be past its glory days and capitalism is also getting there with the current string of crises showing no signs of abating.

It is only obvious that we are seeing the re-emergence of Keynesian economics, where private enterprise is allowed to function with the government intervening in certain sectors and also during periods of crisis. But I would go a bit more than that, government should play the role of the regulator and also participate in certain sectors such as public transport, power, water, education etc because in a country with vast underdevelopment only the government can provide certain goods and services. Whenever there are profits to be made and that too in the immediate future, there and only there will capitalism fill the demand. The current trend has been high economic growth with little growth in employment* as investments are high in capital intensive sectors and not labour intensive sectors which makes for good economic growth numbers but bad for people and if we do not give people opportunities to develop and add to the skills of our working population, once capital finds greener cheaper pastures, we will be left in the lurch.

We need investment and economic growth for the good of our people, we need jobs and education for our people and a healthy and prosperous environment to be preserved for future generations and not just GDP growth that will only fill the coffers of a few rich industrialists and politicians in their payroll.



Nandan Nilekani's book 'Imagining India' is quite naive in assuming that capitalism is the panacea to all our economic problems and the left parties in India are merely being boisterous as they are tied down to old ideas and the 'red corridor' is merely an outcome to over-activism and dismisses the work of Medha Patkar and Aruna Roy. He fails to understand that their work is to ensure equitable development and social justice and they have gained a place because the ruling parties have been hand in glove with corporates in exploiting natural resources with scant regard to the environmental and social consequences. Development has to be atleast Pareto neutral in the worst case and even then it is futile and it has to be a Pareto improvement(1) and what we have are Pareto inefficient outcomes and that is what fuels the naxal movement in this country.

If we have unbridled capitalism, we will only have development and growth in statistics and tables while even a billion Indians can be left in the lurch without any access to a decent standard of living or hope for the future.


*http://articles.economictimes.indiatimes.com/2012-02-04/news/31024793_1_labour-intensive-labour-productivity-manufacturing-sector

1-   http://en.wikipedia.org/wiki/Pareto_efficiency