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Public Distribution System (PDS): Features, Allocation and Appraisal

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In this article we will discuss about Public Distribution System (PDS). After reading this article you will learn about: 1. Features of Public Distribution System 2. Allocation under TPDS 3. Appraisal.  

Features of Public Distribution System:

Essential features of such designated Targeted PDS include:

1. States to identify families Below the Poverty Line (BPL) who would be issued 10 kgs of food grains per month per family at prices less than the Central Issue Price (CIP).

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2. Population above the poverty line (non-poor) now under PDS to continue to receive normal entitlement at the full CIP.

3. Supply of food grains for the people BPL at 10 kgs per month per family shall be guaranteed to States by the Centre. Additional quantities required by the States would depend on the availability of stocks in the central pool.

4. States will be free to add to the quantum, coverage and the subsidy from their own resources.

5. Subsidised food grains will also be issued to all beneficiaries under EAS/JRY as per guidelines at the rate of 1 kg per man day for which food coupons would be issued to beneficiaries for exchanging at fair price shops.

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Thus, the Government has introduced a dual-pricing formula in the public distribution system which would ensure a better deal to the 32 crore of people living below the poverty line. Designated Targeted Public Distribution System will thus provide 10 kgs food grains pet month to families living below the poverty line with an annual income of Rs 15,000 or less.

Special cards are be issued to those families. The issue prices of food grains sold to holders of special cards have been fixed at Rs 3.50 per kg of rice and Rs 2.50 per kg of wheat. For card holders who are above the poverty line the revised issue prices will be Rs 6.50 and Rs 7.50 for fine and super fine varieties of rice and Rs 4.50 for a kg of wheat.

The total food subsidy has been projected at Rs 8,282.90 crore. Prior to the introduction of revised PDS, the subsidy had been calculated at Rs 5,884 crore. The annual income of Rs 15,000 a year cut off line had been fixed by the Planning Commission using the methodology devised by the expert group led by Prof. Lakdawala.

Subsequently, the amount of supply of food grains for a family living below the poverty line (BPL) has been enhanced from 10 kg per month per family to 25 kg per month per family. Thus, in order to make PDS more responsive to the needs of the poor, the Targeted Public Distribution System (TPDS) was introduced in June 1997.

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This system is now making attempt to target families below the poverty line (BPL) at heavily subsidized rates.

The quantity of food grains earmarked to meet BPL require­ments (including Antyodaya families) is 18.52 million tonnes per annum (at the rate of 25 kg per family per month) benefitting an estimated 65.2 million poor families, while for the population above poverty line (APL) a quantity of 10.33 million tonnes of food grains per annum is earmarked for distribution under TPDS.

Keeping in view the surplus stocks of food-grains, the allocation of food grains has been increased to 35 kg per family per month from April 1, 2002 for households covered under Antyodaya, APL and BPL families for a period of one year.

In order to make TPDS more focused and targeted towards the poor population, the Prime Minister launched the “Antyodaya Anna Yojana (AAY) on December 25, 2000. AAY targets one crore poorest of the poor families out of a total of 6.52 crore BPL families covered under TPDS.

These identified families are currently being provided 35 kg food grains per family per month at a highly subsidized price of Rs 2 per kg for wheat and Rs 3 per kg for rice.

Allocation under TPDS:

Allocations of food grains for BPL and AAY categories are made at the rate 35 kg per family per month for all accepted 6.52 crore families in the country. Total BPL and AAY allocations made during 2009-10 were 276.77 lakh tonnes comprising 185.05 lakh tonnes of rice and 95.72 lakh tonnes of wheat.

Allocations under the APL category are made depending upon the availability of stock, of food grains in the central pool and past off-take. Presently, these allocations range between 10 kg and 35 kg per family per month in different states/UTs. During 2009-10, 197.17 lakh tonnes of food grains has been allocated to states/UTs under the APL Category as against 112 lakh tonnes allocated during 2008-09.

Appraisal of New PDS:

The decision of the centre to introduce the “New PDS” so as to keep the non poor (i.e., the population above the poverty line) off from the purview of the public distribution system was under consideration since the days the Government led by Narasimha Rao.

After all the PDS has been one of the many ways of subsidizing goods and services in the name of “welfare of the people“, i.e., a concept which has already undergone drastic changes in this era of liberalisation and privatisation.

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In recent times, welfare state no longer takes over the welfare of the entire people, who are interestingly made to find for themselves. Rather the welfare state should take care of only those people who really cannot fend for, themselves. Thus, the recent decision on the PDS, therefore, is a sensible step the Government has taken under the circumstances.

Moreover, the cost running PDS is also increasing progressively. The preliminary assessment of the programme (PDS) by the Independent Evaluation Office (IEO) reveals that to deliver Rs 1 worth of food to people under the PDS, it costs the government Rs 3.65.

The IEO has found that 57 per cent of the subsidized food grains distributed in Delhi, do not reach the target group with close with close to 36 per cent siphoned off the supply chain.

Incidentally, there is little logic for a middle class family and a rich family to wait in queue before a PDS outlet to purchase an item which is readily available at affordable price in the open market. But the below poverty line (BPL) families have to look for the items in the PDS outlet as they cannot afford to purchase those items from the open market.

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Under the present circumstances, the Government should make its machinery efficient so that it can cater to the needs of BPL families better than ever before. Under the new PDS, as the target group having been identified and the number of people requiring PDS facility drastically reduced, like Government should now be able to concentrate on how to reach and serve those people living in difficult or inaccessible areas.

The Government should also now try to include certain other items which are as much essential as rice, kerosene and wheat, in the PDS list so as to fulfil the objective of welfare state along with putting the economy on competitive path.

By targeting the PDS, the Government will now’ be able to save a good volume of resources which they can now utilise to meet the minimum needs of the poorer sections of the society. Thus, it can be expected that the new PDS would be a harbinger of a new movement for attaining a better living in the backward areas.

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