Day 33 – Q 4.What are the limitations of the current methodology for targeting households for the public distribution system? Discuss. Can you suggest a more suitable targeting methodology?

4. What are the limitations of the current methodology for targeting households for the public distribution system? Discuss. Can you suggest a more suitable targeting methodology?  

सार्वजनिक वितरण प्रणाली के लिए घरों को लक्षित करने के लिए वर्तमान पद्धति की सीमाएं क्या हैं? चर्चा करें। क्या आप अधिक उपयुक्त लक्ष्यीकरण पद्धति सुझा सकते हैं?

Introduction:

Public distribution system 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. Wheat, rice, kerosene, sugar, etc. are a few major commodities distributed by the public distribution system.

Body

Limitations of the current methodology for targeting households for the public distribution system

• Wrong classification of economic status:  Studies have shown that targeting mechanisms such as TPDS are prone to large inclusion and exclusion errors.  This implies that entitled beneficiaries are not getting food grains while those that are ineligible are getting undue benefits. An expert group was set up in 2009 to advise the Ministry of Rural Development on the methodology for conducting the BPL census. It estimated that about 61% of the eligible population was excluded from the BPL list while 25% of non-poor households were included in the BPL list. Below Table categorizes states according to varying levels of errors of exclusion (of BPL families).

Table: Categorization of states according to high and low exclusion of BPL families from TPDS

Source: “Performance Evaluation of Targeted Public Distribution System”, Planning Commission,

• Ghost Cards: Another indicator of inaccurate classification of beneficiaries is the existence of ghost cards in several states. “Ghost cards” are cards made in the name of non-existent people. The existence of ghost cards indicates that grains are diverted from deserving households into the open market. Below Table shows states grouped according to the level of leakage of grains due to the existence of ghost cards.

   Table: Leakage through ghost cards

Source: “Performance Evaluation of Targeted Public Distribution System”, Planning Commission,

• Double Counting Error: Gujarat, Haryana, Karnataka, Kerala, Madhya Pradesh, Rajasthan, Tamil Nadu and Uttar Pradesh have issued a large number of excess ration cards over the number of households. If the overall APL-BPL break-up of the ration cards in circulation is assumed, it is possible to arrive at estimates of leakages of BPL quota of grains through this mode of corruption.
• Missing Households Error: Assam, Bihar, Himachal Pradesh, Punjab and West Bengal have exhibited high Missing Households Error. Since no cards have been issued to these households, Missing Households Error implies welfare loss to the extent the BPL households have been left out of purview of TPDS.

More suitable targeting methodologies

• Digitization of ration cards 

• • Allows for online entry and verification of beneficiary data. 
  • Online storing of monthly entitlement of beneficiaries, number of dependents, off take of food grains by beneficiaries from FPS, etc.

• Computerized allocation to FPS

• • Computerizes FPS allocation, declaration of stock balance, web-based truck challans, etc.
  • Allows for quick and efficient tracking of transactions

• Issue of smart cards in place of ration cards

• • Secure electronic devices used to store beneficiary data 
  • Stores data such as name, address, biometrics, BPL/APL category and monthly entitlement of beneficiaries and family members 
  • Prevents counterfeiting

• Use of GPS technology

• • Use of Global Positioning System (GPS) technology to track movement of trucks carrying food grains from state depots to FPS

• SMS based monitoring

• • Allows monitoring by citizens so they can register their mobile numbers and send/receive SMS alerts during dispatch and arrival of TPDS commodities

• Use of web-based citizens‟ portal 

• • Publicizes grievance redressal machinery, such as toll free number for call centers to register complaints or suggestions

• Cash Transfers: The National Food Security Act, 2013 includes cash transfers and food coupons as possible alternative mechanisms to the PDS. Beneficiaries would be given either cash or coupons by the state government, which they can exchange for food grains. Such programmes provide cash directly to a target group – usually poor households.
• Food coupons Food coupons are another alternative to PDS.  Beneficiaries are given coupons in lieu of money, which can be used to buy food grains from any grocery store. Under this system, grains will not be given at a subsidised rate to the PDS stores. Instead, beneficiaries will use the food coupons to purchase food grains from retailers (which could be PDS stores). Retailers take these coupons to the local bank and are reimbursed with money.

Conclusion

Public Distribution System is a crucial resource for the food security of the poor people, particularly the urban poor, and women, who manage household food supplies. It is a major challenge for government to increase food availability to the poor. Public Distribution System has played vital role in serving the poor people as many people earlier died because of malnutrition. When analysing in Indian context, India’s Public Distribution System is the major distribution network of its kind in the world.