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Tuesday, 10 January 2012

Understanding the PDS



http://www.frontlineonnet.com/stories/20120113282709600.htm

FOOD SECURITY

Understanding the PDS
JEAN DREZE AND REETIKA KHERA
A survey in nine States shows that they have quietly revived and expanded their public distribution system.
NAGARA GOPAL 

At a slum in Patel Nagar in Hyderabad. A large number of the poor are excluded from the public distribution system. The PDS tends to work better where it is more inclusive – targeting is divisive and undermines public pressure for a functional PDS.
AT a time when the Union Cabinet cleared the draft of the national food security Bill after dilly-dallying over it comes a compelling piece of information: many State governments have quietly revived and expanded the public distribution system in their States. That, at any rate, is one of the main findings of a recent survey of the PDS in nine States: Andhra Pradesh, Bihar, Chhattisgarh, Himachal Pradesh, Jharkhand, Orissa, Rajasthan, Uttar Pradesh and Tamil Nadu. The survey, initiated by the Indian Institute of Technology Delhi, covered about 1,200 randomly selected below-poverty-line (and Antyodaya) households in 110 villages.
One sign of revival is that the sample households had received 85 per cent of their official “quota” of PDS grain during the preceding three months. This contrasts with the common perception that most of the grain meant for poor households ends up in the open market. Further, with market prices shooting up and PDS issue prices coming down, the implicit value of PDS transfers is now quite substantial. In many States, BPL households get as much from the PDS every month as they would after a whole week of employment under the National Rural Employment Guarantee Act (NREGA) – without having to work.
The health of the PDS, of course, varies widely among States. Some, like Himachal Pradesh and Tamil Nadu, have a well-functioning universal PDS, which provides not only foodgrains but also other essential commodities such as pulses and oil. At the other extreme are States like Bihar and Jharkhand where PDS reforms have barely begun. The PDS tends to work better where it is more inclusive – targeting is divisive and undermines public pressure for a functional PDS.

Aside from expanding coverage and lowering issue prices, many State governments have launched other PDS reforms such as de-privatisation of fair price shops, “doorstep delivery” of grain to fair price shops, computerisation of records, and a range of transparency measures. An important lesson of recent experience is not only that the PDS can be improved, but also that we have a reasonably good idea of how to do it. Much depends on the political value of the PDS. That is perhaps the biggest recent change: with market prices shooting up, the PDS now means a lot for poor people, and State governments had to respond to the clamour for a functional PDS.
It would be a tragedy if the National Food Security Act ended up undermining instead of consolidating this revival of the PDS. There is a real danger of this happening, not only because of the continued obsession of the Central government with “targeting” but also because of the illusion that cash transfers are an easy alternative. A large majority of the sample households were opposed to the PDS being replaced with cash transfers, and the reasons they gave for this were enlightening.

A sample of the survey findings is presented in this issue of Frontline, including four articles written by some of the student volunteers who conducted this investigation. A more detailed report was published in a recent issue of Economic and Political Weekly. We hope this material contributes to a better understanding of the PDS, and to a more enlightened debate on these vital issues