PLUGGING THE LEAKS

Nikhil Gokhale

Arjun Iyer

Dharmesh Kariya

Harshit Gupta

Varsha Venkat

Institution: IIT MADRAS

GROUP DETAILS:

Only 10% of poor receive intended benefits on the

subsidies offered by the Public Distribution System (PDS)

in India.

61% of households are excluded from the Below Poverty

Line (BPL) net and 25% of households become

unintended beneficiaries.

23% of all Fair Price Shops (FPS) survive solely due to

leakages and diversion.

PDS Corruption estimate is around Rs. 20747 Crores.

CONCERNS

Fair Price Shop Owners made more accountable to the

government

Commission earned by the FPS Shop

Owners proportional to quantity of goods

sold

Awareness Campaigns

particularly in small towns and rural areas

Formation of a committee to keep a check on FPS and

godowns

SNAPSHOT OF SOLUTION PROPOSED:

Linking the ration card with the Aadhar card will decrease exclusion

errors.

Criteria of poverty line to be based on the possession of certain assets rather than on the income.

Other assets can also be included.

Families with working female as only source of income(e.g. – maids, house servants) should be included under BPL.

PROBLEM OF GHOST CARDS

Assets making one ineligible for BPL cards:

Television Set

Refrigerator

Fan

Two- or Four-Wheeler

More than Five Acres Land Holding

Setting up of NGOs to conduct surveys which reveal family

situations and constraints.

These NGOs will then submit an independent report on the people eligible to recieve the benefits of the PDS system.

In small villages this job can be made easier by obtaining the required information about families from the gram panchayat,as it has lesser chances of being manipulated.

Based on the reports obtained from the independent surveys conducted,eligible citizens will be given the status of BPL and will obtain benefits of the PDS system.

The NGOs should be given financial and legal support by the government to carry out these surveys.

MEASURES TO TACKLE GHOST CARDS

Payment to the FPS shop owner should be done in two stages:

1. Initial Payment: Minimum payment for providing the service

through his shop.

2. Final Payment: This will be based on the percentage of allotted

families that he covers.

Every FPS shop owner must maintain records containing the following details:

1. Card Holder’s Name.

2. Amount of grains and other items provided.

3. Money received.

4. Sign/Thumbprint of the Customer.

5. Sign of the Shop Owner.

Shopkeeper must produce such a bill to become eligible for final payment.

Each customer must also receive a signed copy of the bill before leaving the FPS

shop.

THE LEAKAGE PROBLEM

Proper accounting of grains to be done at the godowns.

Timely audits to be done by the district collector to check

the accounts and the conditions at the godowns.

Margin of profit should be increased for efficient

business.Incentives may be provided to such owners.

Display of rate chart and quantity available in the block-

boards in front of the shop should be enforced strictly.

Electronic weighing scales should be made compulsory to

reduce malpractices.

KEEPING A CHECK

ORGANISATION STRUCTURE

Responsibility of spreading awareness about rights of the people should be given to the Panchayats.

Regulatory Committee will ask for feedback from the people from time to time.

VIGILANCE SQUAD is responsible for conducting raids and detecting corruption in the system.

Collector

Auditing Committee

GrievancesVigilance

SquadRegulatory Committee

Considerable manpower and financial aid will be required for

implimenting the surveys as it intended to cover a vast number of citizens.

More manpower will also be required in the government mechanism, as the plan suggests formation of specialised committes to audit and to keep a vigilant check on the PDS system.

The incentives proposed for the FPS owners will also require additional funding.

Advanced equipments required for preventing leakeages and tampering,both in godowns and in FPS will also require financial funding.

FINANCIAL AND HUMAN RESOURCES REQUIRED

IMPACT AND REACH:

21% of the poor are remaining undernourished currently.

URBAN AREAS:

There are around 10 million families who depend on the PDS in urban areas.

RURAL AREAS:

Over 8 million families living in rural areas depend on the PDS for getting their essential commodities.

The Civil Supplies Corporation should open more Fair Price shops in rural areas since density of shops is less in such areas.

There are many challenges to implementing this plan:

The strengthening of vigilance squads will be an additional burden on the

taxpayers.

F.C.I. and other agencies don’t really have any incentive to provide good

quality food grains.

Frequent checks and raids on Fair Price Shops are again an additional burden

on the taxpayers and are not foolproof.

Fair Price Shop owners might cheat the poor, uneducated villagers by giving

them false bills.e.g.- he might give a bill for 35 kg when only 30 kg rice was

given.

During surveys people may exhibit only part of their assests, due to which

undeserving people ay obtain benefits.

CHALLENGES AND RISKS

planningcommission.gov.in/reports/sereport/ser/PDS_Frep.pdf

web.iitd.ac.in/~reetika/PDS%20JDS%202011.pdf

www.financialexpress.com/news/states-submit-suggestions-to-improve-pds/645481

pdscvc.nic.in/Annexure%20C.pdf

www.indiancag.org/manthan/improving-public-distribution-system

REFERENCES

http://pdscvc.nic.in/Annexure%20C.pdf