pds report of haryana

8/3/2019 PDS Report of Haryana

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CENTRAL VIGILANCE COMMITTEE

ON

PUBLIC DISTRIBUTION SYSTEM

REPORT

ON

THE STATE OF HARYANA


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Justice Wadhwa Committee

on

Public Distribution System

STATE OF HARYANA

INDEX

Chapters Topics Page no.

A Preface 1-9

B Broad Overview i- xiv

1 Introduction 1-2

2 Legal Regime 3-17

3 Distribution of Foodgrain 18-31

4 Mode of Appointment of Dealers 32-39

5 Viability 40-48

6 Identification of BPL Beneficiaries 49-54

7 Computerisation 55-59

8 Enforcement, Vigilance and

Complaint Mechanism

60-64

9 Distribution of wheat flour/atta to

PDS beneficiaries

65-70

10 Recommendations 71-80

11 Appendix 81-83


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PREFACE

1. In Writ Petition(C) No.196/2001 Peoples Union for Civil Liberties

V/S Union of India and Ors., Honble Supreme Court of India by Order

dated the12.7.2006 constituted a Committee to be headed by me to look

into maladies affecting the proper functioning of the Public Distribution

System (PDS) and to suggest remedial measures. The operative portion

of the order reads as under:

After having heard learned counsel for the parties, we find

that there is practically no monitoring over the sums allotted

for the Public Distribution System (in short PDS) by the

Central Government, and its utilization. The amount involved

we are told is in the neighborhood of Rupees Thirty

Thousand Crores annually. Certain suggestions have been

given by Mr. Colin Gonsalves, learned senior counsel as to

the modalities to be adopted in such cases. At the present

stage we feel it would be necessary to constitute a Central

Vigilance Committee headed by a retired Judge of the Court

to be assisted by Dr. N.C. Saxena, the Commissioner earlier

appointed by this Court. We requested Mr. Justice D.P.

Wadhwa to head the Committee.

The Committee shall look into the maladies which are

affecting the proper functioning of the system and also

suggest remedial measures. For this purpose the

Committee shall amongst other things, focus on:-

a) The mode of appointment of the dealers,

b) The ideal commission or the rates payable to the

dealers, and


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c) Modalities as to how the Committees already in place,

can function better,

d) Modes as to how there can be transparency inallotment of the food stocks to be sold at the shops.

While dealing with the question of the mode of appointment,

the Committee shall also suggest as to a transparent mode

in the selection of the dealers. The Committee shall also

indicate as to how more effective action can be taken on the

report of the Vigilance Committee already appointed. It goes

without saying that the same shall be in addition to the legal

remedies available to any citizen in setting law into motion.

We request the Committee to give its report within period of

four months so that further instructions/directions can be

given.

The Committee would invite suggestions from general

public, organizations and would consider the suggestions, if

any received in the proper perspective.

2. Honble Courts direction was initially given for the Government of Delhi to

be followed on an all India basis.

3. Committee submitted report on Delhi on 21.8.2007.

4. By order dated 10.01.2008, Honble Court, while accepting the report,

directed the Committee to undertake a similar exercise in terms of earlier

order for the entire country.

5. Scope of the task assigned to the Committee thus having been enlarged,

the Committee projected to the Department of Food & Public Distribution,


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additional requirements of staff, space and delegation of financial powers

for its smooth functioning. The Department dilly dallied and did not meet

the requirements. The Committee had to approach the Honble Court againand again. It was only after a peremptory Order dated 25.8.2008 was

passed by the Honble Court that the Department started taking steps for

creating necessary infrastructure. It was only thereafter that the

Committee could start functioning in right earnest. The Honble Court

extended the time for submitting the report till April 2009.

6. The Committee submitted its report for the States of Uttarakhand,

Jharkhand, Orissa and Karnataka. Thereafter, the Honble Court has been

pleased to extend the time further till December 2009. The Committee has

since submitted the report on the State of Andhra Pradesh, Bihar, Gujarat

and Rajasthan. The Honble Court has further extended the tenure of the

Committee till 30.6.2010The Committee is presently submitting its report

on the State of Haryana.

7. The Committee has already submitted a separate comprehensive report

on Computerization of PDS. Some States have shown interest towards

computerization of PDS. It is the mandate of the Public Distribution

System (Control) Order 2001 that State Governments shall ensure

monitoring of the functioning of the Public Distribution System at the fair

price shop level through the computer network of the NIC installed in the

District NIC Centres. For this purpose computerized codes shall be

issued to each FPS in the district. Nothing appears to have been done

towards this.

8. PDS is undoubtedly the largest food distribution network of the kind in the

world. While procurement, storage in FCI godowns and allocation of food

grain to the states is in the hands of the Central Government, distribution


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is done through the Fair Price Shops licensed by the State after identifying

BPL and AAY population as per the estimation fixed by the Planning

Commission.

9. No one has doubted the utility of PDS being the need for supply of food

grains to the poor of the country at affordable rates. Procurement and

distribution of food grains is a huge and gigantic task but the whole system

is built on corruption. There are more leakages and maladministration and

benefits to the poor are low. Inefficiency and corruption has made PDS

corrupt at several levels (during the course of the visit of the Committee to

various places it was found that an equal and perhaps more corruption is

present in the distribution of kerosene oil). The system lacks transparency,

accountability, monitoring and enforcement. Survey is not being

conducted regularly and properly, with the result that people Above

Poverty Line (APL) have been issued Below Poverty Line (BPL) cards and

those eligible for BPL cards have been ignored.

10. There is also a menace of bogus cards. Immediate measures are required

to reduce diversion of food grains. Delivery systems under the PDS have

to be improved so that the actual beneficiary gets its due entitlement at

fixed price, fixed quantity, fixed time and of wholesome quality. Innovative

methods are required to improve the system. The whole system has to be

totally revamped and modern technology appears to be the only answer.

Rather it is a matter of deep regret that in a surplus State of wheat like

Haryana there is large scale of diversion of PDS food grains meant for the

poor.

11. Haryana and Union Territory of Chandigarh are in the process of

introducing, on a pilot basis, a smart card data base system to deliver

food items under the PDS. Project is to be financed by the Central


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Government. Through smart card, Central Government aims to increase

transparency and remove corruption from the much maligned PDS. It is

stated that in Haryana about 53 lakh people will be issued the smart card.Central Government have recently constituted a Unique Identification

Authority of India (UIDAI). The mandate of UIDAI is to issue unique ID

number to every resident of the country. It is stated that if PDS

authorities, in their domain make UID number of the ration card holders

and their family members as mandatory, they can clear up their data base

of bogus ration cards. UIDAI would re commend that all State

Governments should start working and actively participate with the UIDAI

so as to clean up their data bases and improve their delivery system.

12. In answer to a question that about 1.5. crores bogus ration card holders

were milking the PDS and could UID help such situations, Mr. Nandan

Nilekani, Chairman, UIDAI, replied UID by itself will not solve the issue.

The application of UID in a given context will solve it. If a state decides to

have UID in all its ration cards, then somebody who has a ration card with

the UID cannot come again on another ration card with another UID. So

UID will ensure there are no duplicates. We are providing a capability to

agencies to re-engineer their public service deliveries but the decision to

re-engineer has to be theirs.

13. There is a complete mess in the state in the functioning of PDS and the

whole system is mired with corruption. After the Release Order is issued

by District Supply Officer to CONFED to lift food grain from FCI or other

agencies, there is no system of checking if the food grain reaches the FPS

and it is allotted to the beneficiaries in right quality, quantity and in time.

There is no check if the FPS has issued all the PDS food grain allocated

to it and without their being any check Release Order for the next month

is issued as a matter of course.

14. CONFED is misfit for handling distribution of PDS food grain. It has no

trucks of its own. Tender process for appointing transporters is faulty.


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Even the tenderers have no trucks of their own and they have to hire

private trucks. These transporters quote rates which are less than the

market rates. To illustrate on 6

th

March 2009 tender was issued and 6applications were received. The transporter names Hamida was

appointed in District Mewat and his rates for transportation of grain were:

Within District 6.90 per quintal

Out of district 11.50 per quintal.

The rates of transportation in the previous year were Rs.13 per quintal for

within district and out of district 20.50 per quintal. It is pertinent to

mention that the rates for the previous year was double the rate of the

current year.

15. No doubt that FPS is not a profitable proposition. But it is also apparent

that the FPS owners are not interested in selling other grocery items from

the shop. No amount of increase in commission even by 100%, to an FPS

owner will make his shop viable for him to earn sufficient income. An FPS

owner can certainly add to his income by selling grocery items from his

shop but, it would appear, greed overtakes to make a quick buck from the

black-market and to share his ill gotten income with corrupt officials,

politicians and transporters. There is no prohibition from the State for the

FPS owner to sell other non-PDS items from his shop. Diversion is

lucrative business considering the vast difference between the PDS food-

grain price and the market price.

16. Committee has suggested that in order to combat corruption and

strengthening PDS there has to be a zero tolerance approach. Everything

appears to be fine on paper but its implementation is faulty.

17. During its visit to the State of Haryana, Committee visited State capital

Chandigarh, eight districts Ambala, Kurukshetra, Rohtak, Faridabad,

Mewat, Palwal, Bhiwani and Hissar. Apart from meeting officials of the

State, FCI, State agencies, the Committee met a cross section of people.


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These included NGOs, FPS owners, transporters and beneficiaries. The

Committee also inspected FPSs, wholesale godowns, godowns of State

agencies and FCI. Committee also visited offices of the Department ofFood & Civil Supplies in some of the districts. The Committee got full

cooperation from the officers of the State Government, State agencies

involved in the procurement and distribution, CONFED (the authorized

wholesaler in the state) and FCI.

18. Committee records its appreciation of the assistance rendered.

Committee met various officials of the State Government. The Committee

had public meetings at Kurukshetra, Rohtak, Mewat and Hissar. The

Committee also had informal meetings with various stake holders at

Ambala, Faridabad, Palwal and Bhiwani. Due publicity had been given of

the visit of the Committee. Committee wishes to record its appreciation

of the help and assistance rendered by Mr. A.R. Godara, Addl. Director,

Department Food & Civil Supplies, Government of Haryana to the

functioning of the Committee. Mr. Godara has however, retired before

the Committee could finalise its report.

19. Participants in the meetings with the officers at various places are as

under:-

Chandigarh Mr. Dharamvir, Chief Secretary, Haryana; Mr. L.S.M. Salins,

Principal Secretary (Food & Supplies Department); Mr. Avtar Singh,

Commissioner, Food & Civil Supplies & CMD, CONFED; Mr. A.R. Godara,

Addl. Director Food & Sup0p-lies and Mr. Arun Gupta, General Manager,

Food Corporation of India.

Ambala - Mr. Samir Pal Sarow, Dy. Commissioner, Mr. Y. Puran Kumar,

S.P.; Mr. G.P. Sikri, DFSC; Mr. Surinder Arora, AFSO; Mr. Brham Pal

Rana, Chairman, Zial Parishad; Karnail Singh, Distt. Manager, CONFED;


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Mr. Vinod Kumar, DM(B), CONFED, Chandigarh and Mr. Sandip Singal,

D.M, FCI, Karnal.

Kurukshetra Mr. Narinder Singh, Addl. Deputy Commissioner; Mr, A.R.

Godara, ADFS; Mr. Ashok Bansal, SDM Thanesar; Ms. Manjula

Dahiya,DFSC; Mr. Dhan Singh, D.M.,CONFED; Mr. B. Devanand, D.M.,

FCI; Mr. Vinod Kumar, GM(B), CONFED, Chandigarh and Mr. Prem

Singh,BFSO,Ambala City.

Rohtak Mr. P.C. Meena, Dy. Commissioner; Mr. A.S. Mann, A.D.C.; Mr.

A.R. Godara, A.D.F.S.,CMD; Mr. Vinod Kumar, G.M. CONFED,

Chandigarh; Mr. Parmodh Sharma, D.F.S.C.; Mr. D.K. Singla,D.M.

CONFED; Mr. K.C. Garg, D.M.,FCI; Mr. Harbans Lal, Manager

Procurement,FCI and Mr. Mahavir Sharma, Asstt. Registrar,G.M Coop.

Store.

Faridabad Mr. Barjinder Singh, Dy. Commissioner; Mr. Pushpender

Singh Chauhan, SDM; Mr. A.R. Godara, Addl. DFC, Chandigarh; Mr.

Vinod Kumar, GM, CONFED; Mr. Ram Avtar, DFSC; Mr. Anil Malik, DM,

CONFED, Faridabad and Mr. K.K. Barua, Area Manager, FCI.

Mewat (Nuh) Mr. Mehtab Singh, Dy. Commissioner; Mr. S.S. Dalal,

Addl. Dy. Commissioner; Mr. Atul Dwivedi, SDM; Mr. Inder Pal B ishnoi,

SDM; Mr. K.K. Goyal, DFSC and Mr. Ashwani K. Gaur, Dy. Director.

Palwal Mr. M.K. Mahajan, Dy. Commissioner; Mr. Ram Niwas, DSFC;

Mr. Shankar Lal Gupta, AFSO; Mr. Amrik Singh, DSP and Mr. R.D. Mehra,

Distt. Manager, CONFED.

Bhiwani Mr. Vikas Gupta, Dy. Commissioner; Mr. R.C. Bidhan, ADC; Mr.

Azad Singh, DFSC; Mr. A.K. Goel, Dy.DF&SS(HR),Ch.D; Mr. Kamal Singh

DPRO; Mr. K.K. Varsmnei, DPO & ADC; Mr. Dharam Pal Singh,

Manager(D),FCI; Mr. L.R. Jain, Area Manager,FCI, Hissar; Mr. Subhash

Singh , Distt. Manager, HAFED and Mr. T.K. Mittal, D.M., CONFED.


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Hissar Mr. O.P. Sheoran, Dy. Commissioner; Mr. Amardeep Jain, SDM;

Mr. D.P. Singh, City Magistrate; Mr. Pankaj Nain, ASP; Mr. Dharmvir

Goyat, Distt. Food & Supply Controller; Mr. D.C. Sharma; DFSO; Mr.Subhas Sihed, Asstt. Food & Supply Officer; Mr. S.S. Bishn oi, Distt.

Manager, CONFED; Mr. B.S. Bhati, Area Manager, FCI; Mr. Jaivir Singh,

Asstt. Controller Legal Meteorology and Mr. Jaipal Singh, Inspector, Legal,

Meteorology.

20. Members of the Committee who visited the State are Ms. Meenakshi

Chauhan, Ms. Naomi Chandra and Mr. Shohit Chaudhry (being members

of Legal Team), Mr. K.K. Mittal, Director and Mr. J.K. Bhutani, Section

Officer. Mr. S.C. Rawal, a former Registrar of Delhi High Court and

appointed as Secretary by the Chairman, has been performing functions

of the Secretary of the Committee. Dr. N.C. Saxena, however, could not

offer any assistance to the Committee perhaps due to his other

engagements.

21. The Committee is submitting its report which has been divided into various

Chapters like distribution of food grain, appointment of FPS dealers,

viability, identification of BPL, wheat flour (atta), coupon system, diversion

of foodgrains, vigilance, enforcement & complaint mechanism and

computerization . Overview has been given of the PDS in the State and

recommendations made. An attempt has been made to make each

Chapter self-contained and there is possibly a repetition at various places.

Delhi

(Justice D.P Wadhwa)Chairman

Central Vigilance Committeeon Public Distribution System


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Broad Overview

1. There are 21 districts in the State of Haryana. There are 9570 (2751

Urban and 6819 Rural) Fair Price Shops (FPS) catering to 54,32,815 ration

cards. The population of the State of Haryana as per 2007 census was

2.39 Crores and the projected population as on 31.10.2008 was 2.44

Crores. As per the Planning Commission there are 7.29 lakh families living

below the poverty line in the State. However, the survey revealed that

there are about 11.97 lakh (BPL + AAY) families below poverty line. The

State of Haryana is a wheat surplus State.

2. The Central Vigilance Committee visited the State of Haryana from 5th -

12th, August, 2009 and 29th November to 1st December, 2009. The

Committee during the visit met the officials of the State Government in

Chandigarh and discussed various issues concerning PDS in the State.

The Committee also studied of the functioning of the Public Distribution

System in the following districts of the State- Ambala, Kurukshetra,

Rohtak, Faridabad, Mewat, Palwal, Bhiwani and Hissar. The Committee

interacted with the State Government officials, District officials, Officials of

FCI, CONFED, Consumers, FPS dealers, NGOs, Self Help Groups,

Consumer Organizations and Media etc., to assess the working of the PDS

in the State. The Committee found that Public Distribution System in the

State has failed miserably. There is a large scale diversion from wholesale

distribution to retail distribution.

3. It seems that the Public Distribution System in the State needs to be

analysed by the senior level functionaries of the department and drastic


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changes need to be done to make the PDS in this food surplus State

workable. During the visit the Committee examined the following aspects

of the PDS regarding the Implementation of the Government Rules andRegulations and Control Order and the compliance of the directions of the

Honble Supreme Court concerning PDS :-

i. Distribution of Food grains.

ii. Mode of appointment of FPS dealers.

iii. Viability of FPSs.

iv. Functioning of Vigilance Committees.

v. Enforcement and complaint mechanism.vi. Identification of Beneficiaries.

vii. Issuing of ration cards.

viii. Role of officials of the Department at different levels concerning

PDS.

ix. Computerisation.

4. During the visit of the Committee public meetings were organized atdifferent places to know the grievances of stake holders concerning PDS.

The views expressed by the people during these public meetings are

mentioned at the end of the report as Appendix.

5. On the basis of the observations and findings the Committee has made

some recommendations in the report which are enumerated in separate

chapters. The Committee has analyzed various aspects affecting PDS inthe State in different Chapters which are as under:-

6 Distribution and Transportation of the Food grains :-


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6.1 The State of Haryana is a wheat surplus State. The Central Government

under its decentralized procurement policy has allowed certain agencies of

the State Government to procure wheat on its behalf. The FCI is theagency of the Central Government for procurement of food grain. In

Haryana the State Food and Supplies department, HAFED, FCI Haryana

Region, Haryana Warehousing Corporation, CONFED and Haryana Agro

Industries Corporation have been allowed to do procurement on behalf of

the FCI in the ratio of 20%, 33%, 20%, 9%, 9%, and 9% respectively. All

these agencies procure wheat from the farmers who come to the Mandis

set up by Haryana Agricultural Marketing Board and store it in theirgodowns.

6.2 The State agency CONFED is responsible to lift the foodgrain from the

procuring agencies and to deliver the same at the doorstep of the Fair

Price shops. The CONFED does not have its own trucks and it appoints

transporters through Tender process. The transporters appointed through

tender process usually do not have sufficient trucks and usually they haveone or two trucks of their own and rest of the trucks is hired by them.

The Committee observed that the transporters quote less than the actual

rates to get the Contract. This clearly gives inference that they recoup the

losses by diverting the foodgrain.

6.3 For Instance in Mewat District, On 6th March 09 tender was issued and 6

applications were received. The transporter named Hamida was appointedand his rates for transportation of grain were

Within District 6.90 per quintal

Out of District- 11.50 per quintal


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6.4 The rates of transportation in the previous year were Rs. 13 per quintal

for within district and out of district 20.50 per quintal. It is pertinent to

mention that the rates for the previous year was double the rates of thecurrent year. The transporter himself quoted such low prices and later in

August he refused to Continue as transporter even at the cost of forfeiting

his security amount.

6.5 Committee on perusal of transporters file observed that the transporters

usually have one or two vehicles. Officer of CONFED informed the

Committee that as the number of vehicles are not sufficient thetransporter hires trucks for supply of foodgrain to FPS. As the private

trucks are hired by the Transporters to carry and transport foodgrain the

question arise that why the private truck owners transports the foodgrain

in lesser rates than the market rates. These facts give direct inference

about the Diversion of the foodgrains during transportation. Similar facts

were observed while perusing transportation files pertaining to other

districts.

6.6 Further, it is to be noted that no officer of CONFED accompanies the truck

while transportation of the foodgrain from procurement agency to the fair

price shops. There is no monitoring by the CONFED officers on the

transportation of foodgrains. Once the foodgrain is lifted and loaded in the

truck from the godowns of the procuring agencies it is totally in the hands

of the transporters. The transporter and whether he delivers the fullquantity at fair price shop or not.

6.7 The Department officials are duty bound to check whether the foodgrain

have reached the fair price shop or not. The department has to certify


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that the 100 % foodgrain has been delivered by the transporter and give

the same to the CONFED before the bills pertaining to same is cleared.

However, the Committee observed that the department officials are notchecking the delivery of the foodgrain by CONFED appointed transporters

at the fair price shops. This clearly indicates the connivance of CONFED

officers, department officials and the transporters. Strict Penal actions

should be taken against officers and transporters if found guilty of

diversion of foodgrain.

6.8 The Committee observed that the shops are not opened for distribution offood grains and other items through out the month. It was also observed

that the time schedule adopted by the Department for distribution is not

proper. The time schedule for deposit of the money by the FPS dealers,

issuing of release orders, lifting from the State agencies by CONFED and

distribution by CONFED to the FPS dealers has been fixed in such a way

that the actual duration for distribution for the FPS dealer is only 10-15

days. This is in violation of the direction of Honble Supreme Court.

6.9 Presently the APL beneficiaries entitled to 35 kg foodgrain however, it was

found that they are not getting any foodgrain. The BPL beneficiaries in

some districts are getting 28 kg and in some districts they are getting 31

or 32 kg foodgrain. However, AAY beneficiaries are getting 35 Kg

foodgrain.

6.10 In the State of Haryana there large number of labours from different

States keep migrating in search of work. The Committee feels that there

should be some provision of food security for the migrant labour who

come in search of job or work from their native places temporarily. They


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could be registered as temporary residents and provision should be made

for providing PDS food grains etc. to them also.

6.11 The Committee during the visit to the State came across many cases of

damaged/ rotten foodgrain supplied to the consumers under PDS. It was

informed by the District Officials that generally the quality is proper

however at some places the grain is damaged because of the non-

availability of storage space with the procurement agencies in Haryana.

They have to store the foodgrains sometimes in the open. The Committee

feels that State Government must take immediate steps for creatingstorage space so that the foodgrains is not damaged and the proper

quality is available to the consumer though PDS.

7 Quality Control / Joint Sampling of food grain -

The Committee during the visit observed that joint sampling of foodgrain

is not done by the agencies at the time of lifting of the food grains. No

sample is provided to the FPS dealers. This is again violation of the Public

Distribution System (Control) Order, 2001 which provides for the

mandatory display of samples by the FPS dealer in his shop. The samples

are essential to ensure that the same quality is being distributed by the

FPS dealer which has been delivered by the wholesale agents. Though

the clause 9(v) and 10 (1) imposes duty on FPS dealers and CONFED to

display samples of foodgrains, same was found to be not followed all the

districts visited by the Committee. It was observed that the provisions of

the Control Order are not implemented properly and the officers

responsible for monitoring the same shall be made accountable for such

lapses.

8 Mode of Appointment of Dealers :-


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8.1 As per Clause 2(k) of the Haryana Public Distribution System ( licencing

and control Order, 2009 the District Food and Supplies Controller of theconcerned district. Clause 2 (i) of the Haryana Public Distribution System

(licencing and control Order, 2009 provides that the Lincence of a fair.

The license of a fair price shop shall be granted for a minimum number of

600 ration cards not exceeding 1200 ration cards, but in rural areas a

village shall be treated as one unit for this purpose and as such the

license for the fair price shop may be issued even for less than 600 ration

cards of the village.

8.2 The Haryana PDS control Order 2009 of the State provides that Licensing

authority shall call for applications through local publicity and munadi in

the local area of the Fair Price Shop. A committee comprising District Food

and Supplies Controller, Inspector Food and Supplies concerned and the

Sarpanch of village in rural area and District Food and Supplies Controller,

Inspector Food and Supplies concerned and Municipal Councilor in urbanarea shall recommend to the licensing authority the name of the eligible

applicant as per these priorities/ preference. However, it was observed by

the Committee that the procedure of appointment of FPS dealer is vice

versa. The persons having political links first get recommendations from

the Sarpanch or Municipal councilor and apply for the licence. The

department on obtaining the applications publicize the vacancy through

munadiwhich is mere formality. Such persons are given time to show list

of 600 families and on submission of the list he is given lincence. It is only

on the basis of the resolution of Panchayat, the FPS dealership is given. It

was also seen that in practice recommendations of local politicians, MLAs,

Municipal Councilors, Sarpanch and other influential people are the only


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qualification for getting FPS licences. Other conditions as prescribed in

the Haryana State Control Order of 2002 and latest order of 2009 are not

followed while granting the FPS dealership. No vacancy is advertised.

8.3 The provisions of the Haryana Control Order 2009 recognizes and gives

legitimacy to political interference in appointment of dealers by making

the Sarpanch and the Municipal Councilor as members of the rural/urban

committees appointed for recommending the applicants for allotment of

licences for Fair Price Shops. The Committee is of the view that political

involvement in the grant of licences has to be completely eliminated.

8.4 Clause 2(h) Provides the eligibility condition for the applicant. Provides

that a person having 10+2 or its equivalent qualification, not less than

21 years of age and is a resident of the locality for which the fair price

shop license in applied for. However, in case of a Group like Self Help

Group and Sakshar Mahila Samooh, the condition of 10+2 pass and age

will not apply; The Order provides for preference to unemployedgraduates while granting FPS licence. The Committee is of the view that

as the FPS is not a viable unit giving preference to unemployed graduates

serves no purpose. As the income of FPS dealer is not much they indulge

in malpractices to make profits.

9 Viability of Fair Price Shops :-

9.1 During the visit to the State the Committee visited number of shops in

various Districts. The Committee feels that stand alone FPS is not

profitable. There was a general demand to increase the commission of


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the FPS, at some places there was also a demand from FPS dealers that a

fixed salary may be given to them for running the FPS.

9.2 The Committee is of the view that since any amount of increase incommission would not make an FPS viable, it is, therefore, necessary that

FPS dealers should sell grocery items along with PDS items. The condition

should be that in the Grocery / Kirana shop, the sale should only be non

PDS commodities. The Committee feels that the condition should be put

in the licence that FPS owner must have a running Kirana / Grocery shop.

In case of default or non compliance with the condition, the FPS licence

should be revoked.

9.3 Efficient retailing would require pre-conditions such as experience and

ability to undertake certain investment and sustain an adequate return.

FPS licences should be granted to people/ groups who have adequate

liquidity of fund. Integrity and rapport of person in the local area are other

aspects to be considered. Pattern of ownership of FPS can have

important bearing on their viability. Self Help Groups and Cooperativescan be given priority for granting licences to rationalize the cost structure

of FPS.

9.4 The Order provides for preference to unemployed graduates while

granting FPS licence. The Committee is of the view that as the FPS is not

a viable unit giving preference to unemployed graduates serves no

purpose. It is a well documented fact that the FPS owner is in business forthe purpose of diversion or for political influence or other influence that he

can wield by being an FPS retailer. There is massive corruption woven

around it where the participants are the shop keeper, officials of the

Department / Corporation, transporters and last but not the least the


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politicians. The Committee is of the view that the reservation for various

categories provided in the Haryana Public Distribution (Licensing and

Control) Order, 2009 appears rather unnecessary. FPS licences should beallotted to persons of the locality who are already running kirana/ grocery

shop or have the capability to do so. Though there is a clamour for

allotment for FPS, the stand alone FPS does not rehabilitate or support

sustenance of any category or gender. It rather breeds corruption.

10 Enforcement, Vigilance and Complaint Mechanism :-

10.1 There is no separate system of implementation of enforcement and

vigilance in the PDS as currently there is no separate cell for the purposes

of monitoring PDS. It is recommended that a separate division of

enforcement and vigilance of PDS be started in the State in order to deal

with the specific problems of PDS.

10.2 The rate, at which action is taken against the errant FPS dealers anderrant officials, is abysmally low. Thus there is no effective deterrent to

stop malpractice in PDS. It is necessary that there should be special

squads for enforcement of PDS. The squads should be responsible for

conducting raids, surprise checks, conducting prosecutions,

recommending Departmental action against the officials and taking action

against the defaulting officer under the Haryana PDS Control Order 2009,

Essential Commodities Act 1955, Prevention of Corruption Act, 1988 andIndian Penal Code. The Haryana PDS control Order 2009 provides that if

any Licencee contravenes any of the terms or conditions of the license or

of any control order issued under the Act the licence shall be suspended

immediately without giving any notice. The licensing authority shall take


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strict action which included forfeiture of the security deposit in full and

suspension of licence; cancellation of the license and forfeiture of the

security deposit in full; or registration of criminal case as per provisions ofthe Act. However, it was observed that no action is taken by the officials

against errant FPS dealers. PDS operation should be based on the

principle of zero tolerance. Any infraction of the Rules and Regulations or

Instructions should invite strict action not only against the FPS owner but

also the concerned officials.

10.3 The Committee found that most of the FPS dealers do not have properweights and mostly the certificates are obtained without actually checking

the weighing machines. The officials of the Legal Metrology department

should also be made accountable for any act of omission or commission in

fulfilling their duties.

10.4 The State should set up Vigilance Committees at the State and District

levels also to keep an eye on the Public Distribution System. Date, Placeand time for the meeting of the committees should be fixed in advance.

Vigilance Committees at various levels be strengthened by including the

NGOs, Self Help Group, Consumer Organisations and the educated youth

in the Vigilance Committee at various levels. The meetings of the Vigilance

Committees must be convened regularly.

10.5 The Village/ FPS level committee should also meet regularly every month.Minutes of the meetings of the vigilance committees should be recorded.

Follow up action should be reviewed in the next meeting.


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10.6 There is no effective and systematic complaint redressal mechanism for

the common people. In the absence of a customized complaint redressal

system, most of the grievances of the common man go unheard andunattended, encouraging the corrupt practices by the dealers and the

officials. It is recommended that an effective complaint redressal system

for PDS related grievances be initiated wherein the beneficiaries may

register and also follow up their complaints.

10.7 State should set up a 24 hours toll free helpline where a beneficiary can

lodge his complaint. The toll free number should be printed or stamped onthe Ration Card. There should be a system of the follow up of the

complaint. A post of Ombudsman/Regulator should be created for PDS.

The Ombudsman/Regulator should look into complaints including the

complaints received through the helpline and take appropriate action

against the defaulting licencees and the officials concerned.

11 Indentification of Beneficiaries

11.1 During the visit to the State there was a general complaint that the

deserving people are not having the ration cards and those who are well

to do and prosperous are included the BPL category. There are large

scale exclusion and inclusion errors in the survey done for identification of

BPL families. Committee feels that to make the PDS purposeful it is most

essential that survey should be done by an independent agency which canwork without any political interference and the survey is conducted

without any fear and favour. The Committee feels that Registrar General

of India may be entrusted this work of identification since they have


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necessary experience in such work and also be perceived as a neutral

agency.

11.2 The Committee also feels that the State Government should have

periodical checking of ration cards and there should be continuous process

to weed out bogus cards as provided in para 2 of the Annexure to the

Public Distribution System (Control) Order, 2001. It is also suggested that

a list of the BPL families should be displayed at the FPS.

11.3 The committee was informed that the correct figures have not beencollected during the 2004 BPL survey due to which there was

discontentment amongst the public. Hence the survey was cancelled and

a fresh survey was ordered. The fresh survey was entrusted to Ex-

servicemen. This survey was completed in 2007.

11.4 As per the Planning Commission there are 7.29 lakh families living below

the poverty line in the State. However, the survey revealed that there areabout 11.97 lakh (BPL + AAY) families below poverty line. Since the

number of BPL families found in the survey was more than the estimates

of the Planning Commission, the State decided in year 2008 to treat 3.83

lakh families as State BPL. The BPL cards issued within the limits

prescribed by the Planning Commission are named as Central BPL. By

an order dated 04.09.2008 it was decided that the State will collect the

APL and BPL allocation and distribute it amongst the Central BPL andState BPL equally at 35Kg.per month per ration card. The difference in

cost between the APL wheat and State BPL wheat will be borne by the

State. The quota of the BPL has since been reduced to 33 Kg. per family


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per month. BPL card holders are given wheat @ Rs.4.84 per Kg. AAY

families are being distributed 35Kg. wheat per month @ Rs.2.10 per Kg.

12 Use of ration card as an identity:-

The Committee during the visit to the State observed that ration card is

not only used as identity card but is required for availing benefits under

various schemes of the Government. This is in violation of the provisions

of Public Distribution System (Control) Order, 2001 issued by the Central

Government. The Committee feels that ration card should be de-linkedfrom all other schemes and steps should be taken to ensure that it is not

used as an identity card.

13 Awareness among Beneficiaries

13.1 The Committee during the visit to the State found that there is lack of

awareness in the people about their rights and entitlements. The

Committee is of the view that for the proper functioning of the PDSawareness is very important.

13.2 To create awareness among the people it must be ensured by the District

administration that a press release is issued at the beginning of the month

indicating the quantity issued to be FPSs, entitlement of various categories

of the beneficiaries, rates of the commodities to be charged by the FPS

dealer so that people can know their rights and entitlements. To furtherenlighten the peoples of their rights and entitlements, pamphlets, posters

must be published and widely circulated. Local TV channels may also be

requested to show all these above mentioned details on their scrolls to

create awareness among the people.


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13.3 A Public hearing for PDS on the lines of the Lok Adalat ( Electricity/

telephone/ water) must be convened at a designated place, time and dayevery 2/3 months where general public can seek to resolve outstanding

issues pertaining to the PDS. These may include those relating to their

category / entitlements, non-issuance of the cards, bifurcation of cards,

wrong inclusion of APL, complaints regarding under-weighment etc. PDS

Lok Adalat so constituted should be presided over by District Judge or a

Judicial Officer nominated by him not less than the rank of Additional

Judge and should include the Collector of the District and the District Foodand Supply Controller. A system of accountability must be put in place to

ensure the implementation of decisions taken during these hearings.

14 Computerisation:-

The Committee during the visit to the State observed that the

computerization process has been started. It was informed that the first

phase of computerization has been completed in most of the districts and the

second phase is being implemented in 7 districts. The Committee feels that

end to end computerization is essential for improving the Public Distribution

System. The Committee has already submitted a detailed report on

computerization to Honble Supreme Court for improving the functioning ofPDS. State Government should take up the computerization of PDS on the

lines as suggested by the Committee in its report.

**************


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CHAPTER 1

INTRODUCTION

1. Haryana lies in northern India and is bordered by the Indian states of

Delhi, Rajasthan, Uttarakhand, Himachal Pradesh, Uttar Pradesh and

Punjab. It has a population of 2,10,83,000 and an area of 44,212 sq km.

2. Haryana became a new state of India on 1st November, 1966 with

Chandigarh as its capital, and since then it has made progress to become

one of the most prosperous states of India. Haryana's geographical

proximity to the national capital New Delhi and, a well developed telecom

and transport infrastructure, are its major strengths in the economic field.

3. The population of the State of Haryana as per 2007 census was 2.39

Crores and the projected population as on 31.10.2008 was 2.44 Crores.

There are 21 districts in the State with 6955 villages out of which 6764

villages are inhabited. There are 9570 (2751 Urban and 6819 Rural) Fair

Price Shops (FPS) catering to 54,32,815 ration cards.

4.As per the Planning Commission there are 7.29 lakh families living below

the poverty line in the State. However, the survey revealed that there are

about 11.97 lakh (BPL + AAY) families below poverty line.

5. In order to study the Public Distribution System in the State of Haryana,

the Committee visited Chandigarh and held discussions with the Chief


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Secretary, Principal Secretary Food and Supplies Department and other

Senior Officers of the Department. The Committee visited the office of the

Haryana State Federation of Consumers Co-operative wholesale StoresLtd., popularly known as CONFED which is the agency responsible for

door step delivery of the PDS food grains to the Fair Price Shops.

6. The Committee visited Chandigarh and the Districts of Ambala,

Kurukshetra, Rohtak, Faridabad, Mewat, Palwal, Bhiwani and Hissar.

Public meetings were held to get suggestions from the general public, Fair

Price Shop owners, Municipal Councilors, Surpanch, NGOs, Self HelpGroups, Consumer Organisations etc. Meetings were also held with District

Officials and field staff of the Food and Supplies Department.

7. The State of Haryana and the Union Territory of Chandigarh have been

selected for the pilot projects on computerisation of the Public Distribution

System. The Committee invited the team of officers from the State

responsible for the pilot project along with the representative ofExpedien_E-Solutions who gave a presentation of the proposed system.

The Committee obtained a copy of the Detailed Project Report (DPR) and

visited the PR Center at Ambala where the work on the computerisation

project is in progress.


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CHAPTER 2

LEGAL REGIME

2.1 ESSENTIAL COMMODITIES ACT, 1955: The Essential Commodities

Act 1955 (Act) is an Act to provide, in the interest of general public, for

the control of the production, supply and distribution of, and trade and

commerce, in certain commodities.

i. Section 3 of the Act confers powers on the Central Government to control

production, supply, and distribution etc. of essential commodities. Central

Government has issued an order called Public Distribution System(Control) Order 2001 (Order), which was amended in 2004.

ii. Stringent provisions exist in the Act and the Control Order, to deal with

any infringement of the provisions of the Act or the Order.

iii. Section 7 provides for penalties. Any person contravening the Order is

liable to be sentenced to imprisonment, which may extend upto 7 years

and shall also be liable to fine. Sentence of imprisonment cannot be less

than 3 months unless there are adequate and special reasons. The

property in respect of which contravention of the Order has taken place, is

liable to be forfeited to the Government and so also any vehicle used in

carrying such commodity. If a person commits offence a second time


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then imprisonment cannot be less than 6 months subject to, adequate

and special reasons.

iv. A person who attempts to contravene or abets any contravention of the

Control Order is similarly liable (Section 8).

v. Section 9 provides for punishment upto 5 years or fine or both, if the

record is not maintained in terms of the Control Order or any statement or

information furnished, which is not true.

vi. Section 10 deals with offences by Companies.vii. Section 10A has made any offence punishable under the Act cognizable.

viii. Section 10C provides that Court may presume the existence of such

mental state where an offence under the Act requires culpable mental

state on the part of the accused. Culpable mental state includes

intention, motive, knowledge or reason to believe a fact.

ix. Under Section 11, a Court can take cognizance of an offence under the

Act not only on a complaint made by a public servant but also by any

person aggrieved or any recognized consumer organization.

x. An offence for contravention of the Control Order is to be tried summarily

(Section 12A).

xi. If an accused is sentenced to imprisonment for a period not exceedingone month and of a fine not exceeding Rupees two thousand, no appeal

can be filed.

xii. Section 14 provides that when a person is prosecuted for contravention of

any order which prohibits him from doing any act or being in possession


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of a thing without lawful authority or without a permit, license or other

document, the burden of proving that he has such an authority, permit,

license or other document, shall be on him.

2.2 The Public Distribution System (Control) Order, 2001: The Public

Distribution System (Control) Order, 2001 (hereinafter referred to as the

PDS Order 2001) has been issued by the Central Government in exercise

of powers conferred by Section 3 of the Essential Commodities Act, 1955

for maintaining supplies and securing availability and distribution of

essential commodities under the Public Distribution System. The said

Order has been amended in 2004.

2.3 Haryana Public Distribution System (Licensing and Control)

Order, 2002

The State of Haryana issued the Order dated 18.04.2002, regulating the

sale and distribution of essential commodities, known as the Haryana

Public Distribution System (Licensing and Control) Order, 2002 on. This

order (herein after referred to as the Haryana Control Order, 2002)

provided inter alia for the (i) Identification of families living below poverty

line by the Rural Development Department and Swarn Jayanti Sehri

Rozgar Yojna Departments in rural and Urban areas respectively, (ii) Issue

of ration cards to APL, BPL and AAY families (green yellow and pink)

respectively and periodical review and checking of ration cards, (iii)

Licensing for regulating the sale and distribution of essential commodities

and the responsibility and duties of the Fair Price Shop owner, (iv)

Monitoring the Public Distribution System including functioning of the Fair

Price Shops by the State Government, (v) Power of search and seizure,

(vi) Appeal and (vii) The licence fee payable by the Fair Price Shop owner

for grant of licence and its renewal.


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2.4 Some amendments were made to the Haryana Control Order, 2002 by

Haryana Public Distribution System (Licensing and Control) AmendmentOrder, 2003.

2.5 As per instructions dated 7.4.2005 joint samples ought to be taken at the

time of lifting the grain from the godown by a committee comprising of

the District Food and Supply Controller/ District Food and Supply Officer/

Assistant Food and Supply Officer, concerned District Manager/ Assistant

District Manager CONFED, Chief Analyst of the Food and SupplyDepartment and representative of the depot holders Association so as to

ensure that supply of good quality of wheat to the beneficiaries.

2.6 The Director and Special Secretary, Government of Haryana, Food and

Supplies Department issued instructions vide Order dated 21.09.2005, to

all the District Food and Supply Controllers for making the Public

Distribution System efficient. These instructions inter alia provided thefollowing :

(i) That the provisions of Haryana Public Distribution System (Licensing

and Control) Order, 2002 be strictly enforced and if any depot holder is

found guilty action should be taken against him immediately.

(ii) Local person should be given preference at the time of issue of a

licence.

(iii) While giving the licence for a depot it should be ensured that theapplicant is educated so that he can maintain proper records of the

work relating to the depot.

(iv) It should be ensured that the applicant for FPS depot has sufficient

space to store the food grain, Kerosene oil and sugar.


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(v) The licence for the depot should be given on the recommendation of

the Panchayat. In case such a recommendation is not there, the depot

may be allotted on the recommendation of the local MLA/MP.(vi) The depot holder should not be less than 18 years of age.

(vii) It should be ensured that licence for a depot is not issued on less than

600 cards in the urban areas. In rural areas the licence for a depot

may be issued taking a village as a unit even if the number of cards is

less than 600. However no depot should have more than 1200 cards

attached to it so that the beneficiaries do not have to travel long

distance to get to the depot.(viii) The Fair Price Shops should remain open from 8.00 am to 12.00 noon

and 5.00 pm to 9.00 pm in summer and 9.00 am to 1.00 pm and 3.00

pm to 6.00 pm in winter.

(ix) Detailed instructions on distribution and transportation of food grain

under the Targeted Public Distribution System have also been issued.

(x) Directions were issued to the District Food & Supply Controllers to

ensure that the release orders are issued in time.(xi) In order to ensure supply of ration to the consumer in time every

depot holder shall deposit the cost of BPL and AAY grain as per his

entitlement with the District Manager CONFED/ Co-operative

Consumer Depot from 25th to 30th for the distribution for next month.

In case the depot holder does not deposit the money as per his

entitlement action will be taken against him under the Haryana Public

Distribution System (Licensing and Control) Order, 2002.(xii) District manager CONFED/ Consumer Co-operative Stores will give

information to the District Food and Supply Controller by the 2nd day of

each month about the depot holders who do not deposit the money by

the due date.


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(xiii) The District Manager CONFED/ Consumer Co-operative Stores will

ensure door step delivery of PDS food grain to the depot holder by the

10th

of every month and will give a certificate to the District Food andSupply Controller by the 15th that delivery has been made at the door

step of the FPS.

(xiv) In villages the door step delivery of food grain should be made in the

presence of the village sarpanch and two panches and signatures of

the Sarpanch and the two panches be obtained and kept in the

concerned office of the CONFED.

(xv) The District Manager CONFED will give information about the deliveryof food grain at the door step of the FPS to the District Food Supply

Controller in advance by giving a route chart. A copy of the same will

be sent to the Deputy Commissioner/ Sub Divisional Officer.

(xvi) The District Food Supply Controller will give information in this regard

to the Deputy Commissioner/ Sub Divisional Officer by phone so that

strict vigil can be kept on the transportation of the food grain.

(xvii) It is the duty of CONFED to ensure that after lifting the food grainfrom the godown delivery at the depot is made on the same day.

(xviii) The employee/ representative of CONFED accompanying the vehicle

which goes to delivery the food grain will make an entry of the

quantity issued to the depot holder in the stock register of the depot

holder with his signatures. Besides this he will also make an entry of

the place from where the food grain was lifted and the number of the

vehicle in which the food grain was delivered.(xix) The District Food and Supply Controller and the District Manager

CONFED will review the lifting and distribution of food grain in

meetings twice a month and will ensure that there is no diversion of


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food grain during transportation. Information about this will also be

given to the Deputy Commissioner/ Sub Divisional Officer.

(xx) The contractor of CONFED will be paid the transportation charges bythe CONFED only after the District Food and Supply Controller certifies

that the food grain has reached the depot.

(xxi) Participation of Panchayati Raj institutions has been ensured in

keeping a vigil on the distribution of ration items by the depot holder.

(xxii) The Vigilance Committees have been reconstituted which will have the

following members:-

RURAL AREAS URBAN AREAS

1.

2.

3

Sarpanch

Schedule Caste Panch

(If the Sarpanch is from

Schedule caste a panch

from other caste)

Village Patwari

Municipal Councilor

Ex- Municipal Councilor

Woman representative

nominated by the Sub Divisional

Officer

If there is no Patwari in the village, village panchayat can nominate a

school teacher or an anganwari worker in his place.

(xxiii) The vigilance committee so constituted has to ensure distribution of

PDS items in its presence and the depot holder will get the allotment

for the next month only on production of a certificate from thevigilance committee.

(xxiv) The participation of the Panchayati Raj institutions has been ensured

by involving the Gram Panchayats in issue of licence for the depot in

rural areas on the resolution of the Gram Panchayat; attestation of D-1


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forms for issue of ration cards, addition or deletion of units in the

ration cards; proper distribution of the PDS commodities; Gram

Panchayat has to certify the receipt of PDS commodities at the depotand has to verify the stock register for proper distribution; Gram

Panchayat will submit a report to the Panchayat Samiti once a month

about the working of the Public Distribution System. The Panchayat

Samiti will oversee the working of the Public Distribution System and

hear complaints; the Panchayat Samiti will submit a report to the Zila

Parishad once in three months about the working of the Public

Distribution System. The Zila Parishad will have a meeting with theDistrict Food and Supply Controller every month about the availability

of essential commodities;

(xxv) The Deputy Commissioner will review the lifting and distribution of the

PDS commodities every month in the meeting of the District

Grievances Committee and if there is any complaint it will be decided

at the spot.

2.6 There is a provision of maintaining a PDS Diary which keeps a record of

inspections being conducted by the Inspectors. All the officers are

required to send their PDS diary to the head office by 15th of every month.

Every Inspector/Sub-Inspector who have been assigned depots and all

Assistant Food Supply officer have to check the depots in his area from

15th to 25th of every month. At the time of checking the concerned officer

has to make entry in 25 ration cards about the checking done in thatmonth. A certificate has to be given in the PDS diary that no duplicate

entry of any ration card has been made in the sale register. A certificate

of the vigilance committee has to be attached with the PDS diary.


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2.7 Haryana Public Distribution System (Licensing and Control)

Order, 2009

The State has issued the Haryana Public Distribution System (Licensingand Control) Order, 2009 on 13.07.2009 superseding the Haryana Control

Order, 2002. The new order inter alia provides for the grant of licence

to the dealers, licensing authorities, procedure to be followed for issue of

FPS licence, responsibilities and duties of FPS dealers, requirements and

forms of accounts to be maintained by FPS dealers. The procedure for

issuance of ration cards and use thereof has been provided in the new

order. The Control Order also provides for the enforcement procedure inthe form of powers of entry, search and seizure. There is a provision of

appeal against the order of the licencing authority and requirement of

submission of returns by the licencee. The involvement of Panchayati Raj

Institutions and Muncipal Committees / Councils have been recognized in

the new Control Order, 2009 in grant of licence to the FPS dealers.

2.8 Appointment of Fair Price shop dealerAs per Clause 2(k) of the Haryana Public Distribution System ( licencing

and control Order, 2009 the District Food and Supplies Controller of

the concerned district. Clause 2 (i) of the Haryana Public Distribution

System (licencing and control Order, 2009 provides that the Lincence

of a fair. The license of a fair price shop shall be granted for a

minimum number of 600 ration cards not exceeding 1200 ration cards,

but in rural areas a village shall be treated as one unit for this purposeand as such the license for the fair price shop may be issued even for

less than 600 ration cards of the village.

2.9 Clause 5. (I) Licensing authority shall call for applications through local

publicity and munadi in the local area of the Fair Price Shop. If any


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applicant is a graduate he shall be preferred. The order of preference of all

eligible applicants shall be as under:-

1. Self Help Group or Sakshar Mahila Group;2. Unemployed female/ male graduate;

3. Scheduled Caste female/ male;

4. Backward Class (A) female/ male;

5. Ex-serviceman.

2.10 A committee comprising District Food and Supplies Controller, Inspector

Food and Supplies concerned and the Sarpanch of village in rural areaand District Food and Supplies Controller, Inspector Food and Supplies

concerned and Municipal Councilor in urban area shall recommend to the

licensing authority the name of the eligible applicant as per these

priorities/ preference.

2.11 Clause13. (I) No holder of a license issued under this order shall

contravene any of the terms or conditions of the license or of any controlorder issued under the Act. If he contravenes any of the said terms or

conditions, without prejudice to any other action that may be taken

against him, the licence shall be suspended immediately without giving

any notice. If the licensing authority is satisfied that the licensee has

contravened any of the conditions of the license or is not performing his

responsibility and duties properly, the licensing authority shall take one or

more actions against the licensee as mentioned below:-

(i) forfeiture of the security deposit in full and suspension of licence:


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Provided that the licence may however, be validated and

suspension revoked by depositing the amount of security by the

licencee;(ii) cancellation of the license and forfeiture of the security deposit in

full;

(iii) registration of criminal case as per provisions of the Act:

Provided that no order with regard to above mentioned penal

action shall be made under this clause unless the licensee has

been given a reasonable opportunity of being heard.

2.12 Clause 2(h) Provides the eligibility condition for the applicant. Provides

that a person having 10+2 or its equivalent qualification, not less than

21 years of age and is a resident of the locality for which the fair price

shop license in applied for. However, in case of a Group like Self Help

Group and Sakshar Mahila Smooh, the condition of 10+2 pass and age

will not apply;

2.13 Clause-9 of the Haryana PDS control Order 2009 provides that

responsibilities and duties of the Fair Price Shop Licensees shall include

inter alia-

(i) sale of essential commodities as per the entitlement of ration card

holders at the retail issue price fixed by the State Government

under the Public Distribution System;(ii) display of upto date information on a notice board at a prominent

place in the shop on a daily basis regarding-

(a) list of Below Poverty Line and Antyodaya beneficiaries;

(b) entitlement of essential commodities;


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(c) scale of issue;

(d) retail issue price;

(e) timings of opening and closing of the Fair Price Shop;(f) stocks of essential commodities received during the month;

(g) opening and closing stock of essential commodities; and

(h) authority for redressal of grievances/ lodging complaints with

respect to quality and quantity of essential commodities under

the Public Distribution System;

(iii) maintenance of record of ration card holders (Above Poverty Line,Below Poverty Line and Antyodaya) stock register, issue or sale

register;

(iv) furnishing of copies of specified documents namely, ration card

register, stock register, sale register to the office of the Gram

Panchayat or Nagar Palikas or Vigilance Committee or any other

body authorized for this purpose;

(v) display of samples of foodgrains being supplied through the FairPrice Shop;

(vi) production of books and records relating to the allotment and

distribution of essential commodities to the inspecting agency and

furnishing of such information as may be called for by the

authority;

(vii) account of the actual distribution of essential commodities and the

balance stock at the end of the month to the concerned SubInspector Food and Supplies/ Inspector Food and Supplies/

Assistant Food and Supplies Officer and District Food and Supplies

Controller with a copy to the Gram Panchayat/ local municipal

body;


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(viii) opening and closing of the Fair Price Shop as per the prescribed

timings displayed on the notice board;

(ix) the ration card holder shall not be denied the supply as per

entitlement of essential commodities lying in stock with Fair Price

Shop Owner under the Public Distribution System;

(x) the Fair Price Shop Owner shall provide the relevant extract of the

record maintained by him to the beneficiary on payment of Rs. 10/-

only;

(xi) the Fair Price Shop Owner shall not retain ration card after thesupply of essential commodities;

(xii) the Fair Price Shop Owner shall use only such weights and

measures which are duly verified by the Legal Metrology

Department, Haryana;

(xiii) the Fair Price Shop Owner shall keep the complete records of the

PDS items for at least two years in his/ her safe custody;

(xiv) the Fair Price Shop Owner shall give information every month aboutthe allocated PDS item, the quantity distributed by him to the

eligible consumers and the balance stock etc. to any two members

of the Vigilance Committee otherwise on supply of PDS item shall

be given to the Fair Price Shop Owner for the next month. He shall

also obtain satisfaction certificate from the Vigilance Committee

regarding satisfactory distribution of all allotted items in the

previous month;(xv) the Fair Price Shop Owner shall be responsible for making all

essential entries in the ration cards;

(xvi) the Fair Price Shop Owner shall store and sell essential

commodities only at the place specified in the license;


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(xvii) behave with the consumers cordially and with due courtesy.

2.14 Clause 15 (1) of the Haryana PDS control Order 2009 provides the

licensee shall submit to the licensing authority concerned a true return in

Form C so as to reach him not later than the fifth day of each

month, of stocks, receipts and deliveries of each of the essential

commodities pertaining to the preceding month. Clause 15 (2) says

notwithstanding anything contained in sub-clause (1), the State

Government or the Director of Food Supplies or the Collector of theDistrict or the licensing authority may direct the licensee to submit a

return in a form prescribed by that authority.

2.15 Observations

It was observed during the visit to various districts in the State that the

instructions issued by the State Governments are not being followedproperly. Some of the observations are as follows:-

(i) Timings of shops are not maintained. During the visit of the

Committee in village Arya Nagar in District Hissar, it was found that

both the FPSs in the village were closed at about 10.30 am on

Tuesday. Similar was the position in village Ghaseda District Mewat

where the Committee found that the FPS run by one Mr. Zakhir wasclosed at 10.50 am on Sunday i.e. 29th November, 2009 (a working

day for PDS). BPL beneficiaries complained that they are given only

30 kg wheat once in three months. The shop opens once or twice a

month and shopkeeper always says that ration has not been allocated


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to him. The villagers complained that ration, if at all distributed, is

distributed after the 15th of the month. Most of the villagers are

working as labourers and they dont have sufficient money to buy theration in one go.

(ii) Many card holders of the village of BPL and AAY category complained

that they had not received their entitled ration for the month of

October and November, 2009. The officers of the Department who

accompanied the team did not have an answer to the same. It was

evident that there is no accountability of the field staff for non-distribution by the FPS dealers. It was also told by the villagers that

there is a political interference in the allotment and functioning of FPS.

(iii) The role of Vigilance Committees in PDS is only on paper. It was

observed that Vigilance Committees are not functioning properly. The

Utilisation Certificate is signed by the Members of the Vigilance

Committee without actually verifying the factual position. Generally Vigilance Committee member do not remain present during the

distribution of PDS items by the FPS dealers. The Committee was not

shown any records pertaining to the meetings of Zila Parishad with

District Food & Supply Controller.

(iv) The recommendation / resolution of Gram Panchayat regarding the

FPS licence is not based on merit and is based on extraneousconsiderations. The DSO at Palwal informed that the political

interference is to such an extent that many FPSs in the area are run by

20-25 people belonging to 2-3 families of a village who have political


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connections. Even the Municipal Councilors have FPSs in their name or

in the name of their relatives / dependents.

(v) Representatives of CONFED do not accompany the vehicle which

delivers the food grains to the depot holder. The same was confirmed

by the various CONFED officials that the Committee met during its

visit.

(vi) Sealed samples are not being issued to CONFED and thereby to the

FPS dealers. This affects the quality of the food grain that ultimatelyreaches the beneficiaries.

(vii) As per the guidelines of Honble Supreme Court of 2003 the

distribution of PDS commodities by the FPS dealers should be through

out the month. In view of the time schedule being adopted if the

payment is made in time, the release orders are issued accordingly

and delivery is also made in time, it remains open only 15 days fordistribution. Thus it is a clear violation of the directions of the Honble

Supreme Court. The Committee feels that the time schedule should

be adopted in such a way that the FPSs are open for distribution of

commodities through out the month.


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CHAPTER 3

DISTRIBUTION OF FOODGRAIN

3.1 Public Distribution System is operated under the joint responsibility of the

Central and the State Governments. The Central Government has taken

the responsibility for procurement, storage, transportation and bulk

allocation of food grains to States and Union Territories and maintenance

of buffer stocks. State and Union Territory Governments are responsible


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for identification of BPL and AAY families; issuance of ration cards to

eligible families; storage in state/UT godowns; licencing and supervision

over fair price shops; distribution of ration to ration card holders throughthe Fair Price Shops and eliminating leakages/ ghost cards etc.

3.2 The Food and Supplies Department Haryana is headed by the Financial

Commissioner and Principal Secretary to the Government of Haryana and

there is a Director Food and Supplies. At field level the District Food and

Supplies Controller heads the hierarchy and the District Food and Supply

Officers and other officers are answerable to him.

3.3 The State of Haryana is a wheat surplus State. The Central Government

under its decentralized procurement policy has allowed certain agencies of

the State Government to procure wheat on its behalf. The FCI is the

agency of the Central Government for procurement of food grain. In

Haryana the State Food and Supplies department, HAFED, FCI Haryana

Region, Haryana Warehousing Corporation, CONFED and Haryana AgroIndustries Corporation have been allowed to do procurement on behalf of

the FCI in the ratio of 20%, 33%, 20%, 9%, 9%, and 9% respectively. All

these agencies procure wheat from the farmers who come to the Mandis

set up by Haryana Agricultural Marketing Board and store it in their

godowns.

3.4 The food grain (wheat) is procured by the various agencies at theMinimum Support Price (MSP) and stored on behalf of the FCI. The

Central Government makes allocation to the State under the Public

Distribution System as per its entitlement. The rest of the grain is utilized

for other schemes of the Central Government or is sent to other deficit


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States as per the directions of the Central Government. The FCI

reimburses the State agencies for the price paid and storage costs.

3.5 The Committee visited the godowns of the FCI and Food and Supplies

department to see the conditions of storage. It was observed that the

godowns owned by the FCI have scientific storage system. However, due

to very heavy procurement in the last season a huge quantity of wheat

was still stored in the Mandis by all the agencies. Some wheat was stored

in covered sheds while a lot of wheat was stored in the open and even on

roads inside the Mandis by creating temporary platforms of woodencrates. There is an urgent need for creating more storage space in the

State.

3.6 There was no system of weighment of grain either in the Mandi or in the

godowns of the Food and Supplies Department visited by the Committee

at Ambala, Rohtak and Bhiwani. The trucks are weighed at private weigh

bridges (Dharam Kanata) and after loading they are again weighed at thesame weigh bridge.

3.7 No one accompanies the trucks from the godowns to the FPS. There is no

system of checking after the food grain reaches the Fair Price Shops and

before it is distributed to the beneficiary. Hence there is no check that the

entire quantity of grain reaches the Fair Price Shop.

3.8 There is absolutely no system of preparing samples at the godowns of theState agencies. During the visit to the Mandiin Bhiwani where the stock of

the Department of Food & Supplies, Government of Haryana was there for

distribution through CONFED, it was found that no samples are prepared

for giving to the wholesalers and FPS dealers. The concerned officers of


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the State Government and the DM, CONFED, Bhiwani were requested to

follow the joint sampling system while lifting the food grains and sample

should also be given to the FPS dealers at the time of delivery. StateGovernment officials were requested to issue necessary instructions in this

regard to all the agencies involved in this process. No samples were

found at any of the Fair Price Shops visited by the Committee. Mr. Ajay

Jain Advocate, General Secretary Yuva Shakti, at Ambala and Mr. Suresh

Valmiki a social worker at Rohtak complained of the poor quality of wheat

supplied at the Fair Price Shops. Diversion takes place in two ways, one by

selling the PDS grain in black market and secondly by substituting goodquality of grain by poor quality. The system of joint sampling must be

enforced at all the storage points and samples must be displayed at the

Fair Price Shops so that the consumer can check the quality of food grain

supplied to him.

3.9 The Committee found that the FCI has electronic weighbridges at their

godowns. At the time of delivery of food grain to the CONFED a gate passis issued in which the number of bags loaded in the truck is mentioned.

The gate pass is prepared manually. A weigh check memo is prepared in

the computer system when the truck is finally weighed but copy of the

weight check memo is not supplied to the truck driver. The Committee

feels that that the truck driver should be supplied a copy of the weigh

check memo.

3.10 CONFED is the agency of the state authorized to receive the PDS grain

from the FCI or the other agencies authorized by the Government for

procurement and transport the same to the Fair Price Shops. CONFED is

headed by a board of Directors and a Managing Director. The District


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Manager (DM) is the Head of District Office, besides him there are

salesmen and storekeepers also. The CONFED is fully responsible for

delivery of the food grain at the doorstep of the FPS. The storekeeper issupposed to make entries of the food grain in the stock register of each

and every depot holder. However, since no officer of the CONFED actually

accompanies the truck such entries are not being made. CONFED has to

submit daily statement of delivery of food grain to the DM, DFSC,

respective SDMs and area inspector/ AFSO. The cost of transportation is

added in the sale price of food grain except AAY wheat which is being

borne by the State. In Rohtak City the transportation is being done byCo-operative Store. They also have an FPS. The Committee observed

that there is no difference in the functioning of this FPS as compared to

other FPSs.

3.10 Tenders for transportation are invited every year. A Centralised

advertisement inviting tenders of door step delivery of food grain and levy

sugar are called through Director, Public Relations, Haryana which ispublished in 3-4 leading newspapers of Hindi and English. Wide publicity

of NIT is given and notice of NIT is also displayed/ exhibited at prominent

places like the offices of DC, ADC, SDM, DFSC, BDPO, Tehsildar etc.

3.11 District Level Transport Committee under the Chairmanship of Deputy

Commissioner has been authorized to open the tenders, make

negotiations and finalize reasonable and workable transportation rates.The other members of the committee are ADC, SDM, DFSC, and DM

CONFED. The committee recommends the rates to the Managing Director

CONFED for final approval. As per instructions negotiations are to be

conducted by the committee with the lowest tenderer (L-1)only.


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3.12 There is no fool proof system for the monitoring of transportation of food

grains from the State godowns to the FPS. Only a gate pass is issued tothe truck / vehicle carrying food grains and a banner having marking PDS

GRAIN is put on the front side of the truck.

3.13 The State makes allocation to every district and the District Food and

Supplies Controller (DFSC) makes the allocation for every Fair Price Shop

as per the number of ration cards attached to the shop. The allocation

orders are sent to CONFED.

3.14 On the basis of entitlement, Fair Price Shop owner deposits the cost of

food grain with the authorized bank in the account of CONFED from

the 25th to 30th every month. CONFED in turn lifts the food grain

from the godowns of FCI/ State Agency and delivers the stock at the

door step of the Fair Price Shop. The Committee was informed that

food grain reaches the shops by 10th

of the month of supply.However, the Committee observed in Mewat district that for the

payment and allocation of grain following schedule is followed :

1. Usually the payment is received from FPS dealers by 5th -7th day

of the month and same takes 3-4 days in clearance by bank.

2. By 10th or 12th day of the month the Release Order is issued by

DFSC

3. Lifting by CONFED starts from 11th or 13th day of the month fromthe godowns of the procurement and storage agencies in Haryana

for which the Release Order.

4. Foodgrain is delivered at the fair price shops latest by 20th day of

the month.


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3.15 The Committee found that the system is violative of the directions of the

Supreme Court which require that the Fair Price Shops should remain

open through out the month and that the beneficiary should be allowed to

draw ration in installments. The system effectively ensures that the

distribution of ration has to take place only between the few days when

the delivery is made to the Fair Price Shop and when he has to close his

balance to deposit money for the next month. This system alsoencourages corruption as the depot holder has the opportunity to tell the

beneficiary in the beginning of the month that no stock has been received.

A poor beneficiary is always likely to spend most of his earnings

immediately on receipt of wages at the beginning of the month and may

not be left with enough money to buy ration after the 10th of the month.

Since ration is distributed for a limited number of days the shops do not

remain open throughout the month.

3.16 There were general complaints of short supply by the Fair Price Shop

owners. The Committee inspected several Fair Price Shops. At one of the

shops in Faridabad, it was found that the Fair Price Shop owner was

supplying only 28 kg. wheat to every BPL family, instead of their

entitlement of 33 Kg. per month. He was also not making any entry of the

quantity supplied in the ration cards. In Topkhana colony of Ambala oneFPS owner Ishwar Chand had stored PDS grain at three different

premises. There were complaints against one FPS owner Pawan Kumar of

Chhibba village in Ambala that he used to open his shop before 8.00 AM


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or on Sundays only and did not open his shop on all the working days

during prescribed timings.

3.17 The Committee was also informed during public hearing and visit to

various urban colonies and villages in districts that the FPS dealer makes

the false entries in the ration cards of the beneficiaries without actually

giving the commodity.

3.18 In the year 2004 a BPL survey was conducted in the State. In this survey

all the information about the social and economic conditions of all thefamilies was collected on a 13 point scale. When the information collected

by the survey was sought to be verified through the Gram Sabhas it was

found that ineligible families having good means were going to be

included in BPL list while eligible families were being left out. It was found

that correct figures have not been collected during the survey due to

which there was discontentment amongst the public. Hence the survey

was cancelled and fresh survey was ordered. The fresh survey wasentrusted to Ex-servicemen. This survey was completed in 2007.

3.19 As per the Planning Commission there are 7.29 families living below the

poverty line in the State. However, the survey revealed that there are

about 11.97 families below poverty line (BPL + AAY). The category wise

break up of the families is as under

3.20 Ration Cards as on 30.06.2009

Category Ration Cards Units Colour of Ration

Card

APL 42,35,869 1,87,80,946 Green


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STATE BPL *3,83,361 16,33,481 Green with stamp

Center BPL *5,28,399 24,45,855 Yellow

AAY *2,85,186 12,43,240 Pink

TOTAL 54, 32,815 2,41,03,522

3.21 Since the number of BPL families found in the survey was more than the

estimates of the Planning Commission, the State decided in year 2008 to

treat 3.83 lakh families as State BPL. The BPL cards issued within the

limits prescribed by the Planning Commission are named as Central

BPL. By an order dated 04.09.2008 it was decided that the State will

collect the APL and BPL allocation and distribute it amongst the Central

BPL and State BPL equally at 35Kg.per month per ration card. The

difference in cost between the APL wheat and State BPL wheat will be

borne by the State.

3.22 The allocation of wheat to the state of Haryana category wise is as under

CATEGORY ALLOCTION

(In Mt per month)

SCALE

(In Kg. per card

per month)

APL 7501 (from 7/08) +

15,000 Addl. Allocation

35

BPL 17,381 (from June 08) 35

AAY 10,235 (from 4/08) 35

3.23 The quota of the BPL has been reduced to 33 Kg. per family per month.

BPL card holders are given wheat @ Rs.4.84 per Kg. AAY families are


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being distributed 35Kg. wheat per month @ Rs.2.10 per Kg. Wheat is

supplied to AAY families at Rs. 2.10 per Kg. (additional 10 paise are

charged on account of VAT (Value Added Tax).

3.24 During the public meetings a demand was repeat

pds report of haryana

Documents