Team- Samadhan

IIM Lucknow

Niraj Agarwal | Rohit Bhagat | Utpal Meena | Mitesh Chauhan | Neha Poonia

Problem recognition

• High exclusion and inclusion errors– High exclusion error results low coverage of BPL

households

– High inclusion error results burden on government

• Leakage during transportation or due to existence of ghost cards

• Delay in receiving goods

• Unequal distribution of ration cards between APL and BPL holders

• Increasing transportation cost

• Low commission and blockage of working capital

Total leakage Leakage through ghost cards

Source: Planning Commission. (2005). Performance Evaluation of Targeted Public Distribution System (TPDS)

Targeting errors

Proposed method for minimizing exclusion error

• Based on Vulnerability criteria method of consumer expenditure survey of NSS• Household is defined as vulnerable if it bears at least one of the following

criteria: – households do not own a dwelling unit– households that do not own any land and are not self-employed in non-agriculture and

whose no member is a regular salary earner – where members of the households primarily work as agricultural and other labour

having only homestead land with no regular salary earner– households that hold less than or equal to 2 ha of standardised cultivable land with no

regular salary earner and primarily engaged in agricultural and other labour activities – households belonging to scheduled caste and scheduled tribe– households which spend less than Rs 216.29 per capita on clothing during a year

• A value of “one” when a household had any of these possession and “zero” in an otherwise situation is assigned to prevent complete substitutability across the set of these criteria

• Score of the ith household in all the six dimensions are added to arrive at an aggregate score

• Aggregate score expresses the extent of a household’s vulnerability by the number of dimensions

Reference: Errors of exclusion and inclusion, Conference, Institute for Social and Economic Change, Bangalore

Inclusion Exclusion errors

Food grain allocation

Food grain movement

Ration card management

• Reducing possibility of reducing few deserved households

• Attribute to be included in BPL list:– single woman member (in most cases this would be either widow, divorced/separated,

or unmarried)

– disabled person as a single breadwinner from casual works

– no member above the age of 14 years age

– any member works as a bonded labour

– destitute characteristics

Proposed method for minimizing exclusion error

Minimizing inclusion error

• Proper verification of the applicant for the ration card, an effective PMT

• It will be minimum when integrated with UID

• Self-targeting technique

Community based survey can help in reducing both exclusive as well as inclusive error, which have been practiced in African countries and can be pilot tested in India

Inclusion Exclusion errors

Food grain allocation

Food grain movement

Ration card management

Existing: Food Grain Allocation

Tim

e

LevelsDept

Generates Districtwise Food GrainAllocation

Allocation Letter is dispatched to each District

DC/DSO

District prepares the FPS wiseallocation on the basis ofallocation received and currentre-tagging/de-tagging status ofFPS provided by SDO

FPS Dealer

Draft Submission by Dealer

DM

Draft Reconciliation

Which is large in number

SIO Generation

Day 1

Day 2

Day 10

Day 14

Day 24

Day 30

Source: http://dfpd.nic.in/fcamin/sites/default/files/userfiles/DetailedGuidelines.pdf and JAPIT, Jharkhand

Inclusion Exclusion errors

Food grain allocation

Food grain movement

Ration card management

Up to 21 days savedAdditional Benefits: Food Grain allocation available over internet No more hassle of preparing Demand Drafts and managing

physical instruments Bank reconciles all the payments received from FPS Dealer

instead of DM Office Bank will provide data on payment details which will be passed

into PDS application making SIO generation automatic

Proposed: Food Grain Allocation

Tim

e

LevelsDept

Generates District wise Food Grain Allocation

DC/DSO

District prepares the FPS wise allocation on the

basis of allocation received and current re-tagging/de-tagging status of FPS provided

by SDO

Bank

Auto debit from Dealer’s A/C using

ECSOptional: NeFTbased payment

DM

SIO Generation

Day 1

Day 2

Day 6

Day 7

Day 24

Day 30

Completed

In Progress

Inclusion Exclusion errors

Food grain allocation

Food grain movement

Ration card management

Existing: Food Grain Movement

On the basis of allocation, cash transferred by State Food Corp. head through

RTGS to FCI for RO

Release RO based on stock availability

State department lifts food grains and deliver

to block godown by appointed transporter

Stock unloaded in state warehouses shed and

accepted after verification

Gunny Bags are stacked

On the basis of SIO, stocks are delivered to FPS under Doorstep Delivery system

by DC appointed transporter

Food grains are unloadedat FPS and counter signedSIO is handed over totransporter for sharing withAGM

ChallengeData related to stock issuance, movement & delivery is not timely available for monitoring & proactive steps

Inclusion Exclusion errors

Food grain allocation

Food grain movement

Ration card management

Proposed: Food Grain Movement

On the basis of allocation, Cash Transfer through RTGS

to FCI for RODaily Stock lifting will be entered into PDS application and will be available online

At State Food Corp. Godown, Loaded trucks will be weighed through weight scales linked to PDS

database where FCI can match with the quantity released

On the basis of SIO, stocks are identified by AGM for delivery to FPS under Doorstep Delivery system ward/panchayat

wise

Food grains are unloaded at FPS and counter

signed SIO is handed over to transporter for

sharing with AGM. AGM records the acceptance in the PDS application

Each gunny bags will be weighed and details regarding weight, quality, stacking pos will be

entered into PDS application

Loaded quantity is measured through

Weighbridge/ weighscaleand Road Challan is

issued to DC appointed transporter

Reference: Guidelines by planning commission

Inclusion Exclusion errors

Food grain allocation

Food grain movement

Ration card management

Proposed solutions to key problem areas

• Lobbying between SFC and transporters will be reduced as digital weighing scales will lead to stock inventory data with the FCI

• FPS dealer will not be able to bypass the system as the automated Adhaar database system will detail the quantity bought at the shop, thus giving the difference left with the dealer as inventory

• Available weighing scales have to be modernized to link with computers integrated with main application

Inclusion Exclusion errors

Food grain allocation

Food grain movement

Ration card management

Key concern areas

• Possible lobbying between SFC Officers and transporters leading to pilferage of food grains

• Change in the quality of the food grains in transit

• End of the chain tracing at FPS, where the FPS dealer and transporter may come together to evade food stocks

• Unavailability of digital weighing scales at various points

• FPS dealer may sell less quantity at subsidised rate and hoard the food stock to sell in black market at exorbitant prices

FPS Automation: Integration of TPDS with UIDAI

•Ration Card No.

UID CIDR Database

•Biometrics of Beneficiary

Visit the FPS along with

Ration Card

Validate the Ration Card No. and forward to UID server through

secured lineReturn Yes/No

Authenticate Biometrics of beneficiary

Beneficiary Authenticated

Sale of Commodity

Aadhaar linked Ration card database/SRDH

•Ration Card No.•Biometrics of Beneficiary

Enrolment SytemCIDR with

Biometrics

Authentication Service Agency (ASA) – secured leased line

Authentication User Agency (AUA)

Commodity wise delivery details are entered in PDSapplication. Biometric captured as acknowledgement ofbeneficiary is forwarded with the Ration card details toAadhaar linked Ration card database/State ResidentData Hub (SRDH) through GPRS

Inclusion Exclusion errors

Food grain allocation

Food grain movement

Ration card management

Solution MatrixObjectives Proposed Solution Outcomes Measurable Criteria

Increase

Operational

Efficiency

Supply Chain

Computerization

a) Reduction in time for information exchange

b) Optimized commodity storage and movement

for higher availability at FPS

c) Approved information availability in various

forms and formats

a) Real time information availability

b) % improvement in stock availability at FPS

c) Report preparation and submission will be

near real time

Increase

effectiveness

of service

delivery

Digitization of

beneficiary records

a) Minimize leakages/diversion of food grains

b) Minimize inclusion/exclusion errors

a) Real time display of category wise list of

beneficiaries

b) % Offtake against digitally available card-id

Computerized

Allotment till FPS shop

Community driven monitoring of stock

movement and availability

Average time gap between allotment from GoI and

to FPS

Ration Card

Management System

Better utilization of rationing facility by

beneficiaries

Average time gap between submission of

application and service fulfillment

Supply Chain

Computerization incl.

procurement

a) Community participation in monitoring &

evaluation

b) Minimize leakages/diversion of food grains

c) Improving Procurement and payment to

intended farmers at MSP

d) Improve availability of food grains at FPS

a) Time gap reduction between starting of

harvesting season and actual procurement

post target fixation

b) Real time public disclosure of procurement

from intended farmers

c) Real time public disclosure on food grain

movement

Transparency Portal &

Grievance Redressal

a) Minimize inclusion/exclusion errors

b) Facilitation of social audit and ensure that

beneficiaries receive their entitlement

c) Higher accessibility to channels of

complaints/grievances

a) No. of site hits

b) Real time status update

c) Usage of escalation flow

FPS Automation a) Minimize leakages/diversion of food grains

b) Encourage transparency

c) Improve availability of food grains at FPS

a) Near-Real time public disclosure of beneficiary

wise offtake details

b) % of offtake recorded digitally

Lets revolutionize Public distribution system !!!

Thank you