Plugging The Leaks

TEAM DETAILS

Improving reach and efficiency of the Public Distribution System

TEAM NAME : AASMAAN

NAVEEN KUMAR RUBAL PRAKASH

UTKARSH KUMAR ABHYUDAYA MISHRA

VIKAS RANJAN

BIRLA INSTITUTE OF TECHNOLOGY, PATNA.

Despite for the Indian Government spending Rs 85000cr,

about 230 million people strive for food in India

In fact to provide Re 1 to the poor, the GOI spends Rs 3.75 but due to corruption in PDS only Rs 0.375 reaches finally.

PROBLEMS :-

• Identification Error

Rs 4,360 cr of the subsidy goes to the non-poor in 2012-13.

• Leakage at Different Levels

57% of the PDS does not reach the intended people, due

to leakage at different levels.

• Storage

Approx Rs 380 cr & 1.7 lakhs Tonnes of food grains were wasted

In 2012-2013 due to storage problem .

• Transportation

Approx Rs 339 cr & 18.4 lakhs Tonnes of food grains were wasted

In 2012-2013 due to transportation problem .

•Non-Transparency

Non-transparency at different levels and lack of Public Awareness.

Virtually non existence vigilance machinery at the grass root level.

• Weak & corrupt Administration

Undue political interference, lack of adequate supervision

over PDS operation at field level and laxity which often does

not result in any punishment to culprit found at the supervisory.

Unit 2004-2005

2009-2010

Distribution of Food via PDS ration shops

Mn Tons 41.5 48.9

PDS Food Received by the population , NSS

Mn Tons 13.2 25.3

% Leakage of Food via PDS ration shops

68.2% 48.3%

Food Subsidy- Ministry of Finance

Rs. Crores

24479 59621

Food subsidy according to NSS

Rs. Crores

8474 38875

PDS corruption estimate

Rs. Crores

16005 20746

A Major Problem : Corruption

GOI

FCI Farm

FPS Block

District

State

Corruption (20,747cr)

Poor

Problem:-An ADB study suggests that only 10%

of poor receive intended benefits on the subsidies offered by the Public Distribution System (PDS) in India. The country facing the problem today is not one of shortage of food grains but of managing the surplus.

Corrupt implementing machinery and sleepy and sloppy programme where there is freedom to play with its great objectives with impunity to derive unlawful pecuniary benefits.

India State hunger Index (2009)

India’s GHI 2008 score is 23.7 which ranks it 66th out of 88 countries

“57% of the PDS food grain does not reach the intended people.”

Complaint & Awareness

Centre

MULTI-APPLICATION SMART CARD

(MASC)

Bar-Code in Packets of Food Grain

Reform of PDS System

The whole power of controlling the PDS will be exercised by the District This decentralises the powers to the state.

Smart cum ATM cards for all citizens, with the Thumb Impressions(of atleast 2members in a family) as their password.

It would result from surveys done on a regular basis conducted by NSS and asserted by UIDs. The Smart Cards will be registered with Mobile

no. and bank account of the people.

All food grains will come properly packed with a unique barcode on each of them.

Each packet contains the amount of food grain which the GOI seeks to provide to each person. This ensures efficient distribution system.

The packing of food supplies will be done by electronic system.

IVRS System Toll Free No. Internet Complaint Box to make the people aware of their rights and

latest government schemes and also to Register complaints.

Brief of The Proposed Solution :-

New policy

Transparency Portal

Building Transport Network

Advantage over existing

System

Licence to the FPS are given on Storage basis. FPS owners earn Commission on the supplies they render and amount

of food grains they store. punishment to culprit found in providing wrong information in survey

Web Portal containing all the information about PDS, visible to all people.

A separate Login Section for Monitoring Committee & concerned officers to manage information on procurement , allocation and off take at all levels of the distribution system.

Distribution of supplies is done on district level basis. Each district is responsible for procurement and deliver of food grains

in its area. In case of shortage of Food Grains in a District, it collects supplies from

its surrounding nearby districts having surplus.

Removes exclusion errors thereby covering maximum people. Government saves Rs 19000cr in this system by reducing corruption. Effective handling of complaints. Error free and correct allotment and movement of foodgrains to FPS

through E-Governance.

PDS Network with the aim of providing support in the areas of development, Operations and maintenance of technology, supply chain management and transparency.

Implementing the plan :-

The PDS network will be managed by a District management system supported by Central as well as state government

Salient features

Decentralization of Operations Private Trade in Food grains: – Private

Agencies Can also contribute to the work of Block & FPs

Competitive Grain Procurement Effective, efficient and transparent

delivery system Accessibility of Location Assurance of Product Delivery (at the

desired time , in the desired size , in the ownership status

System Transparency and accountability

Account Transparency. Beneficiary Database Individual beneficiary tracking Shifting of power from political hand

to administrative hand

DISTRICT MANAGEMENT SYSTEM is responsible for implementation and monitoring

Name, photo, Address, Bank account , UID no., Mobile no., biometrics category in which the beneficiary falls and the monthly entitlement of the beneficiary, family members.

Data stored on smart cum ATM card

Data is developed on the basis of survey, verified by bank, UID, LPG card and other cards(PAN, D.L, Credit, visa card, etc.)

Verification of data or identity

Working of card

Distribution of card

Using biometrics as a tool for authentication of identity of

beneficiaries.

Response on complete transaction

Register complaints.

• Swapping the card • Fingerprint reader. • Scanning barcode on packets • Providing sealed packets of

food grains

• Updating system • Conformation message on

registered mobile no. • Circulating updated

information to district center

• Getting information through

IVRS • Filling complain through toll

free no. • Online Complaint Box to make

the people aware of their rights and latest government schemes and also to Register complaints

MULTI-APPLICATION SMART CARD (MASC)

Through this system , MASC will be accepted by FPS anywhere in India.

District head

District food & supply team

Transport team

Monitoring team

Finance team

Technical team

Block level supply team

District management system

At Centre – Manages fund, does survey and set up guidelines to the System. e.g.– set MSP(Minimum Support Price), Subsidized Price, Amount of food grain allotted to the people At State – Manages fund (optional) & does survey of the system. At District – District Level Management System

At block -- F.P.S level supply team Provides food grains to FPS and private Agencies. Keeps a store of food grains atleast one month in advance

Organisational Structure

Collects supplies from farmers, other districts and provides it to other districts & block .

Provides Food grains to the block and wholesaler.

Manages transport of food grains at all levels.

Deals with money related issues

Web portal management, IVRS and SMS updates.

Keeps a Check of proper functioning of other Teams

Transportation cost

Storage(Commission) cost

Barcoded packet cost

Computerization cost

Technical team(5×4.5lakh pa)

Finance team(6×4.6lakh pa)

Logistics cost

Technology cost

Organization cost

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Card Swapping Machine

INR 50lakh

Pa

Smart card cost

INR 75 lakhs

INR 50 lakhs

INR 1.4 cr

# An average of 2.65cr of additional funding will be required, per district annually.

IVRS & Toll Free No. cost

Proposed funding will be provided by the central govt. Total funding required for implementing this scheme(for whole country) will be 1714.65cr (647×2.65cr) which is 8.26% of the total estimated PDS corruption(20747cr).

The program will be able to impact maximum no. of poor who were earlier deprived of the subsidies offered by the Public Distribution System (PDS ) and reduces corruption up to Rs 19000cr.

Minimum Leakage

Benefits for Poor

Reduced Wastage

Easy monitoring and inspection

Food grain for every card.

Choice to collect grains from any FPS centre.

Awareness of their rights.

Toll free number for complaints.

Satisfaction, in terms of quality & quantity.

Reduced wastage/spoilage of food grains.

Improved storage system at the FPS to store sufficient foodgrain

Reduced storage burden on DMS.

DMS can buy & store more grains.

Increased Storage & Transportation infrastructure.

Transparent operation at each level.

Easy data updating. Better

identification. Detailed

information about allocation & off take of PDS, at any level.

The GDP of India would get increased.

Ensuring no loss in weight of packets.

Proper record of each card holder through UID & Computer Database.

Transaction through Bank Accounts, instead of cash.

Impact and Reach

Challenges and Risks

Concept Risks • Difficulty in handling Multi-Application Smart

Cards by illiterate people • There are still some chances of Inclusion errors. • Problem of division of poor into groups. • Unavailability of skilled workers at FPS. • Problem of identifying a customer, if the Card

Swapping Machine goes out of order. • Chances of change of fingerprints of labourers. • Lack of interest among rural people towards

learning and use of new technologies/facilities.

Mitigation Factors

Implementation Factors • Government does not see the viability of this

scheme. • Concentrated Procurement of Rice (Punjab –

25.4%,AP- 24.4%) and Wheat (Punjab- 39.2% Haryana-25.1%)

• Advertising and Awareness Campaigns. • Universalization of PDS : Entitlement of same

PDS, i.e. equal subsidies/food grains to all, irrespective of their financial/social status (along with the proposed plan)

to completely remove the Inclusion errors.

Source of funds for universal PDS : - o Money saved from leakage. o Reducing TAX exemptions.(The Right to Food

Campaign estimates that Rs.1,56lakh crore would be required for universal PDS, which is about 1/3rd of tax exemptions given by the Central govt. in 2009-10.)

• Workers will be trained with new technology. • An alternate offline mechanism, by which the

IVRS system would generate a customer’s unique code to identify the customer, using his registered mobile no.

• The proposed Biometric System would accept if the fingerprints match is more than 75%.

• Increasing farming of food grains at district level.

References

• Planning Commission. (2005). Performance Evaluation of Targeted Public Distribution System

(TPDS).

• Bhalla, Surjit S. (2012, Jan 7). Enhancing Corruption the NAC Way. Oxus Investments

• Press Information Bureau (2012, Dec 17). Review of Food grains Procurement Policy RBI handbook

of Statistics, Ministry of Finance, Budget statements, different years.

• International Journal of Business Economics & Management Research.

• Discussion paper (DEC 2012): National Food Security bill, Ministry of Agriculture ,Govt. of India.

• Report on computerization of PDS by JUSTICE WADHWA COMMITTEE.

• Report by Ministry of Rural Development on the methodology for conducting the BPL Census.

• Report on National Food Security Bill by Dr. C.RANGARAJAN

• RBI handbook of Statistics, Ministry of Finance, Budget statements, different years.

• Ministry of Consumer Affairs , Food and Public Distribution

• Report of National Sample Survey Organisation

• Report by Department of Economics and Statistics of U.S.

• http://www.pdsportal.nic.in • http://www.righttofoodindia.org

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