Whether the way state delivers services is redefined concomitantly with changes in the society that...

7/29/2019 Whether the way state delivers services is redefined concomitantly with changes in the society that are mediated

1/12Electronic copy available at: http://ssrn.com/abstract=2147567

Whether the way state delivers services is redefined concomitantly with changes in the society that aremediated by ICT? : A case of supply chain management of Public Distribution System operations in the

Chhattisgarh state of India.

T.R.SreenivasFPM2011 (CPP)Indian Institute of ManagementBannerghatta Road,Bangalore-560076e-mail: [email protected]

AbstractGlobally New Public Management is concerned with Improving public service delivery. Changes in

service delivery occur either due to demands from the society or state vision. Different maturity models alsotake similar view on e-governance adaptation. The technological sophistication of a society is critical tosocial, political and economic growth of a society. Further, changes in social, political and economic spheresand technology happen in definite stages. State vision, however, needs to be guided by concerns ofimproving capabilities of the citizens rather than growth alone. ICT implementations would be a successwhen their design, aspirations of the society and the concerns of the government are in harmony. Whentechnology is driven by strategic vision alone , the design of technology may not be reflecting thepossibilities that can be achieved with the technological capabilities and the governance processes may notbe optimised to empower citizens.

The above ideas have been tested using the case of computerisation of Public Distribution System

(PDS) operations in the state of Chhattisgarh, India. Recent policy changes resulted in deployment of ICTfor improving operational efficiency. ICT in PDS is, mainly guided by state vision, is happening at a time ofother social and economic changes. The administrative efficiencies gained by the ICT implementation isimpressive enough to sustain the spending on similar projects in near future. The project design, however,needs to be more inclusive if it has to mature in a logical fashion and considerable change in governanceprocesses may be required.

Keywords:Governance - Information - Innovation - Networks - Transparency


2/12Electronic copy available at: http://ssrn.com/abstract=2147567

Whether the way state delivers services is redefined concomitantly with changes in the society that aremediated by ICT? : A case of supply chain management of Public Distribution System operations in the

Chhattisgarh state of India1.

1. Introduction

Improving quality of public services is an integral part of the New Public Management (NPM)

frameworks adopted by many countries, including the OECD framework that had been unveiled during thereform decades of 1980s and 1990s. While the NPM suggested the modus operandi to transform thepublic sector by providing dynamic organisational culture in the public sector (Melchor, 2008), innovationsto NPM are still continuing with emphasis on horizontal coordination etc. albeit under different banners likewhole-of-government.

Certain measures envisaged under NPM can be effected within the ambit of bureaucraticgovernments, maintaining status quo. E-government initiatives like utility bill payments are examples.Kamarack , however, envisages emergence of new forms of governance with varying shades of involvementof bureaucracy. Three such models the entrepreneurial government popularised by the seminal bookThe Reinventing Government (Osborne & Gaebler, 1992) , the networked government or the hollowstate (Provan & Milward, 2003) and the market government , in which government role is confined toregulation, are suggested (Kamarack, 2002). The three different forms assume lesser and lesser role for the

government in delivery of public services, the entrepreneurial government allowing for the maximumgovernment presence and the market government the least.

Changing role of governments can also be conceptualised as a natural process of developmentwherein transformation of societies, including the institution of government, takes place in stages(W.W.Rostow, 1971). The two views of a single phenomenon allow one to draw parallels, with an intentionto understanding as to when there will be a convergence of ideas predominant in the society andgovernment , that will lead to adoption of a technology in the governance. Perhaps, it may also be true thatwhen these two stream of ideas do not converge, changes in public service delivery may be short-lived.

In this paper an attempt is made, using secondary data sources, to analyse a specific case of ICTimplementation in the state of Chhattisgarh of India for managing the supply chain of the flagship foodsecurity programme, the Public Distribution System(PDS). This specific case has been chosen as it is hailedas one of the best ICT implementations and has been in use since past five years. The project bagged manyawards, including the National e-Governance award for 'Excellence in Government Process Re-Engineering'

2. In fact many have hailed this model as the one the country has to adopt("States asked to

follow Gujarat, Chhattisgarh PDS models," 2011).

Chattisgarh, that became a separate state in 2000, has 27 districts with an area of 135,190 sq.km. Itis the poorest state in India with a Human Development Index of 0.358 in 2011("Chhattisgarh,").Success ofan ICT intervention in this backward state with poor infrastructure raises hopes of success in other places.The idea is to link the changing notions of governance with the broader concepts of development of thesociety with a view to understanding the drivers of ICT adoption in the Government.

1.1. structure of the paper

The next section of the paper examines the theoretical basis for the analysis. Section III makes anoverview of the PDS with focus on policy challenges in ensuring food security. Section IV describes thedrivers of recent policy change along with an analysis of the interests of various stakeholders. Section Vdescribes the ICT project intervention in Chattisgarh. section VI makes a critical evaluation of the project within the context of the socio economic scenario, the key players driving the change and the solutions it wouldprovide to the policy challenges. Section VII concludes with a presentation of future scenario.

2. Theoretical discussion

Lyane and Lee in their much cited e-governance maturity model (LLM) suggest a four stageevolution of e-governance systems (Layne & Lee, 2001). Evolution over these stages of e-governance,christened as cataloguing, transaction based, vertical integration and horizontal integration , depends onstructural transformation of fundamental nature in governance. At the first stage, the computerisation will belimited to intra-departmental activities, like word processing, e-mail etc. The two-way communication

between citizens and the government happens at the transaction stage. At the stage of vertical integration,

1T.R.Sreenivas, Doctoral student, Indian Institute of Management, Bangalore

2http://cg.nic.in/khadya/award.html
http://cg.nic.in/khadya/award.htmlhttp://cg.nic.in/khadya/award.htmlhttp://cg.nic.in/khadya/award.htmlhttp://cg.nic.in/khadya/award.html


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government departments discharging similar functions at local , state and national level will be integrated tocreate a unified information resource that will enable hassle free public service delivery. At the fourth stagethe government appears as a monolithic entity interacting with citizens in a unified manner. From thetechnology perspective, the process management at the transaction stage is more complex and challengingand often leads to ICT failures in e-governance(Irani, Al-Sebie, & Elliman, 2006) . Still, moving on to verticalintegration without paying adequate attention to the challenges of transaction stage appears to becommon(Irani et al., 2006). This model assumes that the society will change first and then the ICT usage willnecessitate changes in the way governance is organised.

There are discontinuities between different stages of the LLM. For instance, along with higher levelsof maturity, organisational changes , that is the way a government department is structured, are alsoimperative. The way governance is carried out need not change much in first and second stages; at thestage of vertical integration the concept of government, however, may have to change. It is possible thatsome level of private partnership and outsourcing would have happened by this time. Stage 3 is also criticalfor the technology since communication and integration-oriented technologies become more important thanmere computing and storage technologies.

In a later development, named Public Sector Process Rebuilding Model(PSPRM), it has beencommented that the LLM is too technology centric and the evolution of ICT adaptation has to be measured interms of customer centric and activity centric approach of the organisation(Andersen & Henriksen, 2006). Inthis model, role of technology is to enable the organisation to realise its strategic intent. That is ``digitalization

of the core activities not from the perspective of what is technologically feasible but from what is beneficialfor the end-users regardless of the possible internal changes caused by the digitalization'' . In answering thequestion as to why the government has to adopt an ICT technique, LLM answers it as a response to thedemands of society and PSPRM considers it as a strategic response based on a vision. Since governmentsare preoccupied with data and system integration that focusses on an internal view, according to PSPRM,most e-government initiatives are at stage 1 or what is called the cultivation phase, with low user and activityfocus.

Irrespective of the perspective, the stage models only provide a sense of direction to the policymaker. A supplementary understanding of the organisational capabilities required at each stage will enablethe policy maker to prepare the ground for the next stage and cut short the delays in ICT implementation(Klievink & Janssen, 2009).

The question that remains is what makes the citizen customers to demand more from the

government or how do governments think of strategic possibilities? As far as citizens are concerned, theiraspirations stem from their relevant experiences. When citizens start having higher expectations,governments will come under pressure to 'reinvent'. Adopting a particular ICT model would be only one ofthe facets of changes in governance . Depending on the nature of the public service, aspirations of thecitizens and astuteness of leadership, a range of possibilities would be available to a government agency. Ina democratic environment governments are forced to handle very dynamic and complex situations and suchtransformations are possible only with ``institutions that are extremely flexible and adaptable'' [ pg15](Osborne & Gaebler, 1992)}. The society has become more complex because of the new technologies(ICT now) and knowledge economy that have opened up new opportunities hitherto not available.

According to Rostow, technology has always determined the stage of growth a country has attained.In his analysis while traditional societies are characterised by an inability to take advantage of the benefits ofscience and technology, the nations are shocked by 'literal or figurative invasions' and adopt changes in thepreconditions stage. The changes are essentially in creation of what Rostow calls 'social overhead capital'-

ports and roads etc and creating conditions for a transition from agricultural to manufacturing. On the non-economic side the foundation stage witnesses emergence of entrepreneurship - both in private and publicsectors - who are prepared to take risks. In the take-off stage one or two sectors of economy drive thegrowth and increased productivity is experienced. Although Rostow's analysis is concerned with growth ofthe economy, the idea is to consider societies as interacting organisms. ``while ..economic change haspolitical and social consequence, economic change is, ...consequence of political and social ..forces'' [ pg2](W.W.Rostow, 1971). And technology is the key driver behind most of these social, political and economicchanges.

Perhaps the idea of analysing whether technology shapes society or society determines the choiceof technology is a fallacy; ``In fact, technology and society are intertwined and co-constitutive, and thiscomplex interrelationship makes any assumption of causality problematic'' (Warschauer, 2002). But the idea

of examining whether technology adoption changes society first and the technology modifies the aspirationsof the citizen or the government adopts technology as a strategic option is still relevant. While the sequenceof technology, growth , expectations and adaptation, as the above analysis suggests, appears to be logical,the strategic need of governance needs an examination.


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Governments are for development and the concept of development has been revolutionised by the

ideas of Amartya Sen. For Sen development has to be assessed based on human 'capabilities'. capabilitiesare defined as 'alternative combination of functionings that are feasible for her to achieve' [ pg 75](Sen,2000). Capabilities are freedoms enjoyed by the individual and functionings represent her achievements.Freedoms can be viewed both those that have value in themselves and the freedoms that are instrumentalfor achieving enhance capabilities. The role of a welfare state is to strive for enhancing the capabilities orfreedoms enjoyed by the citizens. Instrumental freedoms can be categorised as

political freedoms economic facilities social opportunities transparency guarantees protective security

Of the above, social opportunities and transparency guarantee are of more relevance for thesubsequent discussion. Social opportunities ensure adequate participation of citizens in other aspects ofsocial and political life. They include all activities that ensure health life, education and knowledge etc.Transparency guarantees ensures openness in the society, that assures citizens as to what can be expectedof their dealing with others. They include measures for preventing corruption, financial irregularities in public

life and fraud.

The perspective developed by Sen provides a vision for the development; the strategies of thegovernment in adopting ICT are to be guided by this vision. It is not that the specific aspects of theframework developed by Sen are entirely new. for instance most of the constitutions across the worldincluding Indian constitution guaranteed certain rights to the citizens and provided certain policy orientationfor the governments

3. Nevertheless, Sen's approach provides an yardstick for measuring development as it

unfolds, that has turned the attention away from measuring mere growth.

The adoption of a particular e-governance model can be either due to the pressure exerted by thecitizens or an exhibition of state vision. The argument here is that the ICT in PDS is more guided by thestate vision than aspersions of the citizens.

1. Policy challenges in ensuring food security through PDS1.1. The role of Public Distribution System

India, the second most populous country in the world, has always grappled with the challenge ofensuring food security to the nation ever since Independence. Among all the policy options pursued by thegovernment for this purpose, the PDS stands apart; ``the most far reaching, in terms of coverage, and alsoby far the most expensive''(Ahluwalia, 1993). The PDS,as the name suggests, manages the distributionside of the food grains supply-chain through a network of outlets known as Fair Price Shops(FPSs). It isbacked up by an open ended procurement of wheat/paddy, that guarantees a pre-specified Market SupportPrice (MSP) to the growers. MSP is announced by the Government well before the crop season. Rice is alsoprocured through a compulsory levy on the rice mills. The food grains procuring had been initially theexclusive purview of the the state run Food Corporation of India (FCI). Established in 1964, FCI was alsoentrusted with the task of storage of food grains so procured , before supplying to the state governments and

maintaining an adequate buffer stock for managing contingencies.

A state government department, commonly the Food and Civil Supplies Department(F&CSD), placesan indent with FCI and allocates food grains to various FPS that in turn ensures distribution of food grainsto the public. In discharging its responsibilities the F&CSD normally will make use of a company for storageand transportation of food grains, called the State Food and Civil Supplies Corporation (SFCSC). In somestates an agency similar to FCI handles the paddy storage and issue functions;in Chattisgarh MARKFED isthe earmarked agency for this purpose.

1.2. Targeted PDS

The system of supplying food grains to the entire population through PDS was found to be neitherdesirable nor sustainable. The inefficiencies of the so called Universal PDS (UPDS), that is supplying foodgrains to entire population , led to increased cost (overall food subsidy bill), at the same time depriving the

food security of many .The response of the government had been to target the PDS to the most deserving,

3Chapter IV of the Indian constitution that has a set of directive principles of state policy


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so that the operations of the PDS could be better managed. The Targeted PDS (TPDS), launched in 1997 ,replaced the UPDS that had been in operation, through the PDS (Control) order,2001.Some salient featuresof the TPDS are(PDS(Control) Order, 2001, 2001)

The Targeted group is Below Poverty Line (BPL) households. At the macro level, the proportion ofBPL population in any state is estimated by the planning commission. Any Central subsidy is limited by thisnumber. The actual identification of a specific BPL household is left to the state governments, who conductBPL surveys once in five years to identify such households.

Each of the BPL household is eligible to get 20 kilograms of food grains ( before April 2000 this wasonly 10 kilograms) every month at 50 percent of the economic value of food grains determined by the FCI.The price at which subsidised food grains are issued by FCI is referred to as the Central Issue Price (CIP).

The states can also supply food grains to other groups , referred as Above Poverty Line (APL) group.Every month the state places an indent for the total requirement of food grains and the centre, through FCI,is responsible for supplying such quantity. The states, however, will get the APL food grains at economicallyviable prices and subject to availability. Any subsidy to such APL groups have to be borne by the respectivestate governments. In fact, many states have chosen to provide some subsidy to certain categories of APLpopulation. For instance the Chattisgarh Government has a scheme called ``Mukhya Mantri KhadyannaSahayata Yojna'' (Mukhya Mantri Khadyanna Sahayata Yojna, 2007). The states are empowered to issuetheir own PDS orders and Chattisgarh has its own order issued in 2004(Chhattisgarh Public DistributionSystem (Control) Order, 2004, 2004).

There is a sub category of poorest among BPL who are eligible for a more highly subsidised schemecalled Antyodaya Anna Yojana (AAY). Under this scheme 35 kg of food grains are provided at rate of Rs 2per kg for wheat and Rs 3 per kg for rice. This group is expected to cover 25 million households or 38% ofBPL families from 2003-04. ("Targeted Public Distribution System (TPDS)," 2009)

Elaborate guidelines have been issued for monitoring the entire TPDS operations, with involvementof local governments, elected representatives etc. Detailed inspection and vigilance norms have beensuggested. Periodic off take reports are also to be submitted to the central government;every month the stateF&CSD sends detailed reports to the centre.

States have been given the responsibility to design credible financial and administrative mechanismsto ensure the supply of food grains from FCI designated godowns to the FPSs. They are also responsible forensuring that the food grains reach actual beneficiaries and will not be diverted in any fashion. Some of the

suggested measures to ensure the efficiency of PDS are: Different categories of beneficiaries are to be given distinctive ration cards with photographs

of family members. Normally, the cards are coloured differently. Beneficiaries must be able to draw from FPS weekly Every FPS is supposed to display details of food grain stock, quantity sold etc prominently as

public information. Delivery of food grains at FPS has to be with in the first week of the concerned month Allocation reports have to be given to vigilance committees and the committees have to

display the supply details to each FPS. Time limits have been prescribed for each activity. FPS have to maintain sale register, stock register and ration card register in prescribed

formats Designated forms have been specified by reporting of FPS (Form A), District

Authorities(Form B) and State Governments (Form C) and they have to be submitted by 7th,15th and end of each month.

In principle, provision of central subsidy is contingent on meeting the above procedures

Many policy changes are brought in soon after the TPDS was introduced, to make it operationallyviable. For instance, in 1997-98 , Government introduced decentralised procurement of food grains enablingthe states to directly procure wheat and rice. FCI will only supply the food grains that is required over andabove the procurement done by the states. This measure is aimed at reducing the storage and transportationcosts incurred by FCI("Eleventh Five Year Plan (2007-12)," 2008). In spite of such attempts somechallenges still remained.

1.3. Challenges faced by the present system}

It is often said that the PDS has to be working transparently and efficiently across the whole supply-chain management , in order to realise its objective of providing food security (Kattumuri, 2011).There aresome well documented challenges with the present PDS that is making it not performing to the adequateefficiency levels. They essentially pertain to diversion of food grains from its intended purposes. For instance


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the 10th Five year(2002-07) plan working group on Public Distribution and Food Security, reported thatdiversion of food grains from PDS is of the magnitude of 36% for wheat and 31% for rice, with largevariations across the states (Commission, 2001). Some estimate are at even higher levels, in spite of someimprovements in recent years (Drze & Reetika). Large scale diversions adversely impacts the financialsystem; the food subsidy bill has gone up to 238,270 million rupees in 2006-07 or 0.57% of GDP, anincrease by 0.15 percentage points from 1996-974.

The other important issue identified by the eleventh plan is large scale exclusion and inclusion errors,

meaning many deserving BPL households have not got the benefits and many undeserving got the benefits.Further, the problem of fake cards, that is ration cards in excess of number of households, has also causedleakages. These issues have became a national concern when the FCI was having large buffer stocks andthe off take from TPDS was not encouraging. Many had expressed a need for abolishing the PDS andreplacing the same with alternative systems of food security(Janbee, 2011).It not only includes World Bankthat bats for free trade, but Chief Ministers of states like Bihar where the PDS machinery is just not in place.There is an equally strong opposing group that demands strengthening of PDS even in the states where it iscurrently not properly functioning. Fresh evidence is put forth to suggest that of late the TPDS has improved(Drze & Reetika).

2. Drivers of change and stakeholders interests

2.1. Judicial Intervention

It needs to be appreciated that a lot of ideas behind the PDS(Control) Order 2011 emanate from acrucial judicial intervention. In fact, the Chattisgardh PDS(Control) order, 2004 liberally refers to the courtintervention. When the government had been toying with various options to improve food security, a PublicInterest Litigation(PIL) writ petition was filed in the Supreme Court of India (SC) for directing the governmentto improve the working of PDS as every year almost 300 billion Indian rupees ( almost $6 billion) are spenton PDS without any monitoring

5. In an unprecedented judicial activism the SC first appointed a

commissioner to investigate the matter and then followed up the same with appointment of a commission6.

The commission named Central Vigilance Committee is headed by a retired SC Judge, Justice.D.P.Wadhvaor in short Wadhva Committee. The following are the terms of reference of the Wadhva Committee.

The mode of appointment of dealers The ideal commission or the rates payable to the dealers, and Modalities as to how the Committees already in place, can function better Modes as to how there can be transparency in allotment of the food stock to be sold at the shops

While submitting its report for the state of Delhi, the committee observed that ``there is rampantcorruption at every level of the distribution chain and the most effective way to deal with this cancerous andall pervading corruption in the system is to introduce a completely automated system based on informationtechnology with minimal or no human intervention'' (Report for Delhi ; Report for the state of Chattisgarh ).Subsequently SC accepted this idea and gave directions to the state for speedy implementation of the PDScomputerisation. In fact the Wadhva Committee had also bee asked to submit a special report oncomputerisation of PDS operations, that the committee has since completed. These actions boosted thecomputerisation of PDS operations further. During the eleventh five year plan (2007-12), the Government ofIndia started a special scheme on computerisation of PDS operations and the same is still being operated ona pilot basis. Many state governments have started developing their own model, but the one developed bythe Chattisgarh has received a lot of attention.

2.2. A stakeholder analysis of the PDS

The adjoining Fig-1 provides a graphic account of stake holders in the PDS system who have theirown role to play in its success.

The Department of Food and Public Distribution, Government of India is the policy making body. Itneeds to have access to strategic information to be able to lay down policies like CIP, allocation to variousstates , coordination with other central ministries like agriculture, water resources etc. It needs to haveessential information for monitoring the operations and ensuring food subsidy is properly utilised.

4GDP was 41458,100 million rupees in 2006-07 and 12,607,100 in 196-97 at current prices.Source:National Accounts Statistics,CSO

5Writ Petition(C) No.196/2001Peoples Union for Civil Liberties V/S Union of India and Ors6Supreme Court order in the WP No.196/2001 dated 12.7.2006 followed by the Notification No.6-1(Accommodation)/2006-BP-II dated

01.12.2006 of the Government of India, Ministry of Consumer Affairs, Food and Public Distribution , Department of Food;http://pdscvc.nic.in/intro.htm


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FCI runs the centralprocurement operations andmanages the warehouses. Itwants to be updated with thestock position available with thestates under decentralisedoperations to be able to plan itstransportation operations as itsmain procurement centres arelocated in northern India. It has toensure quality of storage at itswarehouses across the countryand has to plan the constructionof warehouses. It has theresponsibility that its is notaccused for poor quality suppliesand has to make itself certain thatthe quality samples supplied bythem are properly verified by thestate agencies. The role of

MARKFED is similar to that of FCI. The state department isresponsible for issuing the ration

cards, conducting the BPL surveys, payment to the FCI, licensing the FPS etc.It needs to access a lot ofinformation as it operates at various levels. For instance , the food inspectors have to reach an FPS with inthree hours of receipt of food grains at the FPS for quality and quantity checking. They have to periodicallyverify the ration cards.

The SFCSC has to manage the transporters and ensure safe passage of food grains to FPS fromFCI warehouses. It also has to manage decentralised procurement operations in some states, like localwarehousing etc.

Creditors to farmers are concerned about the repayment of loans and are interested in ensuringtimely payment to farmers through bank accounts.

Transporters are concerned about the leakages happening elsewhere, being attributed to them. Theyare interested in proper weighing at different locations and fair procedures in applying rules and regulations. The District authorities have responsibility of Inspecting and submitting periodic reports. Districtmagistrates are responsible for proper allotment of FPS to different agencies in Chattisgarh. They are alsoresponsible for registering and monitoring rice mills. They have also been traditionally responsible forensuring proper procurement of farm produce. Obviously, they have a stake in accessing the informationabout various PDS operations.

The vigilance committees are responsible for displaying the supply of food grains to various FPS.They also need to monitor the working of FPS, like stock position, hours of business etc. Gram sabhas infact identify the BPL and AAY beneficiaries under their jurisdiction. They are also interested in ensuring thatthe benefits flow to the right household.

FPS expect their quota of food grains in time and have to be ensured of a minimum turn over. Fake

cards , Diversions and poor quality of food grains affect their financial viability. Farmers need a fair price for their produce and immediate payment.

The consumers expect that they get quality food grains at the places and time convenient to them.

The private grain merchants often benefit from the loopholes in the system. They also monitor theworking with a view to ensure that the system does not affect their legitimate interests, like availability ofgrain for private milling. They may also try to sabotage efficient working of the system with their capacity toinfluence decisions with their money power.

3. The Chattisgarh model of PDS computerisation

The state model covers the entire supply-chain in many innovative ways. First of all about 1577paddy procurement centres spread across the state are equipped with a computer. These computers mostlydo not have an Internet connection. These centres are normally operated by Primary AgriculturalCooperative Societies (PACS). The paddy so procured is stored warehouses of MARKFED and periodicallysent to registered rice mills for Custom Milled Rice (CMR). Paddy from FCI godowns is directly sent to ricemills for a similar process.The milled rice will be sent to SFCSC depots or FCI rice receiving centres

Fig 1: Stakeholders in PDS


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(Distribution Centres) for storage and dispatch to FPS. Thus all supply chain operations like procurementand storage of raw material (paddy), conversion (CMR) , storage of finished products(rice) and finally thedistribution of rice and sale need be computerised. It also has links with head office and branch offices( F&CSD, SFCSC and district authorities). The information network consists of apart from 1577 procurementcentres, 52 storage centers, all district officesconcerned(16 in 2007 and 27 at present), 99 CivilSupplies corporation distribution centers , 35 FCI ricereceiving centers. Other stakeholders like the farmers whosupply to the procurement centres, about 3.5 millionhouseholds carrying a ration card and the citizens whovolunteer to monitor the process are also made part ofthe system.

The ICT adaptation in Chattisgarh can be categorised intofour modules; Paddy Procurement and Milling, UnifiedRation Card Database and issue of PDS commodities toFPS, Movement of food grains and Citizen Participation inVigilance, (Dhand, Srivastav, A.K, & Jaiswal, 2008; "FoodSecurity-PDS," 2010)

Paddy Procurement and Milling

The paddy purchasing centres normally need belocated at some bigger villages. Initially about 0.78 millionfarmers who supply paddy to any procurement centre areregistered. Once farmers bring paddy to these centres,they are issued a printed receipt and a cheque forpayment instantaneously. A delivery memo for formovement of paddy to different places is also generated.The purchase details entered into the village computer isuploaded to the central database at the state capital,Raipur( where five servers are placed) through aninnovative procedure. The data is copied on to a USB drive for uploading from a nearby bigger village withInternet facility by designated personnel called `runners', who use a motorcycle for transportation. About 250motorcycle riders are employed for this purpose and they all down load software updations and upload on to

village procurement centre computers. Offices in bigger villages are equipped with V-SAT facility maintainedby National Informatics Centre(NIC). A form based stand alone application , that is also named PACS, isused on the computers of procurement centres.

The storage centres have two computers each with Internet access and a form based module toreceive and issue paddy. They can cross check receipts from the centralised database. The mills areregistered by the state and such registration details are available on line. This avoids diversion of paddy to'dummy' non-existence mills.

The CMR receiving stations, either of FCI or SFCSC use web based module to generate sampleslips, analysis report and acknowledgement report . On the the part of mills the receipt from warehouses actas a security to get more paddy for milling. They can also cross verify the details of dispatch of paddy withCMR that is being received.

Unified Ration Card Database A unified ration card database is being used for issue of ration cards. Only those ration cards havinga unique number and a barcode are now valid in Chhattisgarh. It is estimated that about 2.5 Lakh fake rationcards have been eliminated due to this method.

Issue of PDS commodities to FPS Further, allocation of subsidized food grains has now been automated, since the details of rationcards available with a particular shop are entered in a central database. According to PDS(control) order, allFPSs are required to provide monthly reports on their current stocks and sales in the previous month beforeissue of fresh PDS commodities. These figures are entered in the web application at civil suppliescorporation warehouses. Based on allocation, stock and sales figures of FPS, the actual amount of PDScommodities to be issued to FPS is calculated by the software, and a delivery order is issued on the webapplication. After the issue of delivery order, a truck challan is issued indicating the truck number, driver'sname, quantity dispatched, etc. The truck challan is also generated using the web application and the report

is sent to FPS vigilance committees. Movement of food grains Every truck carrying PDS food grains is fitted with a GPS device. If the truck deviates from its

Fig 2: Chattisgarh PDS Computerisation:

PC Quest July 2009


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permissible path or overstays at a particular location SMS is sent to the concerned authorities for necessaryaction. Further, whenever a truck reaches a warehouse for delivery, a photograph of the same using a GPSenabled mobile phone with camera is sent to te central server. The details of truck along with GPS detailsare compared with central database that has position details of the warehouse, to validated actual delivery.

Citizen Participation in Vigilance The citizen participation works as a two stage process. First the interested citizens have to registertheir e-mail and mobile numbers using the website set up for this purpose. Whenever a truck load is

dispatched, details like vehicle number, quantity are sent by SMS and e-mail to the registered user. Theconcerned citizen can verify the details at the FPS. Any complaint can be lodged on the website or a usingthe dedicated toll-free number 1800-233-3633.All the combined complaints are sent to the concerned districtofficer. This officer has to submit an Action Taken Report(ATR) on these complaints. The complaint redressalsystem is monitored at directorate and secretariat level for their speedy disposal. Between January, 2009and March, 2010 about 25% of 3,500 complaints have been found to be factual and penal action has beentaken.

4. A critique on the Chattisgarh ICT model

While understanding the benefits accrued to various stakeholders, first of all the system haseliminated delays in payment to farmers. A farmer can choose not to sell his produce to the government, if hedoes not get immediate payment. He may still be subjected to some harassment, if he has to sell theproduce any may have to pay some 'speed money'. A major spin-off benefit is that banks have been able torecover loans easily due to cheque payment. It is reported that the recovery is almost to the tune of Rs4000millions("Overall Best Project : Government of Chhattisgarh : Computerization of Paddy Procurement andPublic Distribution System ", 2009). This is substantial , even if the new system is only fractionallyresponsible for the gains.

The system has benefited the government in many ways. It eliminated diversion due to supply ofpaddy to fake mills, fake receipts for milled rice, defaults by millers due to insufficient security(Shukla, 2011).It has helped in eliminating fake ration cards and also controlled issue of food grains to the FPS. The stockposition at FPS , warehouses is being monitored to eliminate diversion. Still, in some rural godowns there areconnectivity issues causing delays in availability of data. Weighing of trucks is not computerised and thedetails are entered manually. The diversion at FPS level has also been eliminated. The Wadhwa committeeobserves that (page 26 of the report) before computerisation the head office would only undertake districtwise allocation and the FPS level allocation was done by the local officer. Influential FPS owners would divert

food grains to their place and divert them to open market.

Public appear to be happy with the arrangements. They have a say in the affairs of FPS and hasbeen participating in good measure in web based vigilance activities. It has been observed that Reducingleakages requires political commitment and participation of the people in the delivery process(Swaminathan,2008) and the Chattisgarh experiment has addressed a significant part of the issue. The outlook article citedearlier mentions of a survey in four districts of Chattisgarh that reported 92% public satisfaction. That is quitestaggering for a system that still suffers from some loopholes. For in stance, none of the 10,000 and oddFPS have been having any beneficiary authenticity mechanism that can allow proxy food grains collection.This is in spite of the fact that there are no private FPSs in Chattisgarh. The Wadhva Committee observesthis as a deficiency in the present system.

Since GPS systems for monitoring movement of trucks is used, there is no scope for truckers toundertake diversion. But this technology is used only in a limited fashion. Large scale substitution of quality

food grains with inferior quality takes place during transportation. In fact no state government was willing toclaim the money earmarked for a plan scheme `` Innovative Scheme for curbing leakages/diversion of foodgrains meant for TPDS Scheme'' in 2008-09.("Plan Schemes for Strengthening of PDS," 2009). Similarly theFCI operations are integrated with the system as far as Chattisgarh state is concerned.

The two-way transaction processing between the citizen and the government is happening in only alimited fashion. In fact he can only lodge complaints using the website. The web technology is used for thebenefit of officials who would update the records. For instance, the citizen can not submit his application for acard online; a miller cannot apply for registration and a farmer can not register himself. Ideally these activitiesshould have been more transparent. The information availability to a citizen is also limited. He can not viewthe details of his own ration card or the ration card of his neighbour. All he can do is view some aggregatereports on the PDS operations. At the same time, the system has moved into vertical integration by linkingvarious official agencies like FCI, SFCSC and the district offices and rural procurement centres. The mind-

set is still empowering the government machinery through ICT to discharge its 'official duties' rather thaninvolving the citizens or private sector in better managing the operations. The question is whether there isenough capability to take the model further and if yes, with in what time horizon?


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The vision for ICT adoption in PDS, can be surmised to have been guided more by administrativeinterests than public demand of a facility. The PDS (Control) order, 2011 has made it mandatory for stategovernments to use ICT with the help of NIC to monitor PDS operations. With the reiteration of the same bythe SC, state governments have become active implementing the requirement. The Chattisgarh experimenthas followed the same as no non-governmental agency is involved in computerisation. Consequently, theICT adaptation has also not enabled market forces to improve service delivery. The major objective of themodel appears to be efficient payment to farmers and minimising diversion . Authenticating the beneficiaryand point of sale diversion has not not got any attention. These objectives are dictated more by state visionthan beneficiary needs. The case appears to be not different with many other government ICT projects thatare based on improving government efficiency. It has been observed in the evaluation of Bhoomi project ofKarnataka, that it has been designed with a view to bringing about greater efficiencies in governmentservice delivery, which is closer to a neoliberal prescription for development, rather than on the basis ofincreasing freedoms and building capacities for the people, especially the smaller and landlessfarmers(Prakash & De, 2007). As far as increasing freedoms and building capacities are concerned thepresent experiment also has a long way to go.

At the macro level the PDS policy remained more or less static during the pre-1991 era. Initiativeslike targeted delivery emerged, still operating in the bureaucratic framework as measures to reduce foodsubsidy. While the judiciary appreciated the value of computerisation, the executive had remained non-committal. For bureaucracy involved itself in computerisation of processes like utility bill payments, land

records management etc. Judicial Intervention kick-started a series of initiatives with an emphasis ondeployment of ICT for improving operational efficiency. At the same time Judiciary did not intervene in PDSduring 1980's when the in famous Kalhandi starvation deaths were reported. It closed the matter with areport from the District Judge. What has made the Judiciary to intervene at present? It is plausible that Indiais likely to surge ahead as a global economy and such dysfunctional institutions like PDS need immediateattention. Some evidence for this exists as the GDP to savings in India that hovered around 20% during thedecades of 80's and 90's reached a level of 35% during 2009-10, a level comparable to other emergingeconomies("Structural shift in India," 2009). Further, the structure of savings is slowly shifting from nonproductive assets like jewellery to more productive financial assets. With increased in availability of financialcapital, better physical and social infrastructure need be created for the future take-off stage and thatincludes removal of poverty, malnutrition along with better health and education. As Avergou has observedhere is a case of ICT adoption creating ``possibilities for the improvement of life conditions in a particularlocality amidst the global socio-economic order'' (Avgerou, 2008)

5. Conclusion

The story of ICT adoption in PDS is not yet complete. It has gained more attention and the the UnionBudget for 2012-13 ear marked Rs.40.00 crore for the purpose 7. The Department of Food and PDS, Govt. ofIndia is unveiling a national level plan for supply chain computerization of PDS. Many state governments aretrying to take the issue seriously with using biometric devices at FPS level("Biometric system at fair priceshops," 2012).The money spent on the Chattisgarh project is worth only 5 crores, whereas another stateplans to spend more than 50 crores on its own("Uttarakhand earmarks Rs 51 cr for PDS,")).

Authenticating Beneficiary using the Unique Identification Number and allowing drawl of food grainsfrom any FPS are being attempted. But ``this will require improvement of connectivity and bringing

broadband services to Indias villages. The development of innovative service delivery and business modelswill also be necessary. .... The Twelfth Plan must stimulate widespread deployment of ICT in the country toaccelerate inclusive growth''[page 139 ](Commission, 2011). The Unique ID is also proposed to be used forplugging leakages across supply chain("UID in PDS," 2010).Perhaps the Government has to move forwardwith the experiments like Chattisgarh PDS computerisation. As Heeks would put it ``Rather than wait forhandset and bandwidth upgrades to allow mobile Internet access, we must determine what can be achievedfor development through calls and SMS and, possibly, older technologies.''(Heeks, 2008). While taking upthe ICT on priority , it is also imperative to design a system that is more transparent and increases thefreedoms and choices of the people.

6. References

7Government of India, Expenditure Budget 2012-13, Vol.I, Part III, page 29}


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