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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
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