A study on the operations of Public Distribution

System in chitradurga district

DISTRIBUTION:
The Government (Govt.) of India on the request of state Govt. and on the basis of
population, food production, status of people brings make allotment to each state for
public distribution. FCI being the agent of Govt. of India plays a very important vital
role in procuring, movement, storage and distribution of food grains to public. At the
first instance of FCI procures the food grains under support price or under Levy.
The required food grains estimated by the Govt. of India under FCI the agencies like
State Food and Civil Supply Corporations, marketing Federation, etc. also participate in
procuring the food grains.
The stocks procured from the surplus states by different agencies are moved to different
parts of the country. Depending upon the requirement by using Railway transportation.
Using all the modes of transportation like road, water, etc. makes the food grains
available in every corners of the country.
The food grains moved from surplus state to deficit states are stored in scientific
godowns available with Central and State agencies these stocks are reserved
scientifically and distributed to public. The stocks required to a particular area are stored
for the requirement of 3 to 5 months.
The food grains are then distributed to public on the basis of allocation of State Govt. to
respective areas through State Agencies like State Food and Civil Supplies distribution is
whole regulated by respective State Govt. The state Govt. takes care of proper
distribution to different categories of people under ration cards by allotting specific
quantity to each family.

The expenditure incurred by the State Govt. in the distribution of food grains subsidized
by Govt. of India.
PUBLIC DISTRIBUTION SYSTEM (PDS):
The concept of Public Distribution System (PDS) in the country was evolved around
1942, due shortage of food grains during 2nd world war. And Government (Govt.)
intervention in distribution of food started. This intervention of Govt. in distribution of
food grains in the food scarcity period and continued in major cities, towns, and certain
food areas. This policy of PDS, rationing system has undergone several changes with
every lap of 5 year Planning System in the country. Population under PDS and became a
permanent environment in the economy of the country.
For the purposes of distribution of food grains are collected under pool by way of
purchase in open market or by levy. The Govt. both for purchase and sale regulates the
price of commodities distributed under PDS. The Govt. of India announces every year
the purchase price of food grains
Under the recommendation of specialist committee on agriculture produces. The
distribution prices or issue prices are fixed by working of economical cost and with
subsidized traders.

OBJECTIVES OF PUBLIC DISTRIBUTION SYSTEM (PDS):

The price support system to the farmers for their product and maintenance of
stocks.
It is against these stocks are procured under price support system, that every
months Govt. releases a prescribed quantity, in each states for distribution under
PDS.
PDS is the mission of the Govt. of India is brought into the reality at the
operational level by FCI.

IMPORTANCE OF PUBLIC DISTRIBUTION

SYSTEM (PDS):
A well-targeted and properly functioning public distribution system (PDS) is an
important constituent of the economic strategy for poverty alleviation. PDS
continues to be a major instrument of government economic policy for ensuring
food security to the poor.

For effective functioning of PDS the central government bears the responsibility
for procurement and supply of food grains namely, wheat, rice and coarse grains,
besides sugar to the state government and the union territories for distribution.

The food grains are supplied at subsidized rates to the consumers. Till the late
1970 the PDS was mainly restricted to the urban areas and food deficit regions.

The main emphasis was on price stabilization, and as an alternative

channel to private trade- in 1980 it was felt that it should be extended to the rural
areas also as a welfare measures and many rural areas were covered in many
states in 1990, it was revived by the Govt. and was decided to restructure PDS in

the was again reviewed and the government introduced targeted public
distribution system.

THE SCHEMES OPERATED AT PRESENT UNDER

PUBLIC DISTRIBUTION SYSTEMS (PDS):
Targeted Public Distribution System (TPDS).
Sampurna Gramin Rozgar Yojana (SGRY).
TARGETED PUBLIC DISTRIBUTION SYSTEM (TPDS):
PDS was widely used for criticized for its failure to serve the population Below the
Poverty Line, its urban bias, negligible coverage in the states with the highest
concentration of the rural poor and lack of transport and accountable arrangements for
delivery. After the neo liberal (new-free) turn to economic a policy after 1991, primacy
was accorded to the logic of fiscal produce, which entailed strongly operative reductions
in subsides, such as that on food. Thus in 1-6-1997 the Govt. of India

decided to realize the

TPDS scheme the Govt. decided to abolish the universal character of the PDS and convert it into a Targeted
scheme in all over the states of the country.

Following the introduction of the TPDS, the population was divided into Above
Poverty Line (APL) and Below Poverty Line (BPL) categories. Those households
divided as BPL were made eligible for subsidized purchase of commodities from
Fair Price Shops (FPS) or Ration Shops.
The APL households were eligible to purchase commodities from FPS, but had to
pay the full Economic Cost of the handling of all commodities. The states district
offices fix the Consumer End Prices (CEP) at Fair Price Shops (FPS) level at not
more than 50 paisa per K.G over the Central Issue Price (CIP) particularly for the
population. Below Poverty Line (BPL).
The FCI State offices are also free to add the quantum coverage and the subsidy
from their own resources. The fundamental critique (critical essay) of the concept of
targeting has centered on the higher weight that new free reforms give to errors of
inclusion than to errors of exclusion. The increase in efficiency realized by

excluding all the in-eligible persons was given more emphasis compared with the
inclusion of all the eligible persons.
The errors of inclusion have only financial implications, but errors of exclusion
have social costs, which have to be weighted higher, a widespread complaint from
many parts of rural India. But after introduced the TPDS has been the existence of a
major miss-match between households divided as BPL by the Govt. of India and
their actual standard of living. Thus the narrow targeting of the PDS based on
absolute income poverty is likely to have excluded a large part of the nutritionally
vulnerable population from the Public Distribution System (PDS)

UNDER TARGETED PUBLIC DISTRIBUTION SYSTEM (TPDS) IS SUB

DIVIDED INTO 4 FAMILIES:
1. Anthyodaya Anna Yojana (AAY).
2. Below Poverty Line (BPL).
3. Above Poverty Line (APL).
4. SC/ST/OBC Hostels.
Types of TPDS (With demarcation to their families):
1. ANTHYODAYA ANNA YOJANA (AAY):
The Govt. of India has decided to issue Rice and Wheat at the rate of Rs.3.0 per K.G. and Rs 2.0 per
K.G. respectively, to the poorest Strata of Population Out of the earlier identified BPL population.

2. BELOW POVERTY LINE (BPL):

The Govt. of India has decided to issue Rice and Wheat at the rate of Rs.5.65 per
K.G. and Rs 4.15 per K.G. respectively, to the Below Poverty Line (BPL) of
population. Out of the earlier identified APL Population.
3. ABOVE POVERTY LINE (APL):
The Govt. of India has decided to issue Rice and Wheat at the rate of Rs.8.30 per
K.G. and Rs 6.10 per K.G. respectively, to the Above Poverty Line (APL) of

Population. But APL card holders cant collect, or taken same quality of the BPL
or AAY.
4. SC/ST/OBC HOSTELS AND OTHER
WELFARE INSTITUTIONS:-

The ministry of Social Justice and empowerment has to monitor the scheme for
providing the food grains to SC/ST/OBC Hostels.
Hostels having students belonging to SC/ST/OBC categories are eligible to draw
15.K.G. food grains per resident per month. Food grains are supplied by the FCI at
BPL rates. Under the head welfare institutions and hostels to meet the requirements
of the state for providing the food grains to different type of welfare institutions.
SAMPOORNA GRAMEEN ROZGAR YOJANA (SGRY):

SGRY was launched on 25 September, 2001 by merging the on-going schemes of EAS
with the objective of providing additional wage employment and food security,
alongside creation of durable community assets in rural areas. The programme is selftargeting in nature with provisions for special emphasis on women, scheduled castes,
scheduled tribes and parents of children withdrawn from hazardous occupations. While
preference is given to BPL families for providing wage employment under SGRY, poor
families above the poverty line can also be offered employment whenever NREGA has
been launched.
The annual outlay (cost) for the programme is Rs.10000 crore which includes 50 lakh
tones on food grains. The cash component is shared between the Centre and the States in
the ratio of 75:25. Food grains are provided free of cost to the States/ UTs. The payment
of food grains is made directly to FCI at economic cost by the Centre. However, State
Governments are responsible for the cost of transportation of food grains from FCI
godown to work-site/PDS shops and its distribution. Minimum wages are paid to the
workers through a mix of minimum five kg of food grains and at least 25%of wages in
cash.

FEATURES OF SGRY:
The salient features of the proposed Scheme are as under:-

The Sampoorna Grameen RozgarYojana (SGRY) is a Centrally Sponsored

Scheme (CSS) being implemented with a total outlay of Rs.10000 crores.
Under the Scheme, 50 lakh tones of food grains amounting to Rs.5,000 crores (at
economic cost) will be provided every year, free of cost to the State Governments
and Union Territory Administrations.
The remaining funds (Rs.5,000 crores) will be utilized, to meet the cost
component of wages and material cost.
The cost of the cash component of the Programme will be shared by the Centre
and States in the ratio of 75:25.
The payment for food grains will be made by the Ministry of Rural Development
to the Food Corporation of India (FCI) directly.
About 100 crore mandal of employment are envisaged to be generated every year
in the rural areas through the SGRY.
Fifty per cent of the total available funds under the SGRY will be provided to each
stream.
Every worker seeking employment under the SGRY will be provided 5 kg. Of
food grains (in kind) per mandal as part of wages.
The balance of wages will be paid in cash so that they are assured of the notified
minimum wages.
The State Governments and UT Administrations will be free to calculate the cost
of food grains (paid as part of wages) at either BPL rates or APL rates or
anywhere between these two rates.

 The SGRY has been in operation from the financial year 2002-2003. Since the
Scheme was launched in the middle of 2001-02, the ongoing schemes of the EAS
and the JGSY were merged with the new Scheme.
The Programme permits works which lead to the creation of additional wage employment, durable assets and
infrastructure, particularly those which assist in drought proofing such as soil and moisture conservation
works, watershed development, promotion of traditional water resources, a forestation and construction of
rural infrastructure and link roads, primary school buildings, marketing and other infrastructures in rural
areas.

OBJECTIVES OF SAMPOORNA GRAMEEN ROZGARYOJANA:

 The objectives of the programme is to provide additional wage employment in the

rural areas as also food security alongside the creation of durable community,
social and economic infrastructure in the rural areas.
The programme is self-targeting in nature with special emphasis to provide wage
employment to women, scheduled castes, scheduled tribes and parents of children
withdrawn from hazardous occupations.
STRATEGY OF SGRY:
The Programme is being implemented in 2 streams :

The 1st Stream of the Programme will be implemented at the District and
Intermediate level. Panchayats. Fifty per cent of the funds available under the
SGRY are earmarked for 1st Stream. These are distributed between the Zilla
Parisad and the Intermediate Panchayats in the ratio of 40:60.

The Second Stream of the Progarmme will be implemented at the Village

Panchayat level. Fifty per cent of the SGRY funds are earmarked for this Stream.
The entire funds are released to the Village Panchayats through the DRDAs/Zilia
Parishads.
Abbreviations
AAY
APL
BPL
CACP
CCTs
CFSA
CIP
DFPD
FCI
FPS
GDP
HP
J&K
MMTs

Annatodya Anna Yojana Program

(Poorest of the Poor)
Above Poverty Line
Below Poverty Line
Commission for Agriculture Costs
and Prices
Conditional Cash Transfers
Chhattisgarh Food Security Act,
2012
Central Issue Price
Department of Food and Public
Distribution
Food Corporation of India
Fair price shops
Gross Domestic Product
Himachal Pradesh
Jammu and Kashmir
million metric tonnes

MP
MPC
MSP
NFSA
NFSB
NMMT
NREGS
NSSO
OWS
PDS
SSP
TN
TPDS
UID
UP
UT
VGB
WB
WBNP

Madhya Pradesh
Monthly per capita
Minimum support price
National Food Security Act, 2013
National Food Security Bill
Nagaland, Manipur Mizoram, and
Tripura
National Rural Employment
Guarantee Scheme
National Sample Survey
Organization
Other Welfare Schemes
Public Distribution System
Social Security Pensions
Tamil Nadu
Targeted Public Distribution
System
Unique Identification Authority
Uttar Pradesh
Union Territory
Village Grain Bank
West Bengal
Wheat Based Nutrition Program