Public Distribution System (PDS)
The Public Distribution System (PDS) evolved as a system of management of scarcity through distribution of foodgrains at affordable prices. Over the years, PDS has become an important part of Government’s policy for management of food economy in the country. PDS is supplemental in nature and is not intended to make available the entire requirement of any of the commodities distributed under it to a household or a section of the society.
PDS is operated under the joint responsibility of the Central and the State/UT Governments. The Central Government, through Food Corporation of India (FCI), has assumed the responsibility for procurement, storage, transportation and bulk allocation of food grains to the State Governments. The operational responsibility including allocation within State, identification of eligible families, issue of Ration Cards and supervision of the functioning of Fair Price Shops (FPSs) etc., rest with the State Governments. Under the PDS, presently the commodities namely wheat, rice, sugar and kerosene are being allocated to the States/UTs for distribution. Some States/UTs also distribute additional items of mass consumption through the PDS outlets such as pulses, edible oils, iodized salt, spices, etc.
History of Public Distribution
Public Distribution System in 1960s:
The public distribution of essential commodities was in existence in the country during the inter-war period. However, PDS, with its focus on distribution of foodgrains in urban scarcity areas, had emanated from the critical food shortages of 1960s. PDS had substantially contributed to the containment of rise in food grains prices and ensured access of food to urban consumers. As the national agricultural production had grown in the aftermath of Green Revolution, the outreach of PDS was extended to tribal blocks and areas of high incidence of poverty in the 1970s and 1980s.
Revamped Public Distribution System (RPDS):
The Revamped Public Distribution System (RPDS) was launched in June, 1992 with a view to strengthen and streamline the PDS as well as to improve its reach in the far-flung, hilly, remote and inaccessible areas where a substantial section of the poor live. It covered 1775 blocks wherein area specific programmes such as the Drought Prone Area Programme(DPAP), Integrated Tribal Development Projects (ITDP), Desert Development Programme (DDP) were being implemented and in certain Designated Hill Areas (DHA) which were identified in consultation with State Governments for special focus. Food grains for distribution in RPDS areas were issued to the States at 50 paise below the Central Issue Price. The scale of issue was up to 20 kg per card.
The RPDS included area approach for ensuring effective reach of the PDS commodities, their delivery by State Governments at the doorstep of FPSs in the identified areas, additional ration cards to the left out families, infrastructure requirements like additional Fair Price Shops, storage capacity etc. and additional commodities such as tea, salt, pulses, soap, etc. for distribution through PDS outlets.
Targeted Public Distribution System (TPDS):
In June, 1997, the Government of India launched the Targeted Public Distribution System (TPDS) with focus on the poor. Under the PDS, States were required to formulate and implement foolproof arrangements for identification of the poor for delivery of foodgrains and for its distribution in a transparent and accountable manner at the FPS level.
The scheme, when introduced, was intended to benefit about 6 crore poor families for whom a quantity of about 72 lakh tonnes of food grains was earmarked annually. The identification of the poor under the scheme was done by the States as per State-wise poverty estimates of the Planning Commission for 1993-94 based on the methodology of the "Expert Group on estimation of proportion and number of poor” chaired by Late Prof Lakdawala. The allocation of food grains to the States/UTs was made on the basis of average consumption in the past i.e. average annual off-take of food grains under the PDS during the past ten years at the time of introduction of TPDS.
The quantum of food grains in excess of the requirement of Below Poverty Line (BPL) families was provided to the State as ‘transitory allocation’ for which a quantum of 103 lakh tonnes of food grains was earmarked annually. Over and above the TPDS allocation, additional allocation to States was also given. The transitory allocation was intended for continuation of benefit of subsidized food grains to the population Above the Poverty Line (APL) as any sudden withdrawal of benefits existing under PDS from them was not considered desirable. The transitory allocation was issued at prices, which were subsidized but were higher than the prices for the BPL quota of food grains.
Keeping in view the consensus on increasing the allocation of food grains to BPL families, and to better target the food subsidy, Government of India increased the allocation to BPL families from 10 kg to 20 kg of food grains per family per month at 50% of the economic cost and allocation to APL families at economic cost w.e.f. 1.4.2000. The allocation of APL families was retained at the same level as at the time of introduction of TPDS but the Central Issue Prices (CIPs) for APL were fixed at 100% of economic cost from that date so that the entire consumer subsidy could be directed to the benefit of the BPL population. However, the CIPs fixed in July and December, 2000 for BPL & AAY respectively and in July, 2002 for APL were not revised upwards since then even though procurement cost have gone up considerably.
The number of BPL families was increased w.e.f. 1.12.2000 by shifting the base to the population projections of the Registrar General as on 1.3.2000 instead of the earlier population projection of 1995. With this increase, the total number of BPL families came to 652.03 lakh as against 596.23 lakh families originally estimated when TPDS was introduced in June 1997.
Under the TPDS, the end retail price was fixed by the States/UTs after taking into account margin for wholesalers/ retailers, transportation charges, levies local taxes etc. The States were earlier requested to issue food-grains at a difference of not more than 50 paise per kg over and above the CIP for BPL families. However, since 2001, flexibility was given to States/UTs in the matter of fixing the retail issue prices by removing the restriction of 50 paise per kg over and above the CIP for distribution of food grains under TPDS.
Antodaya Anna Yojana (AAY)
AAY was a step in the direction of making TPDS aim at reducing hunger among the poorest segments of the BPL population. A National Sample Survey Exercise pointed towards the fact that about 5% of the total population in the country sleeps without two square meals a day. This section of the population could be called as "hungry”. In order to make TPDS more focused and targeted towards this category of population, the "Antyodaya Anna Yojana” (AAY) was launched in December, 2000 for one crore poorest of the poor families.
AAY involved identification of one crore poorest of the poor families from amongst the number of BPL families covered under TPDS within the States and providing them food grains at a highly subsidized rate of Rs.2/- per kg. for wheat and Rs.3/- per kg for rice. The States/UTs were required to bear the distribution cost, including margin to dealers and retailers as well as the transportation cost. Thus the entire food subsidy was passed on to the consumers under the scheme.
The scale of issue that was initially 25 kg per family per month was increased to 35 kg per family per month with effect from 1st April 2002.
The AAY Scheme has since expanded to cover 2.50 crore poorest of the poor households as follows:
1. First Expansion
The AAY Scheme was expanded in 2003-04 by adding another 50 lakh BPL households headed by widows or terminally ill persons or disabled persons or persons aged 60 years or more with no assured means of subsistence or societal support. Order to this effect was issued on 3rd June, 2003. With this increase, 1.5 crore (i.e. 23% of BPL) families were covered under the AAY.
2. Second Expansion
As announced in the Union Budget 2004-05, the AAY was further expanded by another 50 lakh BPL families by including, inter alia, all households at the risk of hunger. Order to this effect was issued on 3rd August 2004. In order to identify these households, the guidelines stipulated the following criteria:-
a) Landless agriculture labourers, marginal farmers, rural artisans /craftsmen, such as potters, tanners, weavers, blacksmiths, carpenters, slum dwellers and persons earning their livelihood on daily basis in the informal sector like porters, coolies, rickshaw pullers, hand cart pullers, fruit and flower sellers, snake charmers, rag pickers, cobblers, destitute and other similar categories in both rural and urban areas.
b) Households headed by widows or terminally ill persons/disabled persons/ persons aged 60 years or more with no assured means of subsistence or societal support.
c) Widows or terminally ill persons or disabled persons or persons aged 60 years or more or single women or single men with no family or societal support or assured means of subsistence.
d) All primitive tribal households.
3. Third Expansion
As announced in the Union Budget 2005-06, the AAY was expanded to cover another 50 lakh BPL households thus increasing its coverage to 2.5 crore households (i.e. 38% of BPL). Order to this effect was issued on 12th May, 2005.
