TARGETED PUBLIC DISTRIBUTION SYSTEM

1. INTRODUCTION

1.1 The Public Distribution System (PDS) evolved as a system of management of scarcity and for 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.

1.2 PDS is operated under the joint responsibility of the Central and the State Governments. The Central Government, through Food Corporation of India (FCI), has assumed the responsibility for procurement, storage, transportation and bulk allocation of foodgrains 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.

2. EVOLUTION OF PUBLIC DISTRIBUTION SYSTEM

2.1 Public Distribution of essential commodities had been in existence in India during the inter-war period. PDS, with its focus on distribution of foodgrains in urban scarcity areas, had emanated from the critical food shortages of the 1960s. PDS had substantially contributed to the containment of rise in foodgrains 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.

2.2 PDS, till 1992, was a general entitlement scheme for all consumers without any specific target. The Revamped Public Distribution System (RPDS) was launched in June 1992 in 1775 blocks throughout the country.

2.3 The Targeted Public Distribution System (TPDS) was introduced with effect from June, 1997.

3. REVAMPED PUBLIC DISTRIBUTION SYSTEM (RPDS)

3.1 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 lived. 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) and certain Designated Hill Areas (DHA) identified in consultation with State Governments for special focus, with respect to improvement of the PDS infrastructure. Foodgrains for distribution in RPDS areas were issued to the States at 50 paise below the Central Issue Price. The scale of issue was upto 20 kg per card.

3.2 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 FPSs, storage capacity, etc. and additional commodities such as tea, salt, pulses, soap, etc. for distribution through PDS outlets.

4. TARGETED PUBLIC DISTRIBUTION SYSTEM (TPDS)

4.1 In June 1997, the Government of India launched the Targeted Public Distribution System (TPDS) with focus on the poor. Under the TPDS, States were required to formulate and implement foolproof arrangements for the identification of the poor for delivery of foodgrains and for its distribution in a transparent and accountable manner at the FPS level.

4.2 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 foodgrains to the States/UTs was made on the basis of average consumption in the past i.e. average annual off-take of foodgrains under the PDS during the past ten years at the time of introduction of TPDS.

4.3 The quantum of foodgrains 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 foodgrains 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 foodgrains 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 foodgrains.

4.4 Keeping in view the consensus on increasing the allocation of foodgrains 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 foodgrains 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 costs have gone up considerably.

4.5 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 projections of 1995. With this increase, the total number of BPL families come to 652.03 lakh as against 596.23 lakh families originally estimated when TPDS was introduced in June, 1997.

4.6 Under the existing TPDS, end retail price is fixed by the States/UTs after taking into account margins for wholesalers/retailers, transportations charges, levies, local taxes etc. The States were earlier requested to issue foodgrains at a difference of not more than 50 paise per kg over and above the CIP for BPL families. However, since 2001, flexibility has been 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 foodgrains under TPDS except with respect to Antyodaya Anna Yojana (AAY) where the end retail price is to be retained at Rs.2/ a kg. for wheat and Rs.3/ a kg. for rice.

5. IDENTIFICATION OF BPL FAMILIES UNDER TPDS

5.1 To work out the population below the poverty line under the TPDS, there was a general consensus at the Food Minister’s conference held in August 1996, for adopting the methodology used by the expert group set up by the Planning Commission under the Chairmanship of Late Prof. Lakadawala. The BPL households were determined on the basis of population projections of the Registrar General of India for 1995 and the State wise poverty estimates of the Planning Commission for 1993-94. The total number of BPL households so determined was 596.23 lakh. Guidelines for implementing the TPDS were issued in which the State Governments had been advised to identify the BPL families by involving the Gram Panchayats and Nagar Palikas. While doing do the thrust would be to include the really poor and vulnerable sections of the society such as landless agricultural labourers, marginal farmers, rural artisans/craftsmen such as potters, tappers, weavers, black-smiths, carpenters, etc. in the rural areas and slum dwellers and persons earning their livelihood on daily basis in the informal sector like potters, rickshaw-pullers, cart- pullers, fruit and flower sellers on the pavement etc. in urban areas. The Gram Panchayats and Gram-Sabhas would also be involved in the identification of eligible families.

5.2 The number of BPL families had been increased w.e.f. 1.12.2000 by shifting the base to the population projections of the Registrar General of India as on 1.3.2000 instead of the earlier population projections of 1995. With this increase, the total number of BPL families in the country come to 652.03 lakh as against 596.23 lakh families originally estimated when TPDS was introduced in June, 1997.

6. ANTYODAYA ANNA YOJANA (AAY)

6.1 AAY is 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 slept 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.

6.2 AAY contemplates 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 foodgrains at a highly subsidized rate of Rs.2/- per kg. for wheat and Rs.3/ per kg. for rice. The States/UTs are required to bear the distribution cost, including margin to dealers and retailers as well as the transportation cost. Thus the entire food subsidy is being passed on to the consumers under the scheme.

6.3 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.

6.4 The AAY has since been expanded to cover 2.50 crore poorest of the poor households as follows:

(i) First Expansion

The AAY Scheme was expanded in 2003-2004 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. With this increase, 1.5 crore (i.e. 23% of BPL) families were covered under the AAY.

(ii) 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. Orders 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, destitutes and other similar categories irrespective of rural or 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.

With this increase, the number of AAY families increased to 2 crore (i.e. 30.66% of BPL families).

(iii) 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).

            As on 30.09.2014, States/UTs have identified and issued AAY ration cards to 242.121 lakh AAY families.

6.5 The identification of the Antyodaya families and issuing of distinctive Ration Cards to these families is the responsibility of the concerned State Governments. Detailed guidelines were issued to the States/UTs for identification of the Antyodaya families under the AAY and additional Antyodaya families under the expanded AAY. Allocation of foodgrains under the scheme is being released to the States/UTs on the basis of issue of distinctive AAY Ration Cards to the identified Antyodaya families. The allocation for the year 2013-14 of foodgrains under AAY was around 13.82 lakh tons.

7. SCALE OF ISSUE OF FOODGRAINS UNDER TPDS

Since 1997, the scale of issue of the BPL families has been gradually increased from 10 kg. to 35 kg. per family per month. The scale of issue to BPL families was increased from 10 kg. to 20 kg per family per month with effect from 1.4.2000. The allocation of foodgrains for the BPL families was further increased from 20 kg. to 25 kg. per family per month with effect from July, 2001. Initially, the Antyodaya families were provided 25 kg. of food grains per family per month at the time of launch of the scheme in December, 2000. The scale of issue of foodgrains under APL, BPL and AAY has been revised to 35 kg per family per month with effect from 1.4.2002 with a view to enhancing the food security at the household level.

 

 

 

8. CENTRAL ISSUE PRICE (CIP)

(figure in Rs. per kg)

Commodity

APL

BPL

AAY

Rice

8.30

(Grade ‘A’)

 

 

7.95

(Common)

5.65

3.00

Wheat

6.10

4.15

2.00

Coarse grains

4.50

3.00

1.50

9. TPDS UNDER NATIONAL FOOD SECURITY ACT, 2013

 

The National Food Security Act, 2013 (NFSA) has been notified on 10.09.2013. The coverage, entitlements of foodgrains, etc. under the NFSA,2013 have undergone change as compared to those under the existing TPDS referred above. NFSA, 2013 inter alia provides for coverage of upto 75% of the rural population and upto 50% of the urban population at the all India level under TPDS. Under the NFSA, 2013, the priority households are entitled to receive foodgrains @ 5 kg per person per month at the issue prices of Rs.3.00, Rs.2.00 and Rs.1.00 per kg for rice, wheat and coarse grains respectively. The existing AAY households, however, will continue to receive 35 kg of foodgrains per households per month.