The leakage of foodgrains distributed free of cost to over 81 crore people by the Centre has been estimated at about ₹69,108 crore. This is equivalent to almost 20 million tonnes (mt) of rice and wheat, according to a study titled “Rationalising Public Distribution System in India” released by policy advocacy group Icrier.
Authored by Raya Das, Ranjana Roy and Ashok Gulati, the study quoted the 2022-23 Household Consumption Expenditure Survey (HCES) and pointed out that almost 28 per cent of the grains supplied by Food Corporation of India (FCI) and State governments never reached the intended beneficiaries.
Acknowledging that India runs the largest public distribution system (PDS) in the world, it said: “Such a leaky PDS needs urgent reforms for better outcomes. The resources thus saved can be ploughed back to agriculture and rural areas to achieve not just food security but also nutritional security.”
Centre’s initiatives
The Icrier study referred to the Shanta Kumar Committee’s (on Re-orienting the Role and Re-Structuring of FCI) finding that had estimated PDS leakage at 46 per cent at all-India level and as high as even 70 per cent in some north-eastern States. The panel, in which Gulati (one of the authors of the current Icrier study) was also a member, had in 2015 end-to-end digitalisation of the system to contain leakages.
After that, the Centre has been taking a lot of steps, including biometric authentication through Aadhaar, for digitisation. Food Ministry officials said the launch of One Nation One Ration scheme was possible only due to the digitisation as beneficiaries are now allowed to buy grain from any ration shop in the country.
The Icrier study said, “Linking the ration card of beneficiaries with Aadhaar for PDS has increased the efficacy of distribution. However, the leakage in the PDS still remains a concern. They have not been fully plugged.”
The Shanta Kumar Committee had also recommended reducing the current 67 per cent coverage to 40 per cent and a gradual shift towards cash transfer options rather than grain-centered distribution to improve efficiency, reduce leakages and encourage diversified diets.
Distribution window
However, the government did not accept the cash transfer suggestion and left it as an option to States to decide and there is not much enthusiasm for that. “As long as the government continues the procurement system of rice and wheat, it also needs a window to distribute it and PDS is best suited for it,” said a former top official of Food Ministry. He said that the suggestion of cash transfer is good, but not an alternative at the moment.
In the PDS, each beneficiary under the National Food Security Act is entitled to receive 5 kg of grain (either one or in combination of rice or wheat depending on availability) every month.
Official sources said since the study has referred to 2022-23 period, out of this beneficiaries received 10 kg each per month for 9 months (April-December 2022) and it is possible that some may have sold some grains after receiving it, which is not the same as the benefit not reaching them.
