Significance of Public Distribution System in an Indian State - Uttar Pradesh

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1 1 Significance of Public Distribution System in an Indian State - Uttar Amit Kumar Gupta, PhD student, Department of Political Science, Guru Ghasidas University, Bilaspur Dr. Anupama Saxena, Professor and Head, Department of Political Science, Guru Ghasidas University, Bilaspur ABSTRACT Public distribution system is instrument of policy intervention for reducing poverty; Infant Mortality Rate, and it provides subsidized food-grains (such as wheat and rice) to targeted poor households. There are two contextual aspects in the article first the chronology of PDS and its functioning at both national and state level, and secondly to the demographic structure and socioeconomic conditions in UP. Within these two contextual aspects we have tried to understand how PDS is significant in UP? This study is based on secondary data. The finding of study is that the implementation of PDS is significant in most populous state of India during the era of economic development. Keywords: Public distribution system, food insecurity, poverty, literacy rate, Below Poverty Line(BPL), India, Uttar INTRODUCTION: Food insecurity is very challenging problem across the world, nearly 870 million people suffer from undernourishment globally (or one in eight of the people in the world did not consume enough food to cover their minimum dietary energy requirements.), particularly in India 217 million people are undernourished, which constitutes 17.5 percent of national population in (FAO, WFP and IFAD, 2012). Every country is trying to tackle these problems. Indian Parliament also appeared very sensitive and enacted to National Food security Act (NFSA) on 10 Sep This act provides legal entitlement to the poor households for receiving the adequate quantity of quality food-grains at affordable prices to live a life with dignity (The Gazette of India, 2013). Food security for a country means sufficient quantity of essential commodities produced, stored properly and made available to all the people, especially the poor people.the broader concept of food security is reflected in the World Food Summit (1996) definition, food security, at the individual, household, national, regional and global levels [is achieved] when all people, at all times, have physical and economic access to sufficient, safe and nutritious food to meet their dietary needs and food preferences for an active and healthy life. A food security has four pillars such as Availability, Accessibility, Utilization and Stability of food(fao, 1996). In India, food security system mainly focuses on supply of food grains and this is distributed through the Public Distribution System. The objectives of PDS are maintaining price stability of essential commodities, providing access to foods at affordable prices to the vulnerable people and to maintain minimum nutrition level to population. In the context of widespread poverty ratio, malnutrition and inflation in food prices, access to basic food at reasonable prices remains an important policy intervention(swaminathan, 2003).India s public distribution system now has a significant impact on rural poverty(dreze & Khera, 2013). HISTORICAL PERSPECTIVE: Public Distribution System was started during British government in 1939 but targeted public distribution system was launched in 1997 for distributing subsidized food-grains such as wheat, rice particularly to poor people. The historical perspective could be understood indifferent distinct phases discussed below. The first phase, from was introduced by the colonial government in 1939 as a war-time rationing measure to ensure food-grains availability and distribution among the urban population of Bombay (now, Mumbai). It was later extended to six other cities and a few regions (e.g., Malabar in Kerala). It ensured some degree of equitable distribution of food-grains among urban consumers in the context of rising prices(swaminathan, 2003). Before 1960s distribution of food-grains through PDS was generally dependent on imports of food-grains. The second phase, from was one which saw major organizational changes. Specifically, in response to the food security, and setting up of Agricultural Prices Commission and the Food Corporation of India (FCI) in order to strengthen domestic procurement and storage. By the 1970s, PDS had been introduced as a universal scheme for the distribution of cheap food at the reasonable prices and a component of the strategy to alleviate poverty(swaminathan, 2003).

2 2 The third phase, from is marked by large scale expansion of the PDS, domestic procurement and storage. In the 1990s, it was modified such as Revamped Public Distribution System. It was structural adjustment programme. It means, PDS was introduced only for poor people belonging to poorest areas such as hilly and inaccessible areas. They received food-grains at the lowest prices. The fourth phase, from 1991 up to present-in 1997, Revamped (universal) Public Distribution System was replaced with a Targeted Public Distribution System (TPDS) with the objectives of the economic liberalization. TARGETED PUBLIC DISTRIBUTION SYSTEM At the World Food Summit in 1996, India signed along with 185 countries a deceleration making a commitment to ensure food security for all(world Food Summit, 1996). The Food Summit set up concrete goals for reducing the number of hungry and malnourished persons in the world by one-half by 2015(World Food Summit, 1996).After that the during the Chief Ministers Conference held in New Delhi in July 1996 on Basic Minimum Services made recommendations for concrete efforts to streamline the Public Distribution System and accordingly it was renamed as Targeted Public Distribution System (TPDS) in June 1997.The PDS as it was being implemented earlier had been criticized for its urban bias and its failure to serve effectively the poorer sections of the population(planning Commission, GOI, , p. 368).It was also criticized for its negligible coverage in the states with the highest concentration of the rural poor and lack of transparent and accountable arrangements for delivery(planning Commission, GOI, , p. 368).TPDS aims to provide subsidized food-grains to the poor households through a network of Fair Prices Shops (ration shops). Food-grains such as rice and wheat that are provided under TPDS are procured from farmers, traders, rice-millers and others at a minimum support price and it sells (allocate) to states at central issue prices (CIP) and delivered to the ration shops where the beneficiary purchase food grains according to his/her entitlement at subsidized prices. Thus, TPDS intends to target the subsidized provision of food grains to poor in all areas unlike RPDS, which laid stress on all in poor areas. The center and states share the responsibilities of identifying the poor, procuring food-grains and delivering food-grains to beneficiaries. Characteristics of targeted PDS have been discussed below: a) Identification of eligible households under existing TPDS- TPDS gives emphasis to provide benefits to the poorest sections of the society. It uses income poverty line to demarcate poor and non-poor households. Households were classified under Below Poverty Line (BPL) and Above Poverty Line (APL).The BPL beneficiaries that are covered under TPDS were identified through a detailed process when TPDS was launched. The Planning Commission calculated state-wise estimated of the total number of BPL beneficiaries that would be covered under TPDS. Each state government was entrusted with the responsibility of identifying eligible BPL households on the basis of inclusion and exclusion criteria. Such families were entitled to receive a BPL ration cards but APL are not identify and any household above the poverty line could typically apply for an APL ration card. The Antyodaya Anna Yojana (AAY) The AAY scheme was launched in December 2000 after the declaration of prime minister for one crore poorest of the poor households. AAY contemplates identification of the poorest of the poor families from amongst the BPL families covered under TPDS within the State. b) Entitlement under TPDS Eligible beneficiaries are entitled to subsidized food grains such as wheat and rice. c) Centre- State control The Centre and state government both share responsibility for the functioning and operation of PDS. The Central government is procuring or buying food-grains mainly rice and wheat from farmers, traders, rice-millers and others at a minimum support price and its sells it to states at central issue prices (CIP). The Size of BPL population and their entitlement of subsidized food-grains both decided by the central government. The Centre also allocates the food-grains to the each state on the basis of the total number of poor in state. After that, each state government has responsibility for delivering the allocated food-grains from depots to each ration shop or fair price shops. These essential commodities are distributed to consumers at ration shops. In 2013, there were a total of 0.52 million fair-price shops in the country. Private agents and co-operative ran these shops and a few were stateowned. There were a total of million families with ration card in the country and, on average; one fair price shop served 473 ration cards(department of Food and Public Distribution, 2014)

3 3 Table 1.1: Timeline of PDS: 1939s to present Evolution of Timeline Details PDS PDS 1939 Launched as general entitlement scheme RPDS 1990 PDS was made universal for poorest areas such as in hilly and inaccessible areas TPDS 1997 PDS was revamped to target poor households Antyodaya Anna Yojana 2000 Scheme launched to target the poorest of the poor PDS Control Government notified this Order 2001 Order to administer TPDS A case in Supreme Court PUCL vs contending that Union Of 2001 right to food is a fundamental India right National Food Security Act (Balani, 2013) 2013 Act to provide legal right to food to the poor PUBLIC DISTRIBUTION SYSTEM IN UTTAR PRADESH Profile of Indian State Uttar Uttar is the most populous state of country. With nearly one-sixth of the total population or crore people (that is percent of total Indian population). The sex ratio is 908 females per thousand males as compared to India s 940 per thousand males. The population of 0-6 age group is 2.97 crore (14.90 per cent) in Uttar (Census 2011). The state was created on 1 April 1937 as the United Provinces with the passing of the States Reorganization Act and was renamed Uttar in Lucknow is the capital of Uttar and Kanpur is the economic and industrial capital of Uttar. On 9 November 2000, a new state, Uttarakhand, was carved out from the mountainous Himalayan region of Uttar. The state is now organized into 71 district, 312 sub-district, 648 Statuary towns and 267 census town and the total no. of towns is 915 and villages is 1.06 lakh(government of Uttar, 2014).The state has a population comparable to Brazil. Only four countries China, USA, Indonesia and Brazil have a population higher than that of Uttar. With an area of 240,928 square km and population density of 828 people per square kilometer, UP is also one of the densest states in the country. Over the last decade, the population of the state has increased by over 20.9 percent and it ranked 14 th in the country. Out of crore population of the state, nearly crore(78 percent) of population lives in rural areas across nearly 1.06 lakh villages and it shares 18.6 percent of India s rural population as per the 2011 census. According to the 2011 Census, UP also has the largest rural population in India. UP is also 4 th top state by 20.7 percent Scheduled Caste (SC) population as per the 2011 census and 0.6 percent population is Scheduled Tribe (ST). Literacy Rate: Chart1.1 Chart 1.1 Litracy Rate in % in UP % 80.00% 60.00% 40.00% 20.00% 0.00% Liter acy rate Male s Liter acy rate Fema les Sources: provisional census, India, 2011 Liter acy rate pers ons Uttar 79.24% 59.26% 69.72% Literacy rate in UP is percent of which per cent male and per cent female(census 2011). All details have been discussed in chart 1.2(Census 2011).The literacy rate data of UP indicate that per cent of the total population of UP is not literate till now (Census 2011). 1 When we look at the female literacy rate, we find that per cent females are illiterate (Census 2011). If we compare illiteracy rate of female with that of male (20.76) in UP, we get that illiteracy rate of female is almost double than that of male(census 2011). Economic profile and reduction of poverty ratio in UP: The economic growth rate of UP is 5.20 per cent and per capita income is 19,512/- in at the constant prices and economic growth rate of India is 4.74 per cent and per capita income is Rs. 39,904/- at constant prices(cso, ).The average Gross State Domestic Product (GSDP) is 6.72 per cent of UP and India s 7.61 per cent from to Along with per capita Net Gross State Domestic Product (GSDP) of UP is 3.42 per cent and India s 2.70 per cent in (CSO, 2014). Average per capita Net GSDP of UP is 4.49 per cent and India s 5.75 per cent from to (CSO, 2014). The average of revenue receipts as a ratio to 1 The data has been taken from provisional census Directorate of Economics and Statistics for state governments; CSO for all India; Released on 1 st March, 2014; Estimates from to have been discussed with States DSE

4 4 GSDP of UP is 18 per cent from to (Reserve Bank of India, 2014) 3. Table 1.2: Uttar All India Growth Rate( ) 5.40% 7.47% Growth Rate( ) 5.20% 4.74% Per CapitaIncome( ) Rs. 12,950/- Rs. 24,143/- Per CapitaIncome( ) Rs. 19,512/- Rs. 39,904/- Average gross GSDP growth 6.72% ( to ), % 7.61% Net GSDP per capita growth 4.49% ( to ), % 5.75% Food inflation rate at national level in % Increase in revenue receipts per annum ( to ) % Reduction in poverty HCR ( to ), % Source: Row 1 and 2, Averages calculated from tables on GSDP at constant prices and per capita NSDP, Directorate of Economics and Statistics for state governments, and CSO for all India (data based on base line); Column 3 & 4, Estimates based on data on revenue receipts and expenditure in State Finances: A Study of Budgets, Reserve Bank of India (years 2014). Percentages are approximate because some year s figures are based on budget estimates not actual receipts/expenditure; Column 5, Tendulkar Committee estimates of Population below Poverty Line, Planning Commission and Food inflation data has been taken from(chand, Gulati, & Kavery, 2011). Despite the better growth rate of UP, the percentage of below the Poverty Line (BPL) population in has been estimated as 25.7 percent in rural areas, 13.7 percent in urban areas and 21.9 per cent (around 27 crore population) for the country as a whole(planning Commission, ). The respective ratios for the rural and urban areas were 41.8 percent and 25.7 percent and 37.2 percent for the country as a whole in (Plannig Commission, ). It was 50.1 percent in rural areas, 31.8 percent in urban areas and 45.3 per cent for the country as a whole in (Planning 3 Estimates based on data on revenue receipts and expenditure in State Finances: A Study of Budgets, Reserve Bank of India (years 2014). Percentages are approximate because some year s figures are based on budget estimates not actual receipts/expenditure Commission, ). In Uttar, The percentage of persons BPL in has been estimated as percent ( lakhs) of total population. Out of which percent ( lakhs) in rural areas, percent ( lakhs) live in urban areas, i.e. with income that is not sufficient to consume the required minimum number of calories. Year wise Estimated Poverty in Uttar and India Table 1.3:(in per cent) Years Uttar India Rural Urban Total Rural Urban Total Sources: Population as on 1 st March 2005 has been used for estimating number of persons; Press note poverty estimates (Plannig Commission, ); Press note poverty estimates (Planning Commission, ) The Proportion of malnourished children under three years of age: Chart 1.2:(In percentage) Stunting Chart 1.2 wasting underwei ght Uttar India Sources of Chart 1.2:(International Institute for Population Sciences (IIPS) and Macro International, 2007) The proportion of malnourished children under three years of age who are stunting (Height-for-age) 52 percent, wasting (Weight-for-height) 20 per cent and underweight (Weight-for-age) 42 per cent, in Uttar which is 45 per cent, 23 per cent and 40 per cent in India, respectively. India States Hunger Index Score (2008) Table: 1.4- Rank Score Uttar 9 th out of 17 major States of country India 66 th out of

5 5 The data has been taking from (Menon, Deolalikar, & Bhaskar, 2008) The Indian States Hunger Index score of UP is and ranked 9 out of 17 states. India s score is 23.31and Global Hunger Index score is 23.7, which ranks it 66 th out of 88countries (Menon, Deolalikar, & Bhaskar, 2008). This indicates continued poor performance of India for reducing hunger. The recent Global Hunger Index Report 2013 puts India at 63rd rank and score is It places India among a group of countries with alarming level of huger, figuring at the bottom of the heap, below China, Sri Lanka, Pakistan and several in sub-saharan Africa(Time of India, 2014) Uttar and India s Infant Mortality Rate ( ) Chart 1.3: Chart 1.3 per thousand live births Person Person Person Uttar India [Source: (Economic Survey, ), A125; Infant mortality rates for 2009, 2010 and 2011 in respect of Uttar and India and based on three year period , and and Estimate of Morality Indicators,(Census 2011); Infant Mortality Rate is defined as the infant deaths (less than one year) per thousand live births.] From chart 1.3, it is very clear that till 2011, 57 children died before achieving the age of 5 at every thousand live births in UP which was just slightly less than 63 before two years in It means the grim scenario. After this whosoever lives, out of them 42 per cent are underweight and 52 per cent undersized and 20 per cent do not have weight according to their height (Chart 1.2). For which scarce or less accessibility of quality food to lactating mothers is counted as a very frequent reason. It is very evident that PDS needs to be made robust which can be very instrumental in tackling hunger and malnourishment and reducing the IMR (Chart 1.3)in the whole country, especially in UP, the home for the largest community of poor (table 1.3) and population in India. This can meet the minimum per capita basic requirement of dietary energy for healthy living that is 2400 kcal in rural areas and 2100 kcal in urban areas (CSO; Ministry of Statistics and Programme Implementation, 2013). ABOUT TPDS IN UTTAR PRADESH TPDS is a central scheme and implemented by state agencies. Targeted PDS has been started in 1997 in Uttar after guidelines of the Indian Government. It was started after replacement of the Revamped Public Distribution System. In UP, the supply and distribution of essential commodities (Wheat, Rice, Kerosene and Sugar) are done under the guidelines of the Government of India. That guidelines have been incepted from 2001 Order(Department of Food and Public Distribution, 2001), it is notified under the Essential Commodities Act, 1955, Section(3) that has authorizes the Governor of Uttar to act in power to ensure the maintenance of storage and distribution of food-grains and other essential commodities timely at appropriate prices. This would be called as Uttar Scheduled Commodities Distribution (Extension) Order-2004(Government of Uttar, 2004) which will cover the whole State. The whole TPDS will function accordingly. A total of lakh metric tonnes of food-grains (wheat and rice) is allotted to Uttar. Currently, there are 74,056 fair price shops (61,044 in rural areas and 13,012 in urban areas)(the Hindu, 2013). Through which BPL, AAY and Annapurna and APL schemes are running. In UP, BPL families are identified as Lakh by Government of India. Out of which Lakh families are identified as poorest of the poor and families as BPL families(food and Civil Suplies Department). Allocation of food-grains to lakh Above Poverty Line (APL) families is made depending upon the availability of foodgrains in the central pool and past off take. Presently, the allocation of food-grains to APL families ranges 10 kg per family per month at Rs 6.60 a kg. BPL card holders are allocated 20 kg wheat & 15 kg rice. 10 kg wheat & 25 kg rice are issued to AAY card holders in Lucknow, Faizabad, Devipatan, Basti, Allahabad, Varanasi, Mirzapur, and Azamgarh but 15 kg wheat & 20 kg rice are given to AAY card holders in Meerut, Saharanpur, Moradabad, Agra, Kanpur, Jhansi and Chitrakut. BPL beneficiaries have to pay Rs per kg for wheat and Rs per kg for rice; for AAY families, the rates are Rs. 2 per kg for wheat, Rs. 3perkg for rice. In addition, BPL and AAY cardholders are given 700 grams of sugar per unit per card at the rate of Rs a kilogram.

6 6 Table 1.5: Number of beneficiaries and entitlements in Uttar Catego ries The total number of FPSs is 74,056 (61,044 in rural areas and 13,012 in urban areas) in UP (The Hindu, 2013), which distribute a total lakh metric tonnes of foodgrains (wheat & rice) to the lakh beneficiaries of TPDS are at the center of the functioning of the TPDS. Allocation, Offtake and Offtake percentage of rice and wheat under TPDS in Uttar to the APL, BPL and AAY Chart 1.4 [Allocation and Off-take (In thousand tonnes)] 15, , , Number of Prices beneficiari Rs. es ( Lakh (For families) wheat) 0.00 Entitleme nt of Wheat (kg/famili es) Prices Rs. (For Rice) Allocation, Off-take and Offtake % of food-grains in UP % 80.00% 60.00% 40.00% 20.00% 0.00% Allotment Off-take % Off-take (Department of Food and Public Distribution, 2014) Entitlem ent of Rice (kg/famili es) AAY / 15 kg / 20 kg BPL kg kg APL kg Total (Food and Civil Suplies Department) TPDS is operated under the joint responsibility of the Central and the State/Union Territory (UT) Governments. Central Government is responsible for procurement, allocation and transportation of food-grains up to the designated depots of the Food Corporation of India. The operational responsibilities for allocation and distribution of food-grains within the States/UTs, identification of eligible Below Poverty Line (BPL) families, issuance of ration cards to them and supervision over and monitoring of functioning of FPSs rest with the concerned State/UT Governments. The allocation to a state changes every year on the basis of the state s average consumption over the last three year(balani, 2013).Chart 1.4 presents the total allocation, off-take and off-take percentage of rice and wheat from to The off-take (lifting) of food-grains has increased significantly in relation to the total amount of foodgrains allotted to states over the last 11 years from % in to % in , which was to % in This off-take remained very less, 25.20% to 36.80% from to respectively (Mulayam Singh regime)whereas the allotted amount of food grains was between 12, to 10, thousand tonnes for the same period. After change in political regime, off-take percentage rose to 54.00% in up to % in but based on the last three years average consumption of state, there was decline in the amount of allotment which remained in between to thousand tonnes. The Share of purchase from the PDS in consumption of rice and wheat Uttar and all India Table 1.6: (In per cent) Rice Wheat RuralUrban Rural UrbanRuralUrban RuralUrban Uttar India Sources: NSS 66 th round data; Public Distribution System and other sources of Households consumption The percentage share of PDS in Rice consumption rose almost double to 23.5% in from 13% in in rural India and in urban India it went up to 18% in from just 11% in In , in rural UP its percentage share was 17.6 whereas in urban UP only 7.8% people purchased rice for their consumption through PDS. The percentage share of PDS in Wheat consumption rose two times to 14.6% in from 7.3% in in rural India and in urban India it increased more than two and half times to 9% in from 3.8% in CONCLUSION: Objectives of TPDS include providing subsidized foodgrains (such as rice and wheat) to the poor households through a network of Fair Prices Shops (ration shops). The finding of this study is as follows: Utter is the most populous state of country and being per cent literacy rate, female are illiterate almost double than that of male s illiterate.

7 7 On the one side, the economic growth rate of UP is 5.20 per cent in at the constant prices. On the other side, due to the low income approximately 6 crores people are poor, in which only 4.79 crores people belong to village. From chart 1.3, it is very clear that till 2011, 57 children died before achieving the age of 5 at every thousand live births in UP which was just slightly less than 63 before two years in Poverty ration in state also decreased (around 8.3 per cent) during this period, i.e. from 37.7 per cent in to 29.4 per cent in On the one side, food inflation has been come up biggest problem to the country after 2008, which reached around double digit in Due to low income, a poor people in the lowest income quartile spend nearly 65 per cent of their total expenditure on food commodities Government of India gives food subsidy around 90,000 crores at the national level. Total allocation of food-grains was lakhs in tonnes through FCI to Uttar for APL, BPL and AAY. While off-take of food-grains was lakhs tonnes of allocated food-grains in UP. That was per cent off-take of allocated food-rains. This study is based on secondary data. The finding of study is that better implementation of PDS become significant in most populous state like UP. REFERENCES [1] Balani, S. (2013). Functioning of the Public Distribution System. PRS Legislative Research. [2] Census (2011). Provisional Population Totals: Uttar Series 10. Director of Census Operation Uttar. [3] Chand, R., Gulati, A., & Kavery, S. P. (2011). Managing Food Inflation in India: Reforms and Policy Option. [4] CSO. (2014). Directorate of Economics and Statistics for state governments, CSO for all India. [5] CSO; Ministry of Statistics and Programme Implementation. (2013). SAARC Development Goals: India Country Report 2013 Statistical Appraisal. [6] Department of Food and Public Distribution. (2001). The Public Distribution System (Control) Order, [7] Department of Food and Public Distribution. (2014, 03 31). Index. [8] Department of Food and Public Distribution. (2014). Monthly food grains bulletin. [9] Dreze, J., & Khera, R. (2013, November 13). Rural Poverty and the Public Distribution System. Economic & Political Weekly, XLVIII(45 & 46). [10] Economic Survey. ( ). STATISTICAL APPENDIX : ECONOMIC SURVEY [11] FAO. (1996). Rome Declaration on World Food Summit. [12] FAO, WFP and IFAD. (2012). The State of Food Insecurity in the World Economic growth is necessary but not sufficient to accelerate reduction of hunger. Rome: FAO. [13] Food and Civil Supplies Department. (n.d.). [14] Government of Uttar. (2004). Government Order. Food and Civil Supplies Department, Uttar. [15] Government of Uttar. (2014). Retrieved February 24, 2014, from [16] International Institute for Population Sciences (IIPS) and Macro International. (2007). National Family Health Survey (NFHS-3) : India: Volume I. Ministry of Health and Family Welfare. Mumbai: IIPS. [17] Menon, P., Deolalikar, A., & Bhaskar, A. (2008, October 14). The Indian State Hunger Index: Comparisons of Hunger Across States. [18] Planning Commission. ( ). Press Note on Poverty Estimates. Government of India, New Delhi. [19] Planning Commission. (2005). Performance Evaluation of Targeted Public Distribution System. [20] Planning Commission. ( ). Press Note on Poverty Estimates. New Delhi: Government of India. [21] Planning Commission, GOI. ( ). Tenth Five Year Plan. Vol. II. [22] Reserve Bank of India. (2014). State Finances: A Study of Budgets of [23] Swaminathan, M. (2003, Sep. - Oct.). Strategies towards Food Security. JSTOR, 31(9/10), [24] The Gazette of India. (2013). The National Food Security Act, Ministry of Law and Justice. [25] The Hindu. (2013, September 01). In Uttar, a cleaning up act. [26] Time of India. (2014). Retrieved from [27] World Food Summit. (1996). Rome Declaration on World Food Summit. Rome.