Nilekani-led panel to reform crumbling PDS

After suggesting prescription for direct transfer of fuel and fertiliser subsidies, the Nandan Nilekani task force will now come out with measures to reform the crumbling public distribution system (PDS) that will involve direct transfer of food and kerosene subsidies.

“It has been decided to extend the terms of reference of the task force to the reforms of PDS,” the finance ministry said in a statement here. The extended terms of reference will include suggesting an implementable solution for direct transfer of subsidies on food and kerosene to intended beneficiaries with the use of Adhaar numbers, the ministry said.

The task force will also identify and suggest required changes in the existing systems, processes and procedures, besides IT frameworks and supply chain management. It will suggest institutional mechanisms to implement the IT strategy for PDS by August 31.

Earlier, Finance Minister Pranab Mukherjee had said subsidy on kerosene should be linked to PDS reforms.

Though there are no confirmed estimates, some studies peg leakage in PDS to 30-40 per cent of total foodgrains supplied, which means that substantial quantity of food and other items do not reach the intended beneficiary.

Currently, PDS caters to 18 crore households, of which 11.05 crore belongs to above poverty line families and the rest below poverty line.

The draft Food Security Bill, cleared by the empowered Group of Ministers recently, proposed legal entitlement for grains to 75 per cent of the rural households and 50 per cent of urban households.

Officials estimate that the country’s food bill will rise to around Rs 94,987 crore after the food Bill is implemented, involving an additional outgo of almost Rs 13,000 crore annually.