'Keep states out of poverty surveys'

(The concluding part of a two-part series on the public distribution system)

Better identification of the poor and an efficient and transparent delivery mechanism will help achieve objectives of the targeted public distribution system (TPDS), says a Planning Commission report.

"Below poverty line (BPL) surveys and identification of BPL families should be done, not by state governments, but by survey organisations like the National Sample Survey Organisation, National Council for Applied Economic Research, and Indian Council for Social Science Research," said a Planning Commission official.

A fresh country-wide survey to identify food-insecure households and to understand the nature of food insecurity for "different types of poor" with respect to their tastes, preferences and needs are called for, says the report. It also adds that food insecurity and poverty should be viewed differently.

The report calls for an active and effective involvement of panchayati raj institutions (PRIs) in the identification of the poor.

"The reform of the TPDS will be taken up in the Eleventh Plan. An evaluation organisation is not best placed to suggest how to reform the programme," said Planning Commission Deputy Chairman Montek Singh Ahluwalia.

He added that an inter-ministerial group was likely to be set up to work out the specific measures to make the TPDS more effective.

The report suggests door-step delivery of monthly foodgrain (authenticated by PRIs) to fair price shops in the first week of a month to improve the delivery mechanism.

Such deliveries will involve an additional cost of about Rs 400 crore per year.

However, it will save Rs 4,197 crore, currently being siphoned off the supply chain because of non-transparent operation of the TPDS, the report says.

Offtake can be improved if the composition of PDS foodgrain given to a state takes into account local preferences, and consumers are allowed to draw ration in weekly instalments, the report says.

Given the high cost of holding buffer stocks and the low offtake in economic cost, it suggests that both BPL and APL cardholders be issued additional foodgrain at less than economic cost.

Measures are also needed for reducing the economic cost of grains. The cost structure of the Food Corporation of India needs to be rigorously examined, it says.

In most states, market prices are less than the economic cost of grains -- implying that the market may be a more efficient mode for transferring income to the poor, it adds. In order to minimise leakages at fair price shops, the report calls for making retail outlets financially viable.

For this, each FPS will have to handle about 122 tonnes of grain annually and keep its margin at 2 per cent of the economic cost. Ration shops can be housed in community buildings in order to save rental costs, the report suggests.