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Revamped PDS under the Food Security Act
Context:
During NFSA 2013 discussions, concerns about food security arose due to PDS inefficiencies, with 41.7% leakages reported in 2011-12 NSS data.
Introduction:
- The National Food Security Act (NFSA) of 2013 raised concerns about ensuring food security through the Public Distribution System (PDS) due to its poor track record.
- According to the National Sample Survey (NSS) 2011-12, nationwide PDS leakages were at 41.7%.
- However, states that implemented PDS reforms experienced significant improvements.
Arguments for PDS Continuation:
- State Reforms: States like Bihar, Chhattisgarh, and Odisha saw drastic reductions in PDS leakages between 2004-05 and 2011-12, with Bihar reducing leakages from 91% to 24%, Chhattisgarh from 52% to 9%, and Odisha from 76% to 25%.
- NFSA Impact: The NFSA 2013 mandated similar reforms, fostering hope for nationwide improvements.
Data from Household Consumption Expenditure Survey (HCES) 2022-23:
- The first large-scale survey post-NFSA implementation showed that PDS leakages had reduced to 22% in 2022-23.
- The methodology for estimating leakages involved comparing household PDS purchases with “offtake” data from the Food Ministry.
Estimation Methodology:
- Defining Leakages: Leakages refer to the amount of PDS rice and wheat that does not reach consumers despite being released by the Food Corporation of India (FCI).
- Dual Checks: The survey matched PDS grain purchases by households (both paid and free) with offtake data under NFSA and PMGKAY.
- Grain Distribution: Between August 2022 and July 2023, PDS ration card holders received NFSA grain and additional PMGKAY grain until December 2022.
Underestimation of Leakages:
- Expanded PDS by States: Many states, like Chhattisgarh, provided PDS grain to non-NFSA beneficiaries using both central and state contributions, making the all-India leakage estimate of 17.6%-18.2% an underestimate.
- State Contributions: If state contributions for non-NFSA beneficiaries are added, the all-India leakage estimate rises to 22%.
Impact of NFSA on PDS Coverage:
- PDS Reforms: The NFSA 2013 expanded PDS coverage to reduce exclusion errors and improve efficiency. By 2011-12, before the NFSA, less than 50% of households had ration cards, and only about 40% accessed the PDS.
- Improvement in Coverage: By 2022-23, 70% of households were using the PDS due to reforms in states like Chhattisgarh (where coverage tripled from 21% to 63% between 2004-05 and 2011-12).
- Shortfall in NFSA Coverage: The Centre is still short of the NFSA mandate, which aims to cover 66% of the population (50% rural and 75% urban).
- Administrative data shows that only 59% have access to PDS under NFSA.
PDS Reforms in Early-Reforming States:
- Key Reforms: States like Chhattisgarh and Odisha reformed their PDS by reducing prices, delivering food grains to doorsteps, digitising records, and de-privatising PDS management.
- Reduction in Leakages: By 2011-12, early reforming states had already reduced leakages significantly.
- For example, HCES 2022-23 showed leakage rates of 9% in Rajasthan, 21% in Jharkhand, and 23% in Uttar Pradesh.
Role of Aadhaar Integration:
- Aadhaar and PDS: Many attribute improvements in PDS to Aadhaar-based biometric authentication (ABBA).
- However, studies in Jharkhand (2017) showed minimal differences in purchase-entitlement ratios between offline and ABBA-using villages, indicating little impact from ABBA on reducing leakages.
Challenges in States with Traditionally Better PDS:
- Unexpected Increase in Leakages: In some states with historically effective PDS systems, leakages have increased, such as in Tamil Nadu, where leakages rose from 12% in 2011-12 to 25% in 2022-23.
- Threats to PDS: The PDS faces ongoing challenges from innovations like cash transfer experiments and Aadhaar-based systems, which could derail its success.
- Policy Focus: Instead of pushing measures like eKYC, the government should expedite the delayed Census, which has led to the exclusion of over 100 million people.
- Other priorities, such as including more nutritious items like pulses and edible oils, remain relevant for improving food security.
