Biometric identification will eliminate misuse of subsidy and will improve efficiency of the supply chain
At a time when the country is debating on the National Food Security Bill and the benefits of direct cash transfers versus the transfer of in-kind benefits, its political connotations, economic liability on the government and corruption in the system, the real issue surrounding the failure of the public distribution system (PDS) stands submerged. PDS is an important constituent of the strategy for poverty eradication and is intended to serve as a safety net for the poor whose number is more than 33 crore and who are nutritionally at risk. The concerns around efficiency and transparency in the PDS start at the source itself. From pilferage, bogus ration cards, incorrect inclusion and exclusion of beneficiaries, corruption during procurement and distribution, and unavailability of stock, to sub-standard stock and the ever-increasing number of middlemen, PDS is fraught with many issues and needs a well-thought-out solution.
Today, malnutrition in India is a multi-dimensional problem and needs a multi-pronged strategy. With reports showing that as many as 2 crore Indians sleep hungry everyday and children suffer from lack of nourishment, deaths in our country due to malnutrition have assumed national importance and rightfully so. India?s poor are fighting death everyday in the battle against the vicious circle of inefficiency of PDS in our country.
The Union Budget saw a raise in the subsidy to provide rations and also an increase of funds to the Food Corporation of India to build infrastructure for food storage. In the Budget even though computerisation and monitoring of PDS got a substantial subsidy, the entire debate seems to have spun around the wrong axis, with the main issue being the delivery mechanism to best deliver the subsidies to the poor. With technology contributing to curbing social evils by reducing human intervention, we need to figure out what role can technology really play in plugging the gap and providing a smooth mechanism for foodgrains to reach the millions below the poverty line?
A solution that improves the quality of the beneficiary database and can track individual beneficiary offtake coupled with a computerised MIS system can effectively improve PDS. By leveraging some of the large e-governance initiatives that are being rolled out, the solution can be implemented swiftly and cost-effectively. Under the proposed Food Security Bill, the systemic efficiency improving changes that can be explored include: (1) roaming ration-cards providing an opportunity to short-term migrants to move their ration-cards to their new area or work; (2) direct cash transfer programme where the subsidy will be transferred into the bank account of the beneficiary, but with majority of BPL families not having access to bank accounts, this will take time to implement; (3) choice of fair price shops should improve quality of service and this solution allows the incorporation of either limited or full choice of FPS; and (4) food stamps can be introduced allowing competition from existing food shops and increasing the reach of the TPDS network.
Here it is critical that the success of direct cash transfers in countries like Brazil and the Philippines, etc, be looked at in perspective?for example, looking at the level of malnutrition in these countries, which is much lower than that in India. Also, these countries have used cash transfers as a supplement to the other benefits in their system of providing basic necessities. Without adequate infrastructure including limited access to banking for the rural poor, direct cash transfers will take time to implement especially since majority of BPL families are unbanked, which also makes it essential to consider an Aadhaar-based regime of transferring benefits.
As per the expert committee report on Food Security Bill, in 2006, in response to a PIL on the PDS, the Supreme Court had appointed a Central Vigilance Committee headed by Justice DP Wadhwa who has given a number of reports on the reform of the distribution system. In July 2010, in a conference, the state food secretaries passed a resolution on the best practices and reform of the PDS. The suggestion to focus on a rapid roll-out of technology in PDS is common to both: end-to-end computerisation of the TPDS network, digitised allocation of foodgrains starting from FCI/state governments, smartcard-based delivery of foodgrains, issue of ration-cards with biometric identification and iris technology. Another key suggestion made was better monitoring of distribution of foodgrains by using technology including GPS tracking of stocks, SMS alerts to beneficiaries, CCTV monitoring of fare price shops, etc.
The proposed Food Security Bill suggests a near universal coverage of the population helping in achieving universality of PDS. Procurement of large quantity of foodgrains and a large distribution network entailing a huge financial burden on the fiscal system and inflationary pressures on food prices is a constraint for the government. However, using the network of about half a million fair price shops effectively, the government with a well-designed technology enabled infrastructure can ensure a transparent and efficient PDS. If synergised with UID, the PDS stands to benefit from the legislative, technology and administrative infrastructure that is being created for the implementation of UID. The large beneficiaries in the PDS will provide the necessary impetus for penetration of UID and vice-versa across India. The efficiency improvements in the PDS will make it one of the best-run pro-poor schemes. Together, it is a win-win for the citizens and the government.
With the national focus on this topic growing, it is now critical that we push for the implementation of these reforms to ensure an effective PDS. In fact, the use of technology for PDS is not new to the Indian environment. Some state governments like Chandigarh and Madhya Pradesh have already endeavored to use ICT for improving the efficiency of PDS. Other states like Tamil Nadu and Kerala have universalised their PDS and reduced food prices while eliminating leakages to a great extent.
The solution lies in bringing together the best of technology and effective public scheme delivery mechanisms backed by accurate data and technological monitoring of the entire PDS using biometric identification parameters. Such a mechanism not just eliminates misuse of subsidy by analysing accurate allocation that is linked to actual utilisation but also improves efficiency of the supply chain through timely reporting of stock lifting at fare price shops while eliminating ghost beneficiaries and keeping a check on private trade. It also then eliminates the debate around the gap between the cash subsidies versus the ever-increasing prices of foodgrains and the benefit of the cash transfer eroding due to inflation.
It is evident that PDS cannot be rid of its evils till there is lesser human intervention. Here the context is much larger than what meets the eye. Economic self-reliance needs to be built and infrastructure needs to be strengthened. However, let?s not dismiss the fact that while plans and policies are being discussed for implementation, several millions in India continue to live without the basic right to food. Let?s aim for speedy implementation of requisite policies to ensure a healthy and hunger-free India.
The author is the founder of HCL