Bihar, Odisha witness sharp fall in PDS leakages

The total estimated national-level PDS grain leakages have declined to 41.7% from 54% during the period from 2004-05 to 2011-12

Bihar, Chhattisgarh and Odisha have reported sharp falls in grain leakages through public distribution system (PDS) during the period between 2004-05 and 2011-12, according to an assessment by development economists Jean Dreze and Reetika Khera.

In Chhattisgarh, which took several measures such as digitisation of beneficiaries lists, fair-price shops and GPS tracking of foodgrain carrying trucks, the estimated grain leakage has reduced to only 9.3% in 2011-12 from 51.8% reported in 2004 -15.

But even dramatic was the improvement in Bihar, where the estimated PDS grain leakage fell from 90.9% to 24.4% between 2004 – 05 and 2011-12. In Odisha too, the grain leakages volume came down from 76.3% to 25% over this period.

Dreze and Khera have stated that ‘signs of improvement emerged around 2011 in Bihar’s PDS, notably with the introduction of a system of ‘tracking coupons’, however evidence of the effectiveness of these early reforms is somewhat mixed.

The total estimated national level PDS grain leakages have declined to 41.7% from 54% during this period.

Both the economists computed leakages by comparing household purchases from the PDS, based on National Sample Survey (NSS) data, with the total offtake of grain from the Central pool maintained by Food Corporation of India (FCI).

Thus, in 2011-12, the grain offtake from FCI’s godowns amounted to 51.4 million tonne (mt) at an all-India level. But the corresponding household purchases from the PDS as per the National Sample Survey (NSS) data (68th round) for the same year was only 30 mt. The difference (21.4 mt) represented the grain diverted into the open market.

“NSS data suggest a dramatic reduction in PDS leakages in Bihar between 2004-5 and 2011- 12, but field surveys suggest that in spite of some improvement, the system remained one of the most corrupt,” they noted.

However both Dreze and Khera, who were instrumental in providing inputs for the National Food Security Act (NFSA), Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) and other such welfare programmes – have also stated that a number of states — Madhya Pradesh, Maharashtra and Uttar Pradesh with higher grain leakages have shown virtually no progress between seven year period.

“If Bihar has curbed large scale PDS grain leakages in such a short span, then its a welcome scenario, as then Chief Minister Nitish Kumar had advocated direct cash transfer to PDS beneficiaries during the debate on NFSA few years back,” Ashok Gulati, Former chairman of Commission for Agricultural Costs and Prices (CACP) told FE.

The assessment by two economists also indicated that grains allocated to Above Poverty Line (APL) categories have been diverted more than the grain allocated to Below Poverty Line (BPL) families.

The High Level Committee (HLC) chaired by former food minister Shanta Kumar recently in its reported submitted to Prime Minister Narendra Modi had stated that given that leakages in PDS range from 40 to 50% , and in some states go as high as 60 to 70%, the government should defer implementation of NFSA in states that have not done end to end computerization, have not put the list of beneficiaries online for anyone to verify, and have not set up vigilance committees to check pilferage from PDS.


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