Study finds large diversion of rice, wheat from PDS, welfare schemes

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Grains leakage in the range of 40-100% across 11 States.

M.R. Subramani

Chennai, Sept. 22

The leakage of foodgrains under public distribution schemes and for development programmes, where a portion of wages is paid in food grains, ranges from 40 to 100 per cent across a cross-section of States, a Government sponsored research study has revealed. 

According to an evaluation undertaken in 11 States by the National Council for Applied Economic Research in 2008, diversion of wheat and rice takes place in cereals meant for all categories — Antodaya Anna Yojana (AAY), below poverty line (BPL) and above poverty line (APL).

In the case of Assam, the diversion is total in the case of wheat for APL and 83 per cent in the case of rice. In Bihar, diversion of wheat meant for AAY and BPL is above 40 per cent, while in the case of Chhattisgarh 78 per cent of the wheat for APL is diverted. (See table)

The evaluation is, more or less, in tune with the findings of ORG-Marg in 2005. The findings showed total diversion of wheat in Assam meant to be distributed through ration shops. It also showed high percentage of diversion in Arunachal Pradesh (64.1 per cent rice and 96.2 per cent wheat). In Chhattisgarh, too, the diversion of wheat is as high as 71 per cent but more surprising is the diversion of wheat in Haryana being 74.2 per cent.

The leakage from the public distribution system is due to the inclusion of people who were not eligible for concessional price and exclusion of those deserving of issue of such food grains on concessional terms. In Kerala, for example, the inclusion error or enrolment of wrong people for the benefits is 80 per cent, while in the case of Delhi and Rajasthan it is 50 per cent.

These details were made available during the meeting of the core group of Central Ministers and State Chief Ministers on prices of essential commodities on April 8.

A Project Evaluation Organisation study in 2005 showed that total food grains leakage from the public distribution system is 36.38 per cent with nearly 20 per cent of coming at the ration shops and the rest through bogus ration cards.

9-point action plan

Ironically, these findings have come up in the backdrop of the Centre's decision to increase the allocation by an additional 2.5 million tonnes (mt) of wheat and rice through the public distribution system, responding to the Supreme Court's criticism of rotting food grains. While the Centre plans to make the cereals available to the below poverty line people in six months, there seems to be a more serious issue — that of leakage and diversion of food grains that are subsidised and distributed through the ration shops.

The Government distributes annually a total of 43.86 million tonnes of food grains (wheat 19.71 mt and 24.15 mt rice).

The Food Ministry came up with a nine-point action plan to strengthen the public distribution system, including computerisation of the entire process, at the meeting.

Three working groups were set up at the meeting with the Deputy Chairman of the Planning Commission, Mr Montek Singh Ahluwalia, heading one on Food and Public Distribution with the Chairman, Economic Advisory Council to the Prime Minister, and the Chief Ministers of Chhattisgarh and Assam as its members.

Related Stories:
Food for all — Aiming towards an efficient public distribution system
PDS in a shambles

(This article was published in the Business Line print edition dated September 23, 2010)
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