‘One nation one ration card’ will disrupt the PDS

S Murlidharan | Updated on March 11, 2020

The proposed regime could throw up a logistical nightmare, calling for frenzied, fleet-footed responses from civil supplies departments across the country

‘One nation one ration card’ (ONORC) sounds good as it resonates with other monolithic regimes like ‘one nation one tax’ and ‘one nation one telecom tariff’. But it forgets the fact that the cereals, pulses, sugar and oil that one can get through the ration card have to be physically purchased from the fair price shop (FPS). FPSs do not practice e-commerce. Had the ONORC been implemented on a giant dedicated e-commerce platform, its objective — helping the migrant workers — could have been realised.

Under the National Food Security Act, grains are allocated by the Centre to States, who then identify the beneficiaries to set procurement requirements. Different regimes are followed: Tamil Nadu follows a universal public distribution system (PDS) while Haryana’s targeted PDS follows Central guidelines, dividing beneficiaries between Antyodaya Anna Yojana (the poorest of the poor) and priority households.

The overarching objective of the ONORC regime, that is proposed to be rolled out on June 30 2020 across 20 States (from the present 12) is that migrant and itinerant workers should not face problems as they shift cities and residences. This sounds ideal, if one forgets the logistical issues.

At present, an FPS receives the monthly quota of products strictly in accordance with the number of people assigned to it. To wit, if 10,000 cards are assigned to a particular FPS, and each card is on average entitled 1-4 kg of sugar per month, the civil supplies department would deliver to the FPS 40,000 kg of sugar. The ONORC, when fully operational would disrupt this practice, as some FPSs may have to cater to more number of cards even as others cater to less, owing to migration of people. This could throw up a logistical nightmare, calling for frenzied, fleet-footed responses from civil supplies departments across the country.

The problem with ONORC is it perpetuates and is woven round the age-old PDS. The Food Corporation of India (FCI) procures cereals at the minimum support price announced by the Central government, and must at times store them without adequate space.

Both the resultant loss of food and enormous overheads entailed by the food bureaucracy can be avoided if the existing regime is replaced by a fool-proof food coupon system targeting the poor, wherein a BPL family can buy rice, pulses, sugar and oil from any kirana store at the market price, by either paying fully through the coupon or by cash, if the amount due exceeds the monthly coupon value.

Critics of the food coupon regime, however, aver that coupons could be traded in for cash. For example, if the value of a monthly coupon of a BPL family is ₹500, it is possible that the family may settle for ₹300 in cash from the kirana store, allowing its owner to make ₹200 when he presents the coupon to the government for redemption.

But the possibility of aberrations and abuse should not be allowed to derail an otherwise beneficial scheme. The coupon system, in addition, does not limit the food options available. Coarse cereal like bajra or corn with nutritious pulses can be obtained in lieu of the one-size-fits all packages of cereals and sugar.

If fraud/forgery is a concern, the government can think in terms of direct benefit transfer (DBT) into the Aadhaar-seeded bank accounts. This will also curb trafficking of the coupons.

The short point is that ONORC sans roots-and-branches reforms in food subsidy would at best be a cosmetic change, the one that glosses over the huge logistical issues.

The writer is a Chennai-based chartered accountant

Published on March 11, 2020

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