SHORT DURATION DISCUSSION ON PUBLIC DISTRIBUTION SYSTEM IN THE COUNTRY

राज्यसभा
SHORT DURATION DISCUSSION ON
PUBLIC DISTRIBUTION SYSTEM IN THE COUNTRY

14 December 2005


SHRI SHARAD ANANTRAO JOSHI (MAHARASHTRA): Thank you very much, Mr Vice-Chairman. I must apologise at the outset because of the fact that we had a meeting of the Welfare for Scheduled Castes and Scheduled Tribes and I could not sit through the discussion here. I heard very attentively to the magnificent maiden speech made by Smt. Brinda Karat and then also heard the hilarious speech made by Smt. Binda Raikarji. And when I came back, it was Ms. Maya Singhji, who was speaking. So, in between all those who spoke, I have not been benefited by that. Firstly, I must compliment Smt. Brinda Karat for the fact that she brought an entirely new and fresh light to the whole discussion. 


                  I was particularly gratified to see that from these (Left) Benches, for the first time probably, the fact that hunger is not only an urban phenomenon but also a rural phenomenon was recognised. Further, she also recognised the fact that even those who are owners of land, do not necessarily rank with Tatas and Birlas, but are also famished in their own term. She started very logically with the concept of food security, and went on to production, distribution and, ultimately, to the working of the PDS. In the security, food security is a sort of very elastic concept. There is the first grade of stark food security which was known to all of us, which is now known even to the countries in Africa, where the food is just not unavailable; it physically doesn’t exist. Once you have crossed that threshold and the food is available, then there are a number of other steps that come in. Do the people have the purchasing power to purchase the food, which is already there? Recently, in the Indian Science Congress, a point was raised by Dr. M.S. Swaminathan that it does not suffice to have just the purchasing power; it is also necessary that the targeted groups, the people concerned must have the necessary education and literacy in order to understand what their real needs are. It does not suffice to have purchasing power only for food; it is necessary that they are able to have access to water as also to fuel. The definition of 'food security' can get expanded like that. I think all human beings and all animals are born with a sense of food insecurity; it is an eternal phenomenon, not that it was born 60 years back or not that it has been created today. The only thing is that the definition and the scope of the word and the sense in which we use the words 'food insecurity' goes on expanding. And I can say that human civilisations go on advancing to a wider and wider definition of food security. 

                  As regards the mechanism for ensuring that the food actually becomes available to the poor, I would like to mention that the controversy is exactly the same as I mentioned last Friday while presenting my Private Member's Bill on Socialism. The controversy is precisely between the Arrow's Theorem, which says that no collective kind of organisation is possible, and the Amartya Sen's theory that at least in respect of hunger, education, health and similar other things, the Government has a role to play. And here it is being argued that the Government would have a role to play, and, in Amartya Sen's terms, it will have to be an efficient State action in favour of the poor in order to ensure public distribution. Now, the problem, Sir, is that an efficient public distribution is a contradiction in term; it doesn’t exist. And so many people have spoken here, so many people have pointed out that there is a lot of diversion of food grains, diversion of kerosene, and every possible method, modus operandi of corruption and diversion is used in the system of Public Distribution. This was understood very early in the 1950's by the great Rafi Ahmed Kidwai, who, even in those days, as early as 1951, when we had not really attained food self-sufficiency, advised that the rationing system should be scrapped. Unfortunately, at that time, the Food Corporation of India and the Rationing System had become such a vast vested interest that they did not allow late Rafi Ahmed Kidwai to have his own way, and, therefore, we continued to have the Public Distribution System in different forms. 

                  After 1997, we are talking of a Targeted Public Distribution System. Now, when it is targeted, I was wondering why is it that we, who in the case of reservation of posts or reservation in jobs or reservation in educational institutions, consider Scheduled Castes and Scheduled Tribes as the nodal backward classes and refuse to accept the economic criteria for reservation? 

                  Why is it that in the case of BPL and Public Distribution System, we prefer to have an economic criterion? Why not put all Scheduled Castes, Scheduled Tribes and OBCs, if they are, in the targeted groups? If they are, according to us, the targeted section of society, then, in order to ensure social justice, it would have been a much more effective targeting, if we had included all the Scheduled Castes, Scheduled Tribes and OBCs into it. When you put BPL, then even if the Panchayat of village sits there and they try to point out who is poor, the kind of discussion that takes place, even in a village panchayat is really disgusting. There is an unseemly competition even amongst the well-to-do to claim that they are poor and they are Below Poverty Line. If this is the position, I don't think that targeting the Public Distribution System better and better is going to improve the performance. Targeting it better and better is having a dart board which has a target which is narrower and narrower; it only makes the possibility of missing the aim larger and larger. What is important is what kind of a delivery system you have. If you want to win the dart, then, you have to have a system where you aim it properly and not have a better target. 

                  One of the major difficulties in case of the present system, in my opinion, is the Food Corporation of India which is a parallel Government, which is an empire and which spends so much money, wastes so much money and its costs of procurement and costs of distribution are so heavy that it would never be able to stand the competition. Apart from the fact that the Food Corporation of India has failed to create a post-harvest process system in between the farm and the kitchen, the fact that the Food Corporation of India works in such a way, that it appeared in the newspapers, that even the porters who lift the bags for it have annual incomes of more than Rs.2 to 3 lakhs. That's the kind of way in which the Food Corporation of India works. Unless you scrap the Food Corporation of India, you are not likely to have any Public Distribution System that will really ensure food security. And I think, if I heard our Minister for Agriculture attentively in various speeches that he made; the correct thing is, I would say, that the system of minimum support prices and the statutory minimum prices has to go. I have been one of the early advocates of that system when the socialist Government was deliberately intervening to ban exports, to make artificial dumping from outside and restricting the movements from one State to another, storage and processing of agricultural produce. That era, at least, in theory, has gone. Therefore, we now have no need for a minimum support price system. I think, they are already working on a system where the farmers will be able to store their produce in a warehouse, where they will get a warehousing receipt along with a seventy to eighty per cent of the price as advance and that warehousing receipt will become a negotiable instrument. I think that is the correct way of proceeding, in order to get rid of this whole bureaucratic and corrupt structure of statutory minimum prices and minimum support prices. Once that is done, how does the food reach the poor? I think, there’s a relatively easy way. I am not advocating coupons because I agree with Brindaji that the coupon system has not worked in any developing country while it has had a better performance in more developed countries. But there are ways. And as Arun Shourieji pointed out, there can be ways of actually making a direct disbursement and income subsidy rather than associate a subsidy with food. In fact, it's not a food subsidy; it has to be a subsidy for the poor who are not able to ensure food security for themselves. I would request the Minister of Agriculture, on the lines of what Bhattacharyaji said; you will have to keep aside all the existing, old and dead paradigms. You will have to take courage in hands. And, if you take courage in hands and get rid of every system where there is a monopoly and where there is a bureaucracy, you will find some solutions. If you persist with bureaucracy and if you persist with systems that are corrupt, you are not likely to get anywhere. Thank you very much. 

 (Ends) 

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SHRI JAIRAM RAMESH (ANDHRA PRADESH): Thank you, Mr. Vice-Chairman, Sir, for calling me to speak. Sir, I was under strict instructions from my senior UPA colleague, comrade Dipankar Mukherjee, not to speak this afternoon! 

Sir, after having listened to a three-and-a-half hours discussion on a subject that I have had the privilege, misfortune, fortune, or, call it what you want, of having dealt with for the last 15 years in various capacities, I do want to make a few points by way of elucidations, clarifications and explanations from the Minister when he responds to the debate tomorrow. 

Sir, the first point that I do want to make is that the PDS was never conceived as an anti-poverty instrument. It was basically an urban rationing mechanism. 

It started off at a time of food shortages and, over a period of time, it evolved into a food-distribution-cum-poverty alleviation instrument. Much of our frustration with the PDS, as an instrument of alleviating poverty, stems from the fact that its basic design was such that it was not oriented towards solving the basic problem of poverty and malnutrition. The basic objective of the PDS was to keep urban prices of foodgrains low so that you did not have food riots in towns and cities. This is the first point which we must recognise about the genesis of the PDS. 

Sir, the second point--Dr. Arjun Kumar Sengupta is not here--is that, in fact, it was in 1991, when Dr. Manmohan Singh was the Finance Minister and Shri Narasimha Rao was the Prime Minister, that the first attempt at targeting the PDS was actually carried out and it was called the RPDS. People talk only about the TPDS. They forget about the RPDS. Shri Yashwant Sinha may recall, because he was the Finance Minister just previous to that. It was the Restructured Public Distribution System or the Revamped Public Distribution System which focussed on 1,727 of the poorest and backward blocks of the country which had the maximum tribal population. In a way, what Dr. Sengupta was suggesting had, in fact, been tried out in 1992, when the Revamped Public Distribution System enhanced the food entitlements in those blocks of the country which were deemed to be the poorest and which also had the maximum proportion of both Scheduled Castes and Scheduled Tribes. This is the point that Shri Sharad Anantrao Joshi made. This experiment lasted for about 5-6 years when the United Front Government came to power. The United Front Government was supported by the CPM from outside like this Government. It is in the United Front Government that the transition from the RPDS to the TPDS, that is, Targeted Public Distribution System, took place. Now, why did this transition take place? This transition took place because of the realisation that the large poorer States of India were not getting commensurate food subsidy. I am sorry, Sir, I have to take the example of your State. I am a great supporter, a friend, and a well-wisher of your State. But the fact of the matter is that, when you look at the distribution subsidy, what stared us in the face was that Uttar Pradesh, with eighteen per cent of India's poor, was getting less than ten per cent of the food subsidy; Bihar, with twelve per cent of India's poor, was getting about four per cent of the food subsidy; Kerala, with three per cent of India's poor, was getting ten per cent of the food subsidy; and Andhra Pradesh, my own State, with five per cent of India's poor, was getting about eight per cent of the food subsidy. Now, nobody is against food subsidy. But the fact of the matter is that the PDS, as it started before 1997, was benefiting largely the peninsular States because they were more efficient, because they were lifting the foodgrains. That is why the system was put in place which said that because the bulk of the poor live in North India, we must have a system which correlates the food subsidies, the food allocations, with poverty ratios. Now, the South Indian States were generally more efficiently governed. Therefore, they were naturally deriving the bulk of the food subsidy. There is no surprise in that. I think, we must recognise the problem in the PDS as a North Indian problem. It is not a problem south of the Vindhyas. With all imperfections, Maharashtra, Tamil Nadu, Andhra Pradesh and Kerala run the PDS efficiently. Now, you may argue here and there about inefficiency, leakage and so on. But, by and large, the peninsular India is running the PDS efficiently and that is why they were able to lift the rice, wheat, kerosene and sugar. The problem is really in North India where a bulk of the poor live; where any attempt, whether it is RPDS or TPDS, has failed. So, my first request to the hon. Agriculture Minister, the Food and Civil Supplies Minister, is that unless we recognise and come to grips with the complete collapse of the governance structure for the PDS and the need for an alternative model for managing the PDS in North India, I am afraid, Sir, we are not addressing the core of the problem. 

Why not turn over management of the PDS to women Self-Help Groups? Why not use ex-servicemen's cooperatives and civil society organisations to run the PDS in large parts of north India. I think we need to do some out of the box thinking because the problem, as I said, is acute in the north Indian States and not so much in the south Indian States. Of course, there is room for efficiency. I am not denying the fact. But if you look at the coverage, if you look at the number of Fair Price Shops in Tamil Nadu, Kerala, Karnataka and Andhra Pradesh, there is no comparison with the penetration of the PDS in Uttar Pradesh, Bihar, Madhya Pradesh and Jharkhand, where a bulk of the poor people live. This is my first request to the hon. Minister. 

Secondly, while I entirely agree with the hon. Member Shrimati Brinda Karat that this APL and BPL distinction -- although it started off as a distinction between the poorer States and the richer States -- has introduced an invidious distinction amongst the poor. The solution that has been offered by a large number of people, which is a universal food subsidy, will impose on the procurement system an obligation that it is simply not going to be able to handle. I think what we have to recognise is -- I hope the hon. Minister will enlighten us tomorrow -- suppose, we in our concern for the poor which all of us have, do, in fact, make the transition to the ideal solution of a universal food subsidy system, what are the procurement implications for this and whether the institutions that we have today, which have been designed in a completely different economic environment are equipped to handle these implications. I thought the direction of reform is decentralised procurement. I thought the direction of reform is community grain banks. I thought the direction of reform is to build food security system not guaranteed by the State necessarily but managed by local communities themselves. I have seen large parts in south India; I have seen in Tamil Nadu; I have seen in Andhra, certainly, where in very large parts of the State grain banks are run by Self-Help Groups, by community organisations at the local level. If this is possible, I think, then we are making the transition from a high cost bureaucracy intensive system of procurement and distribution -- Shri Sharad Joshi referred to it -- to a low cost decentralised community-oriented management. I am not advocating food stamps. I do not believe in food stamps. But I do also believe that the current model of procurement and current model of distribution that we have, which gave India the Green Revolution, which made India self-sufficient in foodgrains in the 60s and 70s has pretty much run its course and you need an alternative paradigm. If we accept the recommendation that Shrimati Karat has made of universal food subsidy, without recognising the need for specialised interventions, it will impose upon the State a requirement for procurement which in my view is simply not possible with the existing capacity of the State. 

Finally, all evaluations done in the Planning Commission, and I myself have participated in some of these evaluations, have come to the conclusion that the PDS is the most cost ineffective mode of poverty alleviation. If you look at wage employment programmes, if you look at the ICDS type of programmes, if you look at all other programmes, they have a far greater impact on social development and human development than the PDS. The PDS is simply not a cost effective instrument for poverty alleviation. This is not a World Bank study, this is not a WTO study, this is a study done by responsible economists who have no ideological access to grind like the allegation that is often made against people like me. I know Comrade Mukherjee is looking at me and laughing. (Interruptions). I am now being attacked both from the left and the right, maybe the Left and the Right, so to speak. (Interruptions). I do want to say that....(Interruptions). I am not even responding to my friend Shri Arun Shourie. The point is let us not look at the PDS as a poverty alleviation device. The PDS is a system of delivering food security, nutrition security which is valid for large sections of the people. I think we have diagnosed the problem very well, but at the end of three-and-a-half hours, we do not have a workable solution. Thank you.