Report on the State of Haryana - Central Vigilance Committee

7/28/2019 Report on the State of Haryana - Central Vigilance Committee

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CENTRAL VIGILANCE COMMITTEE

ON

PUBLIC DISTRIBUTION SYSTEM

REPORT

ON

THE STATE OF HARYANA


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1. In Writ Petition(C) No.196/2001 Peoples Union for Civil Liberties

V/S Union of India and Ors., Honble Supreme Court of India by Order

dated the12.7.2006 constituted a Committee to be headed by me to lookinto maladies affecting the proper functioning of the Public Distribution

System (PDS) and to suggest remedial measures. The operative portion

of the order reads as under:

After having heard learned counsel for the parties, we find

that there is practically no monitoring over the sums allotted

for the Public Distribution System (in short PDS) by the

Central Government, and its utilization. The amount involved

we are told is in the neighborhood of Rupees Thirty

Thousand Crores annually. Certain suggestions have been

given by Mr. Colin Gonsalves, learned senior counsel as to

the modalities to be adopted in such cases. At the present

stage we feel it would be necessary to constitute a Central

Vigilance Committee headed by a retired Judge of the Court

to be assisted by Dr. N.C. Saxena, the Commissioner earlier

appointed by this Court. We requested Mr. Justice D.P.

Wadhwa to head the Committee.

The Committee shall look into the maladies which are

affecting the proper functioning of the system and also

suggest remedial measures. For this purpose the

Committee shall amongst other things, focus on:-

a) The mode of appointment of the dealers,

b) The ideal commission or the rates payable to the

dealers, and

c) Modalities as to how the Committees already in place,

can function better,


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d) Modes as to how there can be transparency in

allotment of the food stocks to be sold at the shops.

While dealing with the question of the mode of appointment,

the Committee shall also suggest as to a transparent mode

in the selection of the dealers. The Committee shall also

indicate as to how more effective action can be taken on the

report of the Vigilance Committee already appointed. It

goes without saying that the same shall be in addition to the

legal remedies available to any citizen in setting law into

motion. We request the Committee to give its report within

period of four months so that further instructions/directions

can be given.

The Committee would invite suggestions from general

public, organizations and would consider the suggestions, if

any received in the proper perspective.

2. Honble Courts direction was initially given for the Government of Delhi to

be followed on an all India basis.

3. Committee submitted report on Delhi on 21.8.2007.

4. By order dated 10.01.2008, Honble Court, while accepting the report,

directed the Committee to undertake a similar exercise in terms of earlier

order for the entire country.

5. Scope of the task assigned to the Committee thus having been enlarged,

the Committee projected to the Department of Food & Public Distribution,

additional requirements of staff, space and delegation of financial powers

for its smooth functioning. The Department dilly dallied and did not meet


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the requirements. The Committee had to approach the Honble Court again

and again. It was only after a peremptory Order dated 25.8.2008 was

passed by the Honble Court that the Department started taking steps forcreating necessary infrastructure. It was only thereafter that the

Committee could start functioning in right earnest. The Honble Court

extended the time for submitting the report till April 2009.

6. The Committee submitted its report for the States of Uttarakhand, Jharkhand,

Orissa and Karnataka. Thereafter, the Honble Court has been pleased to

extend the time further till December 2009. The Committee has since

submitted the report on the State of Andhra Pradesh, Bihar, Gujarat and

Rajasthan. The Honble Court has further extended the tenure of the

Committee till 30.6.2010The Committee is presently submitting its report

on the State of Haryana.

7. The Committee has already submitted a separate comprehensive report on

Computerization of PDS. Some States have shown interest towards

computerization of PDS. It is the mandate of the Public Distribution

System (Control) Order 2001 that State Governments shall ensure

monitoring of the functioning of the Public Distribution System at the fair

price shop level through the computer network of the NIC installed in the

District NIC Centres. For this purpose computerized codes shall be

issued to each FPS in the district. Nothing appears to have been done

towards this.

8. PDS is undoubtedly the largest food distribution network of the kind in the

world. While procurement, storage in FCI godowns and allocation of food

grain to the states is in the hands of the Central Government, distribution

is done through the Fair Price Shops licensed by the State after identifying


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transparency and remove corruption from the much maligned PDS. It is

stated that in Haryana about 53 lakh people will be issued the smart card.

Central Government have recently constituted a Unique IdentificationAuthority of India (UIDAI). The mandate of UIDAI is to issue unique ID

number to every resident of the country. It is stated that if PDS

authorities, in their domain make UID number of the ration card holders

and their family members as mandatory, they can clear up their data base

of bogus ration cards. UIDAI would re commend that all State

Governments should start working and actively participate with the UIDAI

so as to clean up their data bases and improve their delivery system.

12. In answer to a question that about 1.5. crores bogus ration card holders

were milking the PDS and could UID help such situations, Mr. Nandan

Nilekani, Chairman, UIDAI, replied UID by itself will not solve the issue.

The application of UID in a given context will solve it. If a state decides to

have UID in all its ration cards, then somebody who has a ration card with

the UID cannot come again on another ration card with another UID. So

UID will ensure there are no duplicates. We are providing a capability to

agencies to re-engineer their public service deliveries but the decision to

re-engineer has to be theirs.

13. There is a complete mess in the state in the functioning of PDS and the

whole system is mired with corruption. After the Release Order is issued

by District Supply Officer to CONFED to lift food grain from FCI or other

agencies, there is no system of checking if the food grain reaches the FPS

and it is allotted to the beneficiaries in right quality, quantity and in time.

There is no check if the FPS has issued all the PDS food grain allocated

to it and without their being any check Release Order for the next month

is issued as a matter of course.

14. CONFED is misfit for handling distribution of PDS food grain. It has no

trucks of its own. Tender process for appointing transporters is faulty.

Even the tenderers have no trucks of their own and they have to hire


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Kurukshetra Mr. Narinder Singh, Addl. Deputy Commissioner; Mr, A.R.

Godara, ADFS; Mr. Ashok Bansal, SDM Thanesar; Ms. ManjulaDahiya,DFSC; Mr. Dhan Singh, D.M.,CONFED; Mr. B. Devanand, D.M.,

FCI; Mr. Vinod Kumar, GM(B), CONFED, Chandigarh and Mr. Prem

Singh,BFSO,Ambala City.

Rohtak Mr. P.C. Meena, Dy. Commissioner; Mr. A.S. Mann, A.D.C.; Mr.

A.R. Godara, A.D.F.S.,CMD; Mr. Vinod Kumar, G.M. CONFED,

Chandigarh; Mr. Parmodh Sharma, D.F.S.C.; Mr. D.K. Singla,D.M.

CONFED; Mr. K.C. Garg, D.M.,FCI; Mr. Harbans Lal, Manager

Procurement,FCI and Mr. Mahavir Sharma, Asstt. Registrar,G.M Coop.

Store.

Faridabad Mr. Barjinder Singh, Dy. Commissioner; Mr. Pushpender

Singh Chauhan, SDM; Mr. A.R. Godara, Addl. DFC, Chandigarh; Mr.

Vinod Kumar, GM, CONFED; Mr. Ram Avtar, DFSC; Mr. Anil Malik, DM,

CONFED, Faridabad and Mr. K.K. Barua, Area Manager, FCI.

Mewat (Nuh) Mr. Mehtab Singh, Dy. Commissioner; Mr. S.S. Dalal,

Addl. Dy. Commissioner; Mr. Atul Dwivedi, SDM; Mr. Inder Pal B ishnoi,

SDM; Mr. K.K. Goyal, DFSC and Mr. Ashwani K. Gaur, Dy. Director.

Palwal Mr. M.K. Mahajan, Dy. Commissioner; Mr. Ram Niwas, DSFC;

Mr. Shankar Lal Gupta, AFSO; Mr. Amrik Singh, DSP and Mr. R.D. Mehra,

Distt. Manager, CONFED.

Bhiwani Mr. Vikas Gupta, Dy. Commissioner; Mr. R.C. Bidhan, ADC; Mr.

Azad Singh, DFSC; Mr. A.K. Goel, Dy.DF&SS(HR),Ch.D; Mr. Kamal Singh

DPRO; Mr. K.K. Varsmnei, DPO & ADC; Mr. Dharam Pal Singh,

Manager(D),FCI; Mr. L.R. Jain, Area Manager,FCI, Hissar; Mr. Subhash

Singh , Distt. Manager, HAFED and Mr. T.K. Mittal, D.M., CONFED.

Hissar Mr. O.P. Sheoran, Dy. Commissioner; Mr. Amardeep Jain, SDM;

Mr. D.P. Singh, City Magistrate; Mr. Pankaj Nain, ASP; Mr. Dharmvir


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Goyat, Distt. Food & Supply Controller; Mr. D.C. Sharma; DFSO; Mr.

Subhas Sihed, Asstt. Food & Supply Officer; Mr. S.S. Bishn oi, Distt.

Manager, CONFED; Mr. B.S. Bhati, Area Manager, FCI; Mr. Jaivir Singh,Asstt. Controller Legal Meteorology and Mr. Jaipal Singh, Inspector, Legal,

Meteorology.

20. Members of the Committee who visited the State are Ms. Meenakshi

Chauhan, Ms. Naomi Chandra and Mr. Shohit Chaudhry (being members

of Legal Team), Mr. K.K. Mittal, Director and Mr. J.K. Bhutani, Section

Officer. Mr. S.C. Rawal, a former Registrar of Delhi High Court and

appointed as Secretary by the Chairman, has been performing functions

of the Secretary of the Committee. Dr. N.C. Saxena, however, could not

offer any assistance to the Committee perhaps due to his other

engagements.

21. The Committee is submitting its report which has been divided into various

Chapters like distribution of food grain, appointment of FPS dealers,

viability, identification of BPL, wheat flour (atta), coupon system, diversion

of foodgrains, vigilance, enforcement & complaint mechanism and

computerization . Overview has been given of the PDS in the State and

recommendations made. An attempt has been made to make each

Chapter self-contained and there is possibly a repetition at various places.

Delhi

(Justice D.P Wadhwa)

ChairmanCentral Vigilance Committee

on Public Distribution System

Broad Overview


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1. There are 21 districts in the State of Haryana. There are 9570

(2751 Urban and 6819 Rural) Fair Price Shops (FPS) catering to

54,32,815 ration cards. The population of the State of Haryana

as per 2007 census was 2.39 Crores and the projected

population as on 31.10.2008 was 2.44 Crores. As per the

Planning Commission there are 7.29 lakh families living below

the poverty line in the State. However, the survey revealed that

there are about 11.97 lakh (BPL + AAY) families below poverty

line. The State of Haryana is a wheat surplus State.

2. The Central Vigilance Committee visited the State of Haryana

from 5th - 12th, August, 2009 and 29th November to 1st December,

2009. The Committee during the visit met the officials of the

State Government in Chandigarh and discussed various issues

concerning PDS in the State. The Committee also studied of the

functioning of the Public Distribution System in the following

districts of the State- Ambala, Kurukshetra, Rohtak, Faridabad,

Mewat, Palwal, Bhiwani and Hissar. The Committee interacted

with the State Government officials, District officials, Officials of

FCI, CONFED, Consumers, FPS dealers, NGOs, Self Help Groups,

Consumer Organizations and Media etc., to assess the working of

the PDS in the State. The Committee found that Public

Distribution System in the State has failed miserably. There is a

large scale diversion from wholesale distribution to retail

distribution.

3. It seems that the Public Distribution System in the State needs to

be analysed by the senior level functionaries of the department


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and drastic changes need to be done to make the PDS in this

food surplus State workable. During the visit the Committee

examined the following aspects of the PDS regarding theImplementation of the Government Rules and Regulations and

Control Order and the compliance of the directions of the Honble

Supreme Court concerning PDS :-

i. Distribution of Food grains.

ii. Mode of appointment of FPS dealers.

iii. Viability of FPSs.

iv. Functioning of Vigilance Committees.

v. Enforcement and complaint mechanism.

vi. Identification of Beneficiaries.

vii. Issuing of ration cards.

viii. Role of officials of the Department at different levels

concerning PDS.

ix. Computerisation.

4. During the visit of the Committee public meetings were

organized at different places to know the grievances of stake

holders concerning PDS. The views expressed by the people

during these public meetings are mentioned at the end of the

report as Appendix.

5. On the basis of the observations and findings the

Committee has made some recommendations in the reportwhich are enumerated in separate chapters. The Committee has

analyzed various aspects affecting PDS in the State in different

Chapters which are as under:-


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Hamida was appointed and his rates for transportation of grain

were

Within District 6.90 per quintalOut of District- 11.50 per quintal

6.4 The rates of transportation in the previous year were Rs. 13 per

quintal for within district and out of district 20.50 per quintal. It is

pertinent to mention that the rates for the previous year was

double the rates of the current year. The transporter himself

quoted such low prices and later in August he refused to

Continue as transporter even at the cost of forfeiting his security

amount.

6.5 Committee on perusal of transporters file observed that the

transporters usually have one or two vehicles. Officer of CONFED

informed the Committee that as the number of vehicles are not

sufficient the transporter hires trucks for supply of foodgrain to

FPS. As the private trucks are hired by the Transporters to carry

and transport foodgrain the question arise that why the private

truck owners transports the foodgrain in lesser rates than the

market rates. These facts give direct inference about the

Diversion of the foodgrains during transportation. Similar facts

were observed while perusing transportation files pertaining to

other districts.

6.6 Further, it is to be noted that no officer of CONFED accompanies

the truck while transportation of the foodgrain from procurement

agency to the fair price shops. There is no monitoring by the

CONFED officers on the transportation of foodgrains. Once the


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foodgrain is lifted and loaded in the truck from the godowns of

the procuring agencies it is totally in the hands of the

transporters. The transporter and whether he delivers the fullquantity at fair price shop or not.

6.7 The Department officials are duty bound to check whether the

foodgrain have reached the fair price shop or not. The

department has to certify that the 100 % foodgrain has been

delivered by the transporter and give the same to the CONFED

before the bills pertaining to same is cleared. However, the

Committee observed that the department officials are not

checking the delivery of the foodgrain by CONFED appointed

transporters at the fair price shops. This clearly indicates the

connivance of CONFED officers, department officials and the

transporters. Strict Penal actions should be taken against

officers and transporters if found guilty of diversion of foodgrain.

6.8 The Committee observed that the shops are not opened for

distribution of food grains and other items through out the

month. It was also observed that the time schedule adopted by

the Department for distribution is not proper. The time schedule

for deposit of the money by the FPS dealers, issuing of release

orders, lifting from the State agencies by CONFED and

distribution by CONFED to the FPS dealers has been fixed in such

a way that the actual duration for distribution for the FPS dealeris only 10-15 days. This is in violation of the direction of Honble

Supreme Court.


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6.9 Presently the APL beneficiaries entitled to 35 kg foodgrain

however, it was found that they are not getting any foodgrain.

The BPL beneficiaries in some districts are getting 28 kg and insome districts they are getting 31 or 32 kg foodgrain. However,

AAY beneficiaries are getting 35 Kg foodgrain.

6.10 In the State of Haryana there large number of labours from

different States keep migrating in search of work. The Committee

feels that there should be some provision of food security for the

migrant labour who come in search of job or work from their

native places temporarily. They could be registered as

temporary residents and provision should be made for providing

PDS food grains etc. to them also.

6.11 The Committee during the visit to the State came across many

cases of damaged/ rotten foodgrain supplied to the consumers

under PDS. It was informed by the District Officials that

generally the quality is proper however at some places the grain

is damaged because of the non-availability of storage space with

the procurement agencies in Haryana. They have to store the

foodgrains sometimes in the open. The Committee feels that

State Government must take immediate steps for creating

storage space so that the foodgrains is not damaged and the

proper quality is available to the consumer though PDS.

7 Quality Control / Joint Sampling of food grain -

The Committee during the visit observed that joint sampling of

foodgrain is not done by the agencies at the time of lifting of the

food grains. No sample is provided to the FPS dealers. This is

again violation of the Public Distribution System (Control) Order,


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2001 which provides for the mandatory display of samples by the

FPS dealer in his shop. The samples are essential to ensure that

the same quality is being distributed by the FPS dealer which hasbeen delivered by the wholesale agents. Though the clause 9(v)

and 10 (1) imposes duty on FPS dealers and CONFED to display

samples of foodgrains, same was found to be not followed all the

districts visited by the Committee. It was observed that the

provisions of the Control Order are not implemented properly

and the officers responsible for monitoring the same shall be

made accountable for such lapses.

8 Mode of Appointment of Dealers :-

8.1 As per Clause 2(k) of the Haryana Public Distribution System

( licencing and control Order, 2009 the District Food and

Supplies Controller of the concerned district. Clause 2 (i) of the

Haryana Public Distribution System (licencing and control Order,

2009 provides that the Lincence of a fair. The license of a fair

price shop shall be granted for a minimum number of 600 ration

cards not exceeding 1200 ration cards, but in rural areas a

village shall be treated as one unit for this purpose and as such

the license for the fair price shop may be issued even for less

than 600 ration cards of the village.

8.2 The Haryana PDS control Order 2009 of the State provides thatLicensing authority shall call for applications through local

publicity and munadi in the local area of the Fair Price Shop. A

committee comprising District Food and Supplies Controller,

Inspector Food and Supplies concerned and the Sarpanch of


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village in rural area and District Food and Supplies Controller,

Inspector Food and Supplies concerned and Municipal Councilor

in urban area shall recommend to the licensing authority thename of the eligible applicant as per these priorities/ preference.

However, it was observed by the Committee that the procedure

of appointment of FPS dealer is vice versa. The persons having

political links first get recommendations from the Sarpanch or

Municipal councilor and apply for the licence. The department on

obtaining the applications publicize the vacancy through munadi

which is mere formality. Such persons are given time to show list

of 600 families and on submission of the list he is given lincence.

It is only on the basis of the resolution of Panchayat, the FPS

dealership is given. It was also seen that in practice

recommendations of local politicians, MLAs, Municipal Councilors,

Sarpanch and other influential people are the only qualification

for getting FPS licences. Other conditions as prescribed in the

Haryana State Control Order of 2002 and latest order of 2009 are

not followed while granting the FPS dealership. No vacancy is

advertised.

8.3 The provisions of the Haryana Control Order 2009 recognizes

and gives legitimacy to political interference in appointment of

dealers by making the Sarpanch and the Municipal Councilor as

members of the rural/urban committees appointed for

recommending the applicants for allotment of licences for FairPrice Shops. The Committee is of the view that political

involvement in the grant of licences has to be completely

eliminated.


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8.4 Clause 2(h) Provides the eligibility condition for the applicant.

Provides that a person having 10+2 or its equivalent

qualification, not less than 21 years of age and is a resident ofthe locality for which the fair price shop license in applied for.

However, in case of a Group like Self Help Group and Sakshar

Mahila Samooh, the condition of 10+2 pass and age will not

apply; The Order provides for preference to unemployed

graduates while granting FPS licence. The Committee is of the

view that as the FPS is not a viable unit giving preference to

unemployed graduates serves no purpose. As the income of FPS

dealer is not much they indulge in malpractices to make profits.

9 Viability of Fair Price Shops :-

9.1 During the visit to the State the Committee visited number of

shops in various Districts. The Committee feels that stand alone

FPS is not profitable. There was a general demand to increase

the commission of the FPS, at some places there was also a

demand from FPS dealers that a fixed salary may be given to

them for running the FPS.

9.2 The Committee is of the view that since any amount of increase

in commission would not make an FPS viable, it is, therefore,

necessary that FPS dealers should sell grocery items along with

PDS items. The condition should be that in the Grocery / Kirana

shop, the sale should only be non PDS commodities. TheCommittee feels that the condition should be put in the licence

that FPS owner must have a running Kirana / Grocery shop. In

case of default or non compliance with the condition, the FPS

licence should be revoked.


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9.3 Efficient retailing would require pre-conditions such as

experience and ability to undertake certain investment andsustain an adequate return. FPS licences should be granted to

people/ groups who have adequate liquidity of fund. Integrity and

rapport of person in the local area are other aspects to be

considered. Pattern of ownership of FPS can have important

bearing on their viability. Self Help Groups and Cooperatives can

be given priority for granting licences to rationalize the cost

structure of FPS.

9.4 The Order provides for preference to unemployed graduates

while granting FPS licence. The Committee is of the view that as

the FPS is not a viable unit giving preference to unemployed

graduates serves no purpose. It is a well documented fact that

the FPS owner is in business for the purpose of diversion or for

political influence or other influence that he can wield by being

an FPS retailer. There is massive corruption woven around it

where the participants are the shop keeper, officials of the

Department / Corporation, transporters and last but not the least

the politicians. The Committee is of the view that the reservation

for various categories provided in the Haryana Public Distribution

(Licensing and Control) Order, 2009 appears rather unnecessary.

FPS licences should be allotted to persons of the locality who are

already running kirana/ grocery shop or have the capability to doso. Though there is a clamour for allotment for FPS, the stand

alone FPS does not rehabilitate or support sustenance of any

category or gender. It rather breeds corruption.


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10 Enforcement, Vigilance and Complaint Mechanism :-

10.1 There is no separate system of implementation of enforcementand vigilance in the PDS as currently there is no separate cell for

the purposes of monitoring PDS. It is recommended that a

separate division of enforcement and vigilance of PDS be started

in the State in order to deal with the specific problems of PDS.

10.2 The rate, at which action is taken against the errant FPS dealers

and errant officials, is abysmally low. Thus there is no effective

deterrent to stop malpractice in PDS. It is necessary that there

should be special squads for enforcement of PDS. The squads

should be responsible for conducting raids, surprise checks,

conducting prosecutions, recommending Departmental action

against the officials and taking action against the defaulting

officer under the Haryana PDS Control Order 2009, Essential

Commodities Act 1955, Prevention of Corruption Act, 1988 and

Indian Penal Code. The Haryana PDS control Order 2009

provides that if any Licencee contravenes any of the terms or

conditions of the license or of any control order issued under the

Act the licence shall be suspended immediately without giving

any notice. The licensing authority shall take strict action which

included forfeiture of the security deposit in full and suspension

of licence; cancellation of the license and forfeiture of the

security deposit in full; or registration of criminal case as perprovisions of the Act. However, it was observed that no action is

taken by the officials against errant FPS dealers. PDS operation

should be based on the principle of zero tolerance. Any

infraction of the Rules and Regulations or Instructions should


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invite strict action not only against the FPS owner but also the

concerned officials.

10.3 The Committee found that most of the FPS dealers do not have

proper weights and mostly the certificates are obtained without

actually checking the weighing machines. The officials of the

Legal Metrology department should also be made accountable

for any act of omission or commission in fulfilling their duties.

10.4 The State should set up Vigilance Committees at the State and

District levels also to keep an eye on the Public Distribution

System. Date, Place and time for the meeting of the committees

should be fixed in advance. Vigilance Committees at various

levels be strengthened by including the NGOs, Self Help Group,

Consumer Organisations and the educated youth in the Vigilance

Committee at various levels. The meetings of the Vigilance

Committees must be convened regularly.

10.5 The Village/ FPS level committee should also meet regularly

every month. Minutes of the meetings of the vigilance

committees should be recorded. Follow up action should be

reviewed in the next meeting.

10.6 There is no effective and systematic complaint redressal

mechanism for the common people. In the absence of a

customized complaint redressal system, most of the grievances

of the common man go unheard and unattended, encouraging

the corrupt practices by the dealers and the officials. It is

recommended that an effective complaint redressal system for


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PDS related grievances be initiated wherein the beneficiaries

may register and also follow up their complaints.

10.7 State should set up a 24 hours toll free helpline where a

beneficiary can lodge his complaint. The toll free number should

be printed or stamped on the Ration Card. There should be a

system of the follow up of the complaint. A post of

Ombudsman/Regulator should be created for PDS. The

Ombudsman/Regulator should look into complaints including the

complaints received through the helpline and take appropriate

action against the defaulting licencees and the officials

concerned.

11 Indentification of Beneficiaries

11.1 During the visit to the State there was a general complaint that

the deserving people are not having the ration cards and those

who are well to do and prosperous are included the BPL

category. There are large scale exclusion and inclusion errors in

the survey done for identification of BPL families. Committee

feels that to make the PDS purposeful it is most essential that

survey should be done by an independent agency which can

work without any political interference and the survey is

conducted without any fear and favour. The Committee feels

that Registrar General of India may be entrusted this work ofidentification since they have necessary experience in such work

and also be perceived as a neutral agency.


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11.2 The Committee also feels that the State Government should

have periodical checking of ration cards and there should be

continuous process to weed out bogus cards as provided in para2 of the Annexure to the Public Distribution System (Control)

Order, 2001. It is also suggested that a list of the BPL families

should be displayed at the FPS.

11.3 The committee was informed that the correct figures have not

been collected during the 2004 BPL survey due to which there

was discontentment amongst the public. Hence the survey was

cancelled and a fresh survey was ordered. The fresh survey was

entrusted to Ex-servicemen. This survey was completed in 2007.

11.4 As per the Planning Commission there are 7.29 lakh families

living below the poverty line in the State. However, the survey

revealed that there are about 11.97 lakh (BPL + AAY) families

below poverty line. Since the number of BPL families found in

the survey was more than the estimates of the Planning

Commission, the State decided in year 2008 to treat 3.83 lakh

families as State BPL. The BPL cards issued within the limits

prescribed by the Planning Commission are named as Central

BPL. By an order dated 04.09.2008 it was decided that the

State will collect the APL and BPL allocation and distribute it

amongst the Central BPL and State BPL equally at 35Kg.per

month per ration card. The difference in cost between the APLwheat and State BPL wheat will be borne by the State. The quota

of the BPL has since been reduced to 33 Kg. per family per

month. BPL card holders are given wheat @ Rs.4.84 per Kg. AAY


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families are being distributed 35Kg. wheat per month @ Rs.2.10

per Kg.

12 Use of ration card as an identity:-

The Committee during the visit to the State observed that ration

card is not only used as identity card but is required for availing

benefits under various schemes of the Government. This is in

violation of the provisions of Public Distribution System (Control)

Order, 2001 issued by the Central Government. The Committee

feels that ration card should be de-linked from all other schemes

and steps should be taken to ensure that it is not used as an

identity card.

13 Awareness among Beneficiaries

13.1 The Committee during the visit to the State found that there is

lack of awareness in the people about their rights and

entitlements. The Committee is of the view that for the proper

functioning of the PDS awareness is very important.

13.2 To create awareness among the people it must be ensured by

the District administration that a press release is issued at the

beginning of the month indicating the quantity issued to be FPSs,

entitlement of various categories of the beneficiaries, rates of

the commodities to be charged by the FPS dealer so that peoplecan know their rights and entitlements. To further enlighten the

peoples of their rights and entitlements, pamphlets, posters

must be published and widely circulated. Local TV channels


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4. As per the Planning Commission there are 7.29 lakh families

living below the poverty line in the State. However, the survey

revealed that there are about 11.97 lakh (BPL + AAY) familiesbelow poverty line.

5. In order to study the Public Distribution System in the State of

Haryana, the Committee visited Chandigarh and held discussions

with the Chief Secretary, Principal Secretary Food and Supplies

Department and other Senior Officers of the Department. The

Committee visited the office of the Haryana State Federation of

Consumers Co-operative wholesale Stores Ltd., popularly known

as CONFED which is the agency responsible for door step

delivery of the PDS food grains to the Fair Price Shops.

6. The Committee visited Chandigarh and the Districts of Ambala,

Kurukshetra, Rohtak, Faridabad, Mewat, Palwal, Bhiwani and

Hissar. Public meetings were held to get suggestions from the

general public, Fair Price Shop owners, Municipal Councilors,

Surpanch, NGOs, Self Help Groups, Consumer Organisations etc.

Meetings were also held with District Officials and field staff of

the Food and Supplies Department.

7. The State of Haryana and the Union Territory of Chandigarh have

been selected for the pilot projects on computerisation of the

Public Distribution System. The Committee invited the team ofofficers from the State responsible for the pilot project along with

the representative of Expedien_E-Solutions who gave a

presentation of the proposed system. The Committee obtained a

copy of the Detailed Project Report (DPR) and visited the PR


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Center at Ambala where the work on the computerisation project

is in progress.

CHAPTER 2

LEGAL REGIME

2.1 ESSENTIAL COMMODITIES ACT, 1955: The Essential

Commodities Act 1955 (Act) is an Act to provide, in the interest

of general public, for the control of the production, supply and

distribution of, and trade and commerce, in certain

commodities.

i. Section 3 of the Act confers powers on the Central Governmentto control production, supply, and distribution etc. of essential

commodities. Central Government has issued an order called

Public Distribution System (Control) Order 2001 (Order), which

was amended in 2004.


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ii. Stringent provisions exist in the Act and the Control Order, to

deal with any infringement of the provisions of the Act or the

Order.

iii. Section 7 provides for penalties. Any person contravening the

Order is liable to be sentenced to imprisonment, which may

extend upto 7 years and shall also be liable to fine. Sentence of

imprisonment cannot be less than 3 months unless there are

adequate and special reasons. The property in respect of which

contravention of the Order has taken place, is liable to be

forfeited to the Government and so also any vehicle used in

carrying such commodity. If a person commits offence a second

time then imprisonment cannot be less than 6 months subject to,

adequate and special reasons.

iv. A person who attempts to contravene or abets any contravention

of the Control Order is similarly liable (Section 8).

v. Section 9 provides for punishment upto 5 years or fine or both, if

the record is not maintained in terms of the Control Order or any

statement or information furnished, which is not true.

vi. Section 10 deals with offences by Companies.

vii. Section 10A has made any offence punishable under the Act

cognizable.

viii. Section 10C provides that Court may presume the existence of

such mental state where an offence under the Act requires

culpable mental state on the part of the accused. Culpable


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mental state includes intention, motive, knowledge or reason to

believe a fact.

ix. Under Section 11, a Court can take cognizance of an offence

under the Act not only on a complaint made by a public servant

but also by any person aggrieved or any recognized consumer

organization.

x. An offence for contravention of the Control Order is to be tried

summarily (Section 12A).

xi. If an accused is sentenced to imprisonment for a period not

exceeding one month and of a fine not exceeding Rupees two

thousand, no appeal can be filed.

xii. Section 14 provides that when a person is prosecuted for

contravention of any order which prohibits him from doing any

act or being in possession of a thing without lawful authority or

without a permit, license or other document, the burden of

proving that he has such an authority, permit, license or other

document, shall be on him.

2.2 The Public Distribution System (Control) Order, 2001: The

Public Distribution System (Control) Order, 2001 (hereinafter

referred to as the PDS Order 2001) has been issued by the

Central Government in exercise of powers conferred by Section 3

of the Essential Commodities Act, 1955 for maintaining supplies

and securing availability and distribution of essential

commodities under the Public Distribution System. The said

Order has been amended in 2004.


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2.3 Haryana Public Distribution System (Licensing and

Control) Order, 2002

The State of Haryana issued the Order dated 18.04.2002,regulating the sale and distribution of essential commodities,

known as the Haryana Public Distribution System (Licensing and

Control) Order, 2002 on. This order (herein after referred to as

the Haryana Control Order, 2002) provided inter alia for the (i)

Identification of families living below poverty line by the Rural

Development Department and Swarn Jayanti Sehri Rozgar Yojna

Departments in rural and Urban areas respectively, (ii) Issue of

ration cards to APL, BPL and AAY families (green yellow and pink)

respectively and periodical review and checking of ration cards,

(iii) Licensing for regulating the sale and distribution of essential

commodities and the responsibility and duties of the Fair Price

Shop owner, (iv) Monitoring the Public Distribution System

including functioning of the Fair Price Shops by the State

Government, (v) Power of search and seizure, (vi) Appeal and

(vii) The licence fee payable by the Fair Price Shop owner for

grant of licence and its renewal.

2.4 Some amendments were made to the Haryana Control Order,

2002 by Haryana Public Distribution System (Licensing and

Control) Amendment Order, 2003.

2.5 As per instructions dated 7.4.2005 joint samples ought to betaken at the time of lifting the grain from the godown by a

committee comprising of the District Food and Supply Controller/

District Food and Supply Officer/ Assistant Food and Supply

Officer, concerned District Manager/ Assistant District Manager


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CONFED, Chief Analyst of the Food and Supply Department and

representative of the depot holders Association so as to ensure

that supply of good quality of wheat to the beneficiaries.

2.6 The Director and Special Secretary, Government of Haryana,

Food and Supplies Department issued instructions vide Order

dated 21.09.2005, to all the District Food and Supply Controllers

for making the Public Distribution System efficient. These

instructions inter alia provided the following :

(i) That the provisions of Haryana Public Distribution System

(Licensing and Control) Order, 2002 be strictly enforced and if

any depot holder is found guilty action should be taken

against him immediately.

(ii) Local person should be given preference at the time of issue

of a licence.

(iii) While giving the licence for a depot it should be ensured that

the applicant is educated so that he can maintain proper

records of the work relating to the depot.

(iv) It should be ensured that the applicant for FPS depot has

sufficient space to store the food grain, Kerosene oil and

sugar.

(v) The licence for the depot should be given on the

recommendation of the Panchayat. In case such a

recommendation is not there, the depot may be allotted on

the recommendation of the local MLA/MP.(vi) The depot holder should not be less than 18 years of age.

(vii) It should be ensured that licence for a depot is not issued on

less than 600 cards in the urban areas. In rural areas the

licence for a depot may be issued taking a village as a unit


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even if the number of cards is less than 600. However no

depot should have more than 1200 cards attached to it so

that the beneficiaries do not have to travel long distance toget to the depot.

(viii) The Fair Price Shops should remain open from 8.00 am to

12.00 noon and 5.00 pm to 9.00 pm in summer and 9.00 am

to 1.00 pm and 3.00 pm to 6.00 pm in winter.

(ix) Detailed instructions on distribution and transportation of food

grain under the Targeted Public Distribution System have also

been issued.

(x) Directions were issued to the District Food & Supply

Controllers to ensure that the release orders are issued in

time.

(xi) In order to ensure supply of ration to the consumer in time

every depot holder shall deposit the cost of BPL and AAY grain

as per his entitlement with the District Manager CONFED/ Co-

operative Consumer Depot from 25th to 30th for the

distribution for next month. In case the depot holder does not

deposit the money as per his entitlement action will be taken

against him under the Haryana Public Distribution System

(Licensing and Control) Order, 2002.

(xii) District manager CONFED/ Consumer Co-operative Stores will

give information to the District Food and Supply Controller by

the 2nd day of each month about the depot holders who do not

deposit the money by the due date.(xiii) The District Manager CONFED/ Consumer Co-operative Stores

will ensure door step delivery of PDS food grain to the depot

holder by the 10th of every month and will give a certificate to


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the District Food and Supply Controller by the 15th that

delivery has been made at the door step of the FPS.

(xiv) In villages the door step delivery of food grain should be madein the presence of the village sarpanch and two panches and

signatures of the Sarpanch and the two panches be obtained

and kept in the concerned office of the CONFED.

(xv) The District Manager CONFED will give information about the

delivery of food grain at the door step of the FPS to the

District Food Supply Controller in advance by giving a route

chart. A copy of the same will be sent to the Deputy

Commissioner/ Sub Divisional Officer.

(xvi) The District Food Supply Controller will give information in this

regard to the Deputy Commissioner/ Sub Divisional Officer by

phone so that strict vigil can be kept on the transportation of

the food grain.

(xvii) It is the duty of CONFED to ensure that after lifting the food

grain from the godown delivery at the depot is made on the

same day.

(xviii) The employee/ representative of CONFED accompanying the

vehicle which goes to delivery the food grain will make an

entry of the quantity issued to the depot holder in the stock

register of the depot holder with his signatures. Besides this

he will also make an entry of the place from where the food

grain was lifted and the number of the vehicle in which the

food grain was delivered.(xix) The District Food and Supply Controller and the District

Manager CONFED will review the lifting and distribution of

food grain in meetings twice a month and will ensure that

there is no diversion of food grain during transportation.


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Information about this will also be given to the Deputy

Commissioner/ Sub Divisional Officer.

(xx) The contractor of CONFED will be paid the transportationcharges by the CONFED only after the District Food and

Supply Controller certifies that the food grain has reached the

depot.

(xxi) Participation of Panchayati Raj institutions has been ensured

in keeping a vigil on the distribution of ration items by the

depot holder.

(xxii) The Vigilance Committees have been reconstituted which will

have the following members:-

RURAL AREAS URBAN AREAS1

.

2

.

3

Sarpanch

Schedule Caste Panch

(If the Sarpanch is from

Schedule caste a

panch from other caste)Village Patwari

Municipal Councilor

Ex- Municipal Councilor

Woman representative

nominated by the Sub

Divisional Officer

If there is no Patwari in the village, village panchayat can

nominate a school teacher or an anganwari worker in his

place.

(xxiii) The vigilance committee so constituted has to ensure

distribution of PDS items in its presence and the depot holder

will get the allotment for the next month only on production of

a certificate from the vigilance committee.


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(xxiv)The participation of the Panchayati Raj institutions has been

ensured by involving the Gram Panchayats in issue of licence

for the depot in rural areas on the resolution of the GramPanchayat; attestation of D-1 forms for issue of ration cards,

addition or deletion of units in the ration cards; proper

distribution of the PDS commodities; Gram Panchayat has to

certify the receipt of PDS commodities at the depot and has to

verify the stock register for proper distribution; Gram

Panchayat will submit a report to the Panchayat Samiti once a

month about the working of the Public Distribution System.

The Panchayat Samiti will oversee the working of the Public

Distribution System and hear complaints; the Panchayat

Samiti will submit a report to the Zila Parishad once in three

months about the working of the Public Distribution System.

The Zila Parishad will have a meeting with the District Food

and Supply Controller every month about the availability of

essential commodities;

(xxv) The Deputy Commissioner will review the lifting and

distribution of the PDS commodities every month in the

meeting of the District Grievances Committee and if there is

any complaint it will be decided at the spot.

2.6 There is a provision of maintaining a PDS Diary which keeps a

record of inspections being conducted by the Inspectors. All the

officers are required to send their PDS diary to the head office by15th of every month. Every Inspector/Sub-Inspector who have

been assigned depots and all Assistant Food Supply officer have

to check the depots in his area from 15th to 25th of every month.

At the time of checking the concerned officer has to make entry


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in 25 ration cards about the checking done in that month. A

certificate has to be given in the PDS diary that no duplicate

entry of any ration card has been made in the sale register. Acertificate of the vigilance committee has to be attached with the

PDS diary.

2.7 Haryana Public Distribution System (Licensing and

Control) Order, 2009

The State has issued the Haryana Public Distribution System

(Licensing and Control) Order, 2009 on 13.07.2009 superseding

the Haryana Control Order, 2002. The new order inter alia

provides for the grant of licence to the dealers, licensing

authorities, procedure to be followed for issue of FPS licence,

responsibilities and duties of FPS dealers, requirements and

forms of accounts to be maintained by FPS dealers. The

procedure for issuance of ration cards and use thereof has been

provided in the new order. The Control Order also provides for

the enforcement procedure in the form of powers of entry,

search and seizure. There is a provision of appeal against the

order of the licencing authority and requirement of submission of

returns by the licencee. The involvement of Panchayati Raj

Institutions and Muncipal Committees / Councils have been

recognized in the new Control Order, 2009 in grant of licence to

the FPS dealers.

2.8 Appointment of Fair Price shop dealer

As per Clause 2(k) of the Haryana Public Distribution System

( licencing and control Order, 2009 the District Food and

Supplies Controller of the concerned district. Clause 2 (i) of the


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Haryana Public Distribution System (licencing and control

Order, 2009 provides that the Lincence of a fair. The license of

a fair price shop shall be granted for a minimum number of600 ration cards not exceeding 1200 ration cards, but in rural areas

a village shall be treated as one unit for this purpose and as such

the license for the fair price shop may be issued even for less

than 600 ration cards of the village.

2.9 Clause 5. (I) Licensing authority shall call for applications through

local publicity and munadi in the local area of the Fair Price Shop.

If any applicant is a graduate he shall be preferred. The order of

preference of all eligible applicants shall be as under:-

1. Self Help Group or Sakshar Mahila Group;

2. Unemployed female/ male graduate;

3. Scheduled Caste female/ male;

4. Backward Class (A) female/ male;

5. Ex-serviceman.

2.10 A committee comprising District Food and Supplies Controller,

Inspector Food and Supplies concerned and the Sarpanch of

village in rural area and District Food and Supplies Controller,

Inspector Food and Supplies concerned and Municipal Councilor

in urban area shall recommend to the licensing authority the

name of the eligible applicant as per these priorities/ preference.

2.11 Clause13. (I) No holder of a license issued under this order shallcontravene any of the terms or conditions of the license or of

any control order issued under the Act. If he contravenes any of

the said terms or conditions, without prejudice to any other

action that may be taken against him, the licence shall be


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suspended immediately without giving any notice. If the

licensing authority is satisfied that the licensee has contravened

any of the conditions of the license or is not performing hisresponsibility and duties properly, the licensing authority shall

take one or more actions against the licensee as mentioned

below:-

(i) forfeiture of the security deposit in full and suspension of

licence:

Provided that the licence may however, be validated and

suspension revoked by depositing the amount of security

by the licencee;

(ii)cancellation of the license and forfeiture of the security

deposit in full;

(iii) registration of criminal case as per provisions of the Act:

Provided that no order with regard to above mentioned

penal action shall be made under this clause unless the

licensee has been given a reasonable opportunity of being

heard.

2.12 Clause 2(h) Provides the eligibility condition for the applicant.

Provides that a person having 10+2 or its equivalent

qualification, not less than 21 years of age and is a resident of

the locality for which the fair price shop license in applied for.

However, in case of a Group like Self Help Group and SaksharMahila Smooh, the condition of 10+2 pass and age will not

apply;


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2.13 Clause-9 of the Haryana PDS control Order 2009 provides that

responsibilities and duties of the Fair Price Shop Licensees shall

includeinter alia

-

(i) sale of essential commodities as per the entitlement of ration

card holders at the retail issue price fixed by the State

Government under the Public Distribution System;

(ii)display of upto date information on a notice board at a

prominent place in the shop on a daily basis regarding-

(a) list of Below Poverty Line and Antyodaya beneficiaries;

(b) entitlement of essential commodities;

(c) scale of issue;

(d) retail issue price;

(e) timings of opening and closing of the Fair Price Shop;

(f) stocks of essential commodities received during the

month;

(g) opening and closing stock of essential commodities; and

(h) authority for redressal of grievances/ lodging complaints

with respect to quality and quantity of essential

commodities under the Public Distribution System;

(iii) maintenance of record of ration card holders (Above

Poverty Line, Below Poverty Line and Antyodaya) stock

register, issue or sale register;

(iv) furnishing of copies of specified documents namely, rationcard register, stock register, sale register to the office of

the Gram Panchayat or Nagar Palikas or Vigilance

Committee or any other body authorized for this purpose;


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(xiii) the Fair Price Shop Owner shall keep the complete records

of the PDS items for at least two years in his/ her safe

custody;(xiv) the Fair Price Shop Owner shall give information every

month about the allocated PDS item, the quantity

distributed by him to the eligible consumers and the

balance stock etc. to any two members of the Vigilance

Committee otherwise on supply of PDS item shall be given

to the Fair Price Shop Owner for the next month. He shall

also obtain satisfaction certificate from the Vigilance

Committee regarding satisfactory distribution of all allotted

items in the previous month;

(xv) the Fair Price Shop Owner shall be responsible for making

all essential entries in the ration cards;

(xvi) the Fair Price Shop Owner shall store and sell essential

commodities only at the place specified in the license;

(xvii) behave with the consumers cordially and with due

courtesy.

2.14 Clause 15 (1) of the Haryana PDS control Order 2009 provides

the licensee shall submit to the licensing authority concerned a

true return in Form C so as to reach him not later than the fifth

day of each month, of stocks, receipts and deliveries of each of

the essential commodities pertaining to the preceding month.Clause 15 (2) says notwithstanding anything contained in sub-

clause (1), the State Government or the Director of Food

Supplies or the Collector of the District or the licensing authority


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may direct the licensee to submit a return in a form prescribed

by that authority.

2.15 Observations

It was observed during the visit to various districts in the State

that the instructions issued by the State Governments are not

being followed properly. Some of the observations are as

follows:-

(i) Timings of shops are not maintained. During the visit of the

Committee in village Arya Nagar in District Hissar, it was

found that both the FPSs in the village were closed at about

10.30 am on Tuesday. Similar was the position in village

Ghaseda District Mewat where the Committee found that the

FPS run by one Mr. Zakhir was closed at 10.50 am on Sunday

i.e. 29th November, 2009 (a working day for PDS). BPL

beneficiaries complained that they are given only 30 kg wheat

once in three months. The shop opens once or twice a month

and shopkeeper always says that ration has not been

allocated to him. The villagers complained that ration, if at all

distributed, is distributed after the 15th of the month. Most of

the villagers are working as labourers and they dont have

sufficient money to buy the ration in one go.

(ii) Many card holders of the village of BPL and AAY category

complained that they had not received their entitled ration for

the month of October and November, 2009. The officers of the

Department who accompanied the team did not have an


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answer to the same. It was evident that there is no

accountability of the field staff for non-distribution by the FPS

dealers. It was also told by the villagers that there is apolitical interference in the allotment and functioning of FPS.

(iii) The role of Vigilance Committees in PDS is only on paper. It

was observed that Vigilance Committees are not functioning

properly. The Utilisation Certificate is signed by the Members

of the Vigilance Committee without actually verifying the

factual position. Generally Vigilance Committee member do

not remain present during the distribution of PDS items by the

FPS dealers. The Committee was not shown any records

pertaining to the meetings of Zila Parishad with District Food

& Supply Controller.

(iv) The recommendation / resolution of Gram Panchayat

regarding the FPS licence is not based on merit and is based

on extraneous considerations. The DSO at Palwal informed

that the political interference is to such an extent that many

FPSs in the area are run by 20-25 people belonging to 2-3

families of a village who have political connections. Even the

Municipal Councilors have FPSs in their name or in the name

of their relatives / dependents.

(v) Representatives of CONFED do not accompany the vehiclewhich delivers the food grains to the depot holder. The same

was confirmed by the various CONFED officials that the

Committee met during its visit.


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(vi) Sealed samples are not being issued to CONFED and thereby

to the FPS dealers. This affects the quality of the food grain

that ultimately reaches the beneficiaries.

(vii) As per the guidelines of Honble Supreme Court of 2003 the

distribution of PDS commodities by the FPS dealers should be

through out the month. In view of the time schedule being

adopted if the payment is made in time, the release orders

are issued accordingly and delivery is also made in time, it

remains open only 15 days for distribution. Thus it is a clear

violation of the directions of the Honble Supreme Court. The

Committee feels that the time schedule should be adopted in

such a way that the FPSs are open for distribution of

commodities through out the month.


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CHAPTER 3

DISTRIBUTION OF FOODGRAIN

3.1 Public Distribution System is operated under the joint

responsibility of the Central and the State Governments. TheCentral Government has taken the responsibility for

procurement, storage, transportation and bulk allocation of food

grains to States and Union Territories and maintenance of buffer

stocks. State and Union Territory Governments are responsible

for identification of BPL and AAY families; issuance of ration

cards to eligible families; storage in state/UT godowns; licencing

and supervision over fair price shops; distribution of ration to

ration card holders through the Fair Price Shops and eliminating

leakages/ ghost cards etc.

3.2 The Food and Supplies Department Haryana is headed by the

Financial Commissioner and Principal Secretary to the


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Government of Haryana and there is a Director Food and

Supplies. At field level the District Food and Supplies Controller

heads the hierarchy and the District Food and Supply Officersand other officers are answerable to him.

3.3 The State of Haryana is a wheat surplus State. The Central

Government under its decentralized procurement policy has

allowed certain agencies of the State Government to procure

wheat on its behalf. The FCI is the agency of the Central

Government for procurement of food grain. In Haryana the State

Food and Supplies department, HAFED, FCI Haryana Region,

Haryana Warehousing Corporation, CONFED and Haryana Agro

Industries Corporation have been allowed to do procurement on

behalf of the FCI in the ratio of 20%, 33%, 20%, 9%, 9%, and 9%

respectively. All these agencies procure wheat from the farmers

who come to the Mandis set up by Haryana Agricultural

Marketing Board and store it in their godowns.

3.4 The food grain (wheat) is procured by the various agencies at the

Minimum Support Price (MSP) and stored on behalf of the FCI.

The Central Government makes allocation to the State under the

Public Distribution System as per its entitlement. The rest of the

grain is utilized for other schemes of the Central Government or

is sent to other deficit States as per the directions of the Central

Government. The FCI reimburses the State agencies for the pricepaid and storage costs.

3.5 The Committee visited the godowns of the FCI and Food and

Supplies department to see the conditions of storage. It was


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observed that the godowns owned by the FCI have scientific

storage system. However, due to very heavy procurement in the

last season a huge quantity of wheat was still stored in theMandis by all the agencies. Some wheat was stored in covered

sheds while a lot of wheat was stored in the open and even on

roads inside the Mandis by creating temporary platforms of

wooden crates. There is an urgent need for creating more

storage space in the State.

3.6 There was no system of weighment of grain either in the Mandi

or in the godowns of the Food and Supplies Department visited

by the Committee at Ambala, Rohtak and Bhiwani. The trucks are

weighed at private weigh bridges (Dharam Kanata) and after

loading they are again weighed at the same weigh bridge.

3.7 No one accompanies the trucks from the godowns to the FPS.

There is no system of checking after the food grain reaches the

Fair Price Shops and before it is distributed to the beneficiary.

Hence there is no check that the entire quantity of grain reaches

the Fair Price Shop.

3.8 There is absolutely no system of preparing samples at the

godowns of the State agencies. During the visit to the Mandi in

Bhiwani where the stock of the Department of Food & Supplies,

Government of Haryana was there for distribution through

CONFED, it was found that no samples are prepared for giving tothe wholesalers and FPS dealers. The concerned officers of the

State Government and the DM, CONFED, Bhiwani were requested

to follow the joint sampling system while lifting the food grains

and sample should also be given to the FPS dealers at the time


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of delivery. State Government officials were requested to issue

necessary instructions in this regard to all the agencies involved

in this process. No samples were found at any of the Fair PriceShops visited by the Committee. Mr. Ajay Jain Advocate, General

Secretary Yuva Shakti, at Ambala and Mr. Suresh Valmiki a social

worker at Rohtak complained of the poor quality of wheat

supplied at the Fair Price Shops. Diversion takes place in two

ways, one by selling the PDS grain in black market and secondly

by substituting good quality of grain by poor quality. The system

of joint sampling must be enforced at all the storage points and

samples must be displayed at the Fair Price Shops so that the

consumer can check the quality of food grain supplied to him.

3.9 The Committee found that the FCI has electronic weighbridges at

their godowns. At the time of delivery of food grain to the

CONFED a gate pass is issued in which the number of bags

loaded in the truck is mentioned. The gate pass is prepared

manually. A weigh check memo is prepared in the computer

system when the truck is finally weighed but copy of the weight

check memo is not supplied to the truck driver. The Committee

feels that that the truck driver should be supplied a copy of the

weigh check memo.

3.10 CONFED is the agency of the state authorized to receive the PDS

grain from the FCI or the other agencies authorized by theGovernment for procurement and transport the same to the Fair

Price Shops. CONFED is headed by a board of Directors and a

Managing Director. The District Manager (DM) is the Head of

District Office, besides him there are salesmen and storekeepers


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also. The CONFED is fully responsible for delivery of the food

grain at the doorstep of the FPS. The storekeeper is supposed to

make entries of the food grain in the stock register of each andevery depot holder. However, since no officer of the CONFED

actually accompanies the truck such entries are not being made.

CONFED has to submit daily statement of delivery of food grain

to the DM, DFSC, respective SDMs and area inspector/ AFSO.

The cost of transportation is added in the sale price of food grain

except AAY wheat which is being borne by the State. In Rohtak

City the transportation is being done by Co-operative Store. They

also have an FPS. The Committee observed that there is no

difference in the functioning of this FPS as compared to other

FPSs.

3.10 Tenders for transportation are invited every year. A Centralised

advertisement inviting tenders of door step delivery of food grain

and levy sugar are called through Director, Public Relations,

Haryana which is published in 3-4 leading newspapers of Hindi

and English. Wide publicity of NIT is given and notice of NIT is

also displayed/ exhibited at prominent places like the offices of

DC, ADC, SDM, DFSC, BDPO, Tehsildar etc.

3.11 District Level Transport Committee under the Chairmanship of

Deputy Commissioner has been authorized to open the tenders,

make negotiations and finalize reasonable and workabletransportation rates. The other members of the committee are

ADC, SDM, DFSC, and DM CONFED. The committee recommends

the rates to the Managing Director CONFED for final approval. As


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per instructions negotiations are to be conducted by the

committee with the lowest tenderer (L-1)only.

3.12 There is no fool proof system for the monitoring of transportation

of food grains from the State godowns to the FPS. Only a gate

pass is issued to the truck / vehicle carrying food grains and a

banner having marking PDS GRAIN is put on the front side of

the truck.

3.13 The State makes allocation to every district and the District Food

and Supplies Controller (DFSC) makes the allocation for every

Fair Price Shop as per the number of ration cards attached to the

shop. The allocation orders are sent to CONFED.

3.14 On the basis of entitlement, Fair Price Shop owner deposits the

cost of food grain with the authorized bank in the account of

CONFED from the 25th to 30th every month. CONFED in turn lifts

the food grain from the godowns of FCI/ State Agency and delivers

the stock at the door step of the Fair Price Shop. The Committee

was informed that food grain reaches the shops by 10th of the

month of supply. However, the Committee observed in Mewat

district that for the payment and allocation of grain following

schedule is followed :

1. Usually the payment is received from FPS dealers by 5th

-7th day of the month and same takes 3-4 days inclearance by bank.

2. By 10th or 12th day of the month the Release Order is

issued by DFSC


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3. Lifting by CONFED starts from 11th or 13th day of the

month from the godowns of the procurement and storage

agencies in Haryana for which the Release Order.4. Foodgrain is delivered at the fair price shops latest by 20th

day of the month.

3.15 The Committee found that the system is violative of the

directions of the Supreme Court which require that the Fair Price

Shops should remain open through out the month and that the

beneficiary should be allowed to draw ration in installments. The

system effectively ensures that the distribution of ration has to

take place only between the few days when the delivery is made

to the Fair Price Shop and when he has to close his balance to

deposit money for the next month. This system also encourages

corruption as the depot holder has the opportunity to tell the

beneficiary in the beginning of the month that no stock has been

received. A poor beneficiary is always likely to spend most of his

earnings immediately on receipt of wages at the beginning of the

month and may not be left with enough money to buy ration

after the 10th of the month. Since ration is distributed for a

limited number of days the shops do not remain open throughout

the month.

3.16 There were general complaints of short supply by the Fair Price

Shop owners. The Committee inspected several Fair Price Shops.

At one of the shops in Faridabad, it was found that the Fair Price

Shop owner was supplying only 28 kg. wheat to every BPL family,


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instead of their entitlement of 33 Kg. per month. He was also not

making any entry of the quantity supplied in the ration cards. In

Topkhana colony of Ambala one FPS owner Ishwar Chand hadstored PDS grain at three different premises. There were

complaints against one FPS owner Pawan Kumar of Chhibba

village in Ambala that he used to open his shop before 8.00 AM

or on Sundays only and did not open his shop on all the working

days during prescribed timings.

3.17 The Committee was also informed during public hearing and visit

to various urban colonies and villages in districts that the FPS

dealer makes the false entries in the ration cards of the

beneficiaries without actually giving the commodity.

3.18 In the year 2004 a BPL survey was conducted in the State. In this

survey all the information about the social and economic

conditions of all the families was collected on a 13 point scale.

When the information collected by the survey was sought to be

verified through the Gram Sabhas it was found that ineligible

families having good means were going to be included in BPL list

while eligible families were being left out. It was found that

correct figures have not been collected during the survey due to

which there was discontentment amongst the public. Hence the

survey was cancelled and fresh survey was ordered. The fresh

survey was entrusted to Ex-servicemen. This survey wascompleted in 2007.

3.19 As per the Planning Commission there are 7.29 families living

below the poverty line in the State. However, the survey


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revealed that there are about 11.97 families below poverty line

(BPL + AAY). The category wise break up of the families is as

under

3.20 Ration Cards as on 30.06.2009

Category Ration Cards Units Colour of

Ration CardAPL 42,35,869 1,87,80,9

46

Green

STATE BPL *3,83,36

1

16,33,481 Green with

stampCenter BPL *5,28,399 24,45,85

5

Yellow

AAY *2,85,186 12,43,240 PinkTOTAL 54,

32,815

2,41,03,5

22

3.21 Since the number of BPL families found in the survey was more

than the estimates of the Planning Commission, the State

decided in year 2008 to treat 3.83 lakh families as State BPL.

The BPL cards issued within the limits prescribed by the Planning

Commission are named as Central BPL. By an order dated

04.09.2008 it was decided that the State will collect the APL and

BPL allocation and distribute it amongst the Central BPL and

State BPL equally at 35Kg.per month per ration card. The

difference in cost between the APL wheat and State BPL wheat

will be borne by the State.

3.22 The allocation of wheat to the state of Haryana category wise is

as under


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CATEGORY ALLOCTION

(In Mt per month)

SCALE

(In Kg. per card

per month)APL 7501 (from 7/08) +15,000 Addl. Allocation

35

BPL 17,381 (from June 08) 35AAY 10,235 (from 4/08) 35

3.23 The quota of the BPL has been reduced to 33 Kg. per family per

month. BPL card holders are given wheat @ Rs.4.84 per Kg. AAY

families are being distributed 35Kg. wheat per month @ Rs.2.10

per Kg. Wheat is supplied to AAY families at Rs. 2.10 per Kg.

(additional 10 paise are charged on account of VAT (Value

Added Tax).

3.24 During the public meetings a demand was repeatedly raised that

family norm for distribution should be replaced by the earlier

system of fixing entitlement for every individual. It was stated

the present system leads the consumers to artificially divide their

families in order to obtain more quantities of PDS commodities

specially Kerosene Oil. It was stated that there are many ration

cards with only one or two members and they do not require

33Kg. wheat every month. They actually draw less ration and the

rest is sold by the Fair Price Shop owner in the black market. In

the earlier reports, this Committee has mentioned that the

individual norm has merit. The Government may consider

reverting to an individual as a unit for allotment of Public

Distribution grain.


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3.25 Mr. Vinod Mittal of the Flour Mills Association represented in

Ambala that the flour mills in the State are prepared to give

fortifiedatta

at no extra cost and will charge only for grindingand packing. The official informed the Committee that the

experiment of giving atta was tried at some places in Haryana

earlier but it was stopped due to large scale diversion involved in

the process.

3.26 It was a general agreement that atta(wheat flour) if obtained

after properly grounded wheat and delivered in sealed polypacks

would be good proposition and it would also save wheat going

into black marketing. As the shelf life of wheat flour is only 30-

45 days, a proper time line is required to be followed for

distribution. Government of Indias instructions on this subject

dated 17th January, 2008 have to be followed scrupulously.

3.27 In order to get a ration card for the first time, the consumer has

to apply in the prescribed form D-1 either in the office of District

Food and Supplies Controller/ Assistant Food and Supplies

Officer/ Inspector Food and Supplies in whose jurisdiction he

resides. The application forms are available in the Office of

DFSC/AFSO/IFS. Along with the application he has to submit two

attested passport size photographs of his family. The applicant

has to give an affidavit declaring that he has not got prepared

any ration card anywhere in India earlier and names of themembers of his family are not included in any of the ration cards.

He also has to declare his permanent address and disclose his

place/ places of residence during the last five years. He has to

give an undertaking that if any information is found to be false,


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he would be liable for action as specified in the rules/Act. The

consumer is given a slip indicating the date when he should

contact the concerned office for getting the ration card. The SubInspector/ Inspector verifies the particulars by physically visiting

the residence of the applicant and making necessary inquiries.

He also consults the voter list and census records before making

his recommendations. The DFSC/AFSO issues the ration card and

paste one photograph of the family on the same.

3.28 Mr. Raj Kishore a Municipal Councilor informed the Committee in

a Public Meeting at Faridabad that an applicant had to pay Rs.

500/- 1000/- for getting a ration card.

3.29 It was informed by the District officials in Hissar that APL ration

cards can be issued to the applicants after verification by the

Area Inspector.

3.30 The ration card has become a valuable document. It serves as an

identity card. It is required for availing benefits under various

other schemes of the government. This is in gross violation of the

provisions of the Public Distribution System (Control) Order, 2001

issued by the Central Government. Ration card should be de-linked

from all other schemes and steps should be taken to ensure that it

is not used as an identity card. The Committee also further suggests

that in place of ration card a food entitlement card may be issuedwhich can be used only for food supply under Public Distribution

System. The Committee also feels that it is appropriate if the

name of TPDS is changed to FOOD FOR POOR SCHEME.


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3.31 The Committee found that many ration cards in the State had

Rubber Stamp for changing the category. In fact all the persons

in the State BPL category have a stamp on the Green rationcards instead of having Yellow ration cards. The Committee was

informed that the ration cards were issued in the State in 2005.

Fresh BPL survey was finalized in 2007. At that time instead of

issuing new ration cards rubber stamp was affixed to change the

category. A list of all those who were earlier in APL category and

were found to be eligible for BPL ration cards was prepared

separately and their ration cards were marked with rubber stamp

to change their entitlement. Similarly if any person in BPL or AAY

category was found to have an improved status and fell in APL

category his card was accordingly stamped as APL.

3.32 The State agency CONFED is responsible to lift the foodgrain

from the procuring agencies and to deliver the same at the

doorstep of the Fair Price shops. The CONFED does not have its

own trucks and it appoints transporters through Tender process.

The transporters appointed through tender process usually do

not have sufficient trucks and usually they have one or two

trucks of their own and rest of the trucks is hired by them. The

Committee observed that the transporters quote less than the

actual rates to get the Contract. This clearly gives inference that

they recoup the losses by diverting the foodgrain. For instance

in the District of Mewat, there are three transportersi. One for Nuh,

ii. One for Firozpur Zirkha, Nagina, Punhan covering 193

FPS in total.

iii. One for Hathin


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On 6th March 09 tender was issued and 6 applications were

received. The transporter named Hamida was appointed and

his rates for transportation of grain wereWithin District 6.90 per quintal

Out of District- 11.50 per quintal

The rates of transportation in the previous year were Rs. 13 per

quintal for within district and out of district 20.50 per quintal. It is

pertinent to mention that the rates for the previous year was

double the rates of the current year. The transporter himself

quoted such low prices and later in August he refused to

Continue as transporter even at the cost of forfeiting his security

amount. Again on 29.8.2009 fresh tenders were issued for Sub

division Nuh. All tender form were rejected due to higher rates

and Tender Committee authorized D.M to get the work done for

Sept and Oct 09 only on and below the last year rates i.e Rs.

13.00 within District and Rs. 20.50 out of district due to the

election code in force . Later again on 29.10.09 and 8.11 2009

fresh tenders were issued for period of November 2009 to

March 2009. Transporter named Harkesh was appointed on the

rate as follows:

Within district: 12.50 per Q foodgrain

Out of district 20 .00 per Q foodgrain

3.33 Committee on perusal of transporters file observed that the

transporter Harkesh have only two vehicles both having capacityof 9 ton. Officer of CONFED informed that as the number of

vehicles are not sufficient the transporter hires trucks for supply

of foodgrain to FPS. As the private trucks are hired by the

Transporters to carry and transport foodgrain the question arise


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that why the private truck owners transports the foodgrain in

lesser rates than the market rates. These facts give direct

inference about the Diversion of the foodgrains duringtransportation. Similar facts were observed while perusing

transportation files pertaining to other districts.

3.34 Further, it is to be noted that no officer of CONFED accompanies

the truck while transportation of the foodgrain from procurement

agency to the fair price shops. There is no monitoring by the

Report on the State of Haryana - Central Vigilance Committee

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