SYNERGY2K13

LEAKAGES IN THE CURRENT PDS SYSTEM IN INDIA

N.Sree Krishna MashanthV.Pravallika(valli)B.AnushaMk.DevakiV.Rakesh

Objectives

• To understand the leakages in following Schemes and Subsidies:

• PDS

• Mid Day meal scheme

• Fertilizer subsidies

• Power sector

• NREGA

• The Road Ahead

Public Distribution System

• Public Distribution System (PDS), is a national food security system, established by the Government of India under Ministry of Consumer Affairs, Food and Public Distribution and managed jointly with state governments in India.

• It distributes subsidized food and non-food items to India's poor.

• Major commodities distributed to consumers include staple food grains such as wheat, rice, sugar and kerosene through a network of Fair Price Shops (FPS) established in several states across the country.

Leakages and Problems with PDS

• Large errors of exclusion of BPL families and inclusion of above poverty line (APL) families .

• Prevalence of ghost BPL/AAY cards .

• Diversion of subsidised grains to unintended beneficiaries .

• Section of the APL households not lifting their ration quota and thus a part of the entitlement of these households leaking out of the PDS supply chain.

Leaks in NREGA

• Definition of a household

• Distribution of job cards

• Unsolicited fees being charged for work application forms

• Non-issuance of receipts

• Presence of contractors

• Non-availability of muster rolls at the worksite

Mid Day MEAL

Advantages

• Targeted Subsidies:-subsidies can be targeted and made to reach only the people they were meant for.

• Massive Savings:-DCT will translate into good savings for the government.

• Responsible/Reduced Usage:-Because DCT will only compensate for a finite amount of resources consumed, it will encourage beneficiaries reduce their usage of these resources.

Pilot Implementation and Examples

• The state government’s incentive of a bicycle to a girl child joining the ninth standard under a scheme called Mukhyamantri Balika Cycle Yojana, started in 2006. Girls get Rs 2,000 to purchase bicycle and Rs 700 for uniforms. In three years, from 2007-08 to 2009-10, about 8,71,000 girls have received bicycles.

• Mexico – PROGRESSA – transfer of cash to the woman heads of the extremely poor rural families

Challenges

• Unwillingness -People might not be, initially, so receptive to the idea of universal subsidy being removed and a more targeted system being brought in to replace it.

• Mammoth Task - Creating bank accounts for millions of house holds across India will be no easy task and will require many changes/simplifications in the procedures for account creation

Steps needed for effective implementation of DCT

THANK YOU