Universal Public Distribution System - Need

What is the issue?

With the huge burden of rising COVID-19 cases, certainly, it will take a long time for economy to get back to “normal”.
So, among others interventions, it is essential that food support in the form of free/subsidised grains is made available to all without any disruptions.

Why is food support crucial?

Unemployment is high and it will take a while for lost livelihoods to be rebuilt.
This is especially given the fact that India was already facing an economic slowdown.
There were high levels of inequality as well.
So given these, food support becomes absolutely essential.

Are the measures taken so far effective?

In the last week of March 2020, the government made an announcement in this regard.
It said it would provide 5kg of foodgrains and 1 kg of pulses for free to all those who are beneficiaries under the National Food Security Act (NFSA) for 3 months.
This was announced as part of the Rs. 1.70-lakh crore relief package under the Pradhan Mantri Garib Kalyan Yojana (PMGKY).
Soon, it became obvious that many were not part of the NFSA.
So, the government, in May 2020, almost 2 months after the lockdown was initiated, announced an expansion move.
This was to cover an additional 8 crore individuals for 2 months.
It was to ensure that migrants are included under the Atmanirbhar Bharat Abhiyan package.
This meant each State being given foodgrains to the tune of 10% more than what they normally get under the NFSA.
But many States were already covering more beneficiaries than what was allotted to them by the NFSA.
Also, some States even made additional temporary provisions for these 2 months.
So, the interventions made by the central government became inadequate in real terms.

What are the demands made?

A universal Public Distribution System (PDS) will ensure that nobody is excluded.

Also, the food support announced as part of the PMGKY and Atmanirbhar package should be extended for a longer period.
Notably, around 10 States have written to the Ministry to extend the time for 3 more months.
But the government seems to be indicating that all problems of exclusion will be resolved once the One Nation One Ration Card (ONOC) scheme is expanded across the country.
This is supposed to be achieved by March 2021. It has been announced that ONOC is currently operational in 20 States.

Will ONOC be a true solution?

Portability across States is an important and valid concern to be addressed.
This will help migrant workers access their entitlements.
However, the ONOC has a number of problems in the way it has been conceived, being Aadhaar-based.
The experience of biometric authentication using electronic point of sale (ePoS) machines so far has not been encouraging.
The system has resulted in exclusion of some of the most marginalised.
This is because of multiple reasons including network issues, authentication failure and so on.
But even besides this, the ONOC may not be a solution to the immediate crisis of hunger that continues in the aftermath of the lockdown.
Despite ONOC being operational in some states, lakhs of migrants were stranded in different places without access to food following the lockdown.

What is the real problem now?

The real issue is of growing food stocks along with widespread hunger.
Including unmilled paddy, foodgrain stock in the Food Corporation of India has now risen to almost 100 million MTs.
Notably, the buffer stock norms is 41 million MTs.
This will increase even more as there is another week of procurement open in the rabi marketing season.
There will be another round of procurement of kharif crop in a few months.
[Notably, 49.9 million MTs of rice was the procurement during the kharif marketing season in 2019-20.]

What seems to be the government plan?

The government seems to be hoping to get rid of grain through the Open Market Sale Scheme (OMSS).
With OMSS, it sells the grains at prices lower than the procurement cost but much higher than the issue prices under PDS.
By doing so, the fiscal consequences can be contained.
But earlier experiences with the OMSS do not offer much hope that this plan would be successful.
In the period 2017-18 to 2020-21 (up to first week of June 2020), only 16.6 million tonnes of rice and wheat have been sold under the OMSS.
The quantity sold each year was less than the quantity offered.
Moreover, one-third of all sales was to State governments (almost all the rice) thereby shifting the subsidy burden to State governments.
If not OMSS to private buyers, the only other options left are to either export them or let the grain go waste.

How will a universal PDS help here?

A universalised PDS giving 10kg of foodgrains per person per month for another 4 months requires about 47 million tonnes in total.
This is assuming that nearly 85% of the population actually utilises their rations.
It can be safely assumed that the rich will automatically self-select themselves out of the system.
This is only indicative, and the actual requirements would most likely be lower.
Given this, it is highly uncertain why the PDS is not being universalised immediately especially when food stocks are at such a historic high.
To ensure that people do not go hungry, it is absolutely essential for the government to intervene and offer a workable food support.

Source: The Hindu