2. Government of India spends more than 1% of its GDP(750 billion) on PDS but still 21% of people are undernourished.Government of India spends more than 1% of its GDP(750 billion) on PDS but still 21% of people are undernourished.
1. We spent `87581.58crore in fiscal year 2010‐11 but only 42% of subsidized grains reached
the target group.
2. Government of India spends more than 1% of its GDP on PDS but still 21% of people are
undernourished.
3. Around 23% of all Fair Price Shops (FPS) are not viable and survive solely due to leakages and
diversions
4. For every `3.65 allotted only `1 reaches the poor
5. A Planning Commission estimate suggests that 61% of households are excluded from the
Below Poverty Line (BPL) net and 25% of households become unintended beneficiaries.
6. PDS corruption is estimated around `20747crores as per report.
7. In Kerala, the inclusion error or enrolment of wrong people for the benefits is 80 per cent.
8. Over 36% of the budgetary subsidies on food is siphoned off the supply chain and another
21% reaches the APL households.
Sources: indiabudget.nic.in, fcamin.nic.in, planning commission reports, media resources
0
10
20
30
40
50
60
Errors in Beneficiaries List( in %)
Exclusion Error Inclusion Error Shadow Ownership Error
CORRUPTION THE ROOT CAUSE
A. Weak administration and management
1. Adulteration of food grains in FPS
2. Identification of the target group (Inclusion Error).
3. Bogus Ration Cards.
4. Diversion to open market.
5. Uneven procurement of grains by State Governments.
6. Interference by Security forces(Maoist prone areas).
B. Poor Facilities
1. Rotting of grains in FCI godowns because of stalling of state
Government in procuring grains.
2. Grains Vulnerable to rodents due to lack of storage facilities
in case of surplus production.
3. Poor quality of grains.
C. Lack of Transparency
1. Shadow owners.
2. Large fraction of target group deprived of food.
3. Viability of Fair Price Shops.
3. 1. Improper Identification Beneficiary
2. Procurement and storage of grains (FCI, state level and taluka Level godown)
3. Transport mechanism from FCI to FPS (via Whole Sale Point and Taluka)
4. Delivery Mechanism of the PDS and the Quality of grains received by beneficiary
5. Redressed of their Grievances and necessary actions to stop it.
1. Additional Identification of beneficiaries by NGOs and Civil Society.
2. Surveillance of the work of the by the officers responsible for storage and transport by
NGO near vicinity
3. Necessary actions taken by the police/ authorities on finding Guilty.
1. Replacement of sugar by jaggery.
2. No kerosene for AAY and APL people, and gradual removal of kerosene and
NGOs should be encouraged to educate people to use Bio‐gas.
3. Introduction of public‐private partnership for storage and transportation.
Identification of
root Problems and
leaks
Plugging of the
Leaks
SUGGESTED
CHANGES
ADVANTAGES
1. Transparency assured.
2. Covers more than 70% of poor from 10 states.
3. Reduction in fiscal burden.
4. Quality, wastage and storage checked.
Overview understanding of the problem statement
5. 1. Additional identification of beneficiaries by any licensed NGO and Civil Society excluded by state Government.
2. The grains procured from FCI are made into packets to ensure quality and quantity control.
3. Software to be made by IT company to manage online and introduction of E ration Cards with online receipt generation.
4. Surveillance on transport mechanism rather than interfering in their 3 or 4 tier system.
5. All employs/ staff under scanner of NGOs and Civil society.
6. Mandating All companies to give 1 % of their CSR for sustaining FPS.
7. Introduction of, branded private companies (say, giving tax relation) for transport and packaging rather that giving contract basis.
8. Coordinating Officer appointed to keep surveillance(using GPS ) and ensure proper transport of grains and least diversion of grains and
reports to be made online with surprise checks by NGOs to ensure authenticity in the work.
9. Food inspectors guided by Chief inspectors to check quality and quantity of packets of food supplied at the lowest level, i.e. FPS and the
reports to be made online.
10. Automatic Online record against the beneficiary for every food transaction made .
Identification Of
Beneficiary
1. State Government. to Identify it’s
beneficiary
2. NGOs to bring up the left out beneficiaries
3. After cross checking of the lists by both
the Government. and the largest NGO of
that state
4. The list to be given to IT company to
update it online, to know the exact no. of
beneficiaries.
1. State Government. to Identify it’s
beneficiary
2. NGOs to bring up the left out beneficiaries
3. After cross checking of the lists by both
the Government. and the largest NGO of
that state
4. The list to be given to IT company to
update it online, to know the exact no. of
beneficiaries.
Online Resources
1. The IT company designs a software to
update all the data sent by State
Government. and include the data online
2. Smart E ration card to be issued as per the
online database.
3. The % diversion at each step from FCI to
FPS is recorded by Coordinating officer and
the data to be updated by their managers
4. The same holds for food inspectors as
well.
Implementation
1. The beneficiaries receiving smart card
just need to go and swipe that card at
FPS and take the entity
2. For every swipe the data gets updated
online automatically against the
beneficiary
1. The beneficiaries receiving smart card
just need to go and swipe that card at
FPS and take the entity
2. For every swipe the data gets updated
online automatically against the
beneficiary
Snapshot of SolutionSnapshot of Solution
6. 1. Similar to ATM cards but with some
special provisions.
2. It consist of 6 digits to be entered for
every transaction .
3. It is predefined in the software that ,
first digit entered corresponds to a given
entity.( For example 1. rice 2. wheat
3. jaggery)
4. The second digit entered corresponds
to the amount ( has to be<10 for each
transaction., multiple transaction if
greater quantity is allowed )
5. The next four digits is a pin code unique
for each card .
6. Combination of these 6 digits completes
the entity, quantity of entity, and the pin
for transaction.
7. A beneficiary if needs 5 kg Wheat has
to enter ( 25****).
8. On every swipe a receipt generated, and
recorded online as well.
1. Similar to ATM cards but with some
special provisions.
2. It consist of 6 digits to be entered for
every transaction .
3. It is predefined in the software that ,
first digit entered corresponds to a given
entity.( For example 1. rice 2. wheat
3. jaggery)
4. The second digit entered corresponds
to the amount ( has to be<10 for each
transaction., multiple transaction if
greater quantity is allowed )
5. The next four digits is a pin code unique
for each card .
6. Combination of these 6 digits completes
the entity, quantity of entity, and the pin
for transaction.
7. A beneficiary if needs 5 kg Wheat has
to enter ( 25****).
8. On every swipe a receipt generated, and
recorded online as well.
E smart Ration CardE smart Ration Card
Entity code for
wheat
Amount required
Secret code for
the card
Corporate Social Responsibility in helping of PDSCorporate Social Responsibility in helping of PDS
1. Proposal of mandating towards contributing 1 %
of CSR to development of PDS.
2. The companies( say transportation , packaging)
can be lobbied for investing their money as a
business strategy, besides perks of relaxation on
taxes etc.
3. This would generate at least about extra 270 crore
of revenue for the use of PDS plus the revenue of
the lobbied companies.
( 2 5 **** )
10. Challenges and Risks
Implementation Challenges
Mitigation Factors
1. Ample scope of Clash between NGOs and State
Government over beneficiaries.
2. Replacement of sugar by jaggery and gradual removal
of kerosene, may resent the people.
3. Lobbying of the Companies to invest is a big challenge.
4. 1 % contribution from CSR policy may resent the
corporate sectors .
1. Excessive beneficiary may be included.
2. Server Problem may cause disruption.
3. Hacking of servers may lead to data manipulation.
4. Local People may find it difficult to get used to online
transactions.
5. People in Civil society may add excessive beneficiaries
MITIGATION FACTORS
1. Civil Society members comprising of local
eminent personalities and social activists can act
as moderator between Government and NGOs.
2. NGOs to preach and modernize people
regarding online application.
3. Ethical hackers to be kept to check for hacking.
4. Companies need to be ensured that their
investment would not only help people but also
earn them various perks from Government .
