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Robbing The Hungry - the racket called PDS

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With even the likes of Medha Patkar critical of the system, perhaps the only ones who would be opposed to it's being dismantled would now be just the racketeers and a few pseudo-socialists. Isn't it a crying shame that the country continues to allow as massive a loot as an annual Rs 10,000 crores by this lot?

text of the letter sent to the New Indian Express:

I refer to your editorial captioned 'Robbing the hungry' of the 15th December.(

A few months back, Medha Patkar, had co-authored an article, that had appeared in another prominent national newspaper, criticizing the the PDS in equally strong terms. (http://timesofindia.india... )

However, she seemed to think that the suggested alternative, of 'food stamps' would not work since they could easily be counterfeited. Perhaps, she needs to be made aware of fool-proof arrangements here that new technologies can ensure.

Whatever, with even the likes of Medha Patkar critical of the system, perhaps the only ones who would be opposed to it's being dismantled would now be just the racketeers and a few pseudo-socialists. Isn't it a crying shame that the country continues to allow as massive a loot as an annual Rs 10,000 crores by this lot?

Very much as stated, it is time the citizens brought on pressure to dismantle such a system in its entirety.

Muralidhar Rao


tsubba's picture

Food in the mouth problem

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Food in mouth problem Jaithirth Rao http://www.indianexpress.... President Bush in his irrepressible way spoke out about the Indian middle class emerging as meaningful consumers and hence being at least partly responsible for the global rise in prices. This has come in handy for xenophobic politicians in our country (and we have many of those) crying themselves hoarse. Can diverting attention to imaginary foreign bullies help our government in dealing with the public clamour about prices of food-grains? It is always easier to blame others rather than face up to our own shortcomings. No government likes to see a rise in food prices. The Roman Emperor Diocletian discovered centuries ago that high food prices can be hazardous even to the unshakeable imperial throne. He experimented with price controls and as is inevitable when you ignore the rudimentary laws of economics, he failed. High prices overall are rarely an outcome of supply-side problems; inflation is always and everywhere a monetary phenomenon. If we have global inflation today, it is because Mr Greenspan kept pumping up the money supply too much and for too long. He tried among other things to help President Bush fight a war without bearing its fiscal consequences. When money grows too fast, prices rise just as night must follow day. His successor, the intelligent and well-meaning Bernanke, has been forced to continue with easy money in order to save the financial system and prevent a Depression like that of the ’30s or a decade of de-growth as Japan has witnessed in recent times. The net result is that the inflation genie is out of its post-Volckerian bottle. The dollar is weak, aggravating the seeming price rise of commodities where international prices are quoted in dollars. As an aside, inflation is not that high in euro or Swiss franc terms. Despite our trading patterns (largely dollar-denominated), the monetary authorities in India have in fact reduced the dollar’s impact by strengthening the rupee quite a bit. But there is a limit to which they can hold inflation. The real question to ask is not whether there is high inflation, but whether relative prices of wheat and rice have changed. Here it seems to me that the data is not clear at all. Measured in ounces of gold or in barrels of oil or in ingots of steel or in bags of cement (as distinct from in dollars or rupees) we may not have any significant increase in the price of rice or wheat. When the analysis is complete (in twelve months from now — late as with all economic analyses) it may turn out that neither is the Indian Middle Class Consumer nor the US Bio-fuels Producer responsible for anything more than a lot of verbiage in the press. However, going beyond the money illusion caused by the unstoppable printing presses of the Federal Reserve, if in fact there has been a change in the relative price of rice and wheat (which is probably modest at best) it is worth looking into seriously, not with the foolishness and irresponsibility that one has come to associate with the current set of political leaders in India. It was the venerable statesman C. Subramanian who went by his intuition (contrary to the beliefs of World Bank dummies) that the Indian farmer was not stupid. The Indian farmer was an optimiser in a world of great uncertainty and risk. On average he may have received prices that covered his costs and gave him a fair return. But the “average” hid many risks. In years of glut, the Indian farmer had no insurance cover for his returns. This insight was the origin of the minimum support price and the procurement policies that kicked off the Green Revolution. The intelligent Punjabi farmer, once assured of a price, was able to plan better and produce more. We constantly keep saying that we are a nation of farmers and that agriculture is our backbone. Why then are we not happy if in fact the relative price of rice is up as compared to steel or oil? Why are we banning the export of rice and flooding the country with duty-free food items to the detriment of our patriotic kisaans? Why are we not praising Bush instead of berating him? The answer is simple — the welfare measures of our “socialistic” state have failed. While some farmers may benefit from high rice prices, all urban classes are hurt and our state is mortally scared of them just as Diocletian was! It must be pointed out that the Roman Empire and Victorian England were more advanced in dealing with issues of the welfare of the poor than we are. We spend tonnes of money, primarily for the benefit of contractors, bureaucrats and politicians — not for the benefit of the poor. For a country with the levels of privation that we have, we don’t even have public soup-kitchens or their equivalents through public-community-private partnership deals. All we have is monumental theft from the poorly executed PDS. And of course most of our agricultural welfare expenditure is marked not for the benefit of farmers or the poor, but the barons of the Fertiliser and Pesticide industries. We subsidise them and keep prices low resulting in overuse of these items which in turn causes untold ecological damage. The only intelligent programme in recent times was that launched by Jayalalithaa in Tamil Nadu where she encouraged temples and dargahs to provide free meals to the poor and encouraged well-to-do devotees to pay for them. She leveraged traditional beliefs and institutions in an imaginative way. Let us not once more fall into the trap of feeling good by criticising the “foreign hand” of Bush or anyone else. We have issues in Indian agriculture, but we are doing our best to hurt farmers. We have issues regarding the complete absence of the welfare measures we need to protect the vulnerable sections of our population. Let us fix these self-inflicted problems of ours. We will then have plenty of time to tilt at windmills foreign and homegrown. The writer divides his time between Mumbai and Bangalore
Naveen's picture

Food In The Mouth - A Great Article

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TS - Many thanks for posting this.

I think it is very objective & an accurate description about how our PDS system operates with manipulations.


tsubba's picture

Food in the mouth

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naveen i also liked the article because it was one one of those articles that does not indulge in triumphalism.
Rithesh's picture

Do something about storage

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Economics apart, another big problem is the storage issue. I understand that a significant part of the food grains stored at FCI (food corporation of India) gets destroyed by rodents or because of rains or during transportation. Is this such a big problem that it cannot be solved???

We may not be able to completely control the economics part, but this problem can be solved. I guess its only because of the carelessness on the part of FCI.

I hope someone raises this issue at the meet.


murali772's picture

Robbing the hungry

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[This discussion has been moved to a separate thread from the event listing here ]

Mail exchanges on the subject on CAF googlegroup:

By a prominent member on 23rd May:

Just a, perhaps, moot point to which, may I draw your attention? The fact that PDS is woefully inadequate and is perhaps, a miserable failure is well known and equally well documented. What would one more such "interactive session" achieve?

Is there anything else, more concrete, that one could do to see some results? I am nobody to advise CIVIC on its strategy or methodology in addressing CIVIC issues [pun intended!], nor presumptuous enough to attempt to do so. Still, would it not be worthwhile examining what you hope to achieve from the programs you organize, especially, this one, and study when, if ever, the results are likely to materialize?

Why flog a dead horse?


By me on 24th May:

It is none less than Medha Patkar herself who has been the biggest critic of PDS, the way it is - read the article 'stop the robbery' (of over Rs 10,000 cr a year) co-authored by her at

I doubt it can be redeemed. Food stamps/ coupons suggested by some eminent economists has not found favour with the likes of Ms Patkar saying they can be counterfeited. But, I suppose there technological solutions to such problems today.


By Ms Kathyayini, Exec Trustee, CIVIC, on 24th May:

Dear Mr. Murali,

Thanks for forwarding the article which supports what we are also trying to achieve by 'one more interactive session'. We are asking that the vigilance committees comprising beneficiaries of the ration shops be set up to monitor the shop's functioning which in other words is asking for decision-making to go into the hands of the people themselves as envisaged under the 73rd and 74th amdts. reiterated in the article.

We are empowering slum-dwellers to use RTI to question the irregular functioning of the PDS shops, etc. The RTI applications by slum-dwellers and smaller 'interactive sessions' at ward level that we have held over the last year have brought about instant improvements. Shops have started functioning daily. Foodgrains are being given properly, bills which were not being issued are now being issued, vigilance committees are being set up. I think those are hopeful signs that things can improve with greater empowerment of the people and intervention of civil society organisations. This is even more important at a time when food prices on the open market have become absolutely unaffordable for the poor. We would not like to blow our own trumpet also, but I think it would not be an exaggeration to say that the F&CS Department is sitting up and taking note that someone is asking questions and monitoring its functioning in all the wards where we are working.

It isn't such a dead horse, after all, is it?


My response on 25th:

Hi Kathyayini

The poor in the state can certainly bank on committed individuals like you to do their bit for trying to work the system. Similar is the laudable effort put in by the likes of Dr Meenakshi in trying to work the SEC's existing electoral rolls maintenance/ updating system. But, as pointed out by Vijayan Menon, given the existing systemic deficiencies, the efforts put in can at best reduce the error percentage from the existing 55% odd to say 50% (, and in the case of PDS leakages from a level of Rs 10,000 cr per annum to Rs 9,000 cr. Are we going to be satisfied with that? Shouldn't we be demanding much better value for the taxes we are paying in terms of the quality of services provided by the various government agencies? And, these, I am afraid, can be achieved only by getting to the roots of the problem, and attempting totally fresh approaches.

Now, whatever the government may do, it can never possibly achieve the efficiency levels of say a BIG BAZAAR in the procurement/ distribution chain. So, why not leave the job to them, and work on the 'food stamps' suggestion that many eminent economists have made? The poor will benefit from the right quantity as well better quality, and the Rs 8,500 cr pa saved (which was earlier going to the various middle men in the chain) can be used for providing other equally important benefits to the poor.

Well, BIG BAZAAR will also gain. But, should that be a problem? It apparently is, today, with a lot of people. What other explanation can be there for not pursuing this line of thinking?

Muralidhar Rao

Muralidhar Rao
George E Matthew's picture

Food Stamps

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The idea of food stamps is a good one, but can still cause problems.

  • Dishonest officials can refuse to give food stamps to genuine beneficiaries unless bribed. Similiarly, food stamps can be given to the wrong people
  • Food stamps can be stolen by corrupt officials and sold on the market. They are small, light pieces of of paper-much easier to steal than bags of grain.If grain is stolen, food stamps can be stolen too?
  • Organized retail chains may be absent in rural areas.Still, I guess that small shopkeepers are probably more efficient than PDS.
  • If the claim process for the shopkeeper is too difficult(he has to run after many officials and bribe some of them) he may refuse to accept food stamps.
Despite all this, any attempt to improve PDS is welcome. A better supply chain will benefit both farmers and consumers, many of whom are desparately poor
Bengloorappa's picture

Technology is the answer

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As Murali sir and others pointed out, isn't technology the answer?

Middlemen and politicians always want the poor to be poor and less informed. the only way to overcome that is to use technology. The recent GPS experiment of garbage disposal is a case in point.

We dont need just another identification card system or a ration card system. "You are your own ID" should be the motto of such a system. Efficiency can be achieved by using Bio Metrics to a large extent and the only hurdle will be getting people ID-ed the first time.

Then we can start talking about distribution points such as Big Bazaar or local grocery stores.

murali772's picture

Saga of the Yellow Ration Card

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1) On 16/06/07, on behalf of my maid, I sent a mail to the Principal Sec, Food & Civil Supplies, GoK, requesting to know
a)procedure for changing Green ration (APL) card to Yellow ration card (BPL)
b)why web-site has not been updated since 10/10/03.

2) On 29/06/07, I received a response from Smt Tara Ajai Singh stating that I may contact Dy Director, Southern Range, Chamarajpet (near Uma Talkies), Bangalore (ph no 2661 3531), to apply for Yellow ration card.

3) On 2/07/07, I get a further mail from Ms Singh stating that "action was being taken to update the web-site', adding further that "the procedures have not changed much in the last few years".

4) A number of attempts were made thereafter to contact the Dy Director, and after months of 'on leave, on transfer, etc', finally about a month later, the PA of a certain lady Dy Director informs me that the receipt of applications for the purpose had been closed in March, the applications received till then were currently under process, and that fresh applications were not being accepted now. Against my query as to when it will be resumed, the response was "don't know; whatever, will be notified through press".

Now, why none of this information is made available on the web-site is the moot question.

I informed my servant maid accordingly, and suggested to her to forget the matter.

5) On 22/10/07, my maid comes up again to say that there is a talk now that the Yellow ration card holders are going to be allotted land (BDA sites?) on some priority basis, and being the community leader that I am projecting myself to be, I should help her out. I express total helplessness.

6) Under a BPL ration card, she tells me that a family is entitled to a monthly package comprising 20 kg rice, 3 kg wheat, 1 kg sugar, 1 kg tur daal, 1 pkt Sabina (cleaning powder), 2 tablets - Wheel soap, 8 ltr kerosene

As compared to that, an APL card entitles a family to only 5 kg rice at Rs 10/- per kg, and 5 ltr kerosene at Rs 10/- per ltr. Additional quantity of kerosene is generally available at the ration shop at Rs 30 to 40 per ltr.

Rice, Wheat, Sugar, and Tur daal are all supplied loose, and are generally found adulterated, the eventual yield after hours of sifting, cleaning, washing, etc being around 50% (may be an exaggeration).

It had cost her close to Rs 1,500/- by way of bribes, apart from the cost of running around, to get the APL card

7) The maid has heard that I am in touch with the recently elected MLA of the area, Mr Ramalinga Reddy, and requests that I put in a word to him to get her a BPL card. I have offered to check out, and that's where the matter stands currently.

Very clearly, the PDS is set up as a largesse doling out agency so that the politicians can continue to play the role of the feudal lords, and consequently, the lack of transparency. OK - let's not deny the neta his role. But, by introducing the 'food stamp' system, at least the ration shop, and therewith the major part of the malady, can be eliminated.

And, as for the reliability and robustness of the 'food stamps' scheme, there already exists a very successful model in the form of the SODEXHO coupons.

So, what is anybody waiting for?

Muralidhar Rao

Muralidhar Rao
murali772's picture

Entire PDS has collapsed, says SC panel

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The sale of foodgrains through the public distribution system to poor families throughout the country at highly subsidised prices is stinking of corruption, hoarding and black marketing, the Supreme Court appointed central vigilance committee said in its damning reports.

After touring various states and scrutinising the operation of PDS system through fair price shops, the committee headed by retired Supreme Court judge Justice D P Wadhwa used "enforcement lax, collusion between officials, investigating agencies, dealers, wholesalers and other vested interests" to describe the Karnataka set up, alongwith equally damning descriptions for the set ups in other states.

But the most damning comments were reserved for Delhi, the national capital. Apart from terming the PDS as inefficient and corrupt, the committee said in its report to the apex court that "there is largescale diversion and black marketing of PDS foodgrain".

Having read the report, the Bench asked Mr Colin Gonsalves, Senior lawyer and a member of the Committee, to suggest whether there could be an alternative to the existing PDS system or if it could be made efficient through corrective measures.

For the full report in the TOI, click here.

Year after year, various panels/ committees have been submitting similar reports. All the same, the situation continues to deteriorate by the day. Many eminent economists have from years been suggesting the 'food stamps' system adopted successfully in many countries, which will reduce the scope for corruption to just in the matter of identification of the eligible sections of the population. Whatever the government may do, it can never possibly achieve the efficiency levels of say a BIG BAZAAR in the procurement/ distribution chain. So, why not leave the job to them, and work on the 'food stamps' suggestion? The poor will benefit from the right quantity as well better quality.

Muralidhar Rao
Naveen's picture

Food stamps - Really foolproof ?

199 users have liked.

Food stamps is a good idea, but knowing well how our system works, food stamps will find their way into the pockets of the better off, not to mention the "fake food stamp racket" or "food stamps scam" or some such commonly heard term !!

SB_YPR's picture

Privatise both aspects of distribution

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not to mention the "fake food stamp racket" or "food stamps scam" or some such commonly heard term !!

As Murli sir has pointed out, SODEXHO and other such food coupons could be used, and private companies could be invited to supply the same with holograms (through open tendering or by offering tax incentives etc.) This should take care of the genuineness of food stamps.

Organized retail chains may be absent in rural areas.

The distribution aspect, as pointed out, could be privatised by handing it out to organised retail chains such as Food Bazaar, Reliance Fresh, More, etc. Since these are already targeting rural areas as the next big consumer base, it should not be too difficult to incentivise them to set up shop there.

Efficiency can be achieved by using Bio Metrics to a large extent and the only hurdle will be getting people ID-ed the first time.

Precisely. And since the process is already on (UID project), genuine BPL beneficiaries can be identified (and verified biometrically). Eventually, once UID coverage becomes universal, food stamps could be done away with and the individual should be able to get his quota of subsidised foodgrain by merely showing one's UID card (and verifying the same biometrically). This would largely eliminate bureaucratic interference in the distribution system.

Quality specifications for foodgrains can be fixed in advance so that there is uniformity in quality of foodgrains being supplied in various areas.




idontspam's picture

Food stamps is the way to go.

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Food stamps is the way to go. It takes away the burden of procurement, storage & distribution which is not exactly an inexpensive effort and not to say introduces more points of corruption than printing a food stamp. All the money saved on the distribution can be put into a proper technology & enforcement of the food stamps.

Like Manish says, with technology the stamp/coupon will become an electronic transaction like your credit card without the need for a physical coupon. It removes the entire corrupt chain. Any retailer could validate the ration maintained at the central server via his POS teminal and disburse the ration. He can claim his subsidies in the backend from the govt.

You want to make it more inclusive? Allot ration franchise to kirana shops instead of chains especially in tier 2 & 3 cities. Enable them with mobile authentication devices so they can distribute. There isnt a village in the country which wont have a kirana store and they will be more than willing to be a ration franchise.

murali772's picture

a ray of hope, finally

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check this

Muralidhar Rao
murali772's picture

think beyond PDS

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Will UPA-II’s ambitious food security programme work? The issue gains immediacy, with the National Advisory Council unveiling a new draft plan envisaging legal entitlement to subsidised foodgrain for at least 75 per cent of the population. That works out to almost 800 million people. If implemented, this means the government’s food subsidy bill will be far bigger. Also, our groaning public distribution system will come under greater strain. Now, central to the question of the doability of any food cover plan is the efficacy or otherwise of its delivery apparatus. Clearly, the public distribution system as it exists can’t deliver the goods.

Selling food at market rates, against coupons, reduces the incentive for profiteering through diversion by officials, transporters and fair price shops. Plus, people get to choose what they want to buy. It’s been recommended that food coupons, supported by the UID project, should eventually cede way to mobile banking-linked smart cards. The government must act on this advice, which also mandates that UID and financial inclusion initiatives are fast-tracked.

For the full editorial piece in the ToI, click here.

Can't agree more. But, apparently, the ration shop mafia is too well entrenched. Everywhere, it appears to be the same - mafia rule!

Muralidhar Rao
murali772's picture

excellent first step

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For the first time in India, the government is distributing rations through a private supermarket. The Karnataka Food and Civil Supplies Department has set up a counter at Food World in Malleswaram, where items like rice, pulses and sugar are sold at subsidised prices to BPL cardholders. Food and Civil Supplies Minister Dinesh Gundu Rao told reporters on Wednesday about 300 cardholders could now buy their rations from the store. The government took the decision following complaints that fair price shops were not keeping open regularly.

For the full report in the New Indian Express, click here.

Excellent initiative by the F&CS minister.

The obvious next step should be to switch to Food World's and the Big Bazaar's themselves supplying the goods, against stamps/ coupons (or through Aadhaar credit), thereby eventually eliminating the PDS, perhaps initially in cities and towns where retail market is well established, and thereafter all through the country.

Not many tears are going to be shed for the PDS, except by those whose nefarious purposes it served.

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