Plugging The Leaks

TEAM DETAILS

UTKARSH KUMAR, NAVEEN KUMAR, RUBAL PRAKASH, ABHIYUDAYA MISHRA , VIKAS RANJAN.

BIRLA INSTITUTE OF TECHNOLOGY, PATNA.

Improving reach and efficiency of the Public Distribution System

TEAM NAME : AASMAAN

Despite for the Indian Government spending Rs 85000cr,

about 230 million people strive for food in India

In fact to provide Re 1 to the poor, the GOI spends Rs 3.75 but due to corruption in PDS only Rs 0.375 reaches finally.

PROBLEMS :-

• Identification Error

Rs 4,360 cr of the subsidy goes to the non-poor in 2012-13.

• Leakage at Different Levels

57% of the PDS does not reach the intended people, due

to leakage at different levels.

• Storage

Approx Rs 380 cr & 1.7 lakhs Tonnes of food grains were wasted

In 2012-2013 due to storage problem .

• Transportation

Approx Rs 339 cr & 18.4 lakhs. Tonnes of food grains were wasted

In 2012-2013 due to transportation problem .

•Non-Transparency

Non-transparency at different levels and lack of Public Awareness.

Virtually non existence vigilance machinery at the grass root level.

• Weak & corrupt Administration –

Undue political interference, lack of adequate supervision

over PDS operation at field level and laxity which often does

not result in any punishment to culprit found at the supervisory.

Unit 2004-2005

2009-2010

Distribution of Food via PDS ration shops

Mn Tons 41.5 48.9

PDS Food Received by the population , NSS

Mn Tons 13.2 25.3

% Leakage of Food via PDS ration shops

68.2% 48.3%

Food Subsidy- Ministry of Finance

Rs. Crores

24479 59621

Food subsidy according to NSS

Rs. Crores

8474 38875

PDS corruption estimate

Rs. Crores

16005 20746

A Major Problem : Corruption

GOI

FCI Farm

FPS Block

District

State

Corruption (20,747cr)

Poor

Food subsidy for PDS Rs.85,000 cr

(2012-13)

73% Money spent in public transfer.

Rs.62,050 cr

27% expected to reach the poor.

Rs.22,950 cr Rs.20,747 cr (24.4%)

Drained out due to corruption

Finally only 3.6%; Rs.2203 cr reach

the poor.

Problem The country facing the problem today is not one of shortage of food grains but of managing the surplus.

Corrupt implementing machinery and sleepy and sloppy programme where there is freedom to play with its great objectives with impunity to derive unlawful pecuniary benefits.

The Present Scenario of PDS

Complaint & Awareness

Centre

MULTI-APPLICATION SMART CARD

(MASC)

Bar-Code in Packets of Food Grain

Reform of PDS System

The whole power of controlling the PDS will be exercised by the District . This decentralises the powers to the state.

Smart cum ATM cards for all citizens, with the Thumb Impressions(of atleast 2members in a family) as their password. It would result from surveys done on a regular basis conducted by NSS and asserted by UIDs. The Smart Cards will be registered with Mobile no. and bank account of the people.

All food grains will come properly packed with a unique barcode on each of them. Each packet contains the amount of food grain which the GOI seeks to provide to each person. This ensures efficient distribution system. The packing of food supplies will be done by electronic system.

IVRS System , Toll Free No. & Internet Complaint Box to make the people aware of their rights and latest government schemes and also to Register complaints.

Brief of The Proposed Solution :-

New policy for FPS Owners

Web Portal

Building Transport Network

Advantage over existing

System

FPS owners earn Commission on the supplies they render and amount of food grains they store. Licence to the FPS are given on Storage basis.

Web Portal containing all the information about PDS, visible to all people. A separate Login Section for Monitoring Committee & concerned officers to manage information on procurement , allocation and off take at all levels of the distribution system.

Distribution of supplies is done on district level basis. Each district is responsible for procurement and deliver of food grains in its area. In case of shortage of Food Grains in a District, it collects supplies from its surrounding nearby districts having surplus.

Effective handling of complaints. Error free and correct allotment and movement of foodgrains to FPS through E-Governance.

Implementing the plan :-

*The work of Block level & FPS can also be substituted by Private Agencies .

Name, photo, Address, Bank account , UID no., Mobile no., biometrics category in which the beneficiary falls and the monthly entitlement of the beneficiary, family members.

Data stored on smart cum ATM card

Data is developed on the basis of survey, verified by bank, UID, LPG card and other cards(PAN, D.L, Credit, visa card, etc.)

Verification of data or identity

Working of card

Distribution of card

Using biometrics as a tool for authentication of identity of

beneficiaries.

Response on complete transaction

Register complaints.

• Swiping the card • Thump impression • Scanning barcode on packets • Providing sealed packets of

food grains

• Updating system • Conformation message on

registered mobile no. • Circulating updated

information to district center

• Getting information through

IVRS • Filling complain through toll

free no. • Online Complaint Box to make

the people aware of their rights and latest government schemes and also to Register complaints

MULTI-APPLICATION SMART CARD (MASC)

District head

District food & supply team

Transport team

Monitoring team

Finance team

Technical team

Block level supply team

District management system

At Centre – Manages fund, does survey and set up guidelines to the System. e.g.– set MSP(Minimum Support Price), Subsidized Price, Amount of food grain allotted to the people At State – Manages fund (optional) & does survey of the system. At District – District Level Management System

At block -- F.P.S level supply team Provides food grains by electronic Keeps a store of food grains atleast one month in advance

Organisational Structure

Collects supplies from other districts and provides it to other districts & block level.

Provides Food grains to the FPS.

Transports Food grains & keeps an account of the supplies received & dispatched

Deals with money related issues

Web portal management, IVRS and SMS updates.

Keeps a Check of proper functioning of other Teams

Transportation cost

Storage(Commission) cost

Barcoded packet cost

Computerization cost

Technical team(5×4.5lakh pa)

Finance team(6×4.6lakh pa)

Logistics cost

Technology cost

Organization cost

Tota

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Card Swapping Machine

INR 50lakh

Pa

Smart card cost

INR 75 lakhs

INR 50 lakhs

INR 1.4 cr

# An average of 2.65cr of additional funding will be required, per district annually.

IVRS & Toll Free No. cost

Proposed funding will be provided by the central govt. Total funding required for implementing this scheme(for whole country) will be 1714.65cr (647×2.65cr) which is 8.26% of the total estimated PDS corruption(20747cr).

Impact & Reach

Minimum Leakage

Benefits for Poor

Reduced Wastage

Easy monitoring and inspection

Food grain for every card.

Choice to collect grains from any FPS centre.

Awareness of their rights.

Toll free number for complaints.

Satisfaction, in terms of quality & quantity.

Reduced wastage/spoilage of food grains.

Availability of sufficient food at the FPS, when required.

Reduced storage burden on FCI.

FCI can buy & store more grains.

Increased Storage & Transportation infrastructure.

Transparent operation at each level.

Easy data updating.

Better identification.

Detailed information about allocation & off take of PDS, at any level.

**The GDP of India would get increased.

Ensuring no loss in weight of packets.

Proper record of each card holder through UID & Computer Database. Transaction through Bank Accounts, instead of cash.

Challenges and Risks

Concept Risks • Difficulty in handling Multi-Application Smart

Cards by illiterate people • There are still some chances of Inclusion errors • Unavailability of skilled workers at FPS. • Problem of identifying a customer, if the Card

Swapping Machine goes out of order. • Lack of interest among rural people towards

learning and use of new technologies/facilities. • Chances of change of fingerprints of labourers.

Mitigation Factors

Implementation Factors • Government do not see the viability of this

scheme.

• Advertising and Awareness Campaign • Workers will be trained with new

technology. • Universalization of PDS : Entitlement of same

PDS, i.e. equal subsidies/food grains to all, irrespective of their financial/social status (along with the proposed plan)

to completely remove the Inclusion errors.

Source of funds for universal PDS : - o Money saved from leakage. o Reducing TAX exemptions.(The Right to Food

Campaign estimates that Rs.1,56lakh crore would be required for universal PDS, which is about 1/3rd of tax exemptions given by the Central govt. in 2009-10.)

• An alternate offline mechanism, by which the

IVRS system would generate a customer’s unique code to identify the customer, using his registered mobile no.

• The proposed Biometric System would accept if the fingerprints match is more than 75%.

References

•Planning Commission. (2005). Performance Evaluation of Targeted Public Distribution System (TPDS). •Bhalla, Surjit S. (2012, Jan 7). Enhancing Corruption the NAC Way. Oxus Investments •Press Information Bureau (2012, Dec 17). Review of Food grains Procurement Policy RBI handbook of Statistics, Ministry of Finance, Budget statements, different years. •International Journal of Business Economics & Management Research. •Discussion paper (DEC 2012): National Food Security bill, Ministry of Agriculture ,Govt. of India. •Report on computerization of PDS by JUSTICE WADHWA COMMITTEE. •Report by Ministry of Rural Development on the methodology for conducting the BPL Census. •Report on National Food Security Bill by Dr. C.RANGARAJAN • RBI handbook of Statistics, Ministry of Finance, Budget statements, different years.

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