Of wasted subsidy, and freebies for ration-card holders

Like millions of others , I am a middle-class ration-card holder. I heard on a a pre-budget  TV  talk-show the other day that as much as  60 percent families rated above poverty line (APL) hold  ration-cards , while half  the population below poverty line (BPL) has no access to the public distribution system  (PDS).  Maybe,  the unmindful middle-class need to explain.  It is not as  if the middle-class card holders draw subsized rice, wheat and kerosene from fair-price shops. They keep a ration-card  for other reasons ; it is a widely  accepted document as proof-of-identity. We use it for opening a bank  account, getting a phone or gas  connection; for property registration, for school admission, job application , and, I guess, for filing nomination papers for contesting elections.

If govt.  decides to  de-list ration-card from acceptable proof-of-identity/address documents ,  nearly 60 percent of ration-cards would disappear from the books. Apart from reducing food subsidy outlay,  scrapping so many cards from PDS records would lesson the scope for diversion of PDS supplies to the black-market. Besides,  such drastic reduction in ration-card holders  would impact questionable populist state govt. schemes benefiting the card-holders  In Tamilnadu the ruling DMK doles out to ration-card holders  free TV sets, gas-cylinders, and Pongal festival dhoti-saree. A sizeable part of such freebies reach  the card-holding middle-class that promptly converts it into cash.. A Karunandhi-TV, they say, could  fetch Rs. 1000 to  Rs.1,500 , and a free LPG cylinder is snapped up by  restaurants and pavement stalls. Chief minister M karunandhi is quoted in the media as saying his govt. would continue the dole-out ‘as long as poor people existed’  in the state.

Karnataka food and civil supplies minister, Ms Shobha Karandlaje, refers to a food mafia, of transport contractors and food-grains depot managers, engaged in blackmarketing PDS supplies. Ration-card holders in the state number 1.6 crore families, of whom only 98.5 lakh are certified as BPL families. Even among the certified lot there are bogus card-holders.

The centre spends on food subsidy Rs.82,000 crores, much  of which doesn’t reach its intended beneficiaries  – BPL families. An obvious, if expensive, solution is computerizing PDS network for  transparency. Given the scale of wasteful food-subsidy estimated by various agencies, you don’t need to be an analyst to say that  much of the digital technology investment made on  PDS can be recovered through effective subsidy  administration.

Apart from putting an IT system in place, regular evaluation and monitoring of the subsidy administration, in co-operation with state governments, require the kind of outlay that calls for budgetary allocations. A social sector evaluation budget may well be an imperative, if we need to plug gaping holes in PDS, to evaluate how food subsidy released by the centre is put to work on field, and to monitor the social impact of food-subsidy. An elaborate system of performance reporting needs to be factored in,  at all stages, from procurement of food grains till they reach end-users of subsidized items.

Cross-posted from The Viewspaper


One Response

  1. Totally agree with you as to why many of us hold ration cards only as a proof of identity. May be it’s high time the government looked at this and decides as to which document will be considered as the proof of identity. The ration card should serve the purpose it was created for. Food subsidised from WFP to a local ration shop, is always a easy source of money for the contractors.

    But first, (pardon my ignorance) when was the below “poverty line” reviewed last? This piece might be useful; “As per the Government of India, poverty line for the urban areas is Rs. 296 per month and for rural areas Rs. 276 per month, i.e. people in India who earn less than Rs. 10 per day. As per GOI, this amount will buy food equivalent to 2200 calories per day, medically enough, to prevent death. At this level of earning, even in a poor country like India, survival on Rs. 10 per day is a nightmare! This actually translates to Rs. 3650 per year or US $ 75 per year.” these figures might have changed but I am sure they are still far beyond reality. So on what basis do the financial heads justify such a figure. Moreover this calculated figure is to get an individual just about enough food to survive (2200 cal per day). What about other necessities, where does one cook this, how about a shelter, some clothes, medication, education etc. Shouldn’t these figure in as well??

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