XI LOK SABHA DEBATES,   Session V (Monsoon) 

Thursday, August 07/Shravana 16, 1919 (Saka)



Type of Debate: SHORT DURATION DISCUSSIONS (RULE-193)

Title:	Regarding need for streamlining the Public Distribution System.
(Not Concluded)

TEXT :
 
16.02 hrs

MR.  CHAIRMAN:   Now, we shall take up the item no.  16 -Discussion Under Rule
1993 on the need for streamlining the Public Distribution System.


SHRI SRIBALLAV  PANIGRAHI  :  Madam, Chairperson, I rise to raise a discussion
on the need for streamlining the Public Distribution System under Rule 193.

	The Public Distribution System is a welfare measure of our  Government
meant to  serve  the  poor people and the common man.  The Public Distribution
System is in practice, in vogue in our country after Independence since  early
Fifties.  Of course, from time to time, it has undergone some changes here and
there in  different  States to suit to the local requirements.  The Government
of India also, from time time time, has brought out guidelines  to  streamline
the system.

	Ours being an agricultural country and a vast country, the entire food
requirement or requirement of essential commodities of  the  total  population
cannot be met by the Government through the Public Distribution System.

Only a small fraction, a small portion of the requirement of the people is met
through this  system.    Basically  it is meant to provide succour to the poor
people, to the needy people.  Whenever scarcity condition develops in any part
of the State, there also the State Government  strengthens  the  system.    In
urban  areas also when rice, wheat are not available in the required quantity,
the requirement of the people who work in industries and other poor people is
taken into  account  by the Government and accordingly provision is made.  So,
in this way, the interest of the vulnerable section of people, the poor people
is kept uppermost in mind while running the public distribution system.

	We have a network of more than 4.35  lakh  fair  price  shops  located
throughout  the  length  and  breadth  of  our country wherein rice and wheat,
together with sugar, are made available.  Of course, kerosene is also supplied
through the public distribution system.  There are six items which are treated
as essential commodities and are supposed to be made available in  our  public
distribution system.    They  are rice, wheat, sugar, kerosene, edible oil and
soap.  In early 1991-92 the PDS was further  strengthened  and  a  new  scheme
called Revamped Public Distribution System was started.  I think in as many as
1782 blocks  mostly  in  the  tribal areas this RPDS was provided for.  In the
RPDS I think  rice  at  the  rate  of  Rs.2  per  kg.    was  made  available.
Furthermore, some additional items like tea, soap, cloth, etc.  were also made
available.   But  last  year,  from  the 1st of June we have another system, a
modified public distribution system  known  as  Targeted  Public  Distribution
System, TPDS  has been started.  I think this was the brainchild of our former
Prime Minister, Shri Deve Gowda, who from the ramparts of Red  Fort  announced
it on  the  occasion of the last Independence Day.  Later on there was a Chief
Ministers' Conference to debate on it.  This was to be  implemented  from  the
Republic Day  of  1997.  But I do not think it was implemented from that date.
I think it was implemented from the 1st of June in different States.

	The highlights of the Targeted Public Distribution System are: `States
to identify families Below the Poverty Line, who would be issued  10  kgs.  of
foodgrains per month per family at prices less than the Central Issue Price' -
this is the main characteristic feature of the TPDS; the population above  the
poverty   line  (non-poor)  now  under  PDS  to  continue  to  receive  normal
entitlement at the full CIP; supply of foodgrains for the BPL at 10  kgs.  per
month  per  family  shall  be  guaranteed  to States by the Centre. Additional
quantities required by States would depend on the availability  of  stocks  in
the  Central  Pool.'  These  are  the  highlights  of  the new targeted public
distribution system, which is called `Targeted Public Distribution System'.

16.11 hrs (Shri Nitish Kumar in the Chair)

	This  Targeted  Public  Distribution  System  is  supposed  to  target
eradication  of  poverty but I believe, the way it has been formulated and the
way it is being implemented, instead of targeting at eradication  of  poverty,
it is targeting  at  politics.    As  I  said,  according to this, 10 kgs.  of
foodgrains are to be provided to a family below the poverty  line  per  month.
Naturally,  the  number  of  families  below  the  poverty  line  becomes very
important.

	The requirement of foodgrains varies from State to State.  There is  a
change in the procedure that was adopted earlier.  The average of the last ten
years  offtake  of  foodgrains by the respective States is now made the basis.
After that figure is obtained, the number of families below the  poverty  line
is to be  given  ten  kg.   of foodgrains per month.  This is clear from that.
The rest of  it  is  given  for  consumption  by  people  belonging  to  other
categories.   This  is in clear violation of item No.2 of the highlights, that
is, `population above the poverty line - non-poor - now under PDS to  continue
to receive  normal  entitlement  at  the full Central Issue Price'.  It is not
being followed.  This  is  very  clearly  a  violation  of  whatever  was  the
consensus  at  the  Chief Ministers' Conference; it is a violation of whatever
was the understanding given.

	What is the impact of this new public distribution system?    I  would
say, it  is  horrible.   I do not know why the Government of India is pursuing
this.  No State has welcomed it.  I would like the hon.  Minister to reply  to
this.   Which  are  the States that have welcomed this new public distribution
system, the Targeted Public Distribution System?  Here are Press clippings  to
show what  every  State  feels.    Bihar says, `It is horrible'; Orissa is the
worst hit State.

	With your permission, I would like to quote a few Chief  Ministers  or
Food  Ministers  of  the  States  on  what  they  say  about  the  new  public
distribution system. To start with, we have yesterday seen a scene here.

	Now, let us see what the Minister of Food of West  Bengal  Government,
Shri  Kalimuddin  Shams,  had  to  say about this Targeted Public Distribution
System. According to him,

        
        "Instead of helping people below the poverty line,  the  scheme
        was giving them more discomfort with less amount of food grains
        and that too, not at the expected cheap rates"

	His Oriya counterpart, Shri Habibullah Khan said,

        
        "The  Targeted  Public  Distribution  System has put the Orissa
        Government in a quandary".

He further says,

        
        "The  new  TPDS would only assist people below the poverty line
        in a nominal way for they will be given only 10 kg rice at  the
        rate of  Rs.4 a kg.  Whereas the Planning Commission estimates,
        being followed by the Union Government, put the number  of  BPL
        families  in  Orissa  at  32  lakhs, State surveys put it at 43
        lakhs." cent".

	Sir,  I  would like to say that the impact is horrible on the State of
Orissa. I will speak in detail about that a little later. Now, let us see what
the Governments of other States have to say on this.

	A report from Jaipur said that the Rajasthan Government was not  happy
with  the  scheme and had raised the matter with the Centre. Prof. Kamal Kabra
of the Indian Institute of Public Affairs and an expert on PDS, said that  the
new  scheme was inherently flawed in that it was "too centralised, too general
and too aggregative... the macro estimates which  the  Central  Government  is
following,  may  not  tally with the existing ground realities." Mr. Minister,
this is not a political view. I am only quoting what an  expert  had  said  on
this  scheme. You have ignored the ground realities altogether. Sitting in the
air-conditioned chamber, I do not know, how some economists brought  out  this
formula  on the basis of which the number of BPL families are estimated in the
States.

	Sir, then I will quote what Maharashtra's Secretary for Food and Civil
Supplies, J.M. Phatak said about the scheme.

        
        "The ceiling of 60.45 lakh BPL families imposed by  the  Centre
        was  inadequate  as  the  State  has already identified 43 lakh
        families with an annual income less than Rs.4,000 and  77  lakh
        families with an income less than Rs.11,000. A family is BPL if
        its income is less than Rs.15,000".

	Similar is the case with the Gujarat and Andhra  Pradesh  Governments.
Gujarat  spends  Rs.77 crore annually in providing 32.6 lakh BPL families 12.5
kg wheat at the rate of Rs.2 per kg as against 19.95 lakh households  proposed
by the Centre.    This has adversely affected the States.  Sir, all of us know
that it is the basic and essential need of the people.  Poor people  spend  75
per cent of their income on food.

	They  do  not  have  more than 25 per cent to spend on other items. No
State welcomes this Scheme.

	Now,  I  would like to come to the State of Orissa. Our State also has
vehemently protested against the implementation of this Scheme.  The  Minister
in  the  Orissa  Government  rushed  to  Delhi;  the  Chief  Minister also has
addressed several communications to the Minister of Food and also to the  hon.
Prime  Minister.  Further,  when the hon. Prime Minister, Shri Gujral, visited
Orissa, our Chief Minister discussed  this  matter  with  him  and  the  Prime
Minister  promised  and  assured him that the Government would sympathetically
consider the case of Orissa particularly when the State was very  poor  and  a
backward  State  and was still reeling under the severity of drought. Added to
this, floods have aggravated the situation further.

	Sir, hitherto, the State of Orissa was getting one lakh tonnes of rice
and 50,000 MT of wheat every month  from  the  Centre  against  the  quota  of
1,50,000 tonnes  of  foodgrains.    This was the allotted quota for the State.
This quantity was released to the State prior to this policy.  Now,  suddenly,
the State has become entitled to a paltry quantity of 35,000 MT of foodgrains.
I  do  not  know as to what is the logic and justification that has driven the
Government of India to fix this quantity of 35,000 MT of  foodgrains  for  our
State.   If we compare the intake of the State during the last ten years, then
this is a very unrealistic quantity for  a  State  like  Orissa.    Till  very
recently, the  intake  of the State was roughly about one lakh tonnes.  But if
you consider the position for ten years, then it would be  seen  that  earlier
there  was hardly any difference between the prices of the PDS to those of the
open market.  So, there was no pressure.  Now the Government  says  that  this
was the  average of the intake of the last ten years.  How unrealistic is this
estimate!

	Sir,  now the total allocation for the State would be 4.26 lakh MT per
year and the monthly allocation thus comes to 35,000 MT. Out of this 4.26 lakh
MT, 3.81 lakh MT would be meant for the BPL people,  the  Below  Poverty  Line
people;  and  the rest 45,000 MT would be meant for the ABL, the Above Poverty
Line people. This is the allocation for the whole year. So, hardly anything is
left for the people Above the Poverty Line (ABL).

	Sir, on the other side of it, the Government of Orissa, on its own, is
running  a programme called the `Liberation from Hunger' programme. Out of 315
blocks in the State, this scheme has been extended to 143 blocks.  Under  this
scheme,  ten  Kg.  rice  per  family  is  given at the rate of Rs. 2/- per kg.
Another ten Kg. is given at the rate of Rs. 5.12 per kg.  Five  Kg.  wheat  is
given  at  the rate of Rs. 3.78 per Kg. For the next 30 Kg. they depend on the
open market availability. On the lower side,  the  monthly  requirement  of  a
standard  family  is  55 Kg and this is how it is given. A family has to spend
Rs. 330 per month on rice and wheat.

	Now, according to the Deve Gowda formula, the Bhoomiputra formula, how
does the much publicised TPDS help?  Ten Kg.  of rice is given at Rs.  2/- per
Kg.  The people would have to purchase the rest of the quantity from the  open
market, which sells at Rs.  8/- per Kg.  So, in all, the consumer has to spend
Rs.  380  per  month and so the poor people would have to spend Rs.  50/- more
per family under this Scheme.
	Thus, there is a difference of Rs.50 per month for a poor family. This
is the outcome, Mr. Minister of your new TPDS. It is horrible. I would request
him  to  kindly  withdraw  this  scheme  forthwith.  I  will  be  happy  to be
contradicted. I have given the figures.

	There  is  another  disastrous effect of TPDS on market prices of rice
and wheat, etc. What they are giving is, about 35,000 metric tonnes,  of  only
rice  and not a grain of wheat. There is so much of publicity for the last ten
years for consuming wheat. So Orissa fell in line with that and they have been
lifting 55,000 tonnes every month. There are about 6,400  chakkis  in  Orissa,
they  will  all remain idle now. Flour mills are there but they belong to rich
people. But people who own chakkis are not so rich. For  wheat  they  have  to
depend  on  Haryana and Punjab. Some traders are also there who are exploiting
the situation. That is the situation there in Orissa.

	I  would  now  touch upon the system of fixation of estimate of people
living below poverty line. How they do it? A door to door survey was conducted
by  DRDA.  As  you  know,  Sir,  DRDA  is  the  agency  in  the  district  for
implementation  of all poverty alleviation programmes. They prepared a list of
beneficiaries  for  several  anti-poverty  programmes.  According   to   them,
percentage  wise,  78 per cent people and in terms of family, 43 lakh families
are entitled to come under Below Poverty Line category.

	But according  to  Prof.  Lakdawala and one other expert, on the basis
of sample survey, held that only 32 lakh families are entitled to  come  under
BPL category.    That  is  why, I said, that it does not tally with the ground
realities.  Ground  realities  are  something  else,  but  what  they  say  is
something else.    This  is  the  disastrous  situation  Orissa has landed in.
Orissa  cannot,  effectively,  meet  the  situation  arising  out  of  natural
calamities because of this type of things happening there.  The Government of 
India  will have to be held responsible if anything happens there, if any 
starvation death takes place  there.    Wherefrom  would  Orissa  get 
foodgrains to run special feeding programmes?

	We  have  a  Prime  Minister  who  first  agrees  to  take  action and
thereafter he forgets everything.  This is the type of situation prevailing in
the country.  I said that the requirement of the entire population  cannot  be
met.   In  1974 I had the fortune or misfortune of having become Orissa's Food
and Civil Supplies Minister.  I had taken a lot  of  pain  to  streamline  the
public distribution system.

	So, this way, as I said, release of sugar, rice and wheat, etc.  has a
salutary effect on the open market price.

	It caters  to  the requirements of the poor people to some extent.  At
the same time it has some effects.  If PDS is properly run, it  regulates  the
open market price.  That way also, the Government has failed.

	Now,  I come to the anomaly in the allocation of foodgrains to various
States and say how discriminatory it is. As far as  the  Government  of  India
policy  is  concerned,  there  is  wide  discrimination  in  the allocation of
foodgrains from State to State. After meeting the needs of the  below  poverty
line families of the States, the allocation of the remaining foodgrains to the
above poverty line population is having wide variation. It is observed that as
against  the all India annual average of 995 kg per capita, the annual average
per capita in respect of the States getting the above poverty line  allocation
is  308 kg of foodgrains. Against this, Orissa gets a meagre quantity of 13.25
kg of cereals annually in the background of 995 kg per capita in  the  country
...(Interruptions)

SHRI V.V. RAGHAVAN (TRICHUR):  Mr. Chairman, Sir, there should  be  some  time
limit ...(Interruptions)

MR.  CHAIRMAN:  Actually, he is the Mover of this Discussion.

	Shri Sriballav Panigrahi, you have taken 30 minutes.   Now,  I  think,
you should wind up your speech.

SHRI SRIBALLAV PANIGRAHI :  Sir, I will take another ten minutes.

MR. CHAIRMAN:   Perhaps,  ten minutes will be too much.  Please try to wind up
in five minutes.

SHRI SRIBALLAV  PANIGRAHI :  I was mentioning as to how there is an anomaly in
the allocation of foodgrains to various States.  It is highly discriminatory.

	In Orissa, we have 64 lakh families coming  under  PDS  and  they  are
spending  about  Rs.100 crore from their own funds. It will need another Rs.30
crore. That is why,  Orissa's  legitimate  demand  of  getting  the  share  of
subsidised foodgrains has to be taken into consideration. All economic indices
rank Orissa as one of the poorest States. Under such conditions, food security
is  to  be equated with security to life. Under the TPDS, the objective of the
Government of India, is to  provide  minimal  nutritional  level  and  prevent
prolonged malnutrition. It is, therefore, important that the Government should
not  rely  upon  the  statistical  data given by Prof. Lakadawala, etc. and it
should rely upon the DRDA data.

	The Orissa Government was earlier getting one lakh tonnes of rice  and
50,000  tonnes  of  wheat  and  that has to be restored. That will be fair and
proper, just and equitable for the State of Orissa.

	Mr. Chairman, Sir, I will conclude my speech by referring  to  one  or
two points.

	The hon.  Minister may say that the Minister from Orissa came and  the
Centre is  giving  20,000 tonnes of additional quantity of wheat.  But at what
economic rate is the Centre giving this additional quantity of rice ?  I  know
what answer he will give.

	What does  the Chief Minister of Orissa say about this?  Historically,
the PDS has been an effective  instrument  of  market  intervention  with  the
purpose of maintaining price stability.  What is important is at what economic
rate the Orissa Government is getting this additional quantity of wheat, which
the Centre  has been kind enough to give.  In Orissa, the price of rice in the
open market  will  be  around  Rs.8  or  Rs.9  per  kg.     There   is   price
differentiation.  There are four types of prices the Centre is having.  One is
for 10  kg.   quantity; another for the revamped PDS, which is something less,
that is 50 paise; another for issue price and then there is the economic rate.
The Central Government wants to be liberal by issuing foodgrains  at  economic
rate.

	The  other  day, when a delegation consisting of MPs from the State of
Orissa met him, the Prime Minister said:  "There is no problem.  There  is  no
dearth of  wheat.  We will give you sufficient quantity." But the question is:
at what rate is the Centre giving it now and at what rate were we  getting  it
earlier?   That  is  the main point, which has to be taken into consideration.
Because of this new approach, in Orissa the prevailing price of rice and wheat
in the open market will be enhanced.




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