(a) whether Tata Economic Consultancy Service was engaged in 1997 to assess the extent of
diversion of foodgrains, sugar and edible oils from P.D.S. in the country;
(b) if so, the details of the assessment made by TECS; and
(c) the reaction of the Government thereon?
MINISTER OF CONSUMER AFFAIRS AND PUBLIC DISTRIBUTION
( SHRI SHANTA KUMAR )
(a),(b) & (c) : A statement is laid on the Table of the House.
STATEMENT REFERRED TO IN REPLY TO PARTS (a),(b) & (c) OF STARRED QUESTION NO. 544 FOR ANSWER IN
THE LOK SABHA ON 04-05-2000.
(a) & (b): Yes, Sir. The Tata Economic Consultancy Service (TECS) was engaged in the year
1997 for a study to assess the extent of diversion of foodgrains, sugar and edible oil from
Public Distribution System (PDS) in the country. At the national level the diversion is
estimated at 36% in case of wheat, 31% in case of rice, 23% in case of sugar and 55% in case
of edible oils.
The TECS study identified major causes of diversion and suggested remedial measures to
curb diversion. The major causes for diversion cited in the study are bulk diversion from
godowns, bogus units in ration cards, underweighment at various levels, illiteracy of consumers,
low profit margins for Fair Price Shops (FPS) owners, floating population, fictitious
distribution agencies, non-availability/irregular supply and variation in entitlement and
inferior quality with foreign particles. The study also suggested certain remedial measures
to curb diversion like avoiding monthly variation in allocations, minimising storage and transit
loss, avoiding distribution by agencies other than FPS, weeding out bogus units in ration
cards/bogus ration cards, improving communication between FCI and State Governments/ FPS,
increase in profit margins of FPS, excluding the affluent sections from the purview of PDS
gradually.
(c) Public Distribution System is implemented under the joint responsibility of the
Central and State Governments/UT Administrations. The Central Government is responsible for
procurement, storage and transportation of the PDS commodities up to the central godowns and
making them available to the States. The responsibility for distribution to the consumers
through the Fair Price Shops and administration of the PDS rests with the State Governments
and UT Administrations. The matter of diversion of PDS commodities was taken up with the
State Governments. Many states, while disagreeing with the estimates of diversion brought
out in the study, recognised that leakages do take place. Following steps have been
initiated by the Government to check leakages and curb diversion of foodgrains.
(i) State Governments have been requested to closely monitor PDS at the Fair Price Shops
(FPSs) and other levels and to make arrangement for distribution of PDS commodities in a
transparent and accountable manner by involvement of Panchayati Raj Institutions (PRIs) etc.
in implementation of PDS. It has also been impressed upon the State Governments that
publicity regarding allotments to FPS should be given through the local media. The fair
price shops should be asked to display on the notice boards the allotment they have received
for the month along with closing balance. They have also been asked to eliminate bogus ration
cards and initiate action against erring FPS owners under Section 3 of Essential Commodities
Act, 1955.
(ii) State Government have been advised that they can provide for obligations under Section
3 of Essential Commodities Act, 1955 to penalise the violation of the procedure relating to
display of information by the FPS owner. The fair price shop should open on all prescribed
days and complaints regarding closure during working hours should be addressed seriously.
Ration cards should be issued in a time bound and transparent manner by the authorities and
the administrative system should be accountable to the public bodies in this regard. All
efforts should be made to weed out the bogus ration cards in the States.
(iii) The Government of India has set up Public Grievances` Redressal Cell in the Department
of Public Distribution to attend to the complaints relating to any aspect of the Department`s
functioning including the Public Distribution System. The Public Grievances` Redressal Cell
has been provided with an independent telephone, fax and e-mail facilities in addition to a
facilitation counter to receive public complaints. In order to attend to public complaints
on priority, the Department has also designated the senior officers of the Department as
members of flying squad for conducting immediate and prompt enquiry whenever the need for it is
felt. The Government of India also has appointed Area Officers to States/UTs to monitor the
functioning of Public Distribution System including the complaints of diversion.