PDS has had a spectacular run. That may not last

Context: Its golden chapter was scripted in an environment of low global commodity prices and surplus domestic foodgrain production. That party is over, even as food inflation is back.

Why was the 2020-21 year very important for the agricultural sector? 

(1) In 2020-21, Agriculture was the only sector to grow at 3.3%, even as the economy overall contracted by 4.8%. The farm sector added 11 million when the rest of the economy shed 15 million jobs from 2019-20 to 2021-22. 

(2) Till 2015-16, only a handful of states — Kerala, Tamil Nadu, Andhra Pradesh, Chhattisgarh, Orissa, Madhya Pradesh, and West Bengal had a well-functioning PDS. In 2020-21, India’s public distribution system (PDS) reforms were seen in Bihar, Jharkhand and Uttar Pradesh (UP). 

As per the NITI Aayog’s National Multidimensional Poverty Index, the offtake of rice and wheat significantly increased both at the all-India level and for the three poorest states Bihar, Jharkhand and Uttar Pradesh (UP). 

(3) The PDS was expanded beyond rice and wheat in some states. For example, Kerala leveraged its PDS network to supply free food kits to all ration card holders during the 2020 Covid lockdown. 

(4) Unlike the 1943 Bengal or 1966-67 Bihar famines, this time India was able to avert widespread starvation during the Covid-19 pandemic. On 2020-21, the PDS system turned out to be the only effective social safety net amid massive job and income losses during the pandemic.  

What were the factors responsible for improved functioning of the PDS system in 2020-21? 

The National Food Security Act (NFSA) along with PMGKAY has led to a massive jump in grain offtake through the PDS.  

(1) The NFSA legally entitled 5 kg of grain per person per month at highly subsidised rates of Rs 2/kg for wheat and Rs 3/kg for rice up to 75% of India’s rural and 50% of the urban population.  

(2) The Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) scheme was launched in the wake of the Covid-induced economic disruptions. It mandated an extra 5 kg grain per person per month free of cost to the PDS beneficiaries. 

Both the schemes led to increase in the offtake of the food grain in the poorer states like UP, Bihar and Jharkhand. The offtake of these states increased from 21.6% in 2012-13 to 28.6% in 2021-22. 

What are the upcoming challenges to India’s food security?  

This year, the procurement of food grain is likely to be short. The wheat procurement can be low due to poor crop yield owing to bad weather in March 2022. The rice procurement can be challenged due to disruption in supply of fertilisers in the Kharif season. 

The Food Corporation of India’s stocks can probably sustain the annual offtake for NFSA. But PMGKAY offtake can see challenges. 

At present, the global food inflation is posing a challenge. The PDS is mandated to protect ordinary people from extraordinary price rises.  

Source: The post is based on the article “PDS has had a spectacular run. That may not last” published in The Hindu on 27th April 2022.