Reforming India’s Public Distribution System (PDS)

Source: The post Reforming India’s Public Distribution System (PDS) has been created, based on the article “Public Distribution System must be reformed to fix leakage, invest in farming” published in “Indian Express” on 11th November 2024

UPSC Syllabus Topic: GS Paper3-Public Distribution System objectives, functioning, limitations, revamping; issues of buffer stocks and food security.

Context: The article discusses reforming India’s Public Distribution System (PDS). It highlights issues like high leakages (28%), excessive coverage (57%), and poor nutritional outcomes. It suggests cash transfers, reduced subsidies for the non-poor, and promoting diverse, nutritious food through reformed PDS.

For detailed information on Impact of the National Food Security Act 2013 on PDS leakages read this article here

What is the Problem with Free Food Distribution?

1. Excessive Coverage: Free food covers 57% of India’s population under PMGKAY, though only 12.9% live in extreme poverty (below $2.15/day, World Bank 2022). Such broad coverage strains resources unnecessarily.
2. High Leakages: 28% of allocated grains (19.69 MMT) do not reach beneficiaries, causing an annual loss of Rs 69,108 crore (HCES 2022-23). States like Arunachal Pradesh and Nagaland report the highest leakages.
3. Limited Impact on Poverty Reduction: Large-scale subsidies contradict claims of reducing poverty for 248 million people (NITI Aayog, 2024).
4. Nutritional Gaps: Despite free food, 35.5% of children under five are stunted, 19.3% are wasted, and 32.1% are underweight (NFHS 2019-21). Spending on pulses and vegetables has also declined.
5. Inefficient Use of Resources: Funds spent on free food could be redirected toward agri-R&D, skilling, and climate-resilient farming for higher returns.

For detailed information on Arguments for and against reducing food subsidies read this article here

What Reforms are Suggested for the PDS?

1. Targeted Support: Reduce PDS coverage to the extremely poor (12-15% of the population). Others can pay half the Minimum Support Price (MSP).
2. Direct Cash Transfers: Provide direct cash transfers to beneficiaries to plug leakages.
3. Nutrition Hubs: Convert some Fair Price Shops into hubs offering diverse foods like eggs, pulses, millets, and fruits. Use digital food coupons to make these accessible.

4.Invest in Agriculture: Use savings from reduced subsidies to invest in climate-resilient agriculture and rural development.

Conclusion

The PDS needs urgent reform to reduce leakages, improve nutritional outcomes, and save resources. Targeted support, better technology, and diversification of food distribution can make the system more effective and sustainable.

Question for practice:

Discuss the challenges with India’s Public Distribution System (PDS) and the reforms suggested to address these issues.