State links PDS to UID to plug leakages in food supplies but gaps remain
Madhya Pradesh has opted for the technologically most sophisticated—and costliest—method for revamping its public distribution system (PDS). It is one of a handful of states that is trying to ensure that subsidised food reaches the segment it is meant for, the poorest of the population or those below the poverty line (BPL). But the route it has taken is different from the rest and marks a couple of firsts in the efforts to streamline the system.
The big innovation is linking PDS with the controversial unique identity project headed by Nandan Nilekani which aims to give a number to every resident of India. The other is its decision to hire a consortium of private ICT companies to computerise the food supply chain, all of which adds up to a steep bill: a minimum Rs 400 crore. All the same, analysts think the project could still leave a gap in the “last mile” connection, between the fair price shop (FPS) and the actual beneficiary.
With half its population in the BPL category, officials of the MP Food and Civil Supplies department say that the cost of the revamp would be more than offset by plugging the leaks in the system and weeding out fake ration cards. In the last five years, the state has cancelled 2.49 million cards out of a total 14.6 million cards. But even so, the authorities have not been able to come to grips with the problem of fake cards and leakages in the pipeline. Hence, the technology-driven solution, they explain.
Talking to Down To Earth, Dipali Rastogi, director, Food, Civil Supplies and Consumer Protection, outlines how the new scheme works. All those entitled to a ration card will first have to get themselves registered with the Unique Identification Authority of India (UIDAI) for the UID number or Aadhaar (see ‘Long haul to a ration card’). Once this is in hand, families are issued a bar-coded ration card and also tamper-proof coupons that entitle them to their allotted food quota.
The coupons are issued by the vendor appointed for a certain area and have elaborate features to ensure that these cannot be duplicated or misused. The coupon will have two parts. One part would have to be sent back by the FPS owner to the vendor who will tally the bar codes and other features and send his report to the district administration. The district officials will in turn update the state government about disbursals.
The expenditure of Rs 400 crore is over a five-year period, and Rastogi believes it is money well spent because “we aim to save around Rs 400 crore that is incurred as losses due to duplication of cards and fraudulent practices”. That does not really explain why Madhya Pradesh has chosen to rope in the private consortium led by HCL Infosystems, one of India’s top hardware and ICT services company. The rollout of approximately 50 million UID numbers is touted by HCL as one of the biggest such exercises and is expected to be completed by March next year after the verification and de-duplication process.
“This watertight process will help eliminate misuse of subsidy and any irregularities through analysing accurate allocation that is linked to actual utilisation,” according to J V Ramamurthy, president and COO, HCL Infosystems, speaking at the launch of the scheme in August 2010.
However, all other states, some of which have used technology in a creative manner to computerise the PDS chain, have depended on the expertise and infrastructure of the public sector National Informatics Centre (NIC) and saved themselves a packet. Among these are Chhattisgarh and Gujarat, the latter having a system of coupons that is identical to the one being rolled in Madhya Pradesh. Chhattisgarh showed the way in 2007 when it set in place a computerised system from grain godowns to food trucks to improve efficiency of the supply chain through real time reporting of stock lifting and disbursals. It was a path-breaking scheme that was rolled out by then food secretary Alok Shukla and current joint director, food and civil supplies department, Rajeev Jaiswal.
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