A smart way to pick up rations under PDS recommended

ANILKUMAR NARAYAN

NEW DELHI, JANUARY 7: The Tenth Plan Working Group on Public Distribution System and Food Security has recommended introduction of smart-card system in the form of a credit or debit card instead of the existing ration cards to eliminate the rampant corruption in the PDS in the country.

According to the recommendations, the food credit cards may be used by the poor to buy foodgrains at subsidised rates from the open market and the retailers may claim the subsidy from the government later, say once in a month.

Though the issue cost of credit cards is higher than the existing ration cards, the running costs is calculated to be lower with respect to the costs incurred in maintaining the fair price shops (and the entire overhead costs). The group says that it will partly compensate for the initial costs of setting up a leakage proof card system using smart card technology.

It further recommends that the existing credit card companies can be induced to set up and run the system at a cost in return for advertisement rights to this social service.

The working group also suggests that additional safety features such as identifying characteristics of the card holder to wipe out corruption. Also periodic validation and re-charging can be built in to the system which will be very effective and non-tradable like ration cards or much advanced food stamps which already exist in states like Andhra Pradesh.

The card system can also have the in-built flexibility of changing over from a food subsidy to an income transfer system if there is a subsequent change in the policy. The group also suggests that a different subsidy rate can be specified for different set of people according to their eligibility.

The card system can also be integrated with a food-for-work programme without incurring the additional administrative and logistic costs of transporting food to each area where there is need to provide work. Payment for the work would be down by incrementing the food credit of the worker.

Under the existing system, it is well-known that Fair Price Shop owners declare on paper that they have sold a certain quantity of food to the poor at subsidised prices but actually make a big profit by selling the foodgrains at market prices. In a study conducted by the Tata Economic Consultancy Services the extent of diversion of commodities under PDS was assessed to 36 per cent of wheat, 31 per cent of rice and 23 per cent of sugar.