A group of economists have challenged the government move to scale down the ambit of the food security initiative, arguing that leakages in the public distribution system (PDS) are not as bad as an official committee has concluded.

A ‘high-level committee on restructuring of FCI’, headed by Shanta Kumar, submitted its report to prime minister Narendra Modi last month, recommending a curtailment of PDS. For this, it argued, on the basis of intricate data analysis, that there were huge leakages and pilferages making the PDS inefficient.

“There have been several studies earlier which indicated large leakages in PDS. In a performance evaluation report of the Targeted PDS, the Planning Commission (2005) noted that 58 percent of subsidized grains distributed through TPDS do not reach BPL families. The CACP Discussion Paper 2 (2012) on National Food Security Bill points to leakages in PDS to the tune of 54.1 percent in 2004-05, and 40.4 percent in 2009-10, based on NSSO data. Our estimates based on NSSO data of 2011 indicate a leakage of about 46.7 percent (Annexure 4). In many States leakage ranges from 70 to 90 percent.”

However, noted economists Jean Dreze and Reetika Khera told the press on Tuesday that the leakages were actually coming down over the years, and stood at 42 percent in 2011-12 – down from 54 percent in 2004-05, based on analysis of publicly available data. They said this reduction was largely thanks to reforms initiated by various state governments, leading to a dramatic plugging of loopholes – Bihar, for example, curtailed its PDS leakages from 90.9 percent in 2005-05 to 24.4 percent in 2011-12, not to mention the famous success story of Chhattisgarh where the figure came down from 51.8 percent to 9.3 percent in the same period.

Indeed, the India Human Development Surveys (IHDS) of 2004-05 and 2011-12 place the leakages at 49 percent and 32 percent.
Going by the National Sample Survey (NSS) figures for 2011-12, Dreze and Khera pointed out, the calculation goes like this:

*PDS per capita per month (kg), rice+wheat/rural+urban: 2.06
*Population    (million): 1210   
*(a) Total PDS purchase (lakh tonne): 301
*(b) PDS offtake, including special allocations (lakh tonne): 514

This leaves a gap of 42 percent, whereas the official report considers only the total number of ration card holders, instead of the total population, to arrive at a higher estimate of PDS diversions.

Himanshu, from the centre for economic studies and planning at the Jawaharlal Nehru University, termed the PDS as the single biggest public programme accessed by the largest number of people, and in this light called the conclusions of the official report “wishy-washy”, “data fudging” and the result of a “motivated agenda rather than serious, academic work”.

Sonalde Desai, senior fellow at National Council of Applied Economic Research (NCAER), New Delhi, and, professor of sociology at University of Maryland (which supports IHDS), highlighted the fact that more and more people were using PDS now.