Lok Sabha Question No. 1464 (UNSTARRED), answered on 2017-07-25
Subject: Making PDS Transparent
Ministry: CONSUMER AFFAIRS, FOOD AND PUBLIC DISTRIBUTION
Asked by: RAJESHBHAI NARANBHAI CHUDASAMA, CHANDU LAL SAHU

## GOVERNMENT OF INDIA

## MINISTRY OF CONSUMER AFFAIRS, FOOD & PUBLIC DISTRIBUTION

## DEPARTMENT OF FOOD AND PUBLIC DISTRIBUTION

## LOK SABHA UNSTARRED QUESTION NO. 1464

## TO BE ANSWERED ON 25 th  JULY, 2017

## MAKING PDS TRANSPARENT

## 1464. SHRI RAJESHBHAI CHUDASAMA: SHRI CHANDU LAL SAHU:

Will the Minister of CONSUMER AFFAIRS, FOOD AND PUBLIC DISTRIBUTION miHkksDrk ekeys] [kk| vkSj lkoZtfud forj.k ea=h be pleased to state:

- (a)   whether  the  Union  Government  has  taken  several  steps  during  the  last three years to make Public Distribution System (PDS) transparent and consumer friendly, if so, the details and the outcome thereof;
- (b)   whether the Union Government has fixed any target to ensure PDS leakage proof and if so, the details thereof along with the progress made in this regard so far;
- (c)   whether any technology upgradation has been undertaken by the Government to reduce the leakage in the distribution of foodgrains, if  so,  the details thereof;
- (d)   the steps the Government has taken based on the recommendations of the Shanta Kumar Committee report on improving efficiency of FCI; and
- (e)   the steps taken to improve the quality check of the foodgrains procured by
- FCI?

## A N S W E R

MINISTER OF STATE FOR  CONSUMER AFFAIRS, FOOD & PUBLIC DISTRIBUTION

(SHRI C. R. CHAUDHARY)

(a)  to  (c)  For  effective  implementation  of    Public  Distribution  System  (PDS), Government  is  implementing  of  a  scheme  on  'End-to-end  Computerization  of Targeted Public Distribution System (TPDS) Operations'. The component-I of the scheme comprises digitization of ration cards/beneficiary and other databases, online  allocation,  computerization  of  supply-chain  management,  setting  up  of transparency  portal  and  grievance  redressal  mechanisms.  Besides,  Central Govt.  has  also  asked  States/UTs  to  opt  for  any  of  the  two  models  of  Direct Benefit  Transfer  -  Cash  transfer  of  food  subsidy  into  the  bank  account  of beneficiaries or Fair Price Shop (FPS) automation, which involves installation of Point  of  Sale  (PoS)  device  at  FPS,  for  authentication  of  beneficiaries  and electronic capturing of transactions. The cash transfer of food subsidy is being implemented  in  3  UTs  namely  Chandigarh,  Puducherry  w.e.f.  1-9-2015  and partially  in  Dadra  &  Nagar  Haveli  w.e.f.  1-3-2016.  So  far,  more  than  2,45,706 FPSs  are  automated  across  the  country.  A  Statement  showing  the  progress made under 'End-to-end Computerisation of TPDS Operations' is at Annexure-I.

- (d): The steps taken by the Government of India on the recommendation of the Shanta Kumar Committee (HLC) is at Annexure-II.
- (e): Instructions  are  issued  from  time  to  time  to  State  Governments  and FCI as summarised below:-
- I. Only  good  quality  foodgrains  free  from  insect  infestation  and conforming to Food Safety Standards are to be issued under TPDS
- and other welfare schemes.
- II. Ample  opportunities  are  to  be  provided  to  the  officials  of  the State/UT Governments to inspect the stocks prior to lifting from FCI godowns.  States/UTs may ensure that officers not below the rank of  Inspector  are  deputed  for  inspection  of  the  foodgrains  before their lifting from FCI godowns.
- III.   The  samples  from  the  stocks  to  be  issued  to  States/UTs  under TPDS and other welfare schemes are to be drawn jointly and sealed by  the  officers  of  the  State  Governments  and  FCI  for  displaying them  at  the counter  of Fair Price Shops  for the benefit of consumers. A duplicate sealed sample  is to be kept with concerned FCI depots / godowns for any future reference.  In case the  State  agencies  are  taking  delivery  from  FCI  and  thereafter delivering the same to the FPS dealers, they should also follow the same procedure as is being followed by FCI for issuing the jointly sealed samples.
- IV.   Type  sealed  samples  should  be  displayed  by  the  FPS  dealers  in their shops, so that the ration card holders /consumers may check the quality of foodgrain supplied to them.  FPS dealers should also maintain  a  complaint  register  to  enable  the  consumers  to  lodge their complaints / opinions, in case the quality of foodgrains issued
- is not of proper quality standards.
- V. State/UT  Governments  to  ensure  that  during  transportation  and storage at different stages in the distribution chain, the foodgrains retain  the  required  quality  specifications.    For  this  purpose,  all required measures  are  to  be  taken  for scientific storage of foodgrains so that there is no deterioration in their quality at any stage till they are delivered to the ration card holders /consumers.
- VI.   Where decentralized procurement is in operation, State Government  should  follow  the  same  procedure  of  inspection  of foodgrain  stocks  and  joint  sealed  sampling  to  ensure  that  the quality of foodgrains issued under TPDS and other welfare schemes meet the desired standards under the Food Safety Standards Act.

****

## ANNEXURE-I

## ANNEX  REFERRED  TO  IN  REPLY  TO  PARTS  (a)  to  (c)  OF  UNSTARRED QUESTION NO 1464 TO BE ANSWERED ON 25 TH  JULY, 2017 IN LOK SABHA.

## Status of End-to-End Computerization of PDS Operations

(as on 18.07.2017)

| Sl.   | States/UTs        | Digitization of Ration Cards   | Aadhaar Seeding in RCs   | Online Allocation of Foodgrains   | Computerization of Supply-chain Management   | Transparency Portal   | Online Grievance Redressal   | Toll Free Helpline Numbers   | Operational ePoS   |
|-------|-------------------|--------------------------------|--------------------------|-----------------------------------|----------------------------------------------|-----------------------|------------------------------|------------------------------|--------------------|
| 1     | Andhra Pradesh    | 100%                           | 100%                     | Implemented                       | Implemented                                  | Yes                   | Yes                          | Yes                          | 28,643             |
| 2     | A& N Islands      | 100%                           | 100%                     | Implemented                       | Implemented                                  | Yes                   | Yes                          | Yes                          | 373                |
| 3     | Arunachal Pradesh | 100%                           | 45%                      | -                                 | -                                            | Yes                   | -                            | Yes                          | 0                  |
| 4     | Assam             | 100%                           | 0%                       | Implemented                       | -                                            | Yes                   | Yes                          | Yes                          | 0                  |
| 5     | Bihar             | 100%                           | 69%                      | Implemented                       | Implemented                                  | Yes                   | Yes                          | Yes                          | 59                 |
| 6     | Chandigarh        | 100%                           | 100%                     | NA                                | NA                                           | Yes                   | Yes                          | Yes                          | 0                  |
| 7     | Chhattisgarh      | 100%                           | 98%                      | Implemented                       | Implemented                                  | Yes                   | Yes                          | Yes                          | 12,176             |
| 8     | D& N Haveli       | 100%                           | 96%                      | Implemented                       | Implemented                                  | Yes                   | Yes                          | Yes                          | 62                 |
| 9     | Daman& Diu        | 100%                           | 100%                     | Implemented                       | Implemented                                  | Yes                   | Yes                          | Yes                          | 51                 |
| 10    | Delhi             | 100%                           | 100%                     | Implemented                       | Implemented                                  | Yes                   | Yes                          | Yes                          | 17                 |
| 11    | Goa               | 100%                           | 91%                      | Implemented                       | Implemented                                  | Yes                   | Yes                          | Yes                          | 42                 |
| 12    | Gujarat           | 100%                           | 95%                      | Implemented                       | Implemented                                  | Yes                   | Yes                          | Yes                          | 17,197             |
| 13    | Haryana           | 100%                           | 86%                      | Implemented                       | Implemented                                  | Yes                   | Yes                          | Yes                          | 9,507              |
| 14    | Himachal Pradesh  | 100%                           | 91%                      | Implemented                       | Implemented                                  | Yes                   | Yes                          | Yes                          | 4,176              |
| 15    | Jammu and Kashmir | 100%                           | 45%                      | Up to TSOs                        | -                                            | Yes                   | -                            | Yes                          | 0                  |
| 16    | Jharkhand         | 100%                           | 97%                      | Implemented                       | Implemented                                  | Yes                   | Yes                          | Yes                          | 23,115             |
| 17    | Karnataka         | 100%                           | 100%                     | Implemented                       | Implemented                                  | Yes                   | Yes                          | Yes                          | 6,336              |
| 18    | Kerala            | 100%                           | 98%                      | Implemented                       | -                                            | Yes                   | Yes                          | Yes                          | 0                  |
| 19    | Lakshadweep       | 100%                           | 98%                      | -                                 | NA                                           | Yes                   | Yes                          | Yes                          | 0                  |
| 20    | Madhya Pradesh    | 100%                           | 91%                      | Implemented                       | Implemented                                  | Yes                   | Yes                          | Yes                          | 22,401             |
| 21    | Maharashtra       | 100%                           | 87%                      | Implemented                       | Implemented                                  | Yes                   | Yes                          | Yes                          | 41,085             |
| 22    | Manipur           | 100%                           | 22%                      | Partial                           | -                                            | Yes                   | Yes                          | Yes                          | 0                  |
| 23    | Meghalaya         | 100%                           | 0%                       | -                                 | -                                            | Yes                   | Yes                          | Yes                          | 0                  |
| 24    | Mizoram           | 100%                           | 45%                      | Implemented                       | -                                            | Yes                   | Yes                          | Yes                          | 0                  |
| 25    | Nagaland          | 100%                           | 7%                       | -                                 | -                                            | Yes                   | Yes                          | Yes                          | 0                  |
| 26    | Odisha            | 100%                           | 88%                      | Implemented                       | Implemented                                  | Yes                   | Yes                          | Yes                          | 13,305             |
| 27    | Puducherry        | 100%                           | 100%                     | NA                                | NA                                           | Yes                   | Yes                          | Yes                          | 0                  |
| 28    | Punjab            | 100%                           | 97%                      | Implemented                       | -                                            | Yes                   | Yes                          | Yes                          | 0                  |
| 29    | Rajasthan         | 100%                           | 95%                      | Implemented                       | -                                            | Yes                   | Yes                          | Yes                          | 25,617             |
| 30    | Sikkim            | 100%                           | 82%                      | Implemented                       | -                                            | Yes                   | Yes                          | Yes                          | 20                 |
| 31    | Tamil Nadu        | 100%                           | 100%                     | Implemented                       | Implemented                                  | Yes                   | Yes                          | Yes                          | 34,773             |
| 32    | Telangana         | 100%                           | 100%                     | Implemented                       | Implemented                                  | Yes                   | Yes                          | Yes                          | 4,464              |
| 33    | Tripura           | 100%                           | 98%                      | Implemented                       | Implemented                                  | Yes                   | Yes                          | Yes                          | 25                 |
| 34    | Uttar Pradesh     | 100%                           | 77%                      | Implemented                       | -                                            | Yes                   | Yes                          | Yes                          | 2,254              |
| 35    | Uttarakhand       | 100%                           | 90%                      | Implemented                       | -                                            | Yes                   | Yes                          | Yes                          | 8                  |
| 36    | West Bengal       | 100%                           | 62%                      | Implemented                       | Implemented                                  | Yes                   | Yes                          | Yes                          | 0                  |
|       |                   | 100%                           | 78.67%                   | 30                                | 20                                           | 36                    | 34                           | 36                           | 2,45,706           |

## ANNEXURE-II ) OF THE UNSTARRED

## ANNEXURE REFERRED TO IN REPLY TO PART ( d QUESTION NO. 1464 FOR ANSWER ON 25.07.2017 IN THE LOK SABHA

Major Recommendations of High Level Committee and Action Taken thereon

|   Sl. No. | Recommendations                                                                                                                                                                                                                                                                             | Action Taken                                                                                                                                                                                                                                                 |
|-----------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|         1 | FCI to hand over all procurement operations of wheat, paddy and rice to states that have gained sufficient experience in this regard and have created reasonable infrastructure for procurement. These States are Andhra Pradesh, Chhattisgarh, Haryana, Madhya Pradesh, Odisha and Punjab. | FCI has already handed over procurement operation to State Governments in Andhra Pradesh, Chhattisgarh, Odisha and Madhya Pradesh fully. FCI is participating in procurement operations in Punjab and Haryana on the request of concerned State Governments. |
|         2 | FCI will accept only the surplus (after deducting the needs of the states under NFSA) from these state govts. (not millers) to be moved to deficit states.                                                                                                                                  | For Decentralized Procurement (DCP) States only surplus food grains are accepted by FCI.                                                                                                                                                                     |
|         3 | FCI should move on to help those states where farmers suffer from distress sales at prices much below MSP, and which are dominated by small holdings, like Eastern Uttar Pradesh, Bihar, West Bengal, Assam etc.                                                                            | During KMS 15-16, total quantity of 70.70 LMT rice was procured in comparison to 53.65LMT rice procured during KMS 14- 15. During ongoing KMS 2016-17, 65.83 LMT rice has been procured as on 11.07.2017.                                                    |
|         4 | DFPD/ FCI at the Centre should enter into an agreement with states before every procurement season regarding costing norms and basic rules for procurement.                                                                                                                                 | GOI has finalized the tripartite MOU between FCI, Non-DCP States and Government of India for procurement of Paddy/Rice.                                                                                                                                      |
|         5 | In case of any bonus being given by State on top of MSP, Centre will not accept grains under the central pool beyond the quantity needed by the state for its own PDS/ OWS.                                                                                                                 | This has been implemented.                                                                                                                                                                                                                                   |
|         6 | The statutory levies including commissions need to be brought down uniformly.                                                                                                                                                                                                               | The Ministry of Finance has been requested that all State taxes, cess and other charges are subsumed in GST for foodgrain so as to increase the efficiencies of procurement operation and its subsequent movement and sale.                                  |

|   7 | Quality checks in procurement have to be adhered to, with the help of mechanized processes of quality checking.                                                           | 15 computerized rice analyzers have been installed in 15 selected depots for undertaking rice analysis for KMS 2016- 17, as pilot project.                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   8 | Levy on rice millers be done away with.                                                                                                                                   | This has been implemented.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   9 | Negotiable warehouse receipt system (NWRs) should be taken up on priority and scaled up quickly through the Warehousing Development and Regulatory Authority              | Government has approved a transformation plan for WDRA to streamline its functions and to increase the use of NWRs. As part of the transformation plan, the rules for registration of warehouses has been amended and notified in order to simplify the registration process.                                                                                                                                                                                                                                                                                                               |
|  10 | Currently, MSPs are announced for 23 commodities, HLC recommends that pulses and oilseeds deserve priority and GoI must provide better price support operations for them. | In KMS 2016-17, FCI has procured 64737.25MT of Moong, 18234.68 MT of Urad and 175299.03 MT of Tur.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|  11 | FCI should outsource its stocking operations to various agencies.                                                                                                         | Instructions to hire CWC/SWC godowns as per existing procedures and to hire godowns through tendering process wherever there is shortfall have been                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|  12 | India needs more bulk handling facilities a Silo capacity of about 100 LMT (together for wheat and rice) should be created in the next 3-5 years.                         | issued. • Govt. of India has approved Action Plan for construction of 100 LMT silos upto 2019-20. • Silos with railway sidings at 6 locations (VGF route) for 2.5 LMT have been sanctioned. 25000 MT silo at Kotkapura has been put to use in RMS 2017-18. • State Government of M.P. and Punjab have completed 4.5 LMT and 1.5 LMT Silo respectively. • Work has been awarded and Concession Agreements have been signed for 13.5 LMT at 26 locations under Non-VGF route, which are with railway siding. • Under DEA-VGF mode at Kaimur & Buxar (total 1 LMT), tenders have been floated. |

|   13 | Covered and plinth (CAP) storage should be gradually phased out with no grain stocks remaining in CAP for more than 3 months. Silo bag technology and conventional storages where ever possible should replace CAP.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | As per the recommendations of HLC, the hired CAP capacity of 1.94 LMT was de- hired. No stock has been stored in CAP in consuming Regions.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   14 | Each State, especially the deficit ones in difficult terrain (like hilly areas of North-East, Jammu and Kashmir etc), must have storage of grains for at least three months of their consumption requirement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | Existing storage capacity in NE Zone is 5.47 LMT, which is adequate to store 3 months requirements. Construction works for 16,910 MT are in progress under Plan Scheme and 25,000 MT under PEG scheme. Total covered storage capacity with FCI in J&K is 2.45 LMT (Owned 1.03 LMT and Hired 1.42 LMT) which is sufficient to store 3 month's requirement. The average monthly allocation in J&K is 0.64 lakh MT.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   15 | HLC observed huge disparity in wages of various kind of labour force engaged by FCI. This happens because of the incentive system in notified depots, and widely used proxy labour. This must be fixed, either by de- notifying these depots, or handing them over to states or private sector on service contracts, and by fixing a maximum limit on the incentives per person that will not allow him to work for more than say 1.25 times the work agreed with him. These depots should be put on priority for mechanization so that reliance on departmental labour reduces. HLC recommends that the condition of contract labour, which works the hardest and are the largest in number, should be improved by giving them better facilities. | • Ministry of Labour & Employment however issued notification dated 06.07.2016 exempting 226 FCI depots/railheads/godowns from the applicability of earlier notification for a period of 2 years • Consequent upon Exemption Notification, FCI pooled/ repositioned of 9462 Labourers, out of which 9193 labourers have already repositioned. • The recommendation of capping incentive could not be accepted on grounds that it would lead to delay in unloading at the railheads. • However in pursuance to the award passed by CGIT, Karkardooma, Delhi on 05.07.2016, the datum of departmental labour has been revised from 105 Bags per worker per day to 135 Bags per worker per day which has resulted in reduction of incentive to about 30%. • As such there is likely saving of approx. Rs. 200 Crs. per annum after implementation of revised datum. • 30 no's of prototype set of Machines (Bag stacker) comprising of flat belt conveyor and MS stacker were set up at 27 depots across the country on |

|    |                                                                                                                    | pilot basis. Trial found not successful. • Bulk storage & movement of Food grains has been included in the action plan which indirectly emphasizes the mechanical handling of food grains and will thus reduce the labour dependency and requirement. • Nodal Officers have also been nominated to ensure better facilities and adequate welfare provisions like EPF, Minimum Wages, ESI, Workmen Compensation etc. and facilities like canteen/restrooms, urinals, and drinking water facilities.   |
|----|--------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 16 | To liquidate stocks in OMSS or in export markets, whenever stocks go beyond the buffer stock norms.                | Excess stock is disposed through e- auction under OMSS (D).                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 17 | End to end computerization of TPDS                                                                                 | Details are at Annexure-I                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 18 | Targeted beneficiaries under NFSA or TPDS are given 6 months ration immediately after the procurement season ends. | Instructions allowing the state to lift 6 months allotment at a time have been issued.                                                                                                                                                                                                                                                                                                                                                                                                               |
| 19 | Gradual introduction of cash transfer.                                                                             | Cash transfer for foodgrains has been implemented in three UT i.e. Chandigarh, Puducherry and Dadra & Nagar Haveli (in Urban areas).                                                                                                                                                                                                                                                                                                                                                                 |

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