Address by Dr. Raman Singh, Hon'ble Chief Minister Chhattisgarh: Meeting of the Working Group on Food & Public Distribution
September 8,2010, New Delhi
Hon’ble Dy. Chairman, Planning Commission, Hon’ble Chief Minister, Assam, Hon’ble Chairman, Economic Advisory Council to Prime Minister and distinguished gathering
At the outset I wish to thank the Dy Chairman, Planning Commission to have organised this meeting of the Working Group to recommend measures for better and effective delivery of essential commodities to the vulnerable sections of society and augmentation of storage capacity. In Chhattisgarh, we have taken a few measures to strengthen the PDS.
(I) Finalizing Number of BPL beneficiaries:
I propose that all ST & SC families living in scheduled (Tribal sub-plan) areas should be considered as BPL families for the purpose of PDS. This will greatly help in avoiding exclusion errors in the most vulnerable areas of the country. Similarly in Left wing extremism (LWE) affected districts, all families other than those of Govt. servants and income-tax payees, be considered as BPL families for the purpose of PDS. In the present dispensation of GoI, many of the destitutes surviving on govt. pension are left out from the BPL list. It will be proper to include all destitute pension holders and disabled persons in the BPL list for the purpose of PDS.
In Chhattisgarh, we are providing 35 kg food grain to all BPL and Antyodaya families. It will proper to keep the entitlement at 35 kg and not 25 kg per month, as proposed in the concept paper of Food Security Bill circulated by GoI.
Dr. N.C.Saxena’s report appears to be quite close to the true status of poverty in the country. I therefore propose that the states quota for BPL families under PDS should be fixed on the basis of this report on long term basis. However, if the GoI has some constraints, it may start immediate allocations to the State on the basis of figures in Tendulkar Committee report.
In Chhattisgarh, we are providing 35 kg food grain to all BPL and Antyodaya families. It will proper to keep the entitlement at 35 kg and not 25 kg per month, as proposed in the concept paper of Food Security Bill circulated by GoI.
Dr. N.C.Saxena’s report appears to be quite close to the true status of poverty in the country. I therefore propose that the states quota for BPL families under PDS should be fixed on the basis of this report on long term basis. However, if the GoI has some constraints, it may start immediate allocations to the State on the basis of figures in Tendulkar Committee report.
(II) Streamlining and strengthening of TPDS:
Fair price shops (FPS) should be taken away from the hold of private persons. FPS should be run either by the Gram Panchayats, Cooperative Societies, Women-Self-Help Groups or Forest Protection Committees, as has been done in Chhattisgarh. Door step delivery from PDS distribution centres to the FPS is absolutely necessary to stop pilferage of PDS items. In Chhattisgarh we have assigned this job to State Civil Supplies Corporation with good results. Feeding of the PDS items to the FPS should necessarily be completed by the 7th of every month because people have better purchasing power during the first 10 days of a month.
Many times the FPS owners do not have enough funds to buy the PDS items from the distribution centres. It will be proper to give minimum one month credit to the FPS, as has been done in Chhattisgarh with positive outcomes. For transparency, list of the beneficiaries should be exhibited at public places and read over in the Gram Sabha. For further transparency some sort of social audit of the FPS should be done periodically. In Chhattisgarh Chawal Utsav is organized at each FPS on 7th of each month, where people’s representatives and nodal officers are present along with the beneficiaries during distribution of PDS goods.
For grievance redressal a toll free call centre or help line should be established, where complaints regarding PDS should not only be registered but the status of their disposal is also available on the web.
Other than food grains, 2 kg of iodized salt should also be provided to the BPL beneficiaries every month. In Chhattisgarh 2 kg of iodized salt is being provided to each BPL cardholder free of cost every month. I also propose that pulses should be added as PDS item in scheduled (Tribal sub-plan) areas of the country to fight malnutrition. Two kg of pulse should be provided to the BPL beneficiaries every month for which atleast Rs. 25/- per kg subsidy should be provided by the GoI. Institutions like NAFED or any other PSUs of GoI may make bulk supply of pulses to the State Civil Supplies Corporations.
For APL cardholders also the entitlement of food grains should not be less than 35 kg per month, at a price little higher than BPL rates. For proper running of FPS, Shop-cum-godown building are necessary. We have already constructed around 4000 FPS buildings through BRGF, Tribal Development Authority funds or 12th Finance Commission funds. But in non-BRGF districts GoI should provide grants for construction of FPS shop-cum-godowns.
For “Other Welfare Institutions” the demands of the states are not being met by the GoI. The allotment for “Other Welfare Institutions” should be enhanced to cover not only the govt run hostels, but also private hostels and institutions being run for poor people. In urban and semi urban areas, Chhattisgarh is running 152 Dal Bhat Kendra which are feeding around 15 to 20 thousand people every day to their satisfaction, for Rs. 5/- per diet. Such eateries at reasonable rates should be opened all over the country.
Many states are working as Decentralized Procurement State (DCP) for the purpose of food grains procurement. However, the GoI is not clearing the claims and losses in time. This is causing great loss to the states. In a State like Chhattisgarh, we have incurred losses to the tune of more than Rs. 2,200 crores in the last 9 years but our claims are not been processed in time. The food subsidy claims of TPDS are also not paid in time to the State Civil Supplies Corporation. This causes lot of loss by way of interest. The Reserve Bank of India provides food credit to the State at an interest of 11.25%. Moreover the RBI does not accept funds-receivable as an authorized guarantee and charges another 2% as penal interest. This rate of interest is abnormally high and leads to inflation. The RBI should provide food credit at differential rate of 4% interest.
Chhattisgarh produces paddy which is more suitable for par-boiled rice. The GoI does not accept par-boiled rice in the central pool, which leads to many problems. Despite test milling reports, the milling charge for raw rice has not been revised for more than a decade. This causes a loss of around Rs. 50 crores to the state every year.
Many times the FPS owners do not have enough funds to buy the PDS items from the distribution centres. It will be proper to give minimum one month credit to the FPS, as has been done in Chhattisgarh with positive outcomes. For transparency, list of the beneficiaries should be exhibited at public places and read over in the Gram Sabha. For further transparency some sort of social audit of the FPS should be done periodically. In Chhattisgarh Chawal Utsav is organized at each FPS on 7th of each month, where people’s representatives and nodal officers are present along with the beneficiaries during distribution of PDS goods.
For grievance redressal a toll free call centre or help line should be established, where complaints regarding PDS should not only be registered but the status of their disposal is also available on the web.
Other than food grains, 2 kg of iodized salt should also be provided to the BPL beneficiaries every month. In Chhattisgarh 2 kg of iodized salt is being provided to each BPL cardholder free of cost every month. I also propose that pulses should be added as PDS item in scheduled (Tribal sub-plan) areas of the country to fight malnutrition. Two kg of pulse should be provided to the BPL beneficiaries every month for which atleast Rs. 25/- per kg subsidy should be provided by the GoI. Institutions like NAFED or any other PSUs of GoI may make bulk supply of pulses to the State Civil Supplies Corporations.
For APL cardholders also the entitlement of food grains should not be less than 35 kg per month, at a price little higher than BPL rates. For proper running of FPS, Shop-cum-godown building are necessary. We have already constructed around 4000 FPS buildings through BRGF, Tribal Development Authority funds or 12th Finance Commission funds. But in non-BRGF districts GoI should provide grants for construction of FPS shop-cum-godowns.
For “Other Welfare Institutions” the demands of the states are not being met by the GoI. The allotment for “Other Welfare Institutions” should be enhanced to cover not only the govt run hostels, but also private hostels and institutions being run for poor people. In urban and semi urban areas, Chhattisgarh is running 152 Dal Bhat Kendra which are feeding around 15 to 20 thousand people every day to their satisfaction, for Rs. 5/- per diet. Such eateries at reasonable rates should be opened all over the country.
Many states are working as Decentralized Procurement State (DCP) for the purpose of food grains procurement. However, the GoI is not clearing the claims and losses in time. This is causing great loss to the states. In a State like Chhattisgarh, we have incurred losses to the tune of more than Rs. 2,200 crores in the last 9 years but our claims are not been processed in time. The food subsidy claims of TPDS are also not paid in time to the State Civil Supplies Corporation. This causes lot of loss by way of interest. The Reserve Bank of India provides food credit to the State at an interest of 11.25%. Moreover the RBI does not accept funds-receivable as an authorized guarantee and charges another 2% as penal interest. This rate of interest is abnormally high and leads to inflation. The RBI should provide food credit at differential rate of 4% interest.
Chhattisgarh produces paddy which is more suitable for par-boiled rice. The GoI does not accept par-boiled rice in the central pool, which leads to many problems. Despite test milling reports, the milling charge for raw rice has not been revised for more than a decade. This causes a loss of around Rs. 50 crores to the state every year.
Proposed Amendments in EC Act 1955
(a) The offences related to Essential Commodities Act. 1955 under section 10-A are presently cognizable and bailable. Earlier in 1981, GOI had promulgated Essential Commodity (Special Provision) Act. 1981, in which such offences were made cognizable and non-bailable for 15 years. On expiry of above period, offences related to this Act became bailable again. Looking to the black marketing, hoarding and abnormal price rise of essential commodities. the offences related to this Act (specially for PDS commodities) should be made non-bailable.
(b) Under Consumer Protection Act, 1986 time limit of 90/150 days is fixed for disposal of cases. Due to this provision, nearly 90% cases registered in consumer courts have been disposed off. Since the cases related to Essential Commodities Act are related with supply of essential commodities to consumers, it is necessary to fix time limit for their disposal too.
(c) Provision for confiscation of vehicle engaged in illegal transportation of essential commodities is not provided in Essential Commodities Act. Like Forest Act, this provision should be incorporated in Essential Commodities Act too.
(b) Under Consumer Protection Act, 1986 time limit of 90/150 days is fixed for disposal of cases. Due to this provision, nearly 90% cases registered in consumer courts have been disposed off. Since the cases related to Essential Commodities Act are related with supply of essential commodities to consumers, it is necessary to fix time limit for their disposal too.
(c) Provision for confiscation of vehicle engaged in illegal transportation of essential commodities is not provided in Essential Commodities Act. Like Forest Act, this provision should be incorporated in Essential Commodities Act too.
(III) Web enabled computerization of PDS System (including FCI godowns):
Details of ration card holders in the state should be computerized and should be put on the web. Chhattisgarh has already done this and it has brought lot of transparency. Allotment to the FPS should be done online from the state level. This saves time and removes chances of dishonesty at lower level. The PDS distribution centres should also remain online and display supply to each of the FPS on real time basis. This helps in inventory management and strict monitoring. An SMS alert should be sent to all concerned in any FPS area as soon as the truck leaves the PDS distribution centre for the FPS. This is being done in Chhattisgarh for the last two years with very good results.
Smart Card should be issued to each of the ration card holders, but they should be UID-compliant. Since the expenditure involved is high, GoI should finance this. Chhattisgarh is well poised for this and GoI should take Chhattisgarh as a pilot State for this scheme.
Smart Card should be issued to each of the ration card holders, but they should be UID-compliant. Since the expenditure involved is high, GoI should finance this. Chhattisgarh is well poised for this and GoI should take Chhattisgarh as a pilot State for this scheme.
(IV) Enhancing storage capacity:
GoI should evolve a liberal scheme for taking godowns on 10-year guarantee scheme for stocking of food grains. In Chhattisgarh, Collectors have been empowered to allot land to the State Warehousing Corporation for food godowns at 75% of the guide-line rates. The yearly lease rent has also been reduced to half. This has enabled the State Warehousing Corporation to construct 68 new godowns in the last one year totaling 2.12 lac tones capacity. In DCP states, FCI should have adequate storage capacity, because the excess stocks can be transported only on availability of railway rakes and availability of space at the receiving place, which are often in short supply.
In food-deficit districts, cut-off areas and scheduled areas, the total storage in a district should not be less than 8 months quota of PDS. This will greatly help in assuring food security. GoI should come up with Central Sector Scheme for such areas, with 75% capital subsidy. The income of the State Warehousing Corporations should be exempted from income-tax to give a boost to construction of new warehouses.
Presently the entire excess stock of food grain in the country is stocked in Punjab & Haryana. From strategic point of view the GoI should consider creating huge godowns for buffer in the central part of the country. It will be much easier logistically to transfer food grains from Central India to any part of the country. If GoI agrees to this, the Govt. of Chhattisgarh will facilitate the GoI in this endeavor.
Before I close, I would like to strongly plead that the financial management of the decentralized procurement scheme needs to be urgently revamped, and greater powers should be delegated to the State Governments in the administration of Price Support Scheme. For effective control over rising prices of essential commodities, the legal provisions have to be strengthened and PDS reformed to make it consumer-centric, so that it can truly serve the interests of masses. Only then will we be able to provide every citizen with a wholesome meal with human dignity. Only then will the system of food subsidy be justified.
In food-deficit districts, cut-off areas and scheduled areas, the total storage in a district should not be less than 8 months quota of PDS. This will greatly help in assuring food security. GoI should come up with Central Sector Scheme for such areas, with 75% capital subsidy. The income of the State Warehousing Corporations should be exempted from income-tax to give a boost to construction of new warehouses.
Presently the entire excess stock of food grain in the country is stocked in Punjab & Haryana. From strategic point of view the GoI should consider creating huge godowns for buffer in the central part of the country. It will be much easier logistically to transfer food grains from Central India to any part of the country. If GoI agrees to this, the Govt. of Chhattisgarh will facilitate the GoI in this endeavor.
Before I close, I would like to strongly plead that the financial management of the decentralized procurement scheme needs to be urgently revamped, and greater powers should be delegated to the State Governments in the administration of Price Support Scheme. For effective control over rising prices of essential commodities, the legal provisions have to be strengthened and PDS reformed to make it consumer-centric, so that it can truly serve the interests of masses. Only then will we be able to provide every citizen with a wholesome meal with human dignity. Only then will the system of food subsidy be justified.
Jai Hind! Jai Chhattisgarh!!
