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Corruption in PDS: business out of poverty

Corruption in PDS: business out of poverty
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First Published: Thu, May 03 2007. 10 30 PM IST

Updated: Thu, May 03 2007. 10 30 PM IST
One of the most frequently used words in India, corruption signifies a range of things. In 2005, Transparency International, and Delhi-based Centre for Media Studies, a research firm, undertook the India Corruption Study. The survey covered 4,405 respondents over 20 states. The results, published in the same year, said that Indians pay about Rs 21,069 crore as bribes while availing one of 11 public services. The study remains the most recent and most comprehensive report on corruption in India.
Here we cover corruption in India’s public distribution system (PDS), the chain of ration shops that provide supplies to just under 10% of the country’s population (the government claims 16%) as well as Corruption in Education.
Corruption in PDS
Bulk users are from the rural hinterland (7.6 crore). Pointers to how rampant is corruption in a sphere where the government has promised subsidized ‘food for all’ through the PDS are:
Objective: Improving Governance
Context
1.5 crore households have admittedly paid bribe during the past year;
States with a higher poverty index have registered higher corruption (up to 67%);
60% households using PDS confirmed unavailability of rations;
In high poverty incidence states, “out-of-stock” scenarios were as high as 80%;
34% of those visiting ration offices had to make four or more visits before their voice could be heard and suitable action taken; and
Nearly 50% paid bribe for obtaining a new, perfectly legitimate ration card
While the Fair Price Owner is accused of cheating and being corrupt, he has his constraints which include: Low margins leading to low profitability, especially post launch of targeted public distribution system (TPDS); credit provided is so low that they cannot lift stock from government godowns; they have no control over quality of grains; they too may have to pay bribe to ration officials to get their quota of supplies from the Food Corporation of India (FCI); supplies from FCI are erratic and late in coming.
Issues of Concern
Visitor harassment: Incomplete ration forms, attaching identity proof and facilitating process of submission provide opportunities to staff on duty to harass consumers, make them wait endlessly, force them to make repeated visits and give indications that bribing hastens the procedure. Supervisor or in-charge is not visible, making complaints and redressal of consumer issues a non priority issue.
Unavailability of rations: Short supply and out-of-stock items are commonplace.
Poor quality, low weight and higher prices: Inconsistent quality, faulty weights and overpriced items are the norm.
Indifferent attitude: Lackadaisical behaviour of staff shows lack of commitment and motivation, leading to delays and misbehaviour.
Non-availability of forms: Ration application forms are usually unavailable at the PDS while they may be available through touts at a premium.
Closure without notice: On a working day a consumer may find the shutters to the PDS down, without prior notice or information.
Penetration of Corruption
61% people opined that rampant corruption existed in PDS;
1.5 crore (1.22 rural and 0.24 crore urban) households paid bribe in 2006;
Average amount of corruption is roughly Rs 245 per household per annum. Total outflow due to corruption stands at Rs 358 crore per annum;
Corruption in Delhi and Bihar is perceived to be high while Kerala and Himachal Pradesh considered less corrupt;
A reason for short supply of ration is due to its diversion into the open market;
Registering complaints is a complicated task;
Consumer is unaware that he is being overcharged: 24% reported overcharging;
60% respondents felt that corruption increased in 2006 in high poverty states as against 49% in better off states. Rs 50-500 were paid as bribe, to get a new ration card; to make changes regarding residence and addition of a family member;
50% felt there was no push towards undertaking reforms;
19% respondents who used PDS relied on alternative means (bribe, repeated requests and middlemen) to procure rations. (In Bihar 32%, Rajasthan 37% and Delhi 44% sought external means).
Recommendations
Hand out food vouchers or stamps to enable them encash it for goods at any FPS;
Develop local production and distribution systems to reduce dependence on existing distribution chains which are long leading in inefficiency and corruption;
Accuracy in exclusion and inclusion of families in PDS to be more thorough and accurate;
Identify bogus card holders and take suitable action;
Check malpractices where ration card holders are made to sign against amounts of ration that they have not taken;
Set up a Community Grain Fund which will advance loans to beneficiary farmers. Sale proceeds can be deposited in a bank as the Community Grain Fund which can be managed by the village for purposes like reclaiming more fallow lands.
Source: India Corruption Study 2005
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First Published: Thu, May 03 2007. 10 30 PM IST
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