Leakages from the public distribution system (PDS) are probably as old as PDS itself. Much ink has been spilled on how to reduce their volume. Most efforts have borne little fruit. Until recently, pessimists would say that wastage and misallocations in PDS would continue till the system ended.
In the last year or so, since the unique identity (UID) programme came into existence, targeted delivery of PDS supplies has become fashionable once again. Because of the way it has been packaged, the sting in most targeting approaches, reduction in entitlements and/or a reduction in the number of persons targeted, has also been taken out from UID-based approaches. Once a one-person-one-number map is clearly established, which is what the UID approach is all about, you can add or subtract any number of “beneficiaries”.
At least that is what UID authorities seem to believe. In a recently released working paper (“Envisioning a role for Aadhaar in the Public Distribution System”), Unique Identification Authority of India has outlined an ambitious approach to an old problem. In essence there are two stages involved in stemming leakages. A clear identification of those entitled to benefits, a process that will dramatically reduce what fake or ghost ration card holders and also ensure the inclusion of all those who are excluded as they don’t have an identity. In the second step, the actual, physical, aspect of leaks from the fair price shop (FPS) is arrested. This is where the serious challenges lie.
Withdrawals from an FPS using a ration card are the source of most leaks. By some accounts, close to 50% of the ration allocations are siphoned away. Authenticated withdrawals using biometric identification are only one aspect of the problem. They don’t address the root cause of the malaise: the unviability of the FPS system. A 2005 Planning Commission study found that only 23% of the FPSs were economically viable. Their unviability is at the root of leakages. FPS owners find it profitable to leak wheat, rice and sugar meant for the poor. Unless this is fixed, UID-based approaches may only work partially. Should the FPS system be dismantled completely? What can replace it? Can the FPS network be made viable? These are questions that can’t be evaded any more.
The naysayers will exclaim that they always knew better that technology cannot solve all problems. They’re wrong. Gross political interference in a key social sector delivery mechanism has created such bottlenecks that require serious re-engineering of delivery mechanisms if they are to work at all. Sitting in a quiet corner with an air of Schadenfreude will serve no one.
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