The performance of Bihar’s public distribution system (PDS) remains a topic of considerable national interest. For decades, it has been infamous for extreme levels of maladministration and outright theft. Although different researchers vary in their estimates of leakages from Bihar’s PDS, there is no doubt that the state substantially lags the nation when it comes to the operational credibility of this safety net.

In this context, the government has been attempting to reform the state’s PDS. A central plank of these efforts was the 2007 initiative to use coupons to administer the PDS in order to curb the leakages at the beneficiary-fair price shop (FPS) interface. Under the coupon system, every beneficiary household with Antyodaya and Below Poverty Line (BPL) card is provided with 12 coupons annually for each of the PDS commodities that include wheat, rice and kerosene; households with Above Poverty Line (APL) cards are only eligible for kerosene and thus are provided with 12 kerosene coupons. These monthly coupons specify their entitlements and the price they have to pay for each commodity. The monthly PDS entitlements of recipient households include 35kg and 25kg of foodgrains (wheat and rice) for Antyodaya and BPL households, respectively, and a universal entitlement of 2.75 litres of kerosene for all cardholding households. Every month, beneficiary households redeem one coupon against each of the specified PDS commodities at a local FPS. Then, the FPS owner forwards the coupons to the block/district-level authorities in order to get next month’s supplies.

To assess the effects of this reform on the operation of Bihar’s PDS, we draw on evidence from a household survey we conducted in 2012 of 350 households in 10 villages in a district of western Bihar.

Our fieldwork reveals that while the administrative logic of the coupon system is fundamentally sound, the absence of institutional strengthening and improvements to beneficiaries’ capabilities to demand their rights subjects these reforms to new mechanisms of misappropriation by entrenched interests.

Firstly, we find that PDS entitlements among BPL and Antyodaya cardholders were substantially curtailed because of significant delays in coupon delivery. Almost 50% of all BPL and Antyodaya respondents reported that they could not use all of their foodgrain coupons during the previous 12 months because of problems associated with late delivery or because FPS owners failed to honour coupons. Almost a third of BPL and Antyodaya households indicated they had three or more unusable foodgrain coupons, suggesting that they had missed at least three months of entitlement during the past year.

Second, although coupons were intended to enhance transparency in the FPS-beneficiary interface, FPS owners devised new stratagems to deny cardholders their entitlements. We found that that close to 60% of the BPL and Antyodaya households in the sample were asked by FPS owners to provide more than one coupon for a month’s ration supplies.

Our findings reflect the prevailing power imbalance between most beneficiaries and FPS owners. In one of the study villages, for example, all four FPS owners were members of the high-caste and landowning class of Rajputs and Bhumihars. By virtue of their social and economic standing, they were able to exert great influence over village affairs and suppress local disquiet. We were told that in rare cases when beneficiaries complained to officials about fraudulent practices, it often backfired as FPS owners would settle the issue in their favour and then act prejudicially against the complainants. Protests were frequently met with the threat of “no ration in the future".

Despite this dismal picture, other survey data provides important, pro-poor insights into the reform. As noted earlier, Bihar’s PDS coupon arrangements also include monthly allocations of 2.75 litres of kerosene to all cardholding households. Importantly, we found kerosene allocations had considerably less leakage than foodgrain allocations. While the “purchase-entitlement ratio" (PER)—the proportion of full entitlement obtained by beneficiary households—for foodgrains was only 30% for Antyodaya households and 39% for BPL households, the PER for kerosene was 68% and 71%, respectively.

We believe because subsidised kerosene is available to all, not just to BPL and Antyodaya households, local elites have a stake in ensuring robust delivery and allocation apparatus. The universality of kerosene entitlements provides a mechanism that aligns interests of richer and poorer households alike, and this places heightened pressure on FPS owners to ensure ration obligations are met.

Our study highlights the importance of grounding debates on PDS reform within locally-articulated understandings of resources and rights. In our opinion, much of the recent debate on the PDS has been unhelpfully preoccupied with microeconomic discourses that frame policy options in terms of abstractly conceived consumer choice. In the villages of rural India, and especially in places like western Bihar, consumer choice is a misnomer; access to entitlements is conditioned by the real exercise of political power. For PDS reforms to meet expectations, they need to be accompanied by institutional transformations that broker change in the existing local politics of inclusion and exclusion.

Bill Pritchard and Chetan Choithani are associated with the department of human geography, University of Sydney.

Published with permission from Ideas for India, www.ideasforindia.in

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