2380 - Pranab banks on Aadhar to reform public distribution system -

08 February 2012

Reforming the delivery mechanism is key to an effective, transparent and inclusive public distribution system in the country and the main challenge before the PDS today is reaching foodgrains to the actual beneficiaries without leakages and diversion en route to the grass-root level, finance minister Pranab Mukherjee said today. Digitising the database of beneficiaries and computerisation of the entire food supply chain will remain the main stepping-stones to making the PDS successful, he said. The finance minister was addressing a conference on public distribution system in the capital. PDS faces challenges like leakages and diversion of foodgrains, inclusion/exclusion errors, fake and bogus ration cards, lack of transparency, weak grievance redressal and social audit mechanisms, viability of fair price shops, etc,'' he said, adding that the best way to address these is through leveraging Aadhar for unique identification. ''Leveraging Adadhaar is one of the critical components in reforming the PDS. The beneficiaries of PDS can be enrolled into the Aadhaar system,'' Mukherjee said. It is a complex and challenging task as PDS operates in 35 states and UTs through more than 5 lakh fair price shops across diverse operating environments.   'The use of the Aadhaar number in PDS will reduce ''duplicates'', ''fakes'' and ''ghost beneficiaries'' in PDS databases, which will result in reducing wastage and diversion in the system. ''Portability of benefits in PDS is of critical importance due to the migrant nature of India's poor population who are the most important targets of the food security Act. An Aadhaar enabled system makes access to PDS benefits portable across a state and also the country,'' he said. This, he said, would empower the PDS beneficiary due to portability of benefits and choice of the PDS shop. The bargaining power will shift from the supplier to the beneficiary, which will support empowerment and bring about improved accountability, he added. ''The use of Aadhar would make the schemes transparent, help eliminate leakages and corruption and empower the beneficiaries to get what is indeed their right,'' he said. The National Food Security Bill 2011 specifically refers to the need for targeted public distribution system (TPDS) reforms to leverage Aadhaar for unique identification, with authentication of entitled beneficiaries for proper targeting of benefits under the Act. Strengthening of PDS would also require computerisation of operations and an active involvement of panchayati raj institutions and local community as also a responsive, ICT-enabled grievance redressal mechanism, he said. Besides ensuring access to food for all, the country also needs to ensure basic nutrition to all and should help it realise the larger goal of rapid economic development, he said. Sustained high economic growth in recent past has led to improvements in purchasing power in both rural and urban areas. Citing the 12th Plan approach paper, he said, the average real wages in India increased 16 per cent between 2007 and 2010. The growth was fastest in Andhra Pradesh (42 per cent) and Odhisa (33 per cent). Even in states like Bihar and UP the real farm wages went up by 19 and 20 per cent, respectively, over this period. This has increased demand for certain goods and services, which has translated into persistent high inflationary pressures for those goods in the economy. ''The supply response has been inadequate and along with weather induced shortages in the food economy, have resulted in significant challenges for inflation management,'' he pointed out. ''Hopefully we are now out of this high inflationary phase, assisted by what appear to be two back-to-back bumper agricultural harvests.'' Yet, he said, for a country with growing population and a sustained growth momentum, food security challenge is ultimately a challenge of improving agriculture productivity.