The Public Distribution System (PDS), that will be implementing the food security scheme, has changed quite a bit in states such as Tamil Nadu, Andhra Pradesh, Himachal Pradesh, Chhattisgarh and Odisha, and to some extent in Rajasthan and Jharkhand.
In Andhra Pradesh and Tamil Nadu, the PDS has always been good with no serious problems of leakage. The reforms that helped states such as Odisha and Chhattisgarh fix their PDS are mandatory.
Computerisation and de-privatisation of ration shops by allowing them to be run by gram panchayats, self-help groups and cooperatives are some of the reforms that are already being initiated in many states.
In the past, dealerships (for ration shops) were linked to political patronage. Come elections, and it was time to plough back the money to the netas who had handed out these dealerships in the first place.
In Tamil Nadu and Himachal Pradesh, ration shops are being run by the Registrar of Co-operatives Societies while in Odisha, gram panchayat secretaries are running ration shops. This provides for more accountability.
The PDS price for wheat is presently between `4 and `5. By contrast, the market price has shot up to over `15. If the differential between the market price and PDS price was small, people would not have made much fuss if grain was not available. But with prices having shot up, the people now feel “Joota khalenge, gaali khalenge (we will bear humiliation) but we will make sure that we take our entitlement from the ration shops.” There is much more pressure from below for the PDS to perform and stop leakage of grains.
In Tamil Nadu, the Management Information System ensures daily stock-taking of all products including grains, pulses and oil. This makes accounting much easier.
Computerisation allows for greater transparency. Across most states, data is being computerised while in Uttar Pradesh, the BPL lists are being computerised at the ground level.
We are already seeing the success on the ground. In Chhattisgarh, between 2004 and 2005, half the grain was leaking but by 2009-10, leakage was down to 10 per cent. In Odisha, leakage reduced by 30 per cent between 2004 and 2005, and 2009-10. In Tamil Nadu, leakage is down to 4 per cent. The FSB is an opportunity to reform PDS.
Three schemes — the ICDS, mid-day meals and providing maternity entitlements — are presently under the ambit of the PDS.
The expansion of the PDS will cost an additional `30,000 crore which is affordable. The government is already spending `90,000 crore on these schemes. The cost will go up, and will amount to 1.5 per cent of the GDP.
This expansion could have been done as a policy measure by the government three years ago but it chose not to do so. The new beneficiaries will have to be identified. The roll-out will take time. One of the amendments of the FSB is that the states are being given one year instead of giving six months to implement this. This is a good thing.
The coverage of distribution has been de-linked from poverty estimates. Malnutrition and hunger are different things. People are vulnerable to hunger. This is true for a substantial chunk of the population especially since 90 per cent of the workforce is in the informal sector.
In rural areas, where 75 per cent of the population has to be covered, the government is likely to follow the exclusion approach. Those with four-wheel vehicles in rural areas, to cite one example, will be excluded. In urban areas, those living in slums, juggi jhompris and resettlement areas can avail of PDS. The states will have to take the initiative.

As told to Rashme Sehgal Reetika Khera is an economist with IIT-Delhi and a social activist