UP tops in pilferage, diversion of PDSgrain

Nearly 50% of food grains meant for the public distribution system (PDS) is pilfered and diverted to the open market instead of reaching the intended beneficiaries in Uttar Pradesh. This makes the state top the charts when it comes to leakage of PDS grain (in absolute numbers), a nationwide study indicates.

The state government admitted to the heavy leakage in the PDSon the floor of the state assembly last week. A recent nation-wide study by the Indian Council for Research on International Economic Relations (ICRIER) has also revealed these anomalies.

And now there is the possibility of even more leakage as the state has rolled out the National Food Security Act (NFSA) under which UP’s food grain quota from the Centre will almost double. The scope of irregularities may increase unless proper checks are put in place, experts say.

The ICRIER study by Ashok Gulati and Sheweta estimates the proportion of grain that was diverted/ leaked from the PDS grain-chain in 2011-2012. This is done by mapping the difference between the grains off-take (procurement) by states from the Central pool and the grain consumed by the PDS beneficiaries in various states.

The study finds that at an allIndia level, 46.7% or 25.9 million metric tons (MMTs) of the off-taken grain did not reach the intended PDS beneficiaries in 2011-2012. The percent age share of total leakage increased in states, including UP, where greater percent of India’s poor resided. The five states -Uttar Pradesh, Bihar, Madhya Pradesh, Maharashtra and West Bengal -- which are home to nearly 60% of India’s poor accounted for close to 50% of the total leakage in the country.

Of the total 8.29 MMT rice and wheat that was off-taken by UP from the Central pool in 2011-12, only 4.3 MT reached the intended beneficiaries. The remaining 47.9% having been pilfered or diverted to the open market with multiple agencies involved in lifting and handling the grain.

Of the total 25.91 MMT of grain pilfered in the entire country, UP accounted for 4 MMT (15.3%) followed by West Bengal (3 MMT), Bihar (2.5 MMT) Maharashtra (2.43 MMT), Rajasthan ( 2MMTs), MP (1.51 MMT), Assam ( 1.49 MMTs) and Karnataka ( 1.4 MMT). These eight states together pilfered over 70% of the total grains pilfered from the PDS.

Though some states like Bihar, Assam, Delhi, Goa, Haryana, Jharkhand and Maharashtra were found to have more leakage in relation to the total grain offtake by them, in terms of absolute quantity of grains pilfered in the year, UP stood first. Of the total 25.91 MMT of grain pilfered in the entire country, UP accounted for 4 MMT (15.3%) followed by West Bengal (3 MMT), Bihar (2.5 MMT) Maharashtra (2.43 MMT), Rajasthan ( 2MMTs), MP (1.51 MMT), Assam ( 1.49 MMTs) and Karnataka ( 1.4 MMT). These eight states together accounted for over 70% of the total grains pilfered from PDS.

Ironically, UP that comprises 22.17% of the country’s poor was found to be accountable for 15.3% of the total leakage from the PDS in India. WILL NFSA PROVIDE MORE INCENTIVE FOR LEAKAGE?

The implementation of the National Food Security Act in the whole state from March 1 has created the possibility of there being more leakage from the PDS if the holes were not plugged before an increased quantity of grain is poured into the PDS.

“Since, UP will now get nearly double the quantity of the grain (wheat and rice) to be distributed to the eligible families even at a cheaper rate, the vested interested may have more incentive and scope to pilfer as the gap between the PDS price and the open market price will widen,” admitted Sudhakar Mishra who retired recently as chief marketing officer in the food and civil supply department. Mishra said full automation of the entire PDS system or the direct cash transfer to the beneficiaries might be the answer to the food diversion. Principal secretary, food and civil supply, Sudhir Garg said the state government was aware of the problem. “We are already working on a project where point of sale devices linked to beneficiaries’ biometric data would be installed at 1500 PDS shops,” he said.