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The United Nations celebrates October 16 as the World Food Day every year, with an aim to spread awareness about eradicating hunger and ensuring food security for all.[1] In this context, we examine the status of food and public distribution in India, and some challenges in ensuring food security for all.
Background
In 2017-18, over Rs 1,50,000 crore, or 7.6% of the government’s total expenditure has been allocated for providing food subsidy under the Targeted Public Distribution System (TPDS).[2] This allocation is made to the Department of Food and Public Distribution under the Ministry of Consumer Affairs.
Food subsidy has been the largest component of the Department’s expenditure (94% in 2017-18), and has increased six-fold over the past 10 years. This subsidy is used for the implementation of the National Food Security Act, 2013 (NFSA), which provides subsidised food grains (wheat and rice) to 80 crore people in the country.[3] The NFSA seeks to ensure improved nutritional intake for people in the country.3
One of the reasons for the six-fold increase in food subsidy is the non-revision of the price at which food grains are given to beneficiaries since 2002.[4] For example, rice is given to families under the Antyodaya Anna Yojana at Rs 3/Kg since 2002, while the cost of providing this has increased from Rs 11/Kg in 2001-02 to Rs 33/Kg in 2017-18.
Provision of food subsidy
TPDS provides food security to people below the poverty line. Over the years, the expenditure on food subsidy has increased, while the ratio of people below poverty line has reduced. A similar trend can also be seen in the proportion of undernourished persons in India, which reduced from 24% in 1990 to 15% in 2014 (see Table 1). These trends may indicate that the share of people needing subsidised food has declined.
Nutritional balance: The NFSA guarantees food grains i.e. wheat and rice to beneficiaries, to ensure nutritious food intake.3 Over the last two decades, the share of cereals or food grains as a percentage of food consumption has reduced from 13% to 8% in the country, whereas that of milk, eggs, fish and meat has increased (see Figure 1). This indicates a reduced preference for wheat and rice, and a rise in preference towards other protein rich food items. 
Methods of providing food subsidy
Food subsidy is provided majorly using two methods. We discuss these in detail below.
TPDS assures beneficiaries that they will receive food grains, and insulates them against price volatility. Food grains are delivered through fair price shops in villages, which are easy to access.[5],[6]
However, high leakages have been observed in the system, both during transportation and distribution. These include pilferage and errors of inclusion and exclusion from the beneficiary list. In addition, it has also been argued that the distribution of wheat and rice may cause an imbalance in the nutritional intake as discussed earlier.7 Beneficiaries have also reported receiving poor quality food grains as part of the system.
Cash Transfers seek to increase the choices available with a beneficiary, and provide financial assistance. It has been argued that the costs of DBT may be lesser than TPDS, owing to lesser costs incurred on transport and storage. These transfers may also be undertaken electronically.6,7
However, it has also been argued that cash received as part of DBT may be spent on non-food items. Such a system may also expose beneficiaries to inflation. In this regard, one may also consider the low penetration and access to banking in rural areas.[7]
In 2017-18, 52% of the centre’s total subsidy expenditure will be on providing food subsidy under TPDS (see Figure 2). The NFSA states that the centre and states should introduce schemes for cash transfers to beneficiaries. Other experts have also suggested replacing TPDS with a Direct Benefit Transfer (DBT) system.4,[8]
The central government introduced cash subsidy to TPDS beneficiaries in September 2015.[9] As of March 2016, this was being implemented on a pilot basis in a few union territories. In 2015, a Committee on Restructuring of Food Corporation of India had also recommended introducing Aadhaar to plug leakages in PDS, and indexing it to inflation. The Committee estimated that a switch to DBT would reduce the food subsidy bill of the government by more than Rs 30,000 crore.[10]
Current challenges in PDS
Leakages in PDS: Leakages refer to food grains not reaching intended beneficiaries. According to 2011 data, leakages in PDS were estimated to be 46.7%.10,[11] Leakages may be of three types: (i) pilferage during transportation of food grains, (ii) diversion at fair price shops to non-beneficiaries, and (iii) exclusion of entitled beneficiaries from the list.6,[12]
In 2016, the Comptroller and Auditor General (CAG) found that states had not completed the process of identifying beneficiaries, and 49% of the beneficiaries were yet to be identified. It also noted that inclusion and exclusion errors had been reported in the beneficiary lists.[13]
In February 2017, the Ministry made it mandatory for beneficiaries under NFSA to use Aadhaar as proof of identification for receiving food grains. Through this, the government aims to remove bogus ration cards, check leakages and ensure better delivery of food grains.10,[14] As of January 2017, while 100% ration cards had been digitised, the seeding of these cards with Aadhaar was at 73%.14
Storage: As of 2016-17, the total storage capacity in the country is 788 lakh tonnes, of which 354 lakh tonnes is with the Food Corporation of India and 424 lakh tonnes is with the state agencies.[15]
The CAG in its performance audit found that the available storage capacity in states was inadequate for the allocated quantity of food grains.13 For example, as of October 2015, of the 233 godowns sanctioned for construction in Maharashtra, only 93 had been completed. It also noted that in four of the last five years, the stock of food grains with the centre had been higher than the storage capacity available with Food Corporation of India.
Quality of food grains: A survey conducted in 2011 had noted that people complained about receiving poor quality food grain which had to be mixed with other grains to be edible.6 There have also been complaints about people receiving food grains containing alien substances such as pebbles. Poor quality of food may impact the willingness of people to buy food from fair price shops, and may have an adverse impact on their health.[16]
The Ministry has stated that while regular surveillance, monitoring, inspection and random sampling of all food items is under-taken by State Food Safety Officers, separate data for food grains distributed under PDS is unavailable.[17] In the absence of data with regard to quality testing results of food grains supplied under PDS, it may be difficult to ascertain whether these food items meet the prescribed quality and safety standards.
[1] About World Food Day, http://www.fao.org/world-food-day/2017/about/en/.
[2] Expenditure Budget, Union Budget 2017-18, http://unionbudget.nic.in/ub2017-18/eb/allsbe.pdf.
[3] National Food Security Act, 2013, http://indiacode.nic.in/acts-in-pdf/202013.pdf.
[4] “Prices, Agriculture and Food Management”, Chapter 5, Economic Survey 2015-16, http://unionbudget.nic.in/budget2016-2017/es2015-16/echapvol2-05.pdf.
[5] The Case for Direct Cash Transfers to the Poor, Economic and Political Weekly, April 2008, http://www.epw.in/system/files/pdf/2008_43/15/The_Case_for_Direct_Cash_Transfers_to_the_Poor.pdf.
[6] Revival of the Public Distribution System: Evidence and Explanations, The Economic and Political Weekly, November 5, 2011,
[7] ‘Report of the Internal Working Group on Branch Authorisation Policy’, Reserve Bank of India, September 2016, https://rbidocs.rbi.org.in/rdocs/PublicationReport/Pdfs/IWG99F12F147B6E4F8DBEE8CEBB8F09F103.PDF.
[8] Working Paper 294, “Leakages from Public Distribution System”, January 2015, ICRIER, http://icrier.org/pdf/Working_Paper_294.pdf.
[9] “The Cash Transfer of Food Subsidy Rules, 2015”, Ministry of Consumer Affairs, Food and Public Distribution, September 3, 2015, http://dfpd.nic.in/writereaddata/Portal/News/32_1_cash.pdf.
[10] Report of the High Level Committee on Reorienting the Role and Restructuring of Food Corporation of India, January 2015, http://www.fci.gov.in/app2/webroot/upload/News/Report%20of%20the%20High%20Level%20Committee%20on%20Reorienting%20the%20Role%20and%20Restructuring%20of%20FCI_English_1.pdf.
[11] Third Report of the Standing Committee on Food, Consumer Affairs and Public Distribution: Demands for Grants 2015-16, Department of Food and Public Distribution, http://164.100.47.193/lsscommittee/Food,%20Consumer%20Affairs%20&%20Public%20Distribution/16_Food_Consumer_Affairs_And_Public_Distribution_3.pdf.
[12] Performance Evaluation of Targeted Public Distribution System, Planning Commission of India, March 2005, http://planningcommission.nic.in/reports/peoreport/peo/peo_tpds.pdf.
[13] Audit on the Preparedness for Implementation of National Food Security Act, 2013 for the year ended March, 2015, Report No. 54 of 2015, Comptroller and Auditor General of India, http://cag.gov.in/sites/default/files/audit_report_files/Union_Civil_National_Food_Security_Report_54_of_2015.pdf.
[14] Unstarred Question No. 844, Lok Sabha, Ministry of Consumer Affairs, Food and Public Distribution, Answered on February 7, 2017, http://164.100.47.190/loksabhaquestions/annex/11/AU844.pdf.
[15] Annual Report 2016-17, Department of Food & Public Distribution, Ministry of Consumer Affairs, Food & Public Distribution, http://dfpd.nic.in/writereaddata/images/annual-140217.pdf.
[16] 30 Food Subsidy, The Economic and Political Weekly, December 27, 2014, http://www.epw.in/system/files/pdf/2014_49/52/Food_Subsidy.pdf.
[17] Unstarred Question No. 2124, Lok Sabha, Ministry of Consumer Affairs, Food and Public Distribution, Answered on November 29, 2016, http://164.100.47.190/loksabhaquestions/annex/10/AU2124.pdf.
The Justice Srikrishna Committee, which is looking into the feasibility of a separate Telangana State, is expected to submit its report by tomorrow. It might be useful at this point in time to revisit the recommendations of the 1953 States Reorganization Commission (SRC) – the Commission that had first examined the Telangana issue in detail. However, it must be kept in mind that some of those arguments and recommendations may not be applicable today. Background Before independence, Telangana was a part of the Nizam's Hyderabad State and Andhra a part of the erstwhile Madras Province of British India. In 1953, owing to agitation by leaders like Potti Sreeramulu, Telugu-speaking areas were carved out of the Madras Province. This lead to the formation of Andhra Pradesh, the first State formed on the basis of language. Immediately afterward, in 1953, the States Reorganization Commission (SRC) was appointed. SRC was not in favour of an immediate merger of Telangana with Andhra and proposed that a separate State be constituted with a provision for unification after the 1961/ 62 general elections, if a resolution could be passed in the Telangana assembly by 2/3rd majority. However, a 'Gentlemen's agreement' was subsequently signed between the leaders of the two regions and this lead to a merger. The agreement provided for some safeguards for Telangana - for instance, a 'Regional Council' for all round development of Telangana. Thus, a unified Andhra Pradesh was created in 1956. In the years that followed, Telangana continued to see on-and-off protests; major instances of unrest were recorded in 1969 and in the 2000s. The SRC 1953 report The full SRC report can be accessed here. Summarized below are its main arguments and recommendations related to Telangana. Arguments in favour of 'Vishalandhra'
Arguments in favour of a separate Telangana State
SRC recommendations The Commission agreed that there were significant advantages in the formation of 'Vishalandhra'. However, it noted that while opinion in Andhra was overwhelmingly in favour of a larger unit, public opinion in Telangana had still to crystallize. Even though Andhra leaders were willing to provide guarantees ensuring development focus on Telangana, the SRC felt that any guarantee, short of Central Government supervision, could not be effective. In addition, it noted that Andhra, being a relatively new State, was still in the midst of developing policies related to issues like land reform. Thus, a hurried merger could likely create administrative difficulties both for both units. The SRC thus recommended the creation of a separate Telangana State with provision for unification after the 1961/62 general elections.
