Is the public distribution system in India irreparably dysfunctional, or can it effectively provide nutrition and economic support to the poor?

In the last three years since the National Food Security law was passed, a number of state governments have expanded the provision of subsidised foodgrain, and the results of this inclusion are now showing on the ground.

In Chhattisgarh, Odisha, and Madhya Pradesh, most households in villages have ration cards and are able to secure their foodgrain entitlements at the correct rates. Even West Bengal, which had one of the most complicated ration systems till a few years ago, has nearly universalised its public distribution system in the months preceding the recent Assembly elections, with more than 85% of the state's rural families covered. Bihar and Jharkhand too have expanded coverage, though regular and timely delivery, and the quality of foodgrain, remains poor.

These are the select findings of a recent survey of six states by development economists Jean Dreze and Reetika Khera on the implementation of the National Food Security law in central and eastern Indian states, which suffer from the worst levels of malnutrition in the country.

A more inclusive system

Under the Targeted Public Distribution System of 1997, households were given ration cards in the Above Poverty Line and Below Poverty Line categories. A major problem of the older system was that there were large exclusion errors, which means that the poor and the deserving did not get ration cards and thus could not benefit from the programmes intended for them.

In 2005, three surveys – the National Family Health Survey, the National Sample Survey, and the India Human Development Survey – showed that about half of all poor households still did not have a Below Poverty Line card. They were therefore left out of government benefits like subsidised grains.

The National Food Security Act, 2013, expanded coverage under the public distribution system to 67% of the population. In the poorest states such as the six eastern and central states, which were part of the recent survey, the rural coverage went up to 80% and even above. The 2013 law also switched from giving 25 kg-30 kg grains per household at Rs 2 to Rs 3 per kilo, to an individual entitlement of 5 kg at the same prices. This was done so that the entitlements became fair, since the sizes of households, and their needs, vary. The law thus expanded and simplified the entitlements.

The coverage, the delivery of full and quality entitlements is what the recent survey examined through household interviews in the poorest blocks in these states. The surveyors found that the National Food Security law is now reaching its intended beneficiaries, and can provide effective nutritional security to prevent extreme hunger and deprivation.

“We surveyed over 3,600 rural households and found a significant increase in coverage of beneficiaries, in some instances by nearly 50%,” said Dr Reetika Khera, who teaches at IIT-Delhi. “This means the ration system has become more inclusive and more poor are included in the ration system.”

States had to implement the expanded provisions within a year under the National Food Security law, but several states had not finished the identification of the eligible “priority” households even after two years. This was finally completed in most states last year after the Socio Economic Caste Survey data was made available to states.

States like Bihar used the Socio Economic Caste Survey lists to issue new ration cards to 85% of its rural population, up from 63% earlier. In Odisha, the government asked people to self-certify if they were eligible and local officials then verified the claims to give ration cards to 82% of the rural poor. In Madhya Pradesh, the government linked the ration beneficiaries list to a local residents list maintained by the gram panchayat to cover 80% of the population.

Khera, however, added that a major gap is that most states, except Madhya Pradesh, have not put in place a system of adding names of members of the families if children are born, or anyone who missed out inclusion in the first place. “In many instances, one family member's name is missing in the ration card, reducing the amount of grains the household can get in all,” said Khera.

Among large states, Uttar Pradesh is yet to implement the law.

Elections, a driving force

Till about 10 years ago, one of the biggest criticisms of the ration system was that pilferage and leakages were estimated to be about 90%. The survey found that in most states leakages were down to 10%.

In four of six states – Odisha, Chhattisgarh, Madhya Pradesh and West Bengal – sample beneficiaries reported receiving 95%-100% of their grain entitlements in May 2016, and when calculated as an average of the ration received over previous three months, the figure was at more than 90%.

In Bihar and Jharkhand, the delivery of grains was more irregular. In Jharkhand, ration card holders had received 55% of their grain entitlements in May, and in Bihar, only 15%. In the previous three months, however, the sample beneficiaries received 84% of their entitlements in both states.

“The Bihar government started delivering grains to ration shops and increased commission of ration shop dealers in 2014-15," said Aashish Gupta, a PhD student and one of the surveyors in Bihar. "But even now, there are delays in delivery as the state administration does not lift grains from godowns on time. In some villages, even till June, people had not got their grains for May. If these irregularities are not fixed, it will make it easier for ration dealers to siphon off grains.”

The quality of grains varied in states. While in Chhattisgarh, Odisha, and Jharkhand, beneficiaries said they were getting good quality grains in their ration, the quality of rice in Bihar, and of flour provided at ration shops in West Bengal, was poor. “In Birbhum and Bankura, beneficiaries reported the quality of rice to be fair, but said the quality of atta, which is procured through a contractor was poor,” said Sabir Ahmed, one of the surveyors in West Bengal. “In Bankura, people were satisfied that a large number of the poor have now got included in the ration system. The cooperatives were running the ration shop in a more people-friendly manner than the private dealers.”

Dr Khera said that in both West Bengal and Bihar, the fastest improvements were recorded in months preceding the Assembly elections. She added: "It is up to the states now to consolidate these gains and build on them to eradicate hunger from villages."