Is PDS worth Scrapping?
An interesting debate has been raised by the Jago
Party about the feasibility and desirability of abolishing the current
Public Distribution System. The key to implementation of the suggestion lies
in appropriate e-Governance solutions being developed whether to retain the
existing system or to introduce a new system. Since use of technology for
public benefit is close to my heart, I am raising some of the issues
associated with this suggestion... Naavi
It is reported that CVC Justice D P Wadhwa appointed by the
Supreme Court has reported that PDS system is one of the most corrupt sectors
in our economy. The report states that RS 28000/- crores spent annually for PDS
management is largely misused.
It is also stated that according to the Economic Survey, the
total amount the total amount of annual subsidy being given by Central
and State governments is about Rs 4 lakh crore per annum while the
Central Government alone spends Rs 1.8 lakh crores on this account
An interesting off shoot of this is that since it is
estimated that about 27% of India’s roughly 1.13 billion population are below the
poverty line (BPL) i.e., about 310 million people or 70 million households.
the subsidy of Rs 400,000 crore spent on various schemes and subsidies is divided by 70
million households, amounts to an expenditure of Rs 4750 per month per
An argument is therefore being presented that the poor
would be better off if the subsidy is directly distributed in cash rather than
through subsidized supply of grains which get diverted and replaced with
substandard or adulterated stuff.
There appears to be some strength in the argument though
giving a dole is ethically uncomfortable and has to be linked to some
parameter of progress to be achieved by the recipient.
The key to the problem is in using an appropriate IT
mechanism linked to the proposed UID, a micro finance disbursement system
linked to a gradual phasing off of the dole. Such a "Dole" can be called more
respectfully an "Unemployment Allowance" and withdrawn in time to encourage
people finding their own sources of income over a period.
April 2, 2010
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