![• The
Aadhaar
card
is
rela:vely
new
in
terms
of
reach.
Although
new,
it
is
rapidly
becoming
the
new
standard
with
more
than
360
million
cards
in
place
currently.
• Technology
implementa:on
is
a
major
challenge
especially
due
to
non
IT
savvy
nature
of
members
involved.
• Delay
in
payments
to
dealers
can
jeopardize
their
incen:ves
to
cooperate
with
the
system.
• Redistribu:on
of
benefits
has
to
be
done
very
tac]ully.
Slight
problems
can
turn
into
poli:cal
upheavals.
• Losing
corrup:on
benefits
can
result
into
bureaucra:c
hurdles.
• Corrup:on
in
assigning
contracts
to
shopkeepers
can
jeopardize
their
incen:ves
to
act
as
desired.
While
the
solu<on
looks
feasible
to
implement,
there
are
some
things
we
need
to
keep
in
mind](https://image.slidesharecdn.com/4-juggernauts-1378408166-130906034810-/85/Juggernauts-7-320.jpg)
Juggernauts
- 1. Plugging the Leaks Improving reach and efficiency of the Public Distribu<on System Team Name: Juggernauts
- 2. NSS es<mates that 41% of the intended food grains are diverted • Close to 400 million live below poverty line • India has more than 68.7% of people living on less than 2$/day • Survival a big challenge given the infla:on rates • Moral responsibility of the privileged to look a>er the underprivileged • Various Government plans to support the underprivileged • But corrup:on at grass root level nullifying the impact • On average, only 66% of the intended grains reaches the end stakeholder in India • Implementa:on of Food Security Bill will only add to the leakages
- 3. Leakage occurs at various points in the current process flow Farmers Fair price shops-‐ Run by dealers on commission basis Mandal level stocking points Godowns Integrated tribal dev agency Primary agriculture coop Different execu<ve bodies Rice Millers (75% sold to FCI) Civil supplies Transport (Route officer)
- 4. We see a host of reasons for leakage and diversion but will concentrate only on the most important aspects White cards Leakage in the distribu<on system Changing poverty line Due to various reasons, even people above the poverty line have white cards. This means more food grains will have to be sold at subsidized rates to people who can afford otherwise. Leakage is occurring at majorly two sources in the distribu:on mechanism: • While transpor:ng the foodgrains from godown to stocking point • At fair price shops, the shop keeper sells subsidized grains at market price The BPL has been a maRer of great debate and concern, In recent :mes, different commiRees have come out with different levels of poverty thus making it tough for the government to issue ra:on cards. Poli<cal pressure Due to vote bank poli:cs, the white cards that have served their purpose (example provided to gain insurance benefit) care not being cancelled. Moreover, no suitable ac:on is taken when the surveyed popula:on falsifies informa:on about their economic well being. Focus of this document
- 5. White cards should be allocated to only people in need as mass distribu<on defeats the purpose of subsidy Challenges in cancella<on of exis<ng white cards Low penetra:on of alternate id (aadhaar card) Poten:al for the issue to become a poli:cal roadblock as poli:cal par:es will look to save on their vote bank Opera:onal challenges in issuing new cards Recommended solu<ons and implementa<on plan Simultaneous redistribu:on of expired benefits. The number of people losing benefits at one par:cular :me should be outnumbered by genuine people receiving them. This will help prevent from the issue becoming poli:cal. The process of reissuing new cards needs to involve minimum human interven:on. Aadhaar card to serve as the new white card with privileged controlled through technology. Strict ac:ons to be taken against people giving false informa:on. Guidelines have to be in place for BPL benchmark. The new poverty guidelines seem promising. Problem 1
- 6. There is a need to priva<ze/incen<vize the fair price shops to reduce the urge to steal from the government Problems faced with fair price shops Recommended solu<ons and implementa<on plan Fair price shops to buy from Government at the Market Price BPL people to present their Aadhaar cards at these shops. Using the bar code, the shopkeeper to verify status of the person from the Government database. The BPL person to pay a minimal price (set by the Govt.). The dealer records the transac:on with the Govt. Database. A bill to be generated with invoice recorded with the Govt. and a copy handed over to the customer. Problem 2 Informa:on asymmetry between people and dealers about the quality of food grains and the arrival cycle of those High arbitrage opportunity as shop keepers buy at subsidized rates and sell later at market price Severe levels of adultera:on to make up for inventory sold through unfair means “Priva'zing the Fair price shop system along the business model of petrol pumps”
- 7. • The Aadhaar card is rela:vely new in terms of reach. Although new, it is rapidly becoming the new standard with more than 360 million cards in place currently. • Technology implementa:on is a major challenge especially due to non IT savvy nature of members involved. • Delay in payments to dealers can jeopardize their incen:ves to cooperate with the system. • Redistribu:on of benefits has to be done very tac]ully. Slight problems can turn into poli:cal upheavals. • Losing corrup:on benefits can result into bureaucra:c hurdles. • Corrup:on in assigning contracts to shopkeepers can jeopardize their incen:ves to act as desired. While the solu<on looks feasible to implement, there are some things we need to keep in mind
- 8. We need to keep in check the progress we make on these sugges<ons.. Encourage Fair price dealers to sell to BPL families by incen:vizing them. Slightly extra earning over the retail margin would be a strong mo:vator. Rigorous process to be followed while selec:ng the dealer. The installa:on of technology infrastructure to be mandatory for the shopkeeper. Strong punishments for viola:ng guidelines. Govt. IT systems need to be in place to process huge amounts of requests. Support systems for IT to be developed for shopkeepers. Data Analy:cs to be employed on the lines of FMCG organiza:ons. Inventory turnover helps forecas:ng demand beRer. Leakages will be easier to detect. Hence, eliminate the en:re process of acquiring the food grains from the government at subsidized rate, rather encourage to buy at market price. Timely payment by the government to the dealers is extremely cri:cal for success of this model
- 9. • E-‐PDS: PDS portal of India -‐ www.pdsportal.nic.in/ • Na:onal Food Security Bill : Challenges and Op:ons -‐ cacp.dacnet.nic.in/NFSB.pdf • UIDAI – hRp://uadai.gov.in • Andhra Prades State Government PDS process • Does Economic Theory Inform Government Policy? – Kaushik Basu -‐ hRp://www.iegindia.org/kbdlecture.pdf • Poverty in India – Wikipedia – hRp://en.wikipedia.org/wiki/Poverty_in_India • Performance Evalua:on of Targeted Public Distribu:on System (TPDS) -‐ hRp://planningcommission.nic.in/reports/peoreport/peo/peo_tpds.pdf References