PDS AND COVID-19: TACKLING THE HUNGER AND NOT THE HUNGRY

This article addresses the case of hunger that the poor of the country are facing in the times of COVID-19. In other words, the effectiveness and impact that the Public Distribution System has on eliminating or reducing the number of those who sleep hungry at nights. PDS has become an important means of income support and social protection, majorly in rural India along with showcasing increases in implicit value of PDS entitlements as the food grain prices has been on the rise for last many years and yet the prices has remained unchanged in PDS, some states have even managed to lower the prices (Drèze and Khera 2010; 2012; Khera 2011a, 2011b and Drèze 2013).

The rise of COVID-19 worldwide has led to a drastic downturn in all the economies, as complete lockdown is being witnessed, meaning only the essential products and services like food items and medicals are allowed to operate. India, a developing nation, started into the lockdown on 23^rd March 2020, with all public transportation being shut (inter-state buses, railways, etc.) leaving a huge number of migrant workers and labourer’s stranded without enough money or food. Most of these families comprise of the informal workers with daily wage earners and eligible for subsidised food grains available through fair price shops under the Public Distribution System (PDS), although, not every one of these workers/families have a ration card, an essential for availing the benefits of India’s Public Distribution System, as reflected in an article published by Agarwal (2020). Another clause affecting them majorly is that only those people working in their home states can prevail the benefits of fair price shops, accelerating the hunger/hungry percentages in these times. Those not covered by the National Food Security Act (NFSA) are buying food grains from stores, which costs much more than the one offered in fair price shops. Essentially, this also shows that PDS plays a role as implicit income transfer, which can be calculated as, for a household (say h),

T^h = Q^h.(p-q)

Where, Q^h is the quantity of the subsidised commodity provided, p is the market price, and q is issue price (Drèze and Khera 2013). However, the above equation only stands true in the case where the household consumes more than Q^h, as PDS generally covers a portion of one’s food grain requirement.

 PDS has undergone several reforms during the last decade which makes it stand at the current stance of efficiency. Technology was a major implementation that changed the face of PDS. Installation of Point of Sale (POS) machines helped in getting accurate ‘Quantity Transaction Costs’ (QTR) and thus the quantity of grains disbursed to the PDS benefitted households. This also played a role in eliminating corruption at the fair price shops (Drèze 2016). The compulsion to link Aadhar card with the Ration card made identification of households and individuals more efficient. However, the introduction of Aadhar Based Biometric Authentication (ABBA) made use of various “fragile technology”, such as – seeding of Aadhar numbers correctly into the PDS database and ration cards; entire sales are dependent on POS machines, any malfunction would lead to no transactions; proper internet connection for the POS machines to work efficiently; remote Aadhar servers that identify the ration card and authenticate fingerprints;  fingerprint recognition software to identify and verify the beneficiaries.

This essential countrywide lockdown has led to a lot of suffering for the economically vulnerable families due to a number of reasons. Being stranded homeless and without money touches the top of the list. In recent events, many migrant workers have lost lives in an attempt to reach back to their homes, 16 lives lost by being run over by a goods train near Aurangabad, Maharashtra; 24 killed in a road accident in northern India. A lot of people have also lost lives due to hunger, financial stress, exhaustion, lack of medical help, to name a few more.

 Challenges Associated

Studies by Reetika Khera and Jean Drèze elaborate on the fact of the increased population since the last census, conducted in 2011. According to the 2011 population projections for 2020, India currently has a population of 1.37 billion which makes 922 million eligible under the NFSA, as opposed to the actual number of ration card holders, which is 814 million (estimated in 2011 census). Over a 100 million people are currently excluded from the PDS which is over 9% of India’s population. This number is so large than it even supersedes most of the countries’ entire populations.

The new IMF’s Worlds Economic Outlook release provides new country-by-country estimates of what might happen now that the world is facing a pandemic, COVID-19. For this article, we focus on the estimation about poverty in the world, which says that 12 countries would witness an increase in poverty of over 1 million people in 2020 due to COIVD-19. India, however, has been estimated to add about 10 million people due to this pandemic. The situation has exposed the vulnerability of those households who had very recently escaped poverty, pulling them back into the vicious circle

The precise 108 million, could however, as mentioned by Khera and Drèze, might be an over estimation as the growth rate of urban population is more than that of the India’s rural population. The undercoverage stands to be the highest in the most populated states like Uttar Pradesh, Bihar and Madhya Pradesh, where these three states comprise of 55 million eligible uncovered individuals, says Agarwal (2020). The case of undercoverage arises when new ration cards (an essential to avail PDS facility) are not issued by the State Governments due to the exhaustion of the quota provided when the NFSA was put into action. For instance, Jharkhand issued its last fresh Ration card several years ago, and now has over 8.4 lakhs households’ application pending for issuance.

The coverage as per the 2011 census is 67% entailing to 814 million out of the population of 1.22 billion. The number of coverages remains the same even in 2020, making the actual coverage at 60% and not the expected 67% (Drèze). Considering the current COVID-19 situation, the extended lockdown is leaving (at an increasing rate) even more than those who were earlier entitled to PDS, hungry. The daily wage earners like taxi drivers haven’t earned money in over a month, thus the possibility of those households being hungry increases with the days of complete lockdown.

 Aadhar card plays a very crucial role in the exclusion from the PDS. The ration card could be cancelled for any of the three reason below: (Khera 2017)

• Unavailability of Aadhar number.
• Failure to link the Aadhar with ration card.
• Failure of Aadhar Based Biometric Authentication (ABBA)

So those who do not have an Aadhar card or have not linked it with ration card, would be unable to access the PDS and thus remain at a further loss during current situation.

 Steps in Action

The situation arising due to the pandemic and the resulting lockdown is catastrophic, especially for the poor as more than the virus, they are affected by the loss of income and thus food. The country has also witness numerous deaths apart from those of the virus. Nearly 200 people dies due to the lockdown. According to Kharas and Homi (2020), “53 deaths were caused by exhaustion, hunger, denial of medical care, or suicides due to lack of food or livelihood. At least seven people were killed in violent crimes, such as people turning into vigilantes and attacking others for violating the lockdown. Migrant labourers wanting to return home were forced to walk hundreds of kilometres on highways that speeding vehicles were expecting to be empty. At least 35 migrants were accidentally run over. At least 40 people have died or committed suicide after India shut all alcohol stores. Another 39 people have committed suicide because they feared getting the coronavirus infection, thanks to the panic created by the lockdown, or because of loneliness or being quarantined. Yet another 21 deaths were caused for miscellaneous reasons.”

The lockdown was indeed an essential step to be taken to contain the spread of the virus. India has commendably kept the mortality rate at about 3% which is much lower than global average of 7%. Also, India has not witnessed any food riots or major price rises during these times. The availability of essential food items was ensured despite some supply chain disruptions, which were also managed quite well, mentions Gulati (2020).  Nirmala Sitharaman, the Finance Minister of India, announced a relief package on 26^th March 2020. This was a combination of food and cash assistance. The Public Distribution System’s ration entitlement was doubled for three months for those benefitted under the National Food Security Act of India, with the additional quantity provided free of cost. The additional 5kg of rise and 1kg of pulses will not reach the uncovered people. No relief or support of any sort was announced for the migrant workers stranded away from their homes with no source of income or to those 100 million not covered under the PDS. This extra food grain provision is the only help extended by the centre government to tackle the hunger arising in the country. Many food camps were set up in order to provide food by Non-Governmental Organisations (NGOs) across the country. The camps set up by NGOs were more than that set up by the state governments as per the submission made by the Centre to the Supreme Court.

One could wonder maybe the government doesn’t have enough food grains so as to include the left out economically vulnerable, but that is not the case. The stock was counted at 77 million tonnes of rice and wheat in March 2020 by the Food Corporation of India. This is three times the required quantity. The stock is expected to go further up by 40 million tonnes, procured in the rabi harvest in the month of April. Agarwal (2020) mentions that “An average of the last three year’s shows that the PDS needs about 54 million tonnes of food grain to ensure provisions for one full year. And Dreze estimates that an additional 20 million tonnes would be needed to universalise the system for one year.”

The inefficiencies are present on a large scale here. We have been mentioning the most common groups that are suffering but there remain many others who are not on anyone’s radar. Even the relief package announced by the Central Government will have undeniable inefficiencies on state levels. Ration shop owners are not giving the prescribed quantity to the poor households, for example, if they are supposed to get 70kg of wheat or rice, they inly actually get 50 to 60 kgs, which will not be sufficient for them to feed the family. This is most common in Jharkhand. Irregular food distribution and black marketing are very common in Bihar. Recent report shows that FIR has been lodged against 144 fair price shops, with 36 of the licenses cancelled and 127 dealerships suspended.

The crisis that India’s economically backward classes are facing today can be handled better in areas with efficient distribution as compared to the unsteady and non-functional areas.

Apart from just the availability of food grains, there comes several problems related to the supply of these food grains. The supply of labour to load and unload the things from the trucks is short. The dire need of social distancing and various check posts, in order to flatten the curve (contain the spread of virus) makes smooth deliveries difficult. In many cases the produce from the farms is not reaching the mills in time leading to loss of produce (IFPRI). The revival of the economy can follow a J-curve or even a V-curve, difficult to say as of the current situations.

Further Recommended Solutions

Several Nobel laureates, Amartya Sen, Abhijeet Banerjee and the former RBI governor Raghuram Rajan, in an interview with The Indian Express suggested a solution to the problem of undercoverage could be universalising of the PDS for atleast a period of six months. In other words, provision of food grains for all, regardless of whether they have a ration card or not. They have alternatively suggested issuance of temporary ration cards with minimal checks to anyone willing to stand in ques for hours. “The cost of missing many of those who are in dire need vastly exceeds the social cost of letting in some who could perhaps do without it,” Additionally, Dey said that there might be a lot of people who are unable to cook despite having the grains due to multiple reasons. Setting up of communal kitchens in rural and urban areas might solve this issue. The utilisation of every possible tool at the Government’s disposal is the need of the hour towards the next big crisis along with COVID-19.

“India ticks the two key checkboxes to ensure these food transfers are delivered: adequate stock of grains and a system of delivery through PDS and mid-day meal schemes”, mentions Agarwal (2020).

Several steps across the country have been taken to ensure social distancing and thus towards flattening the curve:

• Door step delivery of ration has been started in several parts of the country for high risk communities, with the help of various digital applications.
• Providing several months of ration at once, ensuring that people do not leave the house more often and thus lesser crowd in the marketplaces.
• Moving to Digital Cash Transfers may also help contain the spread and thus have public health benefits as cash can have multiplier effect on economy as well providing a source of much needed stimulus. (Handa et al. 2018; Eager et al. 2019)

A new Economic Package of Rs. 20 Lakh Crore has been announced recently by the Government of India in an approach to make India Atma-nirbhar (self-dependent). In other words, a self-sufficient and self-reliable India. Sitharaman announced the package over five announcements.  The Central Government has permitted the State Governments to use the Disaster Response Funds towards setting up shelters for migrants and providing them food and water, releasing Rs. 11002 Crore as a contribution. It has also started preparation of food hygienically three times a day to feed those in the Shelters for Urban Homeless.

Food grain assistance to the migrant workers has also been addressed in this new package allocating Rs. 3500 Crore. Migrants who are neither covered by the National Food Security Act nor the State Cards of the state they work in, will be provided 5 kgs of grains per person and 1 kg of Chana per family for two months. This is expected to benefit about 8 crore migrants across the country. Costs will be completely borne by the Central Governments while the State Governments have to ensure proper implementation, identification of migrant workers and full distribution. (Government of India)

Prime Minister’s Technology Driven System Reforms played a role in this package as it will be used to enable migrant workers access Public Distribution System (Ration) from any Fair Price Shop in the country by March 2021. “67 crore beneficiaries in 23 states covering 83% of PDS population will be covered by national portability by August 2020. 100% National portability will be achieved by March 2021. All the States/UTs will complete full FPS automation by March 2021.”, mentions Government of India in subsequent releases of the Economic package.

References

1. Agarwal, Kabir (2020), “Coronavirus Lockdown: As Hunger Grows, The Fear Of Starvation Is Real.” The Wire.
2. Covid-19: Provide Food To Everyone Without Worrying About PDS Leakage, Economists Urge Government. [online] Scroll.in. Available at: https://scroll.in/latest/959341/covid-19-provide-food-to-everyone-without-worrying-about-pds-leakage-economists-urge-government.
3. Dev, Mahendra and Sengupta, Rajeswari (2020), “COVID-19: Impact on the Indian Economy”, Indira Gandhi Institute of Developmental Research, Working Paper, April 2020.
4. gov.in. 2020. Coverage And Allocation Under NFSA. [online] Available at: https://dfpd.gov.in/coverageandallocationundernfsa.htm.
5. Drèze (2016). “Dark Clouds Over The PDS”, The Hindu
6. Drèze, Jean and Khera, Reetika (2013), “Rural Poverty and the Public Distribution System”, Economic and Political Weekly, Vol. 48, No. 45/46 (NOVEMBER 16, 2013), pp. 55-60
7. Drèze, Jean and Khera, Reetika, “Understanding the Leakages in the Public Distribution System”, Economic and Political Weekly, Vol L No. 7, pp. 39-42
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9. Gulati, Ashok (2020), “There Is An Opportunity To Put India’S Agri-Marketing And PDS System On A More Efficient Path.”, The Indian Express.
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12. Kharas, Homi and Hamel, Kristoff (2020) “The Covid Effect: Poverty Headcount To Rise The Most In India. 10 Million To Be Affected.”, ThePrint.
13. Khera, Reetika and Somanchi, Anmol (2020), “COVID-19 and Aadhaar: Why the Union Government’s Relief Package is an Exclusionary Endeavour”, Economics and Political Weekly, 59, Issue No. 17, 25 April 2020
14. Mukherjee, S., 2020. Covid-19 Crisis And India’s Ration Story: Mounting Stocks And Hungry Mouths. [online] Business-standard.com. Available at: https://www.business-standard.com/article/economy-policy/covid-19-crisis-and-india-s-ration-story-mounting-stocks-and-hungry-mouths-120041601647_1.html.
15. Murlidharan et al. (2020), “Identity Verification Standards In Welfare Programs: Experimental Evidence From India”, National Bureau of Economic Research, Working Paper 26774, Feb 2020
16. Sen, Amartya; Rajan, Raghuram and Banerjee, Abhijit (2020). “Huge Numbers May Be Pushed Into Dire Poverty Or Starvation…We Need To Secure Them”, The Indian Express
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The views expressed in this paper are the views of the authors and do not necessarily reflect the views or policies of PCI, its Board of Directors, or the governments they represent.

Kritika Garg

Research Intern at Policy Change Initiative | Website

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