This Article is From Jul 06, 2020

PM's One-Nation, One-Ration Scheme - What Not To Do

On March 26, the Finance Minister made the announcement of doubling the entitlements of PDS ration card holders for the months of April-June. Since then, it has been clear that the PDS has served as a lifeline for millions of Indians who were left high and dry when the sudden and complete lockdown had been announced two days prior.

As we approached the end of June, pressure had been mounting to extend this relief - not just from economists, but also from civil society and Chief Ministers including some from the BJP. Through June, when asked about the extension, the Food Ministry passed the buck to the PMO. Therefore, the extension of this relief measure till November, announced on June 30, 2020, was a big relief.

The National Food Security Act (NFSA) 2013 mandates that two-thirds (67%) of the Indian population be provided subsidized grains (5 kg per person per month at Rs 2/kg for wheat and Rs 3/kg for rice) by the central government. At about 80 crores, the central government subsidizes about 60% of today's population. When the Food Security Act was rolled out, 2011 census figures were used to arrive at the number of people to be included nationally. Since then, coverage has remained frozen, in spite of an increase in population. The 7-percentage points under-coverage by the centre translates to roughly 10 crore persons who must be included.

A belated announcement in mid-May to include eight crore migrants in the PDS was a welcome step. However, they were to be included only for two months - and even that has not happened. According to government data, utilization has been less than 20% due to 'lack of demand'. What is more plausible is that it is because no mechanism has been specified for how to go about identifying the migrants who are eligible.

At a time when we should be considering expanding the scope of the PDS beyond the legally mandated 67%, the centre is falling foul even of the legally-mandated coverage.

Why should we go beyond 67% PDS coverage? There are several good reasons for this: one, a universal PDS has been a long-standing demand. For as basic a right as food, it makes sense to have an open system where more people can be added, if needed.

Two, the lockdown created an economic and a humanitarian crisis. The livelihoods of millions were snatched overnight. Among the employed in India, only 17% are salaried; nearly half are self-employed - that includes cobblers, bicycle repairers, street vendors, petty traders in urban areas, and small and marginal farmers in rural areas. Only a minority of self-employed can be considered better off. Another one-third are casual wage labourers. For most of these people, their earnings dried up as soon as the lockdown was announced, and few would have had savings to tide them through the initial three weeks, let alone the extensions that followed.

Three, the Food Corporation of India maintains 'buffer stocks' to deal with exigencies. The buffer stock norms range from 21 million tonnes (mt) on 1 April to 41 mt on 1 July. As opposed to this, we had over 70 mt at the end of April, and after wheat procurement began around that time, we have nearly 100 mt at the end of June. What better time than now to use these stocks?

Four, the huge stocks have created a new headache for the government - safe storage. According to a PTI report in mid-March, the Food Minister said that lifting of six months grain in one go "will ease pressure on central storage as some quantity of wheat is kept in the open". That was before the new season of wheat procurement began - the storage problem is likely to have worsened now. Carrying costs (interest and storage) also impose a burden on the government's exchequer. At Rs 5.4/kg, the excess stock (roughly 56mt) will cost the government a few thousand crores.

Five, the lack of safe storage for some part of the grain means that there is a real possibility that some grain may go bad during the monsoon. At the end of May, reports of rotting grain had started coming in.

What is needed is very clear: add 8-10 crore people permanently to the PDS roster. For this, the centre should notify statewise shares, so that states can use their waitlists to expand the PDS.

The centre could consider issuing temporary ration cards (valid, say, for 6 months) for anyone who applies. The temporary nature of this entitlement is likely to work as a self-selecting filter. Another way of going beyond the legally mandated two-thirds is to set up community kitchens (like Amma's canteens in Tamil Nadu and 'dal-bhaat' kendras in Jharkhand).

Instead of doing all this, the government has latched on to an ill-advised idea from La-la Land - 'one nation, one ration' (ONOR). Why La-la Land? Many people believe that if ONOR had been operational, migrants would not have suffered. They are wrong because to benefit from portability (which is what 'one nation-one ration' promises to bring), the first condition is that migrant workers must be on the ration card list. The fact that the government announced that eight crore migrant workers will be given temporary ration cards suggests that many workers did not have ration cards; consequently, they would not have been able to benefit from ONOR.

Inter-state portability will raise difficult questions of logistics and entitlements. Will Tamil Nadu ration card holders get dal and oil, as migrant workers in Mumbai? Will Odia workers in Rajasthan (which only supplies wheat) get the "usna" rice that they're accustomed to? What of the cost-sharing when there is an additional state subsidy?

Third, the technology on which 'one nation-one ration' hopes to ride - Aadhaar - has proven to be a source of exclusion and hardship for the poor: a randomized control trial in Jharkhand conducted in 2017-18 found that 2.8% stopped receiving food rations entirely, when Aadhaar was integrated with the PDS. Transaction costs (in terms of longer queuing time, repeated visits) rose by 17%. The push for national portability is likely to disrupt the PDS which has truly proven to be a lifesaver these past few months. If the government cannot help poor people, at least it should stop making things worse for them.

(Reetika Khera teaches at IIT Delhi.)

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