The United Nations celebrates October 16 as the World Food Day every year, with an aim to spread awareness about eradicating hunger and ensuring food security for all.[1] In this context, we examine the status of food and public distribution in India, and some challenges in ensuring food security for all.
Background
In 2017-18, over Rs 1,50,000 crore, or 7.6% of the government’s total expenditure has been allocated for providing food subsidy under the Targeted Public Distribution System (TPDS).[2] This allocation is made to the Department of Food and Public Distribution under the Ministry of Consumer Affairs.
Food subsidy has been the largest component of the Department’s expenditure (94% in 2017-18), and has increased six-fold over the past 10 years. This subsidy is used for the implementation of the National Food Security Act, 2013 (NFSA), which provides subsidised food grains (wheat and rice) to 80 crore people in the country.[3] The NFSA seeks to ensure improved nutritional intake for people in the country.3
One of the reasons for the six-fold increase in food subsidy is the non-revision of the price at which food grains are given to beneficiaries since 2002.[4] For example, rice is given to families under the Antyodaya Anna Yojana at Rs 3/Kg since 2002, while the cost of providing this has increased from Rs 11/Kg in 2001-02 to Rs 33/Kg in 2017-18.
Provision of food subsidy
TPDS provides food security to people below the poverty line. Over the years, the expenditure on food subsidy has increased, while the ratio of people below poverty line has reduced. A similar trend can also be seen in the proportion of undernourished persons in India, which reduced from 24% in 1990 to 15% in 2014 (see Table 1). These trends may indicate that the share of people needing subsidised food has declined.
Nutritional balance: The NFSA guarantees food grains i.e. wheat and rice to beneficiaries, to ensure nutritious food intake.3 Over the last two decades, the share of cereals or food grains as a percentage of food consumption has reduced from 13% to 8% in the country, whereas that of milk, eggs, fish and meat has increased (see Figure 1). This indicates a reduced preference for wheat and rice, and a rise in preference towards other protein rich food items. 
Methods of providing food subsidy
Food subsidy is provided majorly using two methods. We discuss these in detail below.
TPDS assures beneficiaries that they will receive food grains, and insulates them against price volatility. Food grains are delivered through fair price shops in villages, which are easy to access.[5],[6]
However, high leakages have been observed in the system, both during transportation and distribution. These include pilferage and errors of inclusion and exclusion from the beneficiary list. In addition, it has also been argued that the distribution of wheat and rice may cause an imbalance in the nutritional intake as discussed earlier.7 Beneficiaries have also reported receiving poor quality food grains as part of the system.
Cash Transfers seek to increase the choices available with a beneficiary, and provide financial assistance. It has been argued that the costs of DBT may be lesser than TPDS, owing to lesser costs incurred on transport and storage. These transfers may also be undertaken electronically.6,7
However, it has also been argued that cash received as part of DBT may be spent on non-food items. Such a system may also expose beneficiaries to inflation. In this regard, one may also consider the low penetration and access to banking in rural areas.[7]
In 2017-18, 52% of the centre’s total subsidy expenditure will be on providing food subsidy under TPDS (see Figure 2). The NFSA states that the centre and states should introduce schemes for cash transfers to beneficiaries. Other experts have also suggested replacing TPDS with a Direct Benefit Transfer (DBT) system.4,[8]
The central government introduced cash subsidy to TPDS beneficiaries in September 2015.[9] As of March 2016, this was being implemented on a pilot basis in a few union territories. In 2015, a Committee on Restructuring of Food Corporation of India had also recommended introducing Aadhaar to plug leakages in PDS, and indexing it to inflation. The Committee estimated that a switch to DBT would reduce the food subsidy bill of the government by more than Rs 30,000 crore.[10]
Current challenges in PDS
Leakages in PDS: Leakages refer to food grains not reaching intended beneficiaries. According to 2011 data, leakages in PDS were estimated to be 46.7%.10,[11] Leakages may be of three types: (i) pilferage during transportation of food grains, (ii) diversion at fair price shops to non-beneficiaries, and (iii) exclusion of entitled beneficiaries from the list.6,[12]
In 2016, the Comptroller and Auditor General (CAG) found that states had not completed the process of identifying beneficiaries, and 49% of the beneficiaries were yet to be identified. It also noted that inclusion and exclusion errors had been reported in the beneficiary lists.[13]
In February 2017, the Ministry made it mandatory for beneficiaries under NFSA to use Aadhaar as proof of identification for receiving food grains. Through this, the government aims to remove bogus ration cards, check leakages and ensure better delivery of food grains.10,[14] As of January 2017, while 100% ration cards had been digitised, the seeding of these cards with Aadhaar was at 73%.14
Storage: As of 2016-17, the total storage capacity in the country is 788 lakh tonnes, of which 354 lakh tonnes is with the Food Corporation of India and 424 lakh tonnes is with the state agencies.[15]
The CAG in its performance audit found that the available storage capacity in states was inadequate for the allocated quantity of food grains.13 For example, as of October 2015, of the 233 godowns sanctioned for construction in Maharashtra, only 93 had been completed. It also noted that in four of the last five years, the stock of food grains with the centre had been higher than the storage capacity available with Food Corporation of India.
Quality of food grains: A survey conducted in 2011 had noted that people complained about receiving poor quality food grain which had to be mixed with other grains to be edible.6 There have also been complaints about people receiving food grains containing alien substances such as pebbles. Poor quality of food may impact the willingness of people to buy food from fair price shops, and may have an adverse impact on their health.[16]
The Ministry has stated that while regular surveillance, monitoring, inspection and random sampling of all food items is under-taken by State Food Safety Officers, separate data for food grains distributed under PDS is unavailable.[17] In the absence of data with regard to quality testing results of food grains supplied under PDS, it may be difficult to ascertain whether these food items meet the prescribed quality and safety standards.
[1] About World Food Day, http://www.fao.org/world-food-day/2017/about/en/.
[2] Expenditure Budget, Union Budget 2017-18, http://unionbudget.nic.in/ub2017-18/eb/allsbe.pdf.
[3] National Food Security Act, 2013, http://indiacode.nic.in/acts-in-pdf/202013.pdf.
[4] “Prices, Agriculture and Food Management”, Chapter 5, Economic Survey 2015-16, http://unionbudget.nic.in/budget2016-2017/es2015-16/echapvol2-05.pdf.
[5] The Case for Direct Cash Transfers to the Poor, Economic and Political Weekly, April 2008, http://www.epw.in/system/files/pdf/2008_43/15/The_Case_for_Direct_Cash_Transfers_to_the_Poor.pdf.
[6] Revival of the Public Distribution System: Evidence and Explanations, The Economic and Political Weekly, November 5, 2011,
[7] ‘Report of the Internal Working Group on Branch Authorisation Policy’, Reserve Bank of India, September 2016, https://rbidocs.rbi.org.in/rdocs/PublicationReport/Pdfs/IWG99F12F147B6E4F8DBEE8CEBB8F09F103.PDF.
[8] Working Paper 294, “Leakages from Public Distribution System”, January 2015, ICRIER, http://icrier.org/pdf/Working_Paper_294.pdf.
[9] “The Cash Transfer of Food Subsidy Rules, 2015”, Ministry of Consumer Affairs, Food and Public Distribution, September 3, 2015, http://dfpd.nic.in/writereaddata/Portal/News/32_1_cash.pdf.
[10] Report of the High Level Committee on Reorienting the Role and Restructuring of Food Corporation of India, January 2015, http://www.fci.gov.in/app2/webroot/upload/News/Report%20of%20the%20High%20Level%20Committee%20on%20Reorienting%20the%20Role%20and%20Restructuring%20of%20FCI_English_1.pdf.
[11] Third Report of the Standing Committee on Food, Consumer Affairs and Public Distribution: Demands for Grants 2015-16, Department of Food and Public Distribution, http://164.100.47.193/lsscommittee/Food,%20Consumer%20Affairs%20&%20Public%20Distribution/16_Food_Consumer_Affairs_And_Public_Distribution_3.pdf.
[12] Performance Evaluation of Targeted Public Distribution System, Planning Commission of India, March 2005, http://planningcommission.nic.in/reports/peoreport/peo/peo_tpds.pdf.
[13] Audit on the Preparedness for Implementation of National Food Security Act, 2013 for the year ended March, 2015, Report No. 54 of 2015, Comptroller and Auditor General of India, http://cag.gov.in/sites/default/files/audit_report_files/Union_Civil_National_Food_Security_Report_54_of_2015.pdf.
[14] Unstarred Question No. 844, Lok Sabha, Ministry of Consumer Affairs, Food and Public Distribution, Answered on February 7, 2017, http://164.100.47.190/loksabhaquestions/annex/11/AU844.pdf.
[15] Annual Report 2016-17, Department of Food & Public Distribution, Ministry of Consumer Affairs, Food & Public Distribution, http://dfpd.nic.in/writereaddata/images/annual-140217.pdf.
[16] 30 Food Subsidy, The Economic and Political Weekly, December 27, 2014, http://www.epw.in/system/files/pdf/2014_49/52/Food_Subsidy.pdf.
[17] Unstarred Question No. 2124, Lok Sabha, Ministry of Consumer Affairs, Food and Public Distribution, Answered on November 29, 2016, http://164.100.47.190/loksabhaquestions/annex/10/AU2124.pdf.
As of April 13, 2020, there are 9,152 confirmed cases of COVID-19 in India. Of these, 857 patients have been cured/discharged and 308 have died. As the spread of COVID-19 has increased across India, the central government has continued to announce several policy decisions to contain the spread, and support citizens and businesses who are being affected by the pandemic. In this blog post, we summarise some of the key measures taken by the central government in this regard between April 7 and April 13, 2020.
Source: Ministry of Health and Family Welfare, PRS.
Health
Supreme Court orders free testing for COVID-19 and provision of personal protective equipment for healthcare workers
Free testing for COVID-19: The Supreme Court held that COVID-19 tests should be free of cost for persons belonging to economically weaker sections as notified by the government and those covered under the Ayushman Bharat scheme, irrespective of whether they are conducted in private or public laboratories. Further, it held that COVID-19 tests may only be carried out in laboratories accredited by the National Accreditation Board for Testing and Calibration Laboratories, or any agencies approved by the World Health Organisation or Indian Council for Medical Research. Prior to this order, tests were free of cost in government laboratories. However, private laboratories were permitted to charge up to Rs 4,500 per test.
Personal protective equipment for healthcare workers: The Supreme Court held that availability of appropriate personal protective equipment (PPE) for front line healthcare workers must be ensured by the government. PPE includes gloves, masks, goggles, face shields, and shoe covers. Usage of PPE must be based on guidelines provided by the Ministry of Health and Family Welfare and the World Health Organisation. Further, it directed the government to promote domestic production of PPE by means such as allowing movement of raw material. Restriction on exports of PPE may also be instituted.
Security for healthcare workers: The Court also noted that healthcare workers treating COVID-19 patients were facing violence by the public due to stigma associated with their potential exposure to COVID-19. The Court held that states and union territories should direct police authorities to provide security to doctors and medical staff in hospitals, places where persons have been quarantined, and while conducting screening visits. Necessary action must be taken against persons who obstruct and commit any offence in respect to performance of duties by doctors, medical staff and other government officials working to contain the outbreak of COVID-19.
Exemptions from customs duty and health cess for certain items
The central government has exempted the levy of basic customs duty and health cess on certain items. These include ventilators, face masks, PPE, COVID-19 testing kits, and items necessary to manufacture these items. The exemptions will remain in force until September 30, 2020.
Financial Assistance
COVlD-19 emergency response and health system preparedness package
The central government approved the COVlD-19 emergency response and health system preparedness package. It will be implemented in three phases from January 2020 to March 2024. The objectives of the package include: (i) strengthening national and state health systems, (ii) support preparedness for COVID-19, (iii) procure essential medical equipment and drugs, (iv) setting up laboratories for surveillance, and (v) biosecurity.
The Ministry of Health and Family Welfare has initiated release of funds for phase 1 of the programme which will last until June 2020. These funds will be utilised for activities such as: (i) developing hospitals and isolation wards for COVID-19 patients, (ii) providing ventilators, (iii) expansion of diagnostic capacities, and (iv) community surveillance for the disease.
Permission granted for partial withdrawal from National Pension System
Subscribers of the National Pension System may make partial withdrawals to fulfil their financial needs. Withdrawals will be permitted on formal request by the subscriber. Funds may be utilised for the treatment of the illness of a subscriber, his spouse, children (including adopted children), or dependent parents.
All pending income tax refunds up to five lakh rupees to be issued
To provide immediate relief to businesses and individuals, all pending income-tax refunds up to five lakh rupees, will be issued immediately. This is estimated to benefit approximately 14 lakh taxpayers. Further, all pending GST and Customs refunds will be issued. This will benefit around one lakh business entities. The total refund granted will be approximately Rs 18,000 crore.
Compensation for Food Corporation of India Employees in case of death due to COVID-19
The central government has approved the proposal for monetary compensation to 1.08 lakh workers of the Food Corporation of India (FCI) including 80,000 labourers who are working to supply food grains across the country. Currently, families of FCI employees are entitled to compensation in the event of death due to terrorist attack, bomb blast, mob attack or natural disaster. However, the regular and contractual labour of FCI are not covered. Under this proposal, all workers on duty will be insured in the event of death due to COVID-19 between March 24, 2020 and 23 September, 2020. Regular labour will be entitled to 15 lakh rupees, contractual labour will be entitled to 10 lakh rupees, category 1 officers will be entitled to 35 lakh rupees, category 2 officers will be entitled to 30 lakh rupees, and category 3 and 4 workers will be entitled to 25 lakh rupees.
NGOs permitted to buy food grains directly from FCI for relief operations
The government noted that NGOs and charitable organisations are playing an important role in providing food to thousands of poor people during the lockdown. To ensure uninterrupted supply of food grain to these organisations, the central government has directed FCI to provide wheat and rice to NGOs at the Open Market Sale Scheme rate. These rates are generally reserved for state governments and registered bulk users. This implies that these organisations can purchase one to ten metric tonnes of wheat and rice at a time from FCI at the predetermined reserve prices.
Increasing financial resources
Reduction in salaries and benefits to Members of Parliament
The centre issued two Ordinances to amend: (i) the Salary, Allowances, and Pension of Members of Parliament Act, 1954 to reduce the salaries of MPs by 30% for a period of one year, and (ii) the Salaries and Allowances of Ministers Act, 1952, to reduce the sumptuary allowance of Ministers by 30% for one year. The government also amended the rules notified under the 1954 Act to reduce certain allowances of MPs for one year, and suspended the MPLAD Scheme for two years. The MPLAD scheme enables members of parliament to recommend developmental work in their constituencies. These changes are being made to supplement the financial resources of the centre to tackle the COVID-19 pandemic. The proposed reduction to the salaries and allowances of MPs and Ministers amounts to savings of around Rs 55 crore, and the suspension of the MPLAD scheme is expected to save Rs 7,800 crore. These measures comprise 0.03% and 4.5% respectively, of the estimated amount required to fight the immediate economic distress unleashed due to COVID.
For more information on the implications of the reduction of salaries and benefits to MPs, please see here.
For more information on the spread of COVID-19 and the central and state government response to the pandemic, please see here.
