Basing on raw NSSO data, economist finds 69% leakage in Gujarat's PDS

By Rajiv Shah 

A senior Jawaharlal Nehru University economist has calculated, on the basis of raw data obtained from the National Sample Survey Organisation’s on foodgrains consumption trend across the country during 2011-12, that Gujarat had the “highest leakage” of foodgrains from public distribution system (PDS) compared to most Indian states. The economist, who works as assistant professor at the Jawaharlal Nehru University, said, Gujarat has turned out to be the “worst performer as far as functioning of PDS is concerned is Gujarat”. He added, “The worst aspect of PDS performance in Gujarat is that it is now the state with the highest leakage in PDS in 2011-12: The figure rising from 45% in 2009-10 to 69% in 2011-12.”
Prof Himanshu, on the basis of his latest study, has said, “Not only has the percentage of population purchasing from PDS declined from 26% in 2009-10 to 22% in 2011-12, the average consumption from PDS per person has also declined from 0.8 kg per person to 0.6 kg per person.” The economist compares this with Bihar, which “used simple technological fixes such as computerization, doorstep delivery of foodgrains and global positioning system to track foodgrain movement and improve transparency in the system.” It increased the coverage of households eligible for PDS cereals from 6.5 million to 12.3 million using its own resources. Last year, Bihar budgeted for Rs 1,283 crore for food and civil supplies. As against this, Gujarat budgeted just one-third of that sum at Rs 476 crore”.
He comments, “While both states have shown remarkable performance on measures such as growth rate, the real yardstick of governance is the ability of state governments to deliver basic services to the poor. A far more important lesson from the experience of poorer states such as Orissa, Chhattisgarh and Bihar is the successful transformation of a leaky PDS into an efficient vehicle for poverty reduction. In all the three cases, it was led by leaders who had political conviction and if these are any indication for how NFSB may be improved, there are certainly lessons to be learnt.”
The economist adds, “Data from the survey shows the extent of leakage for rice and wheat, taken together, is 35% only compared with 55% in 2004-05 in India. Thus, within a span of seven years the reforms introduced by states have led to a significant reduction in leakages. What is also worth noting is not only the curbing of leakages but also the expansion in access to PDS. Only 23% households purchased cereals in 2004-05 and 39% in 2009-10. This number rose to 44.5% in 2011-12. In 2011-12, 50% of rural and 31% of urban population was purchasing cereal from PDS.”
Among the states that have dramatically improved their performance in this respect, one state that stands out is Bihar. A former laggard, Bihar was the state with the highest leakage and lowest percentage of population accessing PDS has shown a surprising turnaround. Per person consumption of PDS cereals in Bihar was 0.66 kg in 2009-10 as against the national average of 1.8kg per person. By 2011-12, per capita consumption of rice and wheat from PDS increased to 2.2 kg per person, marginally higher than 2.1kg per person nationally. What about leakages? As against 65% leakage in PDS in 2009-10, Bihar has managed to reduce leakage in 2011-12 to only 12%.”
The economist underlines, “More than the all-India story, it is the states’ performance that inspires hope. The traditionally low or negligible leakage states of Tamil Nadu, Andhra Pradesh and Himachal Pradesh continue to maintain an efficient PDS. However, Chhattisgarh and Orissa have now joined these states in showing a remarkable reduction in plugging leakages. For Chhattisgarh, the extent of leakage is negligible and Orissa managed to reduce it from 25% in 2009-10 to just 15% in 2011-12. Most states have witnessed an increase in the percentage of population accessing cereals from PDS along with a reduction in leakage. This is most visible in states which reduced the prices of PDS foodgrains and/or expanded coverage. These states include Bihar, Kerala, Uttarakhand, Jharkhand, Madhya Pradesh, Assam and West Bengal.”
Yet another scholar, Reetika Khera, an economist with the Indian Institute of Technology, Delhi, too in a recent study has said that while many Indian states have improved their PDS over the last five years, Gujarat is one of the worst-performing Indian states on two aspects of the PDS -- it has a low and falling per capita PDS consumption, and among the highest rates of foodgrain diversion. She bases her analysis on an analysis of NSSO between 2000-01 and 2008-09. Falling per capita PDS consumption is not considered an indication of rising affluence. Tamil Nadu, with a universal PDS and higher per capita income than Gujarat, has higher per capita PDS purchase and consumption, and far fewer leakages, Dr Khera has found. According to NSSO, over half of those in the poorest quintile in Gujarat report that they do not get any subsidised grain, nearly ten percentage points higher than the national average, according to the 2009-10 National Sample Survey (NSS).