New Delhi: The Union food ministry has contested a report indicating significant leakages in the public distribution system (PDS) amounting to an annual loss of Rs 69,000 to the exchequer.
Indian Council for Research on International Economic Relations (ICRIER, an economic policy think tank, had claimed 28% leakage in PDS with Gujarat, Arunachal Pradesh and Nagaland topping the list of states with the highest loss of grain.
The food ministry on Tuesday said there were significant discrepancies in the data interpretation and methodology used by the report’s authors.
“The food ministry strongly contests these figures. We have critically evaluated the claims made in the ICRIER study, highlight[ed] inaccuracies, and showcased the significant measures taken by the Government to create a more transparent and efficient PDS,” the ministry said.
The ministry challenged the study based on its estimation of offtake figures – the quantity of food grains lifted by states from central depots – and the cereal consumption by individuals based on data from Food Corporation of India (FCI) and Household Consumption Expenditure Survey (HCES).
The ministry said that while the report has cited 51.7 metric tonne as the household PDS consumption figure, it has not provided the calculation and methodology for it in the report.
“HCES data includes cereal consumption from multiple sources, such as state-specific schemes and private purchases, which complicates any direct correlation with PDS offtake,” the ministry said.
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The ministry also claimed that if per capita consumption of rice and wheat in both rural and urban areas was scaled for the total population of beneficiaries under the National Food Security Act (NFSA), the annual household consumption exceeds 85.56 mt (including consumption from sources other than PDS) – which is far greater than the 51.7 mt mentioned in the ICRIER report.
“The ICRIER report mentioned figures of actual household consumption taken from the HCES report whereas the tables mention total HCES PDS consumption,” the ministry said. The ICRIER report too notes this in the introduction to the study.
The ministry said that the ICRIER report had also taken offtake distribution as the same process.
“Offtake refers to the quantity of food grains lifted by states from central depots, while distribution represents the delivery of these grains to beneficiaries. Offtake figures account for stocks in transit, buffer allocations, operational reserves and stocks allocated for other social welfare schemes, Open Market Sales etc. Hence offtake figures should not be confused with PDS stocks used for distribution in households.”
However, the ICRIER report states, “In calculating the total offtake under various schemes, welfare programs such as the mid-day meal program, wheat nutrition program, welfare institutions and hostels, and defence provisions were not included, as the HCES data does not capture information on consumption from these sources. Centre-level offtake data is provided by both the Food Corporation of India (FCI) and the Department of Food and Public Distribution (DFPD), though there are minor variations in the figures from these two sources. For this study, we have relied on data from the FCI.”
“The allegations of systemic wastage are both overstated and dismissive of the significant advancements made in recent years,” the ministry said.
The ICRIER report had said, “While this [28% leakage] represents a significant improvement from the 46% leakage reported in 2011-12 (Shanta Kumar Committee Report, 2015; Gulati and Saini, 2015), it still indicates that a substantial portion of the free/subsidised grains is not reaching the intended beneficiaries. It goes to the credit of the government that they took note of high leakages in the PDS system and made the installation of the Point of Sale (PoS) machines in FPS around 2016. This was part of the broader digitisation efforts under the NFSA to improve transparency and reduce leakage in the PD.”
