CENTRAL VIGILANCE COMMITTEE
PUBLIC DISTRIBUTION SYSTEM
THE STATE OF RAJASTHAN
Justice Wadhwa committee on Public Distribution System
STATE OF RAJASTHAN
Chapter Chapter Page No.
A. Preface 1-9
B. Broad Overview i-xvii
1. Introduction 1-3
2. Distribution of food grain 4-39
3. Wheat Flour/ Atta 40-46
4. Mode of Appointment of FPS Dealers 47-52
5. Viability of Fair Price Shops 53-61
6. Coupon System 62-66
7. Identification of Beneficiaries 67-71
8. Diversion of foodgrains 72-76
9. Vigilance, Enforcement & Complaint 77-86
10. Computerisation 87-88
11. Recommendations 89-103
12 APPENDIX 104-107
Issues raised in Public Hearing
1. In Writ Petition(C) No.196/2001 – People’s Union for
Civil Liberties V/S Union of India and Ors., Hon‟ble
Supreme Court of India by Order dated the 12.7.2006
constituted a Committee to be headed by me to look into the
maladies affecting the proper functioning of the Public
Distribution System (PDS) and to suggest remedial
measures. The operative portion of the order reads as
“After having heard learned counsel for the
parties, we find that there is practically no
monitoring over the sums allotted for the Public
Distribution System (in short PDS) by the Central
Government, and its utilization. The amount
involved, we are told is in the neighborhood of
Rupees Thirty Thousand Crores annually. Certain
suggestions have been given by Mr. Colin
Gonsalves, learned senior counsel as to the
modalities to be adopted in such cases. At the
present stage we feel it would be necessary to
constitute a Central Vigilance Committee headed
by a retired Judge of the Court to be assisted by
Dr. N.C. Saxena, the Commissioner earlier
appointed by this Court. We requested Mr.
Justice D.P. Wadhwa to head the Committee.
The Committee shall look into the maladies which
are affecting the proper functioning of the
system and also suggest remedial measures. For
this purpose the Committee shall amongst other
things, focus on:-
a) The mode of appointment of the dealers,
b) The ideal commission or the rates payable
to the dealers, and
c) Modalities as to how the Committees
already in place, can function better,
d) Modes as to how there can be transparency
in allotment of the food stocks to be sold at
While dealing with the question of the mode of
appointment, the Committee shall also suggest
as to a transparent mode in the selection of the
dealers. The Committee shall also indicate as to
how more effective action can be taken on the
report of the Vigilance Committee already
appointed. It goes without saying that the same
shall be in addition to the legal remedies
available to any citizen in setting law into motion.
We request the Committee to give its report
within period of four months so that further
instructions/directions can be given.
The Committee would invite suggestions from
general public, organizations and would consider
the suggestions, if any received in the proper
2. Hon‟ble Court‟s direction was initially given for the
Government of Delhi to be followed on an all India basis.
3. Committee submitted the report on Delhi on 21.8.2007.
4. By order dated 10.01.2008, Hon‟ble Court, while accepting
the report, directed the Committee to undertake a similar
exercise in terms of the earlier order for the entire country.
5. Scope of the task assigned to the Committee thus having
been enlarged, the Committee projected to the Department
of Food & Public Distribution, additional requirements of
staff, space and delegation of financial powers for its smooth
functioning. The Department dilly dallied and did not meet
the requirements. The Committee had to approach the
Hon‟ble Court again and again. It was only after a
peremptory Order dated 25.8.2008 was passed by the
Hon‟ble Court that the Department started taking steps for
creating necessary infrastructure. It was only thereafter that
the Committee could start functioning in right earnest. The
Hon‟ble Court extended the time for submitting the report till
6. The Committee submitted its report for the States of
Uttarakhand, Jharkhand, Orissa and Karnataka. Thereafter,
the Hon‟ble Court has been pleased to extend the time
further till December 2009. The Committee has since
submitted the report on the State of Andhra Pradesh, Bihar
and Gujarat. The Committee is presently submitting its report
on the State of Rajasthan.
7. The Committee has already submitted a separate
comprehensive report on Computerization of PDS. Some
States have shown interest towards computerization of PDS.
It is the mandate of the Public Distribution System (Control)
Order 2001 that “State Governments shall ensure monitoring
of the functioning of the Public Distribution System at the
fair price shop level through the computer network of the
NIC installed in the District NIC Centres. For this purpose
computerized codes shall be issued to each FPS in the
district.” Nothing appears to have been done towards this.
Rajasthan has yet to make any progress towards
8. PDS is undoubtedly the largest food distribution network of
the kind in the world. While procurement, storage in FCI
godowns and allocation of food grain to the states is in the
hands of the Central Government, distribution is done
through the Fair Price Shops licensed by the State after
identifying BPL and AAY population as per the estimation
fixed by the Planning Commission and the distribution is
9. No one has doubted the utility of PDS being the need for
supply of food grains to the poor of the country at affordable
rates. Procurement and distribution of food grains is a huge
and gigantic task but the whole system is built on corruption.
There are more leakages and maladministration and benefits
to the poor are low. Inefficiency and corruption has made
PDS corrupt at several levels (during the course of the visit
of the Committee to various places it was found that an
equal and perhaps more corruption is present in the
distribution of kerosene oil). The system lacks transparency,
accountability, monitoring and enforcement. Survey is not
being conducted regularly and properly, with the result that
people Above Poverty Line (APL) have been issued Below
Poverty Line (BPL) cards and those eligible for BPL cards
have been ignored. There is also a menace of bogus cards.
Immediate measures are required to reduce diversion of
food grains. Delivery systems under the PDS have to be
improved so that the actual beneficiary gets its due
entitlement at fixed price, fixed quantity, fixed time and of
wholesome quality. Innovative methods are required to
improve the system. The whole system has to be totally
revamped and modern technology appears to be the only
10. Public Distribution System (PDS) is synonymous with
corruption. Rajasthan is no different. There are two corrupt
sectors in PDS, one is distribution of food grain and the other
is distribution of Kerosene Oil. In PDS it is the Fair Price
Shop (FPS) which is the breeding ground of corruption. In
one report we have said that there is a web of corruption
woven around FPS by its owners, politicians, bureaucrats,
officials of Food and Supplies Department, Civil Supplies
Corporation and the transporters. FPS is an important link in
the PDS but then it is the FPS which is the epicenter of
corruption. It is common knowledge to all, whether he be a
politician, bureaucrat or any other public servant that an
honest FPS owner cannot survive from the income earned
from PDS and that he has to indulge in diversion of food
grain in black market. PDS food is meant for the poor.
There being no sustainable income for the FPS dealer, yet
there is clamour for allotment of FPS. The answer is not far
to seek. All are involved in this crime whether be it a
wholesaler, transporter or an official or a bureaucrat or
11. No doubt that FPS is not a profitable proposition. But it is also
apparent that the FPS owners are not interested in selling
other grocery items from the shop. No amount of increase
in commission even by 100%, to an FPS owner will make his
shop viable for him to earn sufficient income. An FPS owner
can certainly add to his income by selling grocery items from
his shop but, it would appear, greed overtakes to make a
quick buck from the black-market and to share his ill gotten
income with corrupt officials, politicians and transporters.
There is no prohibition from the State for the FPS owner to
sell other non-PDS items from his shop. Diversion is
lucrative business considering the vast difference between
the PDS food-grain price and the market price.
12. Committee has suggested that in order to combat corruption
and strengthening PDS there has to be a zero tolerance
approach. Everything appears to be fine on paper but its
implementation is faulty.
13. Committee has suggested strengthening of PDS in tribal and
drought prone areas. Considering that drought conditions
exist. In the State due to scanty rains this year State must
immediately introduce concept of FPS through mobile vans.
Steps must be taken to identify the most vulnerable groups
in rural/tribal areas.
14. During its visit to the State of Rajasthan, Committee visited
Districts of Alwar, Jaipur, Ajmer, Rajsaman, Udaipur,
Dungarpur, Pali and Jodhpur. Apart from meeting officials of
the State, wholesalers, Cooperative Societies, FCI, the
Committee met a cross-section of people. These included
NGOs, FPS owners, transporters and beneficiaries. The
Committee also inspected FPSs, wholesalers and godowns of
FCI. Committee also visited offices of the Department of
Food, Civil Supplies & Consumer Affairs. The Committee got
full cooperation from the officers of State Government, Co-
operative Societies running wholesale and FCI. Committee
records its appreciation of the assistance rendered.
Committee met various officials of the State Government.
The Committee had also public meetings at Jaipur, Udaipur
and Jodhpur. Due publicity had been given of the visit of the
Committee. Committee wishes to record its appreciation of
the help and guidance rendered by Mr. Ajay Aswal, RAS who
acted as Nodal officer on behalf of the Department.
15. Meeting was also held at Jaipur, the State Headquarters.
However, Chief Secretary and the District Collector could not
attend in view of huge fire at the oil depots and there were
number of casualties and relief operations were on.
Participants in the meetings at various places are as under:
Mr. O.P. Meena, Principal Secretary; Mr. O.P. Yadav,
Additional Commissioner; Mr. Parmeshwar Lal, Dy.
Commissioner, Food & Civil Supplies; Mr. Mukesh Sharma,
Registrar, Cooperative Societies; Mr. M.L. Nagpal, General
Manager, FCI, Jaipur; Mr. A.D. Samuel, Manager (Storage &
Sales), FCI Rajasthan; Mr. O.P. Makhija, Deputy General
Manager, FCI; Mr. U.D. Khan, DSO and Dr. Abha Jain DSO
(Rural); Consumer Section & Network Society (CANS); Sawai
Madhopur Rural Consumer Organization(Mukesh
Vaaaishnav, President); Resources Institute for Human
Rights(Vijay Goyal); Bhartiya Gyan Vigyan Samiti (Pappu
Sharma); Rozi Roti Adhikar Samooh, Jaipur (Laksshman);
Alwar Zila Upbhokta Sanrakshan Samiti (Dr, R.K. Siddh);
Centre for Advocacy & Research(Rakhi); PUCL (Rajasthan
Chapter)(Govind Beniwal) and Jagriti Mahila Manch
Mr. O.P. Chauhan, DSO Alwar.
Mr. Rajesh Yadav, Collector; Mr. H.S. Goyal, DSO, Ajmer; Mr.
R.K. Rohilla, Asstt. Registrar, Cooperative Socieities and Mr.
S.K. Meena, Dy. Registrar, Cooperative Socieites.
Mr. Ashwani Kumar, Area Manager, FCI; Mr. Anil Mehta, Dy.
Registrar, Cooperative Societies and Mr. V.P.S. Singh Bhullar,
DSO; Upbhogta Margdarshan Samiti „UMAS‟ , Jodhpur;
Manav Kalyan Sasthan Jodhpur (Indu Kumar); Manavadhikar
Jan Sangathan, Western Rajasthan; Institute of
Development Education & Awareness; Akhil Bharatiya Kisan
Sabha; Dalit Adhikar Network, Rajasthan and Manav Seva
Mr. J.C. Garg, DSO and Mr. Govind Singh, Inspector.
Mr. P.C. Kishan, Collector; Ms. Tina Soni, SDO; Mr. Navneet
Purohit, DSO; Mr. G.L. Rout, Asstt. Registrar, Cooperative
Societies; Mr. B.L. Yadav,Manager, FCI, Udaipur; Mr. Jeev
Raj Roat, Manager,FCI; Mr. B. Pandey, Genertam manager,
KVSS; Tejpal Jain General Manager, Cooperatie Wholesale
Bhandar; Mr. K.R. Roat, Regional Manager, RTADCF Ltd.; Mr.
Jagram Meena, Additional S.P. and Kalpana Kalyan Society.
Mr. Anand Kumar, Collector;Mr. Himmat Singh Bhati, DSO;
Mr. N.K. Khabya, Manager (Storage) FCI; Mr. Prem Prakash
Mandot, Asstt. Registrar, Cooperative Ssocieties; Maruti Seva
Samiti; Aastha, Sansthan (Hari Om Soni) ; South Rajasthan
Mazdoor Union (Madan Vaishnav), Udaipur +Dungarpur;
Churches Auxilliary for Social Action(Bhopi Lal Rao + Sunita)
;Wagadh Mazdoor Kissan Sangathan,Dungarpur (Kantilal);
Prayas, Udaipur and Seva Sansthan, Udaipur.
Mr. Umed Singh, DSO; Mr. O.P. Yadav, SDM and Ms. Aruna
Roy of Mazdoor Kisan Shakti Sangathan.
16. Members of the Committee who visited the State are Ms.
Meenakshi Chauhan, Ms. Naomi Chandra and Mr. Shohit
Chaudhry (being members of the Legal Team), Mr. K.K.
Mittal, Director and Mr. J.K. Bhutani, Section Officer. Mr. S.C.
Rawal, a former Registrar of Delhi High Court and appointed
as Secretary by the Chairman, has been performing
functions of the Secretary of the Committee.
17. The Committee is submitting its report which has been
divided into various Chapters like distribution of food grain,
appointment of FPS dealers, viability, identification of BPL,
wheat flour (atta), coupon system, diversion of foodgrains,
vigilance, enforcement & complaint mechanism and
computerization . An overview has been given of the PDS in
the State and recommendations made. An attempt has been
made to make each Chapter self-contained and there is
possibly a repetition at various places.
(Justice D.P Wadhwa)
Central Vigilance Committee
on Public Distribution System
1. A broad overview of the Central Vigilance Committee‟s report
on the functioning of Public Distribution System in the state
of Rajasthan is presented below. A detailed report covering
different aspects of operation of the system follows the
2. The Committee during its visit to the State of Rajasthan from
1st to 8th November 2009, covered eight districts of the state,
namely, Jaipur, Ajmer, Udaipur, Dungarpur, Jodhpur, Alwar,
Rajsamand and Pali. The Committee, during the visit, made
on the spot study of the functioning of the PDS in different
regions of the state and interacted with the officials of the
state government, consumers, FPS dealers, NGOs, Self-help
groups, wholesalers, consumer organizers, media etc. to
assess the efficacy of PDS operation in the state. The
Committee, in particular, looked into the following aspects of
Mode of appointment of FPS dealers;
Issuing of ration cards;
Distribution of food grains;
Viability of FPSs;
Functioning of vigilance committees;
Enforcement and complaints mechanism;
Role of officials of the Department at different levels
connected with PDS;
Transportation of food grains;
Role of Food Corporation of India;
Issue of bogus ration cards/coupon system;
Supply of wheat flour to APL card holders in 7
divisional headquarters of the state;
Specific problems of the people inhabiting desert and
hilly areas; and
General awareness of the people regarding the
benefits flowing from the
The findings of the Committee are discussed in detail in the
main body of the report.
3. At the outset, before discussing specific issues, the
Committee would like to highlight two distinguishing features
of problems encountered in the functioning of PDS in the
state not found in other states. These features are derived
from the demographic pattern obtaining in the State and its
distinctive geographic terrain. The population is scattered in
far-off places with only 10-15 families living in small hamlets
and the PDS beneficiaries have to cover up to 30 kms to
reach a FPS. In the rural areas, due to drought and desert
like conditions, people lead a hard life. Their problems get
accentuated in some areas including desert areas and hilly
terrain, particularly in southern Rajasthan which is deficient
in rainfall and face frequent drought-like conditions. This
situation directly affects the production of crops at such
places. The obvious result of this situation is increased
dependency on PDS which is the only channel for providing
food security to people, particularly, in such areas.
4. The Committee‟s findings in a summary form, are presented
5. Functioning of PDS in the State of Rajasthan:
The over-all functioning of PDS is unsatisfactory in the state.
This is largely due to large scale diversion of PDS food grains
into black market abetted by inefficient government
machinery, lack of accountability at different levels, poor
vigilance mechanism, proliferation of bogus ration cards,
non-adherence to government guidelines on PDS,
bottlenecks in transportation of food grains and irregularities
of various kinds at FPS level. The detailed report cites
various instances at different points in PDS operation to
substantiate these observations. These shortcomings, seen
in various regions of the state, show a lackadaisical approach
in this important area upon which depends the sustenance of
poor people inhabiting rural areas, hilly terrain and tribal
Urgent steps are required to streamline PDS machinery to
cater efficiently to vulnerable groups of people, particularly
those living in drought prone, hilly, sparsely populated and
desert areas of the state. Distributing PDS food grains
through mobile vans in areas not well-served by FPS is one
option which merits serious consideration. This will, in
addition, have two advantages. First, at places where the
FPS is not situated in the immediate vicinity, mobile vans
could be deployed for distribution of food grains. Secondly,
mobile vans could be used as a substitute for FPS serving
the community at places where the FPS licence has been
cancelled or where the FPS has been relocated.
6. Inadequacies in Wholesale distribution:
In the state of Rajasthan, it is the wholesalers who lift food
grains from FCI godowns. Cooperative societies which go by
the name of Wholesale Upbhokta Sahakari Bhandars and
Kray Vikray Sahakari Samitis (KVSSs) are given priority under
the rules for appointment as wholesalers. These cooperative
societies do not discharge properly their assigned
responsibilities of lifting food grains since the transportation
rate fixed by the state government do not cover the
transportation cost incurred by them. This induces them to
save cost by skipping weighment of food grains which
requires engagement of labour or by sending consignment of
food grains in one go by clubbing the requirement for two-
three months instead of issuing food grains to FPS dealers
every month. Lifting of food grains on time and their timely
delivery to FPSs also suffer in cases of delayed payment
made by the wholesalers to lift the food grains. Numerous
such instances in different districts of the state were found
by the Committee in this respect and these are discussed at
length in the main report.
7. Inclusion/Exclusion Errors:
Numerous instances of such errors were found by the
Committee, particularly, in BPL/AAY categories. The
Committee was apprised that survey done in 1997 in the
rural areas forms the basis for inclusion in the BPL category,
whereas for urban areas, 2003 survey is taken into account
for determining eligibility. The Committee is of the view that
there is a need to carry out a proper survey in the rural and
urban areas on priority basis. This will remove the current
discontentment among the people over non-inclusion of
needy and deserving people in BPL/AAY categories. The
state government also informed the Committee that the
central allocation under BPL/AAY categories only 24.31 lakh
beneficiaries whereas the actual number of such
beneficiaries in these two categories is 25.84 lakhs. This has
led the state government to take a decision to reduce the
monthly quota for BPL families from 35 KG per month to 30
KG, keeping, however, the monthly quota of 35 KG for AAY
category intact. For the APL category, which gets wheat and
kerosene, the scale of distribution depends upon allocation
received in this respect from the central government. The
formula followed for distribution of wheat is to divide the
total number of APL cards with the allocation of wheat
received on this account. The Committee also observed that
the number of APL cards is registering significant increase
since it is taken as a proof of identity for deriving benefits
under various Central and State governments schemes. One
such example is NREGA under one ration card entitles one to
get one job card. This encourages joint families to get
bifurcated into 2-3 nuclear families, each getting one ration
card and more number of job cards in the same proportion.
The committee is of the view that ration card should be di-
linked for identification purposes for deriving benefits under
various schemes. Ration cards should be used only for
getting food grains under the PDS. The Committee also
observed that the number of units in some of the families is
only one or two while there are families consisting of ten-
twelve persons with one ration card. Hence, it will be more
appropriate to take unit as a base for drawing ration from
the FPS. The Committee also noted that only 30-40% APL
card holders draw ration from the FPS and the balance food
grains meant for this category is diverted into the black
market. Hence, the Committee is of the view that food grains
meant for APL category may be restricted to families with
annual family income of around Rs one lakh. This category
may be called APL-I or Marginally Above Poverty Line
8. Vigilance Committees:
Vigilance Committees are either non-functional or non-
existent. The Gram Pradhan is the chairman of vigilance
committee but does not generally visit any FPS. In fact it is
the FPS dealer who carries document certifying proper
distribution of food grains to the Gram Pradhan and other
members of the vigilance committee. This shows that there
is no independent verification of food grains at the receipt
stage in the FPS.
9. The Committee feels that village level vigilance can be
improved if the
composition of vigilance committee is enlarged to include
representatives of NGOs, SHGs and educated youth. There is
also a need to hold meetings of vigilance committee once in
a month for which special instruction should be issued. To
ensure that such meetings are not reduced to farce, proper
minutes of these meetings should be drawn and sent to
concerned higher authorities for information/necessary
action. Action taken on the basis of the minutes should be
reviewed in the next meeting.
The non-official members of these committees may be
suitably remunerated for participation in the meetings in
order to sustain their interest .
10. Enforcement Mechanism:
The Committee observed deficiencies in the functioning of
enforcement mechanism. A large number of vacancies exist
in the cadre of enforcement inspector with the result no
surprise checks are carried out. Currently, there is also no
separate enforcement wing for PDS. It is important that
strict action, including prosecution under Essential
Commodities Act, is taken against persons, be it government
officials or FPS dealers, or transporters or wholesalers found
indulging in malpractices. The Committee is also of the
view that an institution of regulator may be created regulator
with well defined functions, powers and responsibilities to
check malpractices and initiate action against guilty persons
on a suo moto basis.
11. Complaints Redressal Mechanism:
The system of attending to complaints is not efficacious with
the result the complaints remain unattended and there is no
satisfactory redressal of grievances. According to the existing
practice, complaints received in the DSO‟s office are marked
to enforcement inspector. But on checking it was found that
these complaints are not enquired into properly. It is
therefore essential to put in place a proper complaints
redressal mechanism. Such a mechanism should have inbuilt
features, such as, time frame for examining and responding
to complaints A toll-free help line functioning round the
clock would also be useful and needs to be introduced.
Consumer Protection Councils should be constituted at the
state, district, tehsil and block levels which can pursue issues
raised by consumers with the government functionaries.
Special hearings may also be organized to discussing PDS
issues at the village level at least once in a month to settle
the complaints on the spot. The concerned officers of the
Department as well as representatives of NGOs and SHGs
should be invited to such special hearings. These steps may
help in restoring the confidence of the people in the system.
12. Appointment of FPS Dealers:
There are government guide lines and orders for
appointment of FPS dealers. These guidelines are not being
observed strictly in making such appointments. The
Committee, on perusal of some files on the subject, found
that documents submitted by applicants are not being
verified by the concerned officials by conducting field
enquiries. These officials prepare on the basis of documents
received without enquiring the veracity of such documents.
Further, certain castes were given preference at the
discretion of the Advisory Committee for which no reasons
are adduced. The Committee was informed that political
pressure is put on officials and Advisory Committee in
appointment of FPS dealers. The Committee is of the view
that extraneous considerations should have no play in such
appointments which should take into account considerations
like capability of the applicant to run the FPS outlet. Further ,
from viability angle, applicant running a kirana shop should
be given preference in allotment of dealership.
13. Distribution of Coarse Grain through FPS Outlet:
The Committee observed that coarse grains , maize, jowar
and bajra are grown in different regions of the state and in
these regions they form the staple diet of the people. This
being the case, people would like to have these coarse
grains made available through PDS network. The state
government needs to take initiative to identify various
regions and districts and determine the quantum of such
food grains which can be supplied through the PDS network.
It may submit a proposal to the Central Government in this
regard which would also reduce the present scale of
allocation of wheat to the state. The state government
should procure coarse grain from farmers at minimum
support price decided by the central government and also
make arrangement for storage of coarse grain. The
Committee found that in seven districts of Marwar region,
bajra is consumed by the people throughout the year,
whereas in five districts of Hadothi region, jowar is the staple
food. In the districts of southern Rajasthan, i.e., Udaipur,
Dungarpur and nearby districts, maize is the staple food.
14. Viability of FPS:
The Committee observed that the FPS does not run on cost
plus basis and that is one of the reasons for its poor viability.
The income derived from commission by the FPS dealers is
not enough to meet the cost of running the shop and leave
something in his hand to meet the family‟s basic needs. The
present rate of commission is Rs 8 per quintal on wheat and
47 paise per litre on kerosene oil which is very low. Since
Number of cards attached to a FPS and allocation of food
grain and kerosene oil is below the threshold for arriving at a
cost plus figure, the dealers make extra money by resorting
to malpractices, such as, selling PDS items at a higher price,
short weighment of food grain and diversion of food grain
and kerosene oil into black market. Such proclivity on the
part of FPS dealers find encouragement from sharp
difference in the PDS price of food grain in comparison to
the price at which such items of food grain sell in the open
market. Further, kerosene oil is not available in open market
and therefore, diversion of kerosene oil becomes an
attractive proposition. This problem can be mitigated if the
government revisits its policy and allows open sale of
kerosene oil at a reasonable price . For improving the
viability of FPS, the Committee is of the view that increasing
in the commission of FPS dealers does not provide the
answer. This casts a direct burden on the government and
beneficiaries would also get adversely affected consequent
upon an increase in price of items sold through the PDS
network. While there may be a case for a moderate increase
in the rate of commission, there is a need for taking certain
additional measures as indicated below:
Kirana shop owners should be given the responsibility
to run FPS. This saves on additional infrastructure cost
involved in running a stand-alone FPS. Moreover, the
kirana shop owner will have dual income, one from the
kirana shop and extra income by way of commission
on sale of PDS items;
Kirana shop owners who get the licence to run FPS
should be allowed to sell all other items except the PDS
items which should be sold only through FPS;
Loans on easy terms should be made available from
commercial banks to FPS dealers to stock non-PDS
items for sale to customers; and payment of electricity,
water and telephone bills etc. through FPS would give
extra income to FPS dealers by way of commission for
providing these services.
15. Functioning of FPSs:
A number of inadequacies was observed by the Committee
in regard to the functioning of FPSs. These can be
catalogued as follows:
There is no fixed time schedule for opening and closing
fair price shop. A general complaint was that the dealer
opens the shop at his sweet will and at some places ,
the shop opens for a day or two in a month;
No display board is found outside the shop nor is the
sample packet displayed;
The vigilance committees are virtually defunct and
supervision from their side is virtually nil. The
concerned government officials also do not exercise
any supervision of FPS;
The directions of Hon‟ble Supreme Court given in 2003
and the various instructions issued by the government
are not being strictly followed by FPS dealers.
Instances of infraction of these orders require to be
sternly dealt with and the state government should
ensure compliance of these directions/orders.
16. Coupon System:
The State government has adopted coupon system for
beneficiaries in BPL/AAY categories. The operation of the
coupon system leaves much to be desired. The coupons do
not contain relevant details, such as, ration card number,
number of beneficiaries etc. These details are filled by the
FPS dealer which makes such details a suspect. The coupons
submitted by the FPS dealer to the DSO‟s office are not
verified and used as a basis for allocation of food grain to a
FPS.The coupons are supposed to be distributed by the
Panchayat officer in the villages and the Executive officer in
the municipal committee area. In practice, however, these
coupons are handed over to the FPS dealer for distribution to
the beneficiaries. It is thus seen that the very purpose of
introducing coupon system gets defeated. The Committee is
of the view that the present deficiencies in the coupon
system should be rectified urgently. In no case such used
coupons submitted by the FPS dealer should be taken on
their face value for determining quantum of allocation of
food grain and their release until these used coupons are
It was observed by the Committee that computerization of
PDS in the state is still a far cry. The Committee supports
end to end computerization of the PDS operation in order to
ensure proper functioning of the system. Computerization
can help in making PDS transactions at various levels
transparent and also introducing an element of accountability
in the system thereby ensuring proper enforcement of
rules/orders. The Committee has already given a
comprehensive report separately on computerization of PDS
and the state government should consider its adoption to
improve PDS functioning in the state. The state government
can seek financial assistance from the central government
for this venture.
18. Need Based Allocation of Ration Items to Different Districts:
The State of Rajasthan, geographically, covers a vast area with
diversity in food habits, culture, natural resources and level of
prosperity. Therefore, distribution of PDS items for different
regions should take into account food habits, type of food grains
produced locally in different regions and the requirement of the
people. A differential treatment should be accorded in the matter
of allocation of food grains between drought prone areas and such
parts of the state which have good irrigation facilities and better
yield of crops. Drought-prone areas should receive preferential
treatment in regard to allocation of food grains under the PDS and
allocation should be need based.
19. Distribution of Atta (Wheat Flour):
The State government has introduced since October 2009
distribution of Atta to APL card holders in seven divisional
headquarters. 10 kg of Atta is given per APL card for a price
of Rs 90. The PDS rate of wheat for APL card holders is Rs.
6.80 per kg. The state government has entered into an
agreement with the flour mill owners to supply wheat flour
to the FPS dealers and Saras Dairy booths at the rate of Rs.
87 per bag containing 10 kg of Atta. The FPS dealers and
Saras Dairy booths are authorized to sell the flour bag
containing 10 kg of Atta @ Rs. 90, thus earning Rs. 3 per
bag. As per the agreement, the mill owner will lift the wheat
from the FCI godown, grind the wheat and pack the same
followed by its transportation to retail outlets. The
expenditure incurred in grinding, packing and transportation
etc., is required to be met from the margin available
between FCI issue price of Rs. 6.10 for wheat and the actual
sale price of wheat flour to retail outlets. Apl ration card
holders in the urban areas of seven divisional headquarters
have welcomed this decision of the government. In the rural
areas, however, the preference is for whole wheat.
The decision of the state government to supply Atta and its
distribution through Saras Dairy outlets and Upbhokta
Sangh Bhandars instead of FPSs has been challenged in the
Rajasthan High Court through a writ petition.
20. Proposed National Food Security Act:
The Central Government proposes to enact the National
Food Security law which would provide a statutory
framework to ensure food security for all. There is a
provision in the law for supply of 25 kg of food grains every
month to a BPL family at the rate of Rs. 3.00 per kg. The
Committee was informed during a meeting with the state
government officials that the state government has, by and
large, agreed with the proposed enactment. The state
government, however, seeks increase in the number of units
currently admissible to BPL/AAY families. The state
government is of the view that there are large number of
families who need food grain assistance and provided with
10 kg of wheat per ration card. It does not favour doling out
cash in lieu of food grains. The state government is also of
the view that all schemes for BPL families should be merged
to reduce paper work and record keeping.
21. Summary of Recommendations:
(i) Zero tolerance approach should be adopted in dealing
with corruption surrounding PDS operation.
(ii) Steps should be taken to identify most vulnerable
groups in tribal/rural areas and PDS machinery
strengthened, particulary, in such areas.
(iii) Deployment of mobile vans, particularly, in remote,
inaccessible and far-flung areas, lacking the facility of
FPS in the near vicinity, should be considered, for
distributing PDS food grains.
(iv) Local food habits of the people and their staple diet
should be taken into account for procurement and sale
of food grains through FPSs operating in those areas.
The state government should submit a proposal to the
Central Government in this regard.
(v) Wholesale distribution of food grains, currently
entrusted to cooperative societies, should be
streamlined by creating a state level Food Corporation
for facilitating procurement, lifting and distribution of
PDS food grain for the entire state. It should also
provide storage godowns in each block.
(vi) It should be made mandatory for the FPS dealers to lift
the stock every month from the wholesalers and
distribute it to beneficiaries on a regular basis.
(vii) In urban areas, keeping in view the preference of the
people, Atta should be distributed in place of wheat to
all categories of ration card holders through FPSs.
(viii) Dedicated flour mills on Public – Private Partnership
may be established for grinding PDS wheat. The bags
of Atta should carry the date of grinding as well as the
date of expiry. An officer of the Department should be
present on the spot at the time of grinding of wheat.
(ix) Wheat bags leaving the FCI godown, should be bar
coded and checked by the official of the department at
the mill point who should also certify receipt of proper
quantity and good quality of wheat.
(x) The Committee does not favour continuance of APL
category in its present form and would rather like to
restrict it to families having an annual income of
around Rs. One lakh. This category of beneficiaries
may be called Marginally Above Poverty Line (MAPL).
(xi) A fresh survey of BPL/AAY families should be
undertaken to identify genuine beneficiaries and weed
out bogus ration cards.
(xii) There is a case for revisiting criteria prescribed for BPL
(xiii) Steps should be taken to streamline procedure for
issuing ration cards which should be done after
meticulous verification. The scope for exercising
political influence in this matter should be minimised if
not altogether eliminated.
(xiv) The procedure for distribution of coupons should be
rationalized to ensure their timely delivery to
beneficiaries. The coupons should contain all relevant
details, like, the name of the beneficiary, year and date
of printing, the ration card number, the name of the
FPS to which the beneficiary is attached as also the
quantity of grain entitlement.
(xv) Wholesalers should ensure delivery of sealed sample
packet of food grains to FPSs when food grains are
dispatched from wholesale points.
(xvi) The FCI official should indicate the fact of issuing
sample packet on the gate pass and the weight check
memo which should also have the signature of the
concerned FCI official and the wholesaler‟s
representative who comes to the FCI to lift food grains.
(xvii) Vigilance mechanism should be strengthened at all
levels and vigilance committees‟ membership be
enlarged to include representatives of NGOs and SHGs
as well as educated youth.
(xviii) A proper mechanism like Ombudsman should be set up
to attend to complaints of malpractices and take
prompt steps towards redressal of complaints.
(xix) The practice of holding public hearings on the lines of
Lok Adalat every two-three months should be started
for resolving outstanding PDS issues.
(xx) GPS should be used to track and monitor movement of
trucks carrying PDS food grains.
(xxi) For ensuring viability of FPSs, the FPS licence should
also have a clause which requires the licencee to run a
kirana shop. Such a licencee should be permitted to
sell all items excepting those covered under the PDS.
(xxii) Steps should be taken to rationalize number of cards
which are attached to a particular FPS to improve
viability of ration shop.
(xxiii) FPS licence should be given to a local resident of the
place where the shop is to be opened.
(xxiv) The Committee favours the concept of a village
secretariat where all government offices including FPS
could be located. Resources available under MLA Fund
and MPLAD fund could be used for the purpose.
(xxv) Ration cards should be used for the purpose of
drawing food grains from PDS outlets and not used as
a proof of identity. This will discourage the practice of
splitting ration cards to derive benefits under various
central and state government schemes.
(xxvi) The monthly allocation of food grains to a FPS should
be based on the quantity of food grains distributed to
the beneficiaries in the previous month.
(xxvii) Steps should be taken to use local tv channel,
hoarding, pamphlet etc. to create awareness among
the beneficiaries about their entitlements and the
incoming allocation of food grains to FPS.
(xxviii) End to end computerization of PDS operation would
go a long way in revamping the PDS and restoring the
confidence of the people in the system.
1.1 The State of Rajasthan is located in the northwestern part of the
subcontinent. It is bounded on the west and northwest by Pakistan, on
the north and northeast by the states of Punjab, Haryana, and Uttar
Pradesh, on the east and southeast by the states of Uttar Pradesh and
Madhya Pradesh, and on the southwest by the state of Gujarat. The
state has an area of 132,140 square miles (342,239 square
1.2 Rajasthan the largest state of India has Jaipur as its capital. It has 33
districts. The Aravali Range runs across the state from Mount Abu,
which is 1,722 m in height to Khetri. Most of the region of Rajasthan is
covered by Thar Desert. The state economy is mainly agricultural and
pastoral. Sugarcane, pulses, oilseeds, cotton and tobacco are the
major crops of the region. The Indira Gandhi Canal irrigates the
1.3 The population of the State is 564.73 lakh as per the 2001 census, out
of which 435.54 lakh is rural and 129.19 lakh is urban. There are 241
Tehsils, 237 Panchayat Samitis and 9,188 Panchayats. Not every village
has a Panchayat of its own; rather one Panchayat is elected for 2-3
villages. The total number of ration cards in the State is 148 lakhs. The
number of APL is 122.16 lakhs, BPL is 16.52 lakhs, AAY is 9.32 lakhs.
There are also 1.05 lakh Annapurna cards.
1.4 The Committee visited the State of Rajasthan in the month of
November 2009. The Committee visited the Districts of Alwar, Jaipur,
Ajmer, Rajsamand, Udaipur, Dungarpur, Pali, Jodhpur.
1.5 PDS in the State is governed by the Public Distribution System
(Control) Order, 2001, Rajasthan Foodgrains and Other Essential
Articles (Regulation of Distribution) Order 1976 and Rajasthan Trade
Articles (Licensing & Control) Order 1980 and instructions issued by the
State Government from time to time.
1.6 The Committee had discussions with the Principal Secretary, Additional
Commissioner, Deputy Commissioner, Food, Civil Supplies & Consumer
Affairs, various district Collectors and other senior officers of the
Department of connected with the Public Distribution System.
1.7 The function of wholesale distribution is assigned to Cooperative
Societies which are an integral part of the PDS in Rajasthan.
1.8 The retail distribution of PDS items is done through authorized Fair
Price Shops in the State. The State of Rajasthan is also distributing
Atta to the APL beneficiaries through Saras Dairy Booths and Upbhogta
Bhandars. The Committee visited various Fair Price Shops and Saras
Dairy Booths across the State.
1.9 In order to get public opinion, the Committee invited the views of the
general public through news papers. The Committee also held Public
meetings in Jaipur, Udaipur and Jodhpur. Various issues were raised
relating to functioning of the PDS in the State, which are attached as
appendix. The Committee also went to the villages to meet the
consumers / beneficiaries and the tribals and to the fair price shops
and godowns of the wholesalers. There were various problems with
regard to increasing commission, demand for coarse grain, increasing
allocation, errors in identification, accessibility of FPS particularly in
Western Rajasthan and tribal areas.
DISTRIBUTION OF PDS FOODGRAIN
2.1 The Present chapter deals with the distribution of foodgrains in the
State of Rajasthan from the FCI godowns to the Wholesalers and
from Wholesalers to FPSs and from FPSs to the beneficiaries.
2.2 The distribution of PDS foodgrain in the State of Rajasthan can be
understood by looking at the role and functioning of the following
entities involved in the Public Distribution system:
1. Food Corporation of India
2. Upbhokta Sahkari Bhandar (of Cooperative department of State)
and Kray Vikray Sahkari Samiti (registered with Cooperative
3. Fair Price shops
2.3 FOOD CORPORATION OF INDIA (FCI)
2.3.1 Food Corporation India (FCI) is functioning in the State since
01.10.1966. There are 8 FCI District Offices covering all the 33 revenue
districts of the State. FCI has its own 36 covered and one open
complex. Besides this, 94 covered/ open godowns have also been hired
by the FCI from CWC/ SWC and private parties taking the total number
of godowns in the State to 131.
2.3.2 The Ministry of Consumer Affairs, Food & Public Distribution, Deptt. of
Food, Government of India, New Delhi conveyed a Policy vide
reference No. 1-2/2007-BP-III dated 21.2.2008, according to which,
the validity period for the allotted quantity of food grains for a month
would be 50 days which starts from 1st of preceding month and up to
20th of the month for which allotment pertains. According to the policy
in vogue it is be mandatory for the State to deposit the cost of food
grains to FCI latest by 15th of the allocation month. The FCI is bound to
issue fair average quality of food grains under TPDS and all other
Schemes. The Ministry conveys allotment of food grains under TPDS
and other schemes. The Regional Office of FCI in turn seeks
requirement of the Districts of the concerned State. On getting the
sub-allocation from the State authorities, the same is circulated to the
field offices of the FCI in the State for issuing the stocks to the State
Government While taking delivery of stocks against Release Order from
FCI godowns, joint sampling is done by the FCI officials & State
nominees and each of the sample is kept by both the parties. FCI‟s role
in PDS is limited up to this end as it has not been empowered with the
statutory powers to verify/ check the diversion of stocks, if any.
2.3.3 Therefore, in order to streamline and enhance the effectiveness of
instructions pertaining to release of food grains by Food Corporation of
India (FCI) under TPDS and to ensure that the foodgrains allocated for
a particular month are distributed to the beneficiaries in that month,
the existing orders on the subject have been reviewed and in
superssion of the existing orders, the following orders are issued:-
(a) Allocation of foodgrains under the TPDS to States and UTs will
continue to be made on annual basis as is being made at
(b) The validity period for lifting of allocated foodgrains under the
PDS will be 50 days for each allocation month separately,
starting from the 1st day of the month proceeding the allocation
month and ending on the 20th day of the allocation month. For
example, the validity period for the allocation for April, 2008 will
be from 1st March 2008 to 20th April, 2008;
(c) It will be mandatory for State and UT Govts. To deposit the cost
of foodgrains to FCI latest by 15th of the allocation month
(crediting of the amount to the FCI account). However, lifting
of foodgrains in installments against allocations within the
validity period will be allowed. For example, for lifting the
allocations for the month of April, 2008, full payment of the cost
of foodgrains will have to be made to FCI by 15th April, 2008.
(d) Beyond 15th day of the allocation month, the Field Officers of
FCI will not accept payment from the State /UT Governments
for issue of foodgrains during the allocation month;
(e) If full monthly allocated quantities of foodgrains are not
available in a particular FCI deposit / Godown, the State / UT
Governments will have to lift them from the pre-assigned
alternate depot / godown;
(f) Extension of validity period for lifting in respect of unlifted
quantities of foodgrains against allocations of a particular
month shall not be granted by District Managers of FCI.
Extension of validity period upto 15 days will be granted by the
respective Zonal E.D. of the FCI only in such cases when full
payment for the allocation had been received by the FCI by 15 th
of the allocation month, and when full quantities of allocated
foodgrains were not available during the validity period in the
assigned or alternately assigned FCI depots / godowns.
(g) All cases of extension of validity period beyond 15 days, if any,
will have to be referred with full justification to the Ministry for
(h) Ratio of rice, wheat and coarse grains in the monthly allocations
made to State and UT Governments under the TPDS shall not be
changed by FCI. Requests of State /UT Governments in this
regard, if any, will be decided only by the Ministry;
(i) To avoid delays in payment, State and UT Governments may
introduce on account payment / electronic transfer of funds to
2.4 WHOLESALE UPBHOKTA SAHKARI BHANDARS AND KRAY
VIKRAY SAHKARI SAMITIs (KVSSs)
2.4.1 In the State of Rajasthan the wholesalers are appointed by the District
collector or District Supply officer in their district to lift the foodgrain
from FCI. Circular dated 21st September 2004 issued by the State
Government contains the guidelines for appointment of the wholesalers
by the Dist. collector or District Supply officer. It provides that the
wholesaler shall be appointed for one financial year. The State has
Cooperative Societies and while appointing the Wholesalers the priority
is to be given to the Cooperative Societies as per the rules. Some of
the appointed wholesalers are „Upbhokta Sahkari Bhandars‟ which are
directly run by the Cooperative Department and others are Kray Vikray
Sahakari Samitis (KVSSs) which are registered with Cooperative
Department . Appointment of private wholesaler by contract is to be
done only in case the Cooperative Societies refuse to work as
2.4.2 Time Limits for lifting foodgrain from FCI
FCI gives 50 days to the wholesalers for lifting the foodgrain, thus, the
foodgrain can be lifted from the 1st day of the previous month to the
20th day of the concerned month to which stock belongs. Thus, if the
stock is to be lifted for the month of November, wholesalers can lift it
from 1st October to 20th November. However, the Committee observed
that in the State the time limit has been further reduced by the
Department to 30 days, i.e., wholesalers can lift a months stock from
the 20th of the previous month to the 20th of the month in which stock
is to be distributed. Payment shall be made by the wholesaler before
the 15th of the concerned month. If the demand draft is not deposited
at FCI by the wholesaler, the quota of that month lapses inspite of the
permission by the DSO to lift the allocation. When the payment is
made by wholesaler at FCI, FCI issues Release order and accordingly
the foodgrain is lifted from FCI. Payment by wholesaler is allowed to
be made in two installments as found in Jodhpur.
2.4.3 Responsibilities of the Wholesalers
1. The Wholesalers are responsible to lift the foodgrain from FCI
within the prescribed period as permitted by the DSO and to
deliver it at the doorstep of the Fair Price Shops.
2. The wholesaler is bound to arrange for the weighing machine
and to issue the foodgrain to FPS after proper weighment.
3. He is also responsible to arrange transportation to lift grain from
FCI and to deliver it directly to the Fair price shops.
4. The wholesaler is bound to arrange for the labours for loading
and unloading of the foodgrain.
2.5 Facts observed by the Committee pertaining to functioning of
the Cooperative Societies and KVSS as wholesalers
2.5.1 The Cooperative societies and KVSSs are not functioning properly as
wholesalers and there are many reasons for the same and the
irregularities found in the functioning of the wholesalers were different
in different districts.
2.5.2 The wholesalers get Rs. 5 per quintal as Commission and Rs. 13.70 per
quintal as transportation charges. The wholesaler has to either appoint
transporter through tender or has to hire the trucks for regular lifting
from FCI and delivery at FPS.
2.5.3 The transportation rates fixed by the State government in August
2005, for transportation of APL, BPL, AAY foodgrain by the wholesalers
is mentioned below:
Upto 5 km- Rs. 8.50 per quintal
From 5 km to 15 km Rs 5.20 per quintal
From 15 km to 100km Rs. 0.17 per quintal per km
Above 100 km Rs. 0.13 per quintal per km
2.5.4 As the above rates are not realistic and the wholesalers never find
transporters ready to transport foodgrain at the above rates. The rates
at which the contract is entered into by the Wholesalers is different in
different areas. For instance, officials from Jodhpur Sahkari Upbhokta
Wholsale Bhandar Limited informed the Committee that the
transportation rates given by them to transporter is as follows:
Upto 5km – Rs. 6.80 per Quintal.
From 5 km to 15 km – Rs 10.64 per Quintal.
2.5.5 The transportation rates given by the Ajmer Sahkari Upbhokta
Wholsale Bhandar Limited for delivery of foodgrain at FPS in Ajmer city
is as follows:
Upto 5 km Rs. 8.50 per Q
Above 5 km Rs13.70 per Quintal
2.5.6 The Manager of the Ajmer Sahkari Upbhokta Wholsale Bhandar Limited
informed the Committee that they get Rs 18.70 per quintal in total
from the Government i.e. Rs. 5 per quintal as Commission and Rs.
13.70 towards transportation cost. As per their transportation
expenses they spend Rs. 15 per quintal and hence only Rs. 3.70 is
saved as Commission out of which they bear the cost of storage,
staff, electricity and stationery. As the Commission and transportation
cost to the wholesalers is very low it is always difficult to manage the
operations pertaining to the PDS.
2.5.7 Various Cooperative Societies / KVSSs informed the Committee that
Commission of Rs. 5 per Q is very less to meet expenses and it should
be increased to Rs. 20 per quintal. They also requested the Committee
that the transportation rates are not realistic and need to be revised as
per the present cost of transportation.
2.5.8 The wholesalers try to save money either on transportation and labour
charges. In order to save the same they often skip the weighment of
the foodgrain. The Committee found that Weighing machines are not
available at godowns of Wholesalers. Moreover, as the State
Government has directed them to lift foodgrain from FCI and directly
deliver it to FPS some wholesalers stated that it is never practical for
them to weigh at each Fair Price shop.
2.5.9 There is another practical difficulty faced by most of the wholesalers as
in Jodhpur District is that the payment of the fair price shops dealers is
not received upto prescribed time limit. Often 60 % fair price shop
dealers do not pay at all. Those 40% who pay, do not pay in advance,
hence if a truck has to be loaded from FCI to deliver foodgrain to the
FPS dealers it is not possible to follow any route plan for delivering
foodgrain as all the FPS dealers of an area do no pay money hence,
delivery of foodgrain can‟t be done at their doorstep. In such case the
foodgrain is only stored at the godowns of wholesaler.
2.5.10 There is no check on Quality of foodgrain issued to FPS dealers.
Wholesalers do not bring samples from the FCI nor they issue samples
of foodgrain to FPS dealers.
2.5.11 Though the Cooperative Societies / KVSSs are supposed to lift
foodgrain from FCI and directly deliver it to FPS dealers but as they do
not have proper transportation facilities and for them it is not feasible
to deliver foodgrain to all FPS of the area at one time due to the
reasons mentioned above, they often store the stock in their godowns
which are very small and in bad condition. These godowns do not
have proper storage space.
2.5.12 The Committee found that the PDS in the State has collapsed so far as
the issue of foodgrain to FPS dealers is concerned. The wholesalers are
lifting full quota of foodgrain from FCI every month. However,
foodgrain is not issued to FPS dealers every month. Committee
observed that in all the districts, FPS dealers are issued foodgrain for 3
to 6 months in one go. The Committee also found many instances
where foodgrain is issued to FPS dealers once in 6-10 months and
even once in 21 months. On asking reason wholesalers stated that it is
because of non-payment by FPS dealers. The Committee on perusal of
records of one KVSS at Surajpol, Jaipur found that payment of money
was done well in advance by FPS dealers and yet foodgrain was issued
after 3-4 months from the date of payment.
2.5.13 However, in Ajmer Committee found that foodgrain is issued to FPS
dealers when they make payment. If payment by FPS dealer is delayed
issuance is also delayed. In Jodhpur Committee observed that there is
no set norms about date of payment. Upbhokta Bhandars running
under Cooperative Department are lifting full quantity of foodgrain
from FCI. However, as per their sales record they are issuing foodgrain
to few FPS dealers only. On asking the reason for the same, the
Committee was informed that it is because of the non- payment by FPS
dealers. The appointed FPS dealers are not only the individuals but
also the Upbhokta Sahkari Bhandars. It was really disappointing to see
that only 30 to 40 % FPS dealers were lifting foodgrain and rest were
not lifting foodgrain at all. The General Manager Upbhokta Sahkari
Bhandaar, Jodhpur informed the Committee that it is really difficult for
them to manage PDS as FPS dealers are not paying them any money
and they have to really push FPS dealers to make payment to them. It
was also stated that only 40% FPS dealers pay after continuously
pursuing them to make payment and 60% are not interested at all.
2.6 District Jaipur
2.6.1 The Committee found that the KVSS located in Surajpol, in Jaipur
received payment from FPS dealers in advance and they do not deliver
the stock of foodgrains to them in time. Committee found that
foodgrain was issued to the FPS dealers after 3-4 months. Six FPS
dealers were issued August 09 stock of wheat in October end. One
FPS dealer named Dinesh kumar lifted May, June, July and August
Stock on 22.9.09 even when he had made payment on following
2.6.2 Dinesh kumar is running two shops (Shop no. 671 and shop no. 671
A). With shop number 671 there are 700 APL cards having 50 Q
allocation per month. With 671 A shop he had 635 APL ration cards
having 45Q allocation per month. His monthly allocation of APL
foodgrain comes out to be 95 Q. An FPS dealer has to pay Rs. 672
per quintal to the wholesaler which means for 95 Quintal Dinesh
Kumar had to pay Rs. 63,840/- Thus, the Committee observed that the
payment was done almost timely by the FPS dealer but he received
foodgrain after delay of 3-5 months.
2.6.3 There is delay in issuance of foodgrain to the FPSs by the wholesalers
and the officials of the department are grossly negligent to check the
same. For instance FPS dealer Jagdish Rana (shop number 557) lifted
foodgrain quota of May, June and July 09 on 11.9.09 from the above
named wholesaler at Jaipur. Jagidish Rana is running 3 shops
presently as per records of the wholesaler.
Shop no. 557 823 APL cards allocation59 Q
Shop no.557 B 850 cards allocation 60 Q
Shop no. 557 C 829 cards allocation 59 Q
Thus his total monthly allocation is 178 Q.
2.6.4 Payment was made as follows by dealer
9th May 09 : 1,24,000 i.e. for 184 Q of wheat
5th June 09 : 1,20,000 i.e. for 178.57 Q wheat
7th July 09 : 60,000 i.e. for 89.28 Q wheat
13th July 09 : 60,000 i.e. for 89.28 Q wheat
Total : 3,64,000 ( for 541.67 Q wheat which is equal to 3
2.6.5 For the month of May, June and July the dealer made the payment in
time however, he was given foodgrain on 11th September. Foodgrain
stock of 3 months was issued to him together after delay of 3-5
2.6.6 Lifting details of below mentioned 3 dealers is also interesting:
Name of shop allocation No. of Lifting on 15.10.09
dealer number cards for the month of
August, Sept and
Mukesh 721 36Q 103 BPL 89.90 Q lifting of
full stock is not done
Nawal 2B 26 Q 76 34 Q lifting of full
stock is not done
Tulsi ram 3B 29.40 84 45 Q lifting of full
stock is not done.
2.7 District Ajmer
2.7.1 The Committee visited Upbhokta Sahkari Bhandar and met General
Mananger Mr. G.L Gupta who is also Dy. Registrar Cooperative
Department . He stated that they get Rs. 13.70 for transportation and
Rs. 5 as their Commission thus in total they get Rs. 18.70. However,
they have to pay Rs. 15 to transporter and only Rs. 3.70 is left to meet
expenses pertaining to the staff salary, stationary, electricity bill and
godown rent. The Upbhokta Sahkari Bhandar in Ajmer is distributing
PDS foodgrain since 1963. Initially PDS was under cooperatives only
but later KVSS were also appointed as wholesalers. It was informed to
the Committee that transportation rates were fixed on 1.8.05 and are
not revised after that. The godown premises is taken on rent and the
same was in very bad state, damp and giving foul smell. It has storage
capacity of 200MT. The godown incharge sends monthly report to DSO
i.e. from 21st of a month to 20th of the next month. 270 FPS are
attached to this wholesaler. Out of this 103 FPSs distribute BPL / AAY
and APL foodgrain, rest of the shops distributes only APL foodgrains.
Payment is done by the FPS dealers in cash on the date of lifting only.
Dealers do not pay in advance to the wholesaler. Presently the two
months stock of foodgrain is issued to FPS dealers.
2.7.2 Committee also visited the Ajmer Cooperative marketing society Ltd
and met the General Manager Datar Singh Rathore. 120 FPSs are
attached to this wholesaler and it covers 201 villages. The allocation
for 3 month is
1760 Q for BPL
10390 Q for APL
920 Q for AAY
183 Q for Annapurna
2.7.3 Payment by FPS dealers is made in cash and they are issued a receipt
for the same. Weighment is not done while issuing foodgrain to the
FPS dealers. As full bags are given to the FPS dealers, if the foodgrain
is given in excess of the quantity fixed for the FPS same is adjusted
next month. eg. Dinesh kumar one of the FPS dealer whose allocation
was 27.5 for one shop and 52.8 for other shop was given 28 Q and 53
Q for the month of Oct, 27 and 52 for month of September and 27 Q
and 53 Q for the month of August.
2.7.4 It was informed that there are 13 Fair price shops which are attached
to other FPS dealers. Thus, 13 FPS dealers are running two Fair price
shops each. It was further informed that one shop at Shivpura is
officially run by one Sh. Papu Singh Rawat, however, this person Papu
Singh Rawat never made any payment nor he came during issuance of
foodgrain to said shop. The payment and purchase of foodgrain for
said shop is done by another fair price shop dealer of Karnos Mr.
Dinesh kumar. The officials at wholesale depot informed that the
person Papu Singh never came to their depot and it is only Dinesh
kumar who is running shop right from the beginning.
2.8 District Dungarpur
2.8.1 The Committee visited FCI depot in Dungarpur and met Depot
Manager Jeevraj Roat. The capacity of the godown is 1000 MT in CAPs
and 5000 MT foodgrain can be stored in open space. The
wholesalers/ KVSS makes payment to the FCI through DD along with
the permit issued by the DSO. The Manager Depot (FCI) issues Release
Order and accordingly foodgrain is issued to the wholesalers/ KVSS.
There is no weighbridge inside the FCI depot and weighment is done
at private weighbridge. The weighment slip issued by the private
weighbridge operator is kept at FCI for record. The Manager Depot
informed the Committee that gatepass, weight check memo and
weighment slip is given to the truck driver who carries foodgrain from
FCI to wholesalers/ KVSS godown. At the time of weighment at private
weighbridge FCI staff remains at the weighbridge. When truck leaves
FCI depot for weighbridge the gatepass is issued leaving the column
for weight as blank and after weighment at the private weighbridge the
weighment slip is issued to the truck driver by the operator at
weighbridge. Truck driver carries the same with him and delivers goods
at KVSS along with the abovementioned documents.
2.8.2 The Committee visited the godown of wholesaler named Rajasthan Jan
Jaati Kshetriya Vikas Sahkari Sangh Limited [also called Rajasthan
Tribal Area Development Corporation Limited (RTADCL)] and met
Manager Kalu Ram Roat. The Committee found that the trucks coming
from Punjab are directed to the wholesalers godown along with the
same weighment slip issued in Punjab. No endorsement pertaining to
the issuance of the foodgrain to the wholesaler was found on the
weighment slip though the gate pass was issued by the FCI but the
weight and Release order number was not mentioned on that gate
pass. The Godown Manager of RTADCL stated that it not only saves
loading-unloading cost for FCI but also the cost of transportation of
wholesalers are saved as it is not easy to get local transportation as
the rates charged by the local transporters are higher than those
approved by the government. The weight check memo containing
consolidated list of trucks sent from FCI to the wholesaler on one day
and weight and number of bags carried by it was not found in the
wholesalers godown and he stated that same is not issued by the FCI.
Godown Manager of RTADCL stated that samples are not issued by the
FCI along with the foodgrain. The Committee found that all the Trucks
carrying foodgrain to wholesalers are not weighed by FCI Dungarpur
which is evident from the fact that trucks carrying foodgrains from
Punjab are directed to deliver same to wholesalers godown and
weighment slip issued from Punjab is accepted by the wholesalers. On
perusing the records the Committee found that foodgrain is issued
within three to 10 days after the payment is made by the FPS dealers.
Committee also found the variations in monthly allocations for FPSs.
Similarly, Committee found allocation for APL foodgrain of the
wholesaler also differs month to month. However, the reason for the
variations in monthly allocations was not made clear to the Committee.
2.8.3 As the FCI officials stated that they regularly issue samples to the
wholesalers and wholesalers stated that they never received samples
from the FCI the Committee is of the view that FCI should mention
the fact of issuing sample both in the gatepass and the weight check
memo along with the signatures against that of both the FCI official
and wholesaler‟s representative who come to the FCI to lift the
2.9 Jodhpur District
2.9.1 Jodhpur Sahkari Upbhokta Wholesale Bhandar
1. The Committee visited “Jodhpur Sahkari Upbhokta Wholesale Bhandar”
and met Manager, Om Prakash Rathi. Mr.Raja Ram Chaudhry and Mrs.
Neel Kamal, Enforcement Inspectors (E.I) were also present.
Committee was informed by the E.I‟s present that the former DSO,
Sh. Tarachand Khatri, had fixed the APL allocation for every FPS dealer
as 45 Q. He got transferred in February 09 and after him new DSO Mr.
Vijay Pal Singh fixed the APL allocation as per the number of cards
attached with the Fair Price Shops. Committee observed that there are
no fixed rule regarding the fixing of allocation pertaining to the APL
foodgrain. It was found that the same depends upon the discretion of
2. The wholesaler issues foodgrain to 223 Fair price shops. Out of this
only 101 fair price shops have BPL cards and Only 75 fair price shops
have AAY cards. It was informed to the Committee that presently AAY
beneficiaries are getting 35 kg wheat, BPL beneficiaries are getting 30
3. Payment to FCI is allowed to be made in two installments. Committee
was informed that there is manual weighbridge at FCI and handwritten
WCM is issued by the FCI.
4. It was informed that dealers do not lift foodgrain every month rather
they lift foodgrain once in 2-3 months. It was further informed that
usually the stock is delivered directly to the FPS dealers who make
payment after lifting the same from FCI. However, as the wholesalers
lift full allocation from the FCI depot the quantity which is left
undistributed because of non-payment by FPS dealers or is stored in
the godown of wholesaler till the time FPS dealer doesn‟t make
5. The Committee was informed that there are 101 FPSs with which BPL
beneficiaries are attached. The Committee on perusal of the record
pertaining to Sales by the abovesaid wholesaler to Fair price shops,
found that all the fair price shops having BPL beneficiaries are not
lifting the foodgrain from the wholesaler timely.
6. Following table shows how many FPSs lifted foodgrain during the
period from April 09 to October 09.
Months Number of FPS which No. of FPS which
were issued BPL were not issued BPL
April 09 21 80
May 09 25 76
June 09 16 85
July 09 23 78
August 09 34 67
September 09 46 55
October09 72 29
7 Though the exact number of BPL attached to every FPS is not known
but some FPS dealers had 30 BPL card and some had more than 100
BPL cards. Yet considering on the lower side, if on an average 20 BPL
cards are attached to one shop then in 470 shop total BPL families
are 9400 which means foodgrain for 9400 families was not distributed;
which means 2820 Q foodgrain meant for BPL families was not
distributed from this godown during the period from April 09 to
8 Committee visited the godown and the godown keeper informed that
the storage capacity of 2100 Q foodgrain which means 4200 bags can
be stored in the godown of wholesaler. It is worth noting that the
storage space in the godown is less than the undistributed foodgrain in
BPL category only.
9 The Committee found that there were two rooms in the godown. One
room was full and all bags were lying intact, not a single grain was
lying outside the bags. In the other room many Quintals of wheat was
lying scattered on the flour which was indicative of the fact of
pilferage. As such huge quantity of scattered grain cannot be a result
of the spilling during handling of bags. The unhygienic handling of the
foodgrain was evident in the godown and Committee observed that the
godown Manager and keepers never realised that the same foodgrain
is meant for human consumption. Secondly, it is easy to siphon off the
scattered and lose foodgrain.
10 On asking the reason for the same godown keeper stated that it is
because of the tearing of bags at the time of unloading. However, it is
quiet unacceptable that these many Jute bags of foodgrain got
damaged during unloading of grain.
11 The Committee perused the records pertaining to the sales done by the
wholesaler and found that neither there was any time schedule for
issuing foodgrain to FPSs nor there was any fixed limit about the
quantity to be issued to FPSs. Irregularity and malpractices by various
persons/ authorities involved in the distribution of PDS foodgrain can
easily be understood by the details pertaining to issuance of foodgrain
by wholesaler to one of the Fair Price shop which is Upbhokta Sahkari
Bhandar no. 33/169 , managed by the dealer named Anil Gahlot. The
shop is attached with the Jodhpur Sahkari Upbhokta wholesale
Bhandar. Total monthly Allocation of this shop with respect to BPL,
AAY is 33.84 Quintal. The shop has 97 BPL beneficiaries and 7 AAY
beneficiaries attached to it. Forgetting the number of APL beneficiaries
attached to the shop, it is worth noting that total monthly allocation for
BPL comes out to be 29 Q 10 kg on the basis of 30kg wheat per card.
It is quiet surprising that the above said FPS dealer, (which is Ubhokta
Sahkari Bhandar) lifted 624.38 Quintals of foodgrain in the month of
October 2009 under BPL category.
624.38 Q = 62438 kg
Quantity lifted per BPL card = 62438/97=643.69 =644 kg
Number of months for which stock of One BPL family lifted
12. It is worth noting that the above said FPS dealer lifted stock of 21
months at one go in October 09. Previous to this, this FPS dealer had
lifted 176.77 Q of BPL wheat in July 09 which comes out to be stock of
Quantity lifted per card = 17677/97 =182.23kg
Number of months for which stock is lifted= 182 kg divided by 30 kg =
13. Abdul Wahab is running two Fair price shops / Upbhokta Sahkari
Bhandars. 222 BPL beneficiaries are attached shop no. 39/195, and
158 BPL beneficiaries are attached with shop no. 39/196. His monthly
allocation fixed by DSO is 71.84 Q and 51.13Q respectively. Thus, in a
month total 122.97 Q BPL wheat is to be supplied by the wholesaler
to him. The Committee observed that Abdul Wahab purchased only 30
Quintals of BPL wheat from the wholesaler in the month of April 09.
Nothing was purchased in the month of May, June, July, August. In
September he purchased 54 Q BPL wheat. In the month of October he
purchased 122.06Q BPL wheat from the wholesaler. No action ever
was taken against defaulting FPS dealer and wholesaler. It is quiet
unacceptable that the concerned officials of food and Supply
Department are not aware of these facts. It just shows there
connivance in the malpractices and the deep rooted corruption.
14. The above two instances are not the only instances. Details of every
FPS dealer showed similar irregularities in issuance of foodgrain. These
instances show gross negligence on the part of the officials of
Department of food and Civil Supply of State. The instance shows that
there is no time schedule for issuing/lifting foodgrain from wholesaler.
FPS dealer can come any time and pay money and lift as much
quantity as he wishes. The Department officials are least bothered to
check whether the quantity lifted ever reached the beneficiaries. The
poor beneficiary who can not even afford to lift one month stock fully
and always demands that they should be allowed to lift in installments
will never be in a position to buy stock of 21 months from the FPS
dealer. The wholesaler is directly under the Cooperative Department
and the officials of Cooperative Department are equally negligent in
performing their duties. No rule has been followed by the entities
involved in the PDS. The subsidized foodgrain for the poor beneficiaries
has been diverted and all the entities i.e. food and civil supply
department, cooperative department, transporters, FPS dealers. No
action is taken against them.
2.9.2 The Committee also visited the Jodhpur Cooperative Marketing Society
Limited which is also working as wholesaler for PDS foodgrains and
met General Manager Om Pal Singh Bhatti.
2.9.3 It was informed to the Committee that when truck goes from FCI to
FPS no officer accompanies truck and it is only FPS dealer who
sometime accompanies truck. The said marketing Society has storage
capacity of 3000 Q. Upon perusal of records, the Committee found
that one FPS dealer named Meena Kumari whose shop is located in
Basni, Jodhpur has 20 BPL cards. On perusal of records it was found
that Rs. 56,000 were paid by the FPS dealer on 31.8.09 for BPL and
APL foodgrain and she lifted foodgrain on 15.7.09. She also lifted BPL
foodgrain on 23.1.09 for which she made payment on 7.2.09. There
are two important things which is worth noting firstly, the above said
dealer was making payment for BPL foodgrain only after lifting the
same. Secondly, that the above said dealer only lifted BPL foodgrain
twice between the period from 15.4.08 to 31.8.09. It is quiet
unbelievable that the officers of the Food and Civil Supply Department
of the State are not aware of the same as they have not taken any
action against such errant FPS dealers. It is quiet clear that the officials
are negligent in performing their duties.
2.9.4 General Manager, Jodhpur Cooperative Marketing Society Limited,
informed the Committee that often there is delay on the part of FPS
dealers in making payment for the stock of BPL and AAY. He further
informed the Committee that about 60% FPS dealers are not making
payment timely and they have to really push each FPS dealer to
deposit money for the stock. It was informed by the General Manager
and was also evident from the records of the wholesaler that most of
FPS dealers were lifting APL foodgrain regularly. The timely payment
and lifting of APL foodgrain is because of the fact that APL foodgrain is
siphoned off by the FPS dealers and is a means of regular income for
them. The APL card holders informed the Committee during public
hearing and during visits to villages that grain was never distributed to
2.9.5 There are two major difficulties in distribution of foodgrain. First, that
the FPS dealers are not making payment timely. As payment of FPS
dealers is done at different times even if two FPS are on same route
the foodgrain cannot be delivered to both shops at one time because
payment is done by only one of them and without being sure about the
payment from FPS foodgrain cannot be delivered at his doorstep. As it
is doorstep delivery but a separate truck cannot be sent for each FPS
dealer as it increases cost of transportation. The wholesalers thus
prefer to store the grain lifted from FCI at their godown and give
foodgrain to FPS dealers when they make payment. Second major
practical problem is pertaining to distribution of foodgrain is weighment
of foodgrain. If the truck directly goes from FCI the large quantity of
foodgrain can‟t be weighed at FPS as they do not have weighing
machine to weigh large quantity of foodgrain. The Committee was
informed that the FCI do not give electronic weighment slip. It was
found that Gate pass is also not kept in the record at the office of the
above named wholesaler. Only manual weight Check memo was found
in the records. It was also found on perusal of records that there are
few FPSs which lift foodgrain from one godown at one point of time
and from other godown from other point of time. On asking the reason
Committee was informed that it was done on the oral instructions of
2.9.6 Committee also visited the said shop which was found closed and
though several calls were made to the said dealer and the concerned
Supply Inspector, but their phone were switched off.
2.9.7 Committee visited FPS no. 224, Ward no. 45, Bhagat ki kothi Jodhpur,
which was stated to be distributing foodgrains to the beneficiaries. As
per the records kept by the FPS dealer following was observed:
Number of cards attached to the shop
1. APL -872
3. AAY- 9
Lifting of AAY wheat stock ( allocation 3.15 Q per month)
Date on which Quantity Stock of the month
16.5.09, 9.45 Q April May.
15.7.09 9.45 Q April to June
15.9.09 9.45 July to September
19.10.09 3.15 Q October.
9.11.09 3.15 Q November 2009
Lifting of BPL stock ( allocation approx 51 Q per month)
Date on which Quantity Stock of the month
17.5.09 147 Q April and May
15.7.09 172.27 Q April to June.
15.9.09 92.52 Q July to September
15.10 09 43.68 Q October
4.11.09 40.80 Q October
2.9.8 The distribution of the BPL Stock for the month of July to September
started on 17.9.09 and was distributed till 18.10.09. On asking reason
he stated that he is distributing it better than other FPS dealers who
have not even lifted the foodgrain stock pertaining to the month of
2.10 The Committee was informed at the Mathania Kray Vikray Sehkari
Samiti (KVSS), Jodhpur that the transportation charges are more than
what is prescribed by the Government. Committee observed that FPS
dealers were issued two months stock together and stock is not issued
monthly. The representative of wholesaler takes the delivery from FCI
godown and do not accompany the truck. The staff was of the view
that transportation charges fixed by the Government should be
2.11 At Sri Karni Gram Seva Sehkari Samiti (GSS) which is appointed FPS
dealer for PDS the Committee found that Upto October 09, five months
stock of wheat for BPL beneficiaries was issued to GSS by the
wholesaler together. No BPL stock was issued after 16th October.
2.12 At FCI Godown in Jodhpur, Depot Manager M.K Purohit informed the
Committee that stock is also issued to wholesalers directly from
Railway point. It is worth noting that in such cases weighment of
foodgrain issued to the wholesalers is doubtful.
2.13 The Committee recommends that all the FCI godowns feeding the
wholesalers in the State of Rajasthan should issue electronically
generated weight check memo to the trucks carrying the food grains of
2.14 FCI should not issue foodgrain to the wholesalers directly without
weighing the truck, as the Committee found that the trucks coming
from Punjab were directed to the wholesalers without weighment of
2.15 The FCI shall issue to the wholesalers stack-wise sealed samples of the
stocks of foodgrains supplied to them for distribution under the Public
Distribution System at the time of dispatch. State Governments shall
exercise necessary checks to ensure that full quantity lifted by them
reach the fair price shops. State Governments shall ensure that stocks
of essential commodities under the Public Distribution System, as
issued from the FCI godowns, are not replaced by stocks of inferior
quality during storage, transit or any other stage till delivery to the
ration card holder. The Committee found that there was no system of
quality control in the State. No samples are given to the FPS dealers
by the wholesalers. There is no check on quality of grain being
supplied to the beneficiaries. The system of sampling should be strictly
observed. The retailer must display the sample at his FPS shop so that
the quality can be checked by the officials, vigilance machinery,
enforcement machinery and the consumer.
2.16 Committee observed that not only the foodgrain is not issued to every
FPS but also those FPS where foodgrain reach do not distribute the
same to beneficiaries fully. The pattern of irregularities Found can be
broadly classified into 3 kinds.
1. Some FPS purchase BPL foodgrain once in 2-3 months and purchase
APL foodgrain regularly from wholesalers. These FPS dealers issue
foodgrain to BPL families once in 2-3 months but they do not distribute
APL foodgrain and siphon off the same. The purpose of delivery of
BPL foodgrain once in 2-3 months was apparently the saving of
transportation cost by the wholesaler.
2. Committee found that many FPS dealers purchase BPL foodgrain once
in 9 to 21 months from wholesalers. It appears that these FPS dealers
not only siphon off APL foodgrain but also the BPL foodgrain as it is not
acceptable that they distribute foodgrain stock of one year or more to
the beneficiaries at one time when the poor beneficiaries do not even
have money to buy one months quota at one go. They distribute
foodgrain stock of 2-3 months misrepresenting to beneficiaries that
only this much stock has come and the undistributed balance stock is
diverted in open market. The easiness of selling the large quantity of
grain at one go to open market is appeared to be the main reason for
lifting/ issuance food stock of 9- 21 months together by the FPS
3. The Committee found that there are many FPS dealers who do not lift
foodgrain at all. This was found mainly in Jodhpur where maximum
FPS dealers are Upbhokta Sahkari Bhandar. As they are under
cooperative department and are selling other grocery items and
earning profit they hardly bother to make an effort and devote time for
unviable PDS. They don‟t lift foodgrain at all. It‟s the beneficiaries
ultimately who suffer as they are unaware about the schemes and
benefits provided to them by the Government.
2.17 The Committee is of the view that appointment of Cooperative
societies as wholesalers has following drawbacks.
1. The Committee observed that entities involved in Wholesale
distribution are not properly functioning in the State as there is no
supervision and monitoring by the Food and Civil Supply Department
or the Cooperative Department on the functioning of the Cooperative
societies / KVSS as wholesalers for public Distribution system. In case
of any irregularities found in the functioning of wholesalers the
prosecution under Essential Commodities Act can be initiated only by
the Department of Food and Civil Supplies. However, the departmental
proceedings can be initiated only by Cooperative department. Thus,
there is dual authority responsible for keeping check on the functioning
which results into lapses in monitoring the functioning of the
2. The officials of the State Department have failed to check whether
the beneficiaries get their allocations every month and the coupons are
submitted by the FPS to the DSO. Registrar of Cooperative Society has
also failed in its duty in not checking Cooperative Societies working as
wholesalers under his charge regarding their negligence in not
delivering the PDS foodgrain every month to FPS. Registrar of
Cooperative Societies has not taken any action against the officers of
the Department attached to wholesalers for neglecting their duties
under the control Order. There is gross negligence of duty by all the
officials of the Food, Civil Supply and Consumers Affair Department of
the State and the Cooperative Department in not streamlining the
system resulting in huge diversion of PDS foodgrain.
3. If the Cooperative Societies are not running in profit the Government
officials of Cooperative Department, are given only additional charge
and not as a full time official to supervise their functions.
4. The lifting of foodgrain by the wholesalers is not done regularly. There
is no uniformity in the functioning of Cooperative Societies of different
districts. So far as KVSS are concerned these are Cooperative Societies
registered with the Cooperative Department. There is no uniformity
regarding their functioning in the State and different KVSSs work in
5. The financial status of most of the KVSSs is not sound which affects
the timely offtake from FCI and supply to the FPS dealers. As the
transportation cost is initially to be borne by the wholesaler and later
reimbursed by the Department on submitting bills pertaining to the
cost of transportation, these KVSS cannot invest money for
transportation by trucks hired by them because of which they always
keep manipulating things to adjust the cost of transportation.
6. Quality check is not ensured as no samples are given by these
wholesalers to the FPS dealers for display at their shops.
7. The wholesalers Upbhokta Bhandars/ KVSSs are not in a position to
supply the food grains in time for distribution and and they supply the
food grains of many months together to the FPS dealers for
distribution, thus defeating the very purpose of PDS and the food
8. Nobody accompanies the trucks hired by the wholesalers while
bringing from the FCI godown for delivery to the FPS dealers or at the
godown of the wholesalers. It was informed that generally the door
step delivery is given by the wholesalers but in case quantity to be
delivered is small the FPS dealers themselves lift from the godowns of
the wholesaler however, reimbursement of the transportation cost is
done by the wholesaler to the FPS dealer.
9. No weighment is done at the godown of wholesaler
2.18 The Committee is of the view that in order to streamline distribution of
foodgrains throughout the State, the State Government should
constitute its own Corporation which should be having its own godown
and staff to look after storage, and distribution of foodgrains.
2.19 FAIR PRICE SHOPS
2.19.1 There are 22830 Fair Price Shops operational in the 33 Districts of the
State of Rajasthan. FPS dealers have to make payment to the
wholesalers and as per the allocation fixed by the DSO for a particular
FPS, the wholesaler / KVSS issues foodgrain to the FPS.
2.19.2 Monthly allocation of foodgrain for FPS is fixed by DSO for a period of
one year and is not on the basis of distribution done in previous
month. The Committee found that there is no time schedule for FPS
dealers to make payment to the wholesalers. When ever the FPS
dealer wish to get foodgrain he approach authorities to issue permit
and the DSO issues permit and the wholesaler issues foodgrain to the
FPS dealers subject to the payment of money sometimes before or
sometimes later. It varies from wholesaler to wholesaler whether the
payment is to be deposited in advance (as observed by the Committee
in Jaipur) or at the time of issuance of foodgrain (as found in Ajmer) or
after the issuance of foodgrain (as found in Jodhpur).
2.19.3 Duties and Responsibilities of FPS dealers
A. Para 5(ii) of the Annexure to PDS control order 2001 provides that
each FPS will display the following information on a notice board which
is to be put up at a prominent place in the Shop on a daily basis:-
(i) List of BPL and Antodaya beneficiaries,
(ii) Entitlement of essential commodities,
(iii) Scale of issue,
(iv) Retail issue prices,
(v) Timings of opening and closing of the fair price shop,
(vi) Stock of essential commodities received during the month,
(vii) Opening and closing stock of essential commodities and
(viii) The authority for redressal of grievances/lodging complaints
with respect to quality and quantity of essential commodities
under the Public Distribution System.
B. Orders passed by the Hon'ble Supreme Court in W.P. (c) no. 196/2001
The Hon'ble Supreme Court by the Order dated 02.05.2003 directed as
"It is necessary to issue immediate directions to evolve a system
whereby eligible BPL families, which may not be on BPL list, are so
included as also regarding the ration shops and other outlets remaining
open and giving deliveries of food-grains to those, who are on the list
and hold the requisite cards……. the respondents shall ensure that the
ration shops remain open throughout the month during fixed hours and
the details of which shall be displayed in the notice board.
To facilitate the supply of the grain, we issue the following
(1) Licencees, who
(a) do not keep their shops open throughout the month during the
(b) fail to provide grain to BPL families strictly at BPL rates and no
(c) keep the cards of BPL households with them,
(d) make false entries in the BPL cards,
(e) engage in black-marketing or siphoning away of grains to the
open market and hand over such ration shops to such other
shall make themselves liable for cancellation of their licences.The
concerned authorities/functionaries would not show any laxity on the
C. The timings of opening of Fair Price shops in the State are
In winter: 9.00 a.m to 1.00 p.m
In summer: 8.00 a.m to 12.00 p.m
2.19.4 Irregularities found
1. There was a general complaint that FPS dealers open the shop at their
sweet will. Most of the shop owners, specially in rural areas, open the
shop only for two-three days in a month.
2. Weighing balances are not proper in every shop and Committee found
that FPS dealers use spring balances also to weigh foodgrain while
issuing the same to beneficiaries.
3. Required information was not displayed on the Display Boards.
4. Registers are not properly maintained by the Fair price shop dealers.
The pages of the registers were not found to be stamped as required
by the rules of the State government.
5. Committee found that the FPS dealers do not keep sample of foodgrain
at shop. Most of them complained that they do not receive samples
6. The Beneficiaries complained that the FPS dealers often misbehave
with the beneficiaries.
7. The Vigilance Committees do not monitor when and how much stock is
received by the FPS dealer and how much is actually distributed by him
to the beneficiaries.
8. The Committee also observed that the officials of the Food and Supply
Department are negligent and do not keep any check on the
functioning of FPSs.
9. Committee found that FPS dealers lift the APL foodgrain but do not
distribute the same to the beneficiaries and misrepresent that they are
not receiving any stock of APL category.
10. Most of the dealers distribute foodgrain to BPL beneficiaries once in 3-4
months. There are many dealers who do not lift BPL foodgrain for
many months rather they lift the stock of many months together.
2.20 ENTITILEMENT OF BENEFICIARIES
2.20.1 The issue price of wheat for APL beneficiaries is Rs. 6.80/- per kg. To
BPL beneficiaries wheat is issued@ Rs. 4.70 per kg and to AAY
beneficiaries wheat is issued @ Rs 2 per kg. AAY beneficiaries are
getting 35 kg per month. Quantity issued to BPL beneficiaries differs
from 28 kg to 31 kg from district to district. So far as the APL
beneficiaries are concerned the quantity per card allocated is 5 kg.
However, 10 kg wheat per card was allocated to Fair Price shops on
2.20.2 The Committee was also informed by the officials of the State
Government that the State has taken following steps to ensure food
security for the vulnerable sections:
1. State government is distributing foodgrain free of cost to the two
tribes „Kathodi‟ in Udaipur District and tribe named „Saharia‟ in Baran
2. The State Government launched the Food Stamp Scheme in the
year 2004. Under this scheme Sarpanchs of all the Gram Panchayats
are being supplied with 100 food stamps worth 10 kg of wheat each
every year. A needy person can obtain a food stamp from the gram
Panchayat once a year and get 10 kg wheat from the FPS free of
2.20.3 ALLOTMENT AND LIFTING OF FOODGRAIN
A. Monthly allotment / No. of Beneficiaries under TPDS
(As on March 2009)
Scheme No. of Foodgrain Allotment Shortfall per
Families Allotment by sufficient for month on
(In Lacs) GOI per no. of the basis of
month (MT) families (In no. of
(10 kg. per
APL 122.16 64360 64.36 363200
the month of
BPL 16.52 52461 14.98 5360
AAY 9.32 32624 9.32 -
Annapurna 1.05 1053 1.05 -
B. Allotment & Offtake of Wheat APL
Year Allotment Offtake Percent offtake
2004-2005 2696376 302814 11.23
2005-2006 2188544 198433 9.07
2006-2007 5269554 153529 29.14
2007-2008 290948 236554 81.30
2008-2009 343114 287664 83.84
2009-2010 321800 314694 97.79
(upto Aug 09)
C. Allotment & Offtake of Wheat BPL
Year Allotment Offtake Percent offtake
2004-2005 701294 650466 92.75
2005-2006 517808 448715 86.66
2006-2007 434372 415671 95.69
2007-2008 408640 385339 94.30
2008-2009 596800 589606 98.96
2009-2010 262305 263659 100.52
2.21 FOODGRAIN ALLOCATED FOR APL BENEFICIARIES
2.21.1 The allocation of wheat to the State of Rajasthan for APL category
from the year 2000-01 upto 2009-10 kept on changing. Off take
which was very poor upto the year 2006-07, picked up from the year
2007-08 onwards. The Committee was informed that this is because
of the less difference of PDS price and market price of wheat. The
lifting during the last three years is more than 80% of the allocation.
2.21.2 Apart from the regular allocation of APL foodgrain the State has also
received regular ad-hoc allocation for APL category. It is difficult to
comprehend that when the off take by the State with respect to the
regular allocation is very low then why ad-hoc allocation is given and
same is continuously lifted by the State. Again on perusal of records
it was evident that the State government was randomly issuing ad-
hoc APL grain to districts. Sometime to 16 districts and sometimes to
22 or 26 districts and no pattern has been followed regarding
choosing districts for issuing APL foodgrain. For example State
received 4000 MT for the month of September and October 2007,
which was distributed to 22 districts. For January to March 08 State
received 10,000 MT ad-hoc extra APL wheat which was distributed to
26 districts. It was observed by the Committee that the ad-hoc APL
wheat has never reached the beneficiaries and was lifted only for
siphoning off the same.
2.21.3 The Committee was also informed that main reason of the increase
of the APL ration card is that there is no restriction on issuance of
APL ration cards. However, the number of BPL cards is restricted.
Further, Ration card is also used as an identity proof for obtaining
benefits of other schemes of Central /State Governments such as
NREGA. D.S.O Jaipur, Ajmer, Udaipur and Jodhpur informed the
Committee that to give employment in the NREGA scheme, ration
cards are used as proof of residence of that area and holder is
counted as one family unit. Hence, many people obtain the card for
getting benefits under the scheme. The use of ration cards for any
other purpose or as identity proof is not permitted under PDS Control
Order however, not only the beneficiaries but the government
officials are ignorant about this fact.
2.21.4 Due to increase in the number of ration cards in APL category and
allocation of APL foodgrain for the State remaining same the
quantity of foodgrain to be issued per card has been reduced to
even less than 5 kg per month. However, the State Government
informed the Committee that they have decided to distribute 10 kg
wheat per ration card on rotational basis as the APL beneficiaries
were not lifting the wheat from Ration shop due to the less quantity.
2.21.5 In Jodhpur District total number of APL cardholders are 7,19,536.
3583 MT APL wheat is allocated per month for the District Jodhpur.
10 kg atta is distributed from the month of October 09 to 2,55,206
APL beneficiaries of the District Jodhpur, hence, for rest of the
4,64,330 APL cardholders only 1083 MT wheat is allocated in the
district because of which only 2.33 kg wheat can be distributed per
ration card. As Jodhpur is draught prone area, to distribute minimum
10 kg wheat 4643 MT wheat is required instead of 1083 Mt wheat.
Considering the increased demand for foodgrain State should
consider the procurement and distribution of coarse grain.
2.21.6 As the allocation of APL is done on rotational basis means
wholesalers issue APL foodgrain to the FPS dealers and then FPS
dealers are supposed to distribute the same to APL beneficiaries on
rotational basis. This also has created confusion. It would have been
better if the foodgrain be issued to every FPS dealer calculating his
allotment according to 5 kg per card and let the FPS dealer distribute
the same on rotational basis. This may ensure that the FPS dealer
gets his foodgrain stock every month and he will not get opportunity
to misrepresent that he is not received the stock.
2.21.7 The APL beneficiaries are not getting foodgrain at all and tons of
Foodgrain allocated for APL beneficiaries is siphoned off. To stop the
Diversion distribution of atta to APL beneficiaries is good initiative by
the State Government. The Government has started the atta supply
to APL beneficiaries through FPS and dairy booths. However, scheme
needs improvement. Like accountability of dairy booth owners in case
of diversion. Secondly, the Committee was informed by the
beneficiaries in Public hearing that as the dairy booth owners do not
have proper list of beneficiaries attached with them and they give the
atta to BPL families meant for APL families.
2.21.8 It is worth noting that in the State of Gujrat atta was introduced in
order to reduce malnutrition. Fortified atta was thus supplied to the
section which is vulnerable to starvation and malnutrition i.e AAY
beneficiaries. However, in the State of Rajasthan atta is introduced
in order to curb the diversion of APL foodgrain. As shelf life of atta is
less the same can‟t be stored for long duration and hence diversion
of the same is difficult.
2.21.9 Committee observed that every APL beneficiary do not lift the
foodgrain from the ration shop and his share gets diverted. On the
one hand huge quantity of foodgrain gets diverted because many
APL families do not purchase grain from ration shop and on the other
hand many families who really need the subsidized foodgrain do not
get the same. There are many draught prone areas in Rajasthan like
Jaisalmer, Barmer, Dungarpur, Banswara where the families not
covered under BPL scheme also need food security. In order to cure
this malady the Committee is of the view that following two measures
should be adopted.
1. Abolition of APL category and increasing the number of
beneficiaries entitled to subsidized foodgrain by adding those
families in the scheme who are Marginally Above Poverty Line.
The Committee reiterates its suggestion/recommendation made
in the Delhi report that the category of APL be abolished.
Reference may be made to the said report for a detailed
analysis of the said recommendation and it may be added that
the Committee in its visit to state after State has found that the
concept of APL is serving no useful purpose for food security
and instead only a diversion tool. Hence, the APL category
should be limited to households whose annual income is Rs.
One lakh. This is based on the fact that a class IV employee of
the Central Government in Delhi gets a consolidated salary of
about Rs. 8000/- per making it Rs. 96,000/- annually. This
category may be called “Marginally Above Poverty Line (MAPL)”.
This limit may however be revised as when required on a
rational basis by the government.
2. As the allocation of foodgrain is not sufficient to meet the
requirements of the large number of families who require food security
and support from the Government, State Government should consider
procurement of the coarse grain i.e. Maize, Jowar and Bajra which is
locally produced in the State. Committee found that in different regions
of the State coarse grain i.e. Maize, Jowar and Bajra is the staple food.
State Government may take necessary action for identifying the
various regions and Districts where the coarse grain is in demand and
the quantity of coarse grains required for such districts.
WHEAT FLOUR / ATTA
3.1 The State Government of Rajasthan has undertaken supply of
wheat flour (atta) instead of whole wheat to APL category of ration
card holders in the urban areas of 7 districts – Jaipur, Jodhpur,
Bikaner, Ajmer, Kota, Udaipur and Bharatpur. Atta is being
distributed in the polythene bags of 10 Kg. each and the
distribution is being done not through the FPS but through the
Upbhokta Sangh Bhandars and outlets of Saras Dairy. The decision
was taken by the State Government and order was issued by the
Deputy Commissioner and Deputy Secretary to the Government of
Rajasthan in the Department of Food, Civil Supplies & Consumer
Affairs. This was vide communication dated 28.08.2009.
3.2 The Committee enquired from the officials as to why distribution of
atta was not being done through the FPS, the answer was given
that since FPS dealers indulge in corrupt practices and divert the
PDS food grain to the black-market, it was, therefore, decided to
keep them away from distribution of atta. Though such decision
was not recorded in the official files, it was mentioned before the
Committee that the arrangement / system of distribution of atta
was introduced to bring about transparency in the distribution of
atta and pulses through Saras Dairy outlets and Upbhokta Sangh
Bhandars and to provide more facilities and convenience to the
3.3 Considering the demand and popularity of atta, the State
Government is planning to introduce atta in various urban areas in
the State as well. Supply of wheat to APL card holders in these
areas has been stopped. The atta is being sold at the rate of Rs.9/-
per Kg and a polythene bag of 10 Kgs. costs Rs.90/-. Wheat is
supplied to APL ration card holders @ Rs.6.80/- per Kg. The income
of dairy booths distributing atta has increased by Rs. 2,500-3,000/-
3.4 A Writ Petition has been filed in the Rajasthan High Court
challenging the decision of the State Government of introducing
supply of atta instead of whole wheat and also the distribution of
the same through the Saras Dairy outlets and Upbhokta Sangh
Bhandars. It is said that this is against the provisions of the
Rajasthan Foodgrains & other Essential Articles (Regulation of
Distribution) Order 1976 and the PDS (Control) Order 2001 issued
by the Central Government.
3.5 In its reply the State Government has sought to justify its decision
to distribute atta instead of whole wheat to APL category of ration
3.6 In the meetings conducted by the Committee, the officials stated
that there was a lot of diversion of wheat and the trucks were going
from the FCI directly to the market or to the atta chakki. Also, there
was no difference in the packing of PDS wheat and market / private
wheat, thus, the State could not stop / check the diversion. The
Department had also sent DSO, Udaipur to study the system of Atta
in Gujarat and have also gone through the Committee‟s reports.
3.7 The main objective for starting the distribution of Atta instead of
wheat was to check diversion and it was stated by officials and
millers that atleast 70-80% diversion has already been prevented.
The lifting of atta by the APL beneficiaries has also increased as
compared to wheat. It was also stated that the FPS opens only for
3-4 days in a week whereas the dairy booths open everyday. The
criteria for giving Atta to dairy booths is, inter-alia, that they should
have adequate space to store the Atta bags and adequate funds. At
present there is no fortification of atta in Rajasthan; however, it is
being considered as the next step.
3.8 Distribution of atta instead of wheat has also checked diversion of
PDS wheat to black-market. In Udaipur, it was stated that with the
distribution of atta, the lifting by APL beneficiaries has increased
from 16% to 60%.
3.9 The standard of the quality of atta is being maintained by ensuring
that good quality of wheat is lifted from the FCI godown by the
flour mills for grinding. The State has also got the Atta / wheat
grain lab-tested in order to ensure that it is fit for human
consumption. The shelf life of atta is 30 days. In case the stock
remains unsold for 20 days, the miller lifts the stock back and
delivers it to the dairy booth in another area for distribution.
3.10 The DSO allots the quantity of wheat grain to be lifted by each mill.
The wheat grain is lifted from the FCI by the flour mills and taken
directly to their mills where it is ground into the atta. At the time of
lifting, an inspector of the department is present at the FCI
godown. The millers deposit the money at the FCI in advance.
3.11 The state officials stated that though, maida and suji are also being
produced by these flour mills, it has been ensured that when PDS
Atta is being ground, no other product is manufactured. The wheat
flour for PDS is directly ground from the whole wheat. No other
product is taken out from this wheat. The Committee also visited
flour mills in the State and observed that all the mills were also
producing wheat flour for selling in the open market albeit
separately. It was stated that 5% wastage is allowed for bran and
other for foreign materials.
3.12 Once the wheat grain is ground into atta, the miller delivers the
atta to the dairy booth.
3.13 The wheat flour in bags of 10 kg is supplied by the flour mill to the
dairy booths and Upbhokta Bhandar @ Rs. 87/- per bag to be
distributed by the retailer to the APL beneficiaries @ Rs. 90/- per
bag. The rate of supply i.e. Rs. 87/- per bag is inclusive of the
cost of wheat, VAT, cost of milling, cost of transportation from FCI
to mill and mill to the dairy booth, packaging, tax on the difference
between the value of atta and wheat grain, printing on the bag,
wastage and miscellaneous work. The commission on atta payable
to the dairy booth owner is Rs. 0.30/- per kg or Rs. 3/- per bag.
The market rate of wheat is Rs. 18/- per kg, thus, there is a
difference of Rs. 90/- per 10kg.
3.14 A number of Non Government Organizations have though
appreciated the decision to supply atta instead of wheat, have
stated that the cost of atta @ Rs. 9/- per kg is too high. It was
further stated that if all the additional expenses are added to the
cost of wheat grain, the cost of atta should still not exceed Rs.
7.50/- per kg.
3.15 In the public meetings held by the Committee, the consumers i.e.
APL ration card holders in the urban areas of aforesaid seven
districts have welcomed the distribution of atta instead of wheat. In
the rural areas, however, the opinion was that it should be only
wheat which should be distributed and not atta. This is because the
beneficiaries in the rural areas prefer to lift wheat grain and get it
ground into atta as per their own requirement. Also, since the shelf
life of atta is stated to be only 30 days, it is difficult to deliver the
atta, within the stipulated time, to FPS located in remote areas. A
number of beneficiaries were apprehensive of the quality of atta
and it was suggested that some representatives of beneficiaries be
shown the entire process of grinding of wheat grain into atta for
3.16 In a public meeting as Udaipur, opposition to atta was raised by a
section of people consisting of ladies and 2-3 men. It was
complained that the quality of atta is not good and chapatis made
from the atta break if kept for over two hours. The chapati also did
not taste good. It was offered to them that a member of the
Committee would go with them to any booth to purchase the atta
and chapati would be prepared from that atta in the Circuit House
during lunch time. However, the said group was disinclined to do
so. Upon further probe it was found that the ladies were BPL card
holders and had never purchased the PDS atta as they were not
even entitled to it. They had been asked to come to the meeting at
the instance of some NGO.
3.17 FPS owners have, apart from throwing legal challenge to the
validity of distribution of atta, have also pointed out the
commission of 3% earned by the dairy booth outlets who are
supplied atta @ Rs. 87/- per bag of 10 Kg. They have further stated
that in case atta is distributed through FPS, it would increase their
viability. It was stated that the FPS dealers had been running shop
for several years but their commission has remained same, that is,
Rs. 0.08/- per kg whereas the commission on atta to the dairy
booths is Rs. 0.30/- per kg.
3.18 The FPS dealers have also submitted that atta be distributed
through the FPS rather than dairy booths as it shall ensure that the
FPSs are open through out the month. The wholesalers submitted
that they were prepared to supply the Atta @ Rs. 8/- per kg. and
that they should be made a chain in the distribution process.
3.19 Another complaint against atta was that the quality of atta can not
be checked at the time of purchase whereas the same can be done
in case of wheat grain.
3.20 The process of distributing atta in the State of Rajasthan is still in
its initial stages and it was stated by the department that the
system would soon be streamlined. The Committee visited a few
flour mills in the State of Rajasthan and observed the following:-
(i) Some of the bags prepared by the miller 3-5 days ago
were still lying at the mill.
(ii) No official / inspector of the Department accompanies the
truck from the FCI godown to the flour mill.
(iii) An employee of the miller accompanies the truck from
the FCI godown to the mill and from the mill to the dairy
(iv) The production of atta was stated to be in consonance
with the Prevention of Food Adulteration Act, 1954.
(v) The atta was packed in polythene bags of 10 kg each.
The weight of the polythene bags is 32 grams. Earlier the
atta was being supplied in bags of 5 kg each but that has
been discontinued as the cost to the miller was Rs. 2.37/-
per kg as compared to Rs. 2.15/- per kg for bags of 10
(vi) It was stated that an official of the department visits the
mill and checks the quality of atta and the weight of the
(vii) A daily report and a monthly statement is also prepared
and sent to the department
(viii) The production of atta begins when the release order is
received by the flour mill from the department.
(ix) The miller delivers the atta to the dairy booths and
receives cash payment at the time delivery
(x) The millers also produce wheat flour which is sold in the
(xi) The miller stated that a schedule of delivery to the dairy
booths should be supplied by the department so that all
the booths in a particular area could be supplied atta at
the same time. The official of the department stated that
they were in the process of streamlining the system.
3.21 The Committee also visited the Saras dairy booths and observed that
the entire atta which arrives at the booth is sold off on that very day
itself. Any beneficiary, irrespective of his residence, could lift the atta
from any dairy booth without restriction. The dairy owner
telephonically informs the miller as to the quantity required by him and
the cash payment is made on delivery. An authorization has been
given to the Saras dairy booths for sale of atta to the APL beneficiaries.
MODE OF APPOINTMENT OF FAIR PRICE SHOPS DEALERS
4.1 Vide Order No. F 17(1) Food Department/ Law/ 08, dated 27.02.2009,
the Food, Civil Supplies and Consumer Affairs Department laid down
directions with regard to appointment of FPS dealers. All earlier
direction and resolution pertaining to appointment of FPS dealers stand
repealed after this Order.
4.2 Vide Order No. F 17 (1) Food Department/ Law/08 dated 06.10.2009,
the government further clarified the reservation criteria in the
appointment of FPS dealers.
4.3 Vide Order No. F 74(7) Food Department / PDS / 87 III, Jaipur, dated
21.07.2009, directions have been issued with regard to rationalisation
of FPS. Accordingly, it has been directed that a vacancy for a new FPS
shall arise after every 2000 units or 500 ration cards. The Order
directed the District Supply Officers to take immediate steps to initiate
the process of survey and identification of new FPS vacancies by
deploying enforcement staff and field officers.
4.4 However, vide Order dated 21.05.2009, fresh appointment of FPS
dealers has been stopped until further orders.
4.5 Procedure for Appointment of FPS dealers
4.5.1 Invitation for application
1. Upon determination of vacancies for FPS in the district and upon its
approval by the District Collector, the District Public Relations officer
issues a Press Note and advertises the vacancies through newspapers
and other such media.
2. For urban areas, the applicant should belong to the same ward where
the FPS vacancy has arisen. For rural areas, the applicant should be a
resident of any village of the Panchayat where the vacancy has arisen.
3. Educational qualification –
For General category applicants – Standard 8 pass.
For Scheduled Tribe Sub-Plan Area and Schedule Caste applicants of
the Shahvad and Kishanganj tehsil/ Saharia persons, minimum
educational qualification is standard 5 pass.
4. The applicant has to submit an affidavit stating that he has not been
punished under the Essential Commodities Act in the past 10 years,
that he will run the FPS himself and that none of his immediate family
members already run an FPS.
5. The applicant has to submit a certificate issued by the Tehsildar
certifying his solvency to the tune of Rs.25,000/-.
6. Upon receiving the applications by the due date, after due verification
of the documents and facts, the concerned official presents the eligible
applications before the Advisory Committee. The decision on the
selection of the dealer is to be made by the Advisory Committee.
4.5.2 Advisory Committee
1. The Advisory Committee is to be constituted at the tehsil level to take
a decision on the applications received. The constitution shall as under:
District Supply Officer President
Nagar Nigam/ Parishad/ President of the Member
Palika/ Administrator or a representative
nominated by them
(i) Social worker Members
(iii) Woman consumer
All nominated by the Government belonging
to the same area.
District Supply Officer President
Concerned Gram Panchayat Sarpanch Member
(iv) Social worker Members
(vi) Woman consumer
All nominated by the Government belonging
to the same area.
2. If the nominated members of the Advisory Committee are found
indulging in any irregularities, they would be liable to be removed by
3. After finalising the candidate, the Advisory Committee presents the
same before the District Collector.
4. The following category of people are given preference in the following
(i) Women Self help Groups recognized by the Women and
Child Welfare Department, Rural Development Department,
Social Justice department or any other government
(ii) Cooperative Societies registered under the Cooperative
(iii) Educated Unemployed
(iv) Scheduled Caste and Scheduled Tribe
(v) Widow and abandoned women
(vi) Former defence personnel and their widows
(vii) In Tehsil Shahbad and Kishanganj of District Bara, 50 % FPS
are reserved for Saharia caste and in the Scheduled Tribe
Sub-Plan Area, 50% FPS are reserved for Scheduled Tribe.
The other 50% shall be allocated to general category
persons as per normal procedure.
5. In case of a dispute within the Advisory Committee with regard to
selection of a particular applicant, the same is presented before the
District Collector who takes a decision on the matter using his own
6. The Advisory Committee keeps one application in reserve so as to
ensure its immediate appointment in case a selected FPS dealer is
7. Issuance of Licence - Selected applicants are issued a licence by the
District Collector. The dealer deposits the requisite amount and the
process of appointment is to be concluded within a month.
4.5.3 Appointment on compassionate grounds
1. Upon the death of an FPS dealer, his licence is transferred in the name
of one of his following family member :
(i) Widow of the deceased
(ii) Adult son of the deceased who was dependent on the
(iii) Adult unmarried daughter who was dependent on the
(iv) Widow daughter of the deceased
4.6 Details of Reservation criteria
1. Order No. F 17 (1) Food Department/ Law/08 dated 06.10.1009
clarifies point (iv) of the reservation criteria as mentioned in the order
dated 27.02.2009 as mentioned above. Accordingly, the reservation
will be as follows :
(i) Scheduled caste - 16 %
(ii) Scheduled Tribe - 12 %
(iii) Other backward class - 21 %
2. A 100 point roster shall be maintained as per the above criteria, for
FPS vacancies. The vacancies shall be filled as per the roster
determined by the District Collector.
3. In case a qualified SC applicant is not available then the next category,
that is, ST category applicant shall be considered. However, later if an
ST vacancy arises then an SC shall be considered for it as at no time
any category shall be given more than what is reserved for it.
4. The rest of the 51 % of vacancies shall be filled as per the normal
procedure and all applicants shall be treated equally.
5. While calculating the percentage for reservation, if the figure comes
out in decimal points, then incase the figure is less 0.5, the lower
round off figure shall be considered and in case the figure is more than
0.5 then the higher round off figure shall be considered.
6. In case of appointment on compassionate grounds, the reservation
criteria shall not be applicable.
4.7.1 The Committee perused some files pertaining to appointment of FPS
dealers. It was observed that the concerned officials/ inspectors in
practice are not verifying the details and documents being submitted
by the applicants by conducting field enquiries. They prepare reports
only on the basis of the documents received and verification of the
same is not carried out.
4.7.2 The Committee also found instances where applicants of certain castes
were being given preference on discretion of the Advisory Committee
though no particular reason has been stated for doing so. Upon
probing further on the issue the Committee was informed that often
there is political pressure on the officials and the Advisory Committee
in appointment of FPS dealers.
4.7.3 Upon visit to FPS in various districts, the Committee observed that in
practice most of the FPSs are being allocated to / run by the
Cooperative Societies (like Gram Sewa Sahakari Samiti and Upbhokta
Sahakari Bhandar). Cooperatives like Upbhokta Sahakari Bhandar are
conducting wholesale as well as retail functions. In Jodhpur, out of 222
attached to the Cooperative Society - Upbhokta Sahakari Bhandar
(Wholesale point), around 138 are run by the same Cooperative
Society through FPS licence. Thus it was not clear as to how the
department is maintaining its reservation criteria in allocation of FPS.
VIABILITY OF FAIR PRICE SHOPS
5.1 Viability of FPS is linked with the rate of commission to be paid to FPS
dealers. The Committee discussed the issue of viability with FPS
owners and their associations, government officials and also invited
suggestions from the public.
5.2 Viability of Fair Price Shop is critical to sustenance of Public Distribution
System and to minimize leakages of PDS grains. The number of ration
cards attached to FPS in each category, offtake of grains, margin on
commodities, cost incurred on transport and handling, rents etc. are
the determinants of viability of Fair Price Shops.
5.3 Programme Evaluation Organisation (PEO) under Planning Commission
in its evaluation Report on TPDS defined Viability of FPS to mean an
annual return of 12% or more on the working capital.1 Average gross
income of an FPS is calculated as an average of the total margins
generated from the sale of sugar, kerosene, rice and wheat (APL, BPL,
AAY) and other receipts out of the sale of gunny bag in which PDS
grains are packed and sent in to the FPS.
5.4 The PEO report, 2005 brings out the importance of kerosene in the
income composition of the FPS. The Report states that the income
from kerosene almost equals the combined share of income generated
from sale of BPL rice and wheat and thus speaks of the importance of
keeping kerosene within the PDS retail trading to improve their
PEO, Performance Evaluation of Targeted Public Distribution
System-2005, (at pg vi and 50).
5.5 The commission for the FPS dealers is fixed by Food, Civil Supplies and
Consumer Affairs Department as under:-
Kerosene Rs. 0.45/- per litre
Wheat Rs. 8/- per quintal
Sugar Rs. 11.99/- per 100 kg
5.6 The Department provided the Committee with the following
information by taking an example of an FPS dealer as under :–
Sample calculations for economic viability of FPS in Jaipur
Name of the dealer – Jagdish Prasad Jat, Shahpura, Jaipur
Total number of ration cards -728
APL-545, BPL-129, AAY-54
Allocated quantity for APL @ 4.43 kg per ration card-2414.35 kg; rounded off
to 2400 kg or 24 quintals.
Allocated quantity for BPL @ 25.14 kg per ration card-3243.06 kg; rounded
off to 3200 kg or 32 quintals
Allocated quantity for AAY @ 35 kg per ration card -1890 kg; rounded off to
1900 kg or 19 quintals.
Allocated quantity for Sugar to be distributed to BPL and AAY beneficiaries
(183 cards) @ 2.5 kg per ration card -457.5 kg per ration card; rounded off to
500 kg or 5 quintals.
Approximately 2000 litres kerosene are allotted for 728 ration cards.
Commission (per quintal / litre) Amount (in Rs.)
APL wheat @ Rs.8/- (24 quintals) 192
BPL wheat @ Rs. 8/- (32 quintals) 256
AAY wheat @ Rs. 8/- (19 quintals) 152
Sugar @ Rs. 11.99/- (5 quintals) 60
Kerosene oil @ Rs. 0.45/-(2000 litres) 900
Total Commission 1560
Income from sale of empty gunny bags @ Rs. 8/- (160 1280
Amount (in Rs.)
Rent 500 to 1000
Stationery 50 to 100
Other 100 to 200
Total 650 to 1300
No transportation cost is incurred by the FPS dealers as there is door step
delivery of the food grain.
Net Earning (Income - Expenses) Rs. 2190 to 1540
5.7 The FPS dealers (as well as the wholesalers) have made
representations to the Department for increasing their commission. The
inspection of the file revealed that the same is under consideration of
5.8 The following is the viability of few FPSs visited by the Committee in
the State of Rajasthan -
1. Visit to FPS dealer Ramesh Chandar at Chhote Undri, Udaipur
No. of cards - 541
APL – 425, BPL – 81, AAY – 35
Commodity Quantity Commission Income
Wheat 60.60 quintals Rs. 8/- 484.80
Gunny 121 bags Rs.10 per bag 1210.00
Stationery & Miscellaneous Charges 100
Net Income (Income – Expenditure) 1,444.80
The above income does not reflect the income from sugar and kerosene oil.
He also has 7 bigha agricultural land.
2. Visit to FPS at Devdungri village, Rajsamand District
FPS Dealer – Mazdoor Kisan Shakti Sangathan, the organization being
run by Ms. Aruna Roy, social activist
The FPS is running since 1994
No. of Cards - 465
APL – 279; BPL –130; AAY – 55; Annapurna -1
It was stated that the FPS is incurring a loss of Rs. 2000/- per month. They
are running the shop only for public service. The FPS is on a piece of land
owned by the Panchayat.
3. Visit to FPS at Sadri, Ranakpur Road, Pali District
FPS dealer- Puna Ram
He has passed higher secondary
No of cards – 1263
APL-997; BPL-199; AAY-64; Annapurna- 29
Commodity Quantity Commission Income
Wheat 141.90 quintals Rs. 8/- 1135.20
Gunny 284 bags Rs.10 per bag 2840.00
Stationery & Miscellaneous Charges 100
Net Income (Income – Expenditure) 2875.20
The FPS dealer also owns 15 bigha of agricultural land.
5.9 In the public hearings conducted by the Committee, the FPS dealer,
inter-alia, stated that the commission should be increased and that
other items like Palm Oil, dal, rice, cloth etc. should be given to the
FPS dealers so that they keep the shop open for the entire month and
their viability increase. They further stated that the allocation of wheat,
in particular for the APL category should be increased.
5.10 The FPS dealers stated that their income had further reduced due to
the supply of grain in plastic bags which are resold @ Rs. 2/- per bag
as compared to Rs. 10/- per jute bag.
5.11 The FPS dealers stated that atta should be distributed through the FPS.
They also made a representation stating that Clause 13 of the FPS
licence should be amended and essential commodities be distributed
only through FPSs. It was stated that the FPS dealers had been
running shop for several years but their commission remains the same
at Rs. 0.08/- per kg whereas the commission on atta to the dairy
booths is Rs. 0.30/- per kg.
5.12 A Writ Petition No.9044/09 has been filed by Rajasthan Rajya Adhikriti
Ration Vikreta Niyojan Sangh, Jaipur against the State of Rajasthan &
Ors questioning the order of the State Government distributing atta
instead of wheat. It was mentioned by the FPS dealers that the State
Government has started treating every ration card as a unit for the
purpose of distribution and therefore, the articles distributed through
the PDS have reduced drastically and this has reduced the income of
FPS adversely. The petition also pointed out that an FPS is allotted in
the area according the criteria of 500 ration cards or 2000 units
(population). The moment the number of ration cards exceeds 500 or
the number of units (population) exceeds 2000, a new FPS is opened.
5.13 In its reply, the State Government has stated that the number of ration
card holders for an FPS is not fixed and it can vary from shop to shop
and running of FPS is not a trade or business and is also not the means
of income but it is a service related to the welfare of the consumers. It
is mentioned that “it is against the spirit, aim and object sought to be
achieved for public distribution system to attach it with profit or loss,
because the dealers of public distribution system are authorized to
distribute the goods on the basis of commission fixed by the
Government.” It is asserted by the State Government “that it is
absolutely wrong to contend that the FPS is a means of income and
running of FPS is neither a trade or business but it is a service to the
public on the basis of commission fixed by the Government and the
licence is voluntarily taken by the petitioner after agreeing with the
conditions mentioned therein.” The Committee has not gone into the
merits or demerits of the Writ Petition filed by the Fair Price Shop
Dealers Association as the matter is pending in the Hon‟ble Rajasthan
5.14 As stated by the Committee in its earlier reports that stand alone FPS is
not profitable and even if the Commission is increased to 100% it will
not result into sufficient income for the FPS dealer. It is a matter of
common knowledge that in order to survive, an FPS owner diverts PDS
food grains in the black market and shares the ill-gotten money with
the officials of the Department.
5.15 The Committee is of the view that since any amount of increase in
commission would not make an FPS viable, it is, therefore, necessary
that FPS dealers should have grocery shops along with PDS licence.
The condition should be that in the Grocery/Kirana shop, the sale
should only be of non PDS commodities. The Committee feels that the
condition should be put in the licence that FPS owner must have a
running Kirana/Grocery shop, in case of default or non compliance with
the condition the FPS licence should be revoked.
5.16 The FPS licence is to be granted to a person having a Kirana/Grocery
shop and belonging to the particular locality or has sufficient means to
run a Kirana/Grocery shop along with FPS food grains. The Committee
is of the view, therefore, the stand alone FPS is not feasible.
5.17 As the commission of the FPS dealer is very less and as the number of
cards and the allocation of foodgrain and kerosene oil is not much in
quantity, the monthly income of FPS dealers is very low. Therefore,
they indulge in malpractices and diversion. It was seen that excess
charges by the FPS dealers, short weighment and diversion of food
grains and kerosene oil in black market is resorted to by these FPS
dealers. This is possible only in connivance with the government
officials. The reason for this black marketing and diversion is due to
high difference in the prices of food grains and kerosene oil supplied in
PDS and in the open market. Further, to make an FPS viable, the
State government should make available the finances through the
commercial banks to these FPS dealers on easy terms to facilitate them
to make the investment for other commodities. The electricity bills,
water bills, telephone bills etc. can be paid through these FPSs, so that
through the Commission on these services the income of FPS dealer
can be raised.
1. Increase in commission will put an unnecessary burden on the State
exchequer or on the consumer if it is passed on to the consumers. It
should rather be the condition of the licence that FPS owner must run
grocery / kirana shop. His inaction to do so should entail cancellation of
licence to run FPS. The authorization of FPS should be given to grocery /
kirana shop in that area itself and it should also be seen that owner
himself resides in that area. A stand alone FPS should not be allowed as
it is an inherently unworkable model and leads to malpractices. A system
needs to be developed where general stores are given licences to sell
PDS grains. There should be a restriction on sale of non PDS wheat and
rice at such shops. For this FPS can be made the supply units for goods
produced and marketed by public and cooperative agencies like Khaadi
and Village Industries, cooperative marketing federation and can also be
allowed to sell products manufactured by women self help groups like
pickles, jams dry masala etc.
2. There has been a general suggestion that the commission of the fair
price shops should be increased. However, the Committee reiterates its
stand which it stated in its Delhi report that in order to improve the
viability of fair price shop, the consumers should not be burdened and
also no additional burden should be there on the government.
3. It was observed by the Committee that some FPS dealers have very few
beneficiaries attached to their shops while other have a large number of
beneficiaries. Number of ration cards attached to a shop has a direct
bearing on the income of FPS. There have been a number of demands
that each FPS should have sufficient number of ration cards attached to
it. Thus, there should be rationalization of cards for each FPS. There is a
need for rationalization of the number of beneficiaries attached to the
FPS to make the shops financially viable.
4. Efficient retailing would require pre-conditions such as experience and
ability to undertake certain investment and sustain an adequate return.
FPS licences should be granted to people/ groups who have adequate
liquidity of fund. Integrity and rapport of person in the local area are
other aspects to be considered. Pattern of ownership of FPS can have
important bearing on their viability. Self help groups and Cooperatives
can be given priority for granting licences to rationalize the cost structure
5. The Committee is of the view that there should not be any reservation in
allotment of FPS, rather it must be seen whether the FPS owner is
competent and capable to run the shop properly.
6.1 The coupon system was started from the year 2006 in the State. It is
popularly known as Ration ticket System. The ration tickets are given
to Annapurna , Antodaya Anna Yojana and Below Poverty Line
beneficiaries. The ration tickets are issued in distinct colours to
beneficiaries of different categories. Annapurna beneficiaries are given
white ration ticket . Ration ticket for AAY beneficiaries is of Yellow
colour and for BPL beneficiaries it is of pink colour. Further the ration
tickets for AAY and BPL families are given in two denominations of 15
kgs and 20 kgs. The size of ration tickets for all categories is 6X 4”
and it comprise of the following information :
i. Name of the category (BPL, AAY or Annapurna)
ii. Coupon serial number
iii. Name of the District
iv. Quantity of grain
v. Space of signature/ thumb impression of the beneficiary
vi. Space for signature of the FPS dealer
6.2 Yellow food coupon/ ticket for Antodaya Anna Yojna beneficiaries
6.3 Pink coupon / ration ticket for BPL beneficiaries
6.4 The District Administration issues coupons/tickets to the BDO‟s in rural
areas and to the Nagarpalika in the urban areas. The BDO is
responsible for distribution of the same to the beneficiaries through the
Gram Sevak / Sachiv. Though these coupons are supposed to be
distributed by the Panchayat officer in the villages and Executive officer
in the Municipal Committee area, but actually these coupons are given
to the FPS dealers only for distribution to the beneficiaries.
6.5 The Committee also found that in a number of villages, the coupons
had not been distributed to the beneficiaries. This was either due to
the delay in issuance of coupons by the State or by the BDO / Gram
Sabha. It should be ensured that all the coupons are distributed timely
and it should be made mandatory for the beneficiaries to submit their
coupons to the dealers at the time of lifting the ration.
6.6 The purpose of introducing ration tickets/ coupons to the BPL,AAY
beneficiaries was to ensure distribution to them by the FPS dealers.
Further, the FPS dealers do not submit the coupons at the time of
lifting their monthly allocation. It is submitted that if coupons are used
in the PDS the same should be submitted by the FPS dealers every
month at the office of the DSO on the basis of which the monthly
allocation of the FPS should be determined.
a. Though the coupons are issued to the beneficiaries in denominations of
15 kgs and 20 kgs for each month but as the foodgrain issued to the
BPL beneficiaries is less than the fixed quantity i.e 35 kg per month the
quantity fixed on the coupon i.e. 15 kg and 20 kg per month does not
serve any purpose. Though the current coupon system in the State
enables the beneficiaries to lift their entitlement in two installments
which in itself is commendable however as the BPL foodgrain reaches
the FPS once in 3-5 months and at many FPSs once in 7-8 months the
purpose of making food coupon in two denominations appears to be
the mockery of the system. When the FPS dealer issues foodgrain to
BPL beneficiaries at maximum once in 3-5 months and many of them
issues once in 7-8 months the State governments initiative to issue
coupons to lift foodgrain twice a month is useless and just an
additional cost on the PDS. The present food coupon system in the
pool of corrupt Public Distribution system is serving no purpose in the
b. Coupons used in the state are not bar coded and the printing of
coupon is such that it is easy to counterfeit the same.
6.9 The beneficiaries are given coupons which are devoid of details such as
ration card number and name of the beneficiary. These details are
required to be filled by the FPS dealer. Coupons should contain the
month and year printed on it and the issue price for beneficiaries
should also be printed on it. Name of beneficiary and his ration card
no. the name of the FPS to which the beneficiary is attached and
quantity of grain entitlement should be printed on the coupon.
6.10 The purpose of coupon to check and ensure that foodgrain has been
actually distributed to beneficiaries is not at all served by the prevailing
coupon system in the State. Because of following reasons:
1. The coupons are not distributed timely to the beneficiaries.
2. Even if the beneficiaries have coupons if the FPS dealers do not issue
foodgrain every month, rather PDS foodgrain is delivered after gap of
3-4 months. Issuing of coupon in two denominations of 15 kg and 20
kg to enable them to lift foodgrain in installments is useless.
3. As the used food coupons are not submitted every month to the
concerned officer of the Department before issuing permit and the next
month allocation of foodgrain to FPS is not based on it the very
purpose of coupon system is defeated.
4. Hence, the prevailing system of food coupons as in the various districts
of the State, is an eye wash and serves no purpose except adding the
cost of printing and circulating the same among beneficiaries and in
the end giving the FPS dealers a veil to cover up diversion as in many
places food coupons are distributed through FPS dealers and the
concerned authorities do not play any role in distribution of coupon to
IDENTIFICATION OF BENEFICIARIES
7.1 The Population of the State is 564.73 lakh as per 2001 census.
Presently there are 1,22,15,464 APL , 16,52,586 BPL ration cards and
9,32,101 AAY ration cards.
7.2 Rural Areas : The State government informed the Committee that the
BPL census of rural areas has been conducted in the year 1997 and
2002. However, presently the beneficiaries identified in the 1997
census are getting benefits of the PDS scheme and the list of 2002 BPL
census is not in force. The BPL census for Ninth Five Year Plan (1997-
2002) was conducted in two stages. First on the basis of several
„exclusion criteria‟ and secondly on the „total consumption‟. The BPL
census adopted in the Ninth Plan was criticized particularly for the
exclusion criteria, mainly the fourth point according to which if family
owns consumer durables like TV, ceiling fan etc, family is not poor.
One of the Exclusion criteria was income. Thus families having income
of more than 20,000 per annum are not eligible to be included in BPL
7.3 Urban Areas :The state Government further informed that in the Urban
areas the BPL census have been conducted in 1998 and 2003 and
presently the BPL census of 2003 is applicable in urban areas. As per
the 2003 norms for identification of BPL families in Urban areas the
criteria is that if the person is having monthly income of Rs.465 or less,
he is BPL.
7.4 BPL beneficiaries are identified by Municipal Council or Municipal
corporations in urban areas and by Gram Vikas Adhikari, Panchayat
Samiti in Rural areas. The APL ration cards are valid upto 5 years and
BPL and AAY ration cards are valid upto the time the BPL census
survey list is in force.2
7.5 In the State the ration cards are issued in distinct colours to APL , BPL
and AAY beneficiaries which are of blue , pink and yellow colours
respectively. To obtain new ration card head of the family has to apply
on Form A along with two passport size photographs, surrender
certificate from the authorities from previous place and affidavit
swearing that he does not have other ration card. If after proper
verification all the details are found correct the APL card is issued to
7.6 Though the DSO / BDO are authorized to issue ration cards after due
verification of the details submitted, in practice they are issued only
upon the recommendations of the Sarpanch in the rural areas and the
Chief Executive Officer in Nagarpalika (Municipal Board). The Sarpanch
being political entity wrongly identifies his own men as persons eligible
for BPL ration cards.
7.7 The Committee was informed that on the eve of election, the State
Government gives directions to issue ration cards without proper
verification resulting in a situation where the number of cards exceeds
all proportion. Thus, bogus / fake cards get circulated which results in
diversion of foodgrains to the black market depriving the poor of their
right to get the PDS foodgrain at affordable prices. PDS should be
apolitical. It cannot be treated as a vehicle to ride on to win the
7.8 The Committee in its Questionnaire asked the State government about
the annual surveys for inclusion and exclusion from the BPL and AAY
Guidelines dated 30.8.07 by the Department of Food , Civil
Supply and Consumer affairs of Rajasthan State
lists. The State Government in its reply stated that as such there is no
system of annual surveys for inclusion and exclusion from BPL and AAY
lists. However, on the basis of directions issued by GOI including the
directions given with reference to WP (c) no. 196/2001 the State Food
Department has issued directions through letter dated 17.2.2007
regarding the procedure of appeal for inclusion and exclusion from BPL
list. However, the elimination of bogus cards is a continuous process
as and when the same is deducted. The State Government informed
the Committee that during the period from April 2004 to August 2008
total 64116 ration cards were cancelled in the State on various
7.9 The State Government should take urgent steps to conduct survey /
verification for detecting the bogus cards. There should be an amnesty
period of four weeks where persons holding bogus cards could
surrender them without liability. However on the expiry of this period
intensive door to door verification should be conducted and during that
verification if any bogus card is detected both the holder as well as the
officers who had recommended the bogus card should be prosecuted
under Section 7 and other Sections of the Essential Commodities Act,
1955 without exception. The Officers can be proceeded against
departmentally and severely punished. Widest possible publicity must
be given to the amnesty scheme.
7.10 There are large inclusion and exclusion errors in the BPL and AAY
categories. There was a discontentment among the people that the
survey has not been conducted properly and needy /deserving people
have not been included in BPL /AAY categories. It is therefore,
essential that a fresh survey may be conducted immediately in urban
as well as rural areas.
7.11 Since one of the reasons for the failure of the system has been wrong
identification of beneficiaries, urgent steps need to be taken for proper
identification so as to ensure there are no inclusion or exclusion errors.
It is worth noting that State is still using 1997 BPL census list.
7.12 There is a need to revisit income criterion prescribed for the BPL
category. The Government / Ministry of Rural Development may also
consider using consumption criteria that is to say calorie intake per
person per day as an indicator of poverty as the minimal objective to
be achieved by TPDS is to ensure that every poor person gets two
square meals a day. This is recommended in as much as a purely
income based criteria may in certain circumstances be misleading in
terms of actual determination of persons below the poverty line.
However the estimation of poverty should not be made on a criteria
which is less than the minimum wage fixed by the state for agricultural
labourers or the wage fixed by the Central Government under Section
6 of the NREG Act 2005. It may not be out of place to point out that in
several states the minimum wage for agricultural labour is in the range
of Rs 100 and even the NSSO in its estimate fixes the estimate of
expenditure at Rs 20 per capita per day which works out to Rs 100 per
day per family (a family is taken as 5 members).
7.13 The Committee was also informed that main reason of the increase of
the APL ration card is that there is no restriction on issue of APL ration
cards. As Ration card is also used as an identity proof for obtaining
benefits of other schemes of Central /State Governments such as
NREGA. D.S.O Jaipur, Ajmer, Udaipur and Jodhpur informed the
Committee that to give employment in the NREGA scheme, ration
cards are used as proof of residence of that area and holder is counted
as one family unit. Hence, many people obtains the card for getting
benefits under the scheme. The use of ration cards for any other
purpose or as identity proof is not permitted under PDS Control Order
2001 and also in the Guidelines dated 30.8.07 issued by the
Department of Food , Civil Supply and Consumer affairs of Rajasthan
State yet it is strange to know that not only the beneficiaries but the
government officials are ignorant about this fact.
7.14 The Committee reiterates its suggestion/recommendation made in the
Delhi report that the Concept of APL be abolished. Reference may be
made to the said report for a detailed analysis of the said
recommendation and it may be added that the Committee in its visit to
State after State has found that the concept of APL is serving no useful
purpose for food security but is instead only a diversion tool. Hence,
the APL category should be limited to households whose annual
income is Rs. One lakh. This is based on the fact that a class IV
employee of the Central Government gets a consolidated salary of
about Rs. 8000/- per month which comes out to be Rs. 96,000/-
annually. This category may be called “Marginally Above Poverty Line
(MAPL)”. This limit may however, be revised as when required on a
rational basis by the government.
DIVERSION OF FOODGRAINS
8.1 Diversion of food grain takes place at every level of the system. The
different ways in which diversion takes place would show that
Government Officials, wholesalers, transporter, and retailers are all
involved in the diversion of food grain in some manner or the other.
The malady of diversion is prevalent in the system at such a large
scale that it has become a menace and threat to the system.
8.2 The first and foremost reason for diversion is the difference in the
price of TPDS grain and market rate. This serves as an incentive for
the unscrupulous persons connected with the implementation of the
system to connive with the traders to divert the TPDS food grain into
8.3 The second reason for diversion is the lack of any system of
accounting for the grain allocated under the system. Ideally there
should be a system by which the grain allocated to the State can be
equated with the grain distributed to the beneficiaries. Since the scale
of distribution and the number of beneficiaries is very large this can
not be achieved manually. Thus there is need for complete
automation and computerization of the Public Distribution System.
8.4 The third reason for is that the functions of implementation,
enforcement and vigilance are not clearly demarcated and
8.5 Diversion takes place by selling the TPDS grain in the open market,
and by substituting the TPDS grain by grain of inferior quality.
8.6 The Targeted Public Distribution System when introduced was
intended to benefit about 6 crore poor families for whom a quantity of
about 72 lakh tones of food grains was earmarked annually. The
allocation for APL has continued till date and has proved to be one of
the greatest sources of diversion. It is common knowledge that most
APL cardholders do not get any food grains under the PDS. Rest do
not bother to draw their entitlement and the entities involved in
distributions are continuously diverting the APL foodgrain.
8.7 Bogus ration cards come into existence in several ways. Some of the
ways are enumerated below only as an example. The list is not
i. By using the cards of the people who are dead or have changed
ii. Obtaining a ration card at temporary place of residence or by
showing residence at some place falsely.
iii. Breaking up the family into smaller units
iv. Duplicate ration cards issued in the name of persons who are
already issued cards.
v. Ration cards issued in fake names and at fake addressees.
8.8 Issue of ration cards to the intended beneficiaries is a process which
requires proper care and scrutiny by the field staff. State Government
should lay down strict guidelines for issue of ration cards and the
officials responsible for issue of ration cards should be made
accountable for any bogus card found in their jurisdiction. The Central
Government has supported the Haryana Government and Chandigarh
Administration to start a computerization project which includes
introduction of smart cards with the biometrics of the card holder and
his family members. This Committee has recommended
computerization of the TPDS in the report relating to Delhi. In fact the
Committee has given separate report on Computerization of Public
Distribution system. This issue is further discussed in detail in the
chapter on computerization in this report. It is felt that smart cards
with the biometrics of the card holder can be very useful in minimizing
bogus ration cards.
8.9 This Committee in its Delhi report has already suggested abolition of
APL. We reiterate the suggestion and maintain that APL should be
abolished and the subsidy provided for APL should be utilized to
increase the BPL and make it more realistic and beneficial to the poor.
8.10 Foodgrains are packed in Jute bags. Bags contain mark of FCI with
logo and stitching is done by using thread. The jute bags are good to
hold the weight but it is common practice during handling, loading
/unloading that labour use iron hooks to lift bags. The hook is pricked
in the bag and bag gets damaged and so there is lots of leakage of
foodgrain in the name of tearing of bags during the handling. The
wholesalers godown in the State do not have electronic weighment
system, and are using manual weighing machine. Many wholesalers
infact do not have weighing machine at all. Weighment is not done as
they are supposed to lift foodgrain from FCI and directly deliver the
same to FPS To do away such malpractices foodgrains can be packed
in smaller bags of 5 or 10 kg so that PDS commodity be supplied in
pre-packed small bags to the consumer. Poor packaging is major
factor which leaves scope for diversion of foodgrains. Central
Government and State Government should ensure better packaging of
commodities. it is felt that in case TPDS food grain is packed in non
pilferable, tamper proof bags of 10kg and 5 kg the same can be
delivered to the beneficiary in sealed packing. It would also ensure a
more hygienic handling of food grain and help in ensuring that the
food grain of proper quality reaches the beneficiary.
8.11 One more peculiar mode of diversion in Rajasthan is irregular/
untimely issuance of foodgrain to FPS dealers. The Committee
observed that the full stock of foodgrain is lifted by the wholesalers
from the FCI. The wholesalers issue APL foodgrain to FPS dealers
almost every month as most of the the FPS dealers make payment
regarding APL grain regularly. However, the issuance of BPL and AAY
foodgrain is delayed and stock of many months is issued together to
FPS. Reason for this was that FPS dealers do not make payment
regularly for the AAY and BPL foodgrain or if they make payment the
wholesalers in order to save the transportation cost issue it once in
many months. As stock of many months is issued together to FPS
dealers the same is not distributed to the beneficiaries and is siphoned
8.12 The general awareness of the beneficiaries, high literacy and strong
grass root level organization (PRI) and strong vigilance Committee are
the important factors to reduce leakages. Strong Political commitment
and careful monitoring by the bureaucracy are the key elements for
successful PDS. Leakages happen due to wrong identification, theft
and diversion of grain by entities involved in distribution system. It
requires strong political commitment and participation of the people in
delivery process. The nexus between officials, the mafia and ration
shop dealers must be broken in order to reduce leakages. Monitoring
and accountability of TPDS can be improved by automation and
computerization of the PDS system. TPDS needs to be strengthened
by means of the effective use of IT including introduction of unique
biometric smart cards.
8.13 In its Eleventh Five Year Plan, Planning Commission has introduced
new scheme to curb leakages/diversion of foodgrains. The scheme
aims at taking effective measures to curb diversion and leakages
through Global Positioning System, Radio Frequency Identification
8.14 The FCI is supposed to issue to the State Governments stack-wise
sealed samples of the stocks of foodgrains supplied to them for
distribution under the Public Distribution System at the time of
dispatch. State Governments is also supposed tol exercise necessary
checks to ensure that full quantity lifted by them reaches their
godowns and in turn the fair price shops. State Governments must l
ensure that stocks of essential commodities under the Public
Distribution System, as issued from the FCI godowns, are not replaced
by stocks of inferior quality during storage, transit or any other stage
till delivery to the ration card holder. The Committee found that there
was no system of quality control in the State. Neither Samples of
foodgrain were found at wholesale godowns nor at Retailers shop.
There is no check on quality of grain being supplied to the
beneficiaries. The system of sampling should be strictly observed. The
retailer must display the sample at his FPS shop so that the quality
can be checked by the officials, vigilance machinery, enforcement
machinery and the beneficiaries. The system of sampling can check
any substitution of PDS foodgrain by poor quality of foodgrain.
8.15 The Committee feels that diversion of PDS food grain can be largely
curbed by use of information and communication technology (ICT)
based solutions. Suggestions in this regard have been given in the
recommendations made by this Committee.
Eleventh Five Year Plan report of Planning Commission at pg
VIGILANCE, ENFORCEMENT AND COMPLAINT MECHANISM
9.1 The efficacy of any system is dependent on its proper implementation
and monitoring. However, in Rajasthan the vigilance and monitoring of
the functioning of the PDS is practically non existent. In the absence of
effective and multi-pronged check, there is ample scope for
irregularities and malpractices in the functioning of PDS.
9.2 The complaint mechanism to deal with the problems pertaining to PDS
is weak resulting in dissatisfaction amongst the beneficiaries.
9.3 Composition and functioning of Vigilance Committees
Vide order number F 97(3)food/PDS/97-11 dated 11.05.1999 the Food,
Civil Supplies and Consumer Affair Department issued directions with
regard to formation of Vigilance Committee in the State at the District,
Tehsil and at FPS level. This is for the purpose of regulation and
vigilance of distribution of essential commodities to the consumer and
for monitoring the functioning of the PDS in State.
9.3.1 District Level Vigilance Committee
The composition of the District level Vigilance Committee is as under:
District Collector President
All Member of Parliament of the District Member
All Members of legislative assembly of the district Member
District (Pramukh) chief Member
All Pradhans of the district (of Panchayat Samiti) Member
All President / Administrators of all Nagar Palika / Member
Nagar Parishad / Local bodies of the district `
Tehsildar/ Sub-Divisional Officer Member
Two representatives of consumer organisations Member
(Nominated by the Collector)
District Supply Officer Member
The abovementioned District Level Committee is responsible for
conducting vigilance functions in the entire district.
9.3.2 Tehsil Level Vigilance Committee
Pradhan of Panchayat Samiti President
Sub-Divisional Officer/ Tehsildar Vice
Two member of Local bodies / Nagar Palika Member
recommended by president of the local body
Two members of Panchayat Samiti recommended by Member
Pradhan of the concerned Panchayat
Local MLA Member
Development officer of the Panchayat Samiti Member
Two consumer (upon recommendation) Member
Two members of Social / Consumer organisations Member
Concerned Enforcement officer / Enforcement inspector Member
9.3.3 FPS Level Vigilance Committee
(1) Urban Area
Ward Parshad (recommended by collector at the district President
level and SDO at any other level)
Two social workers (recommended by collector at the Member
district level and SDO at any other level)
Retired officer/ Worker(local resident) Member
(2) Rural Area
Sarpanch (recommended by SDO) President
One consumer Member
Principal / Head Master / Teacher of School in the area Member
Retired officer/ Worker (local resident) Member
Worker of Consumer / Social organization Member
Panch (one) Member
9.3.4 However, Vide Order No. F 74(7) Food Department / 87-iii, Jaipur
dated 26.12.2008 nomination of non governmental members of the
members of the Vigilance Committees has been stopped.
9.4 Enforcement Procedure
The following steps had been taken to ensure that the essential
commodities reach the beneficiaries at the correct price and quantity:
9.4.1 Cooperative Societies (like KVSS) have been hired for the purpose of
lifting food grain from FCI and making its door step delivery to the FPS.
9.4.2 The concerned Enforcement Staff / Vigilance Committee certify the
allocation and opening of stock at the FPS before the dealer starts its
9.4.3 The Vigilance Committee also issues Utilization Certificate certifying
distribution of food grain by the FPS dealer. The FPS dealer is
supposed to get the allocation of the next month only on the basis of
this Utilization Certificate.
9.4.4 As per the norms of the Department each Enforcement Inspector has
to inspect 15 FPS (amongst other non PDS inspections) in a month.
The District Supply Officer has to conduct between 7-10 FPS
inspections (varying in each district) in a month. Immediate action is to
be taken if irregularities are found in functioning of the FPS.
9.4.5 Steps are being taken for identification of bogus ration cards in the
State. The Committee was provided with the following details with
regard to identification of bogus ration cards in Jaipur:
S.No. Year Number of bogus cards
1. 2005 --
2. 2006 --
3. 2007 --
4. 2008 21
9.4.6 The Committee was informed that identification/ cancellation of bogus
ration cards in the year 2009 were also being carried out however no
details were given thereof.
9.4.7 The Committee enquired about the cases pending against those
indulging in malpractices within the PDS, in particular proceedings
under the Essential Commodities Act, 1955. In Udaipur the Committee
was provided with the following details:
S.No. Court in which case pending Pending cases
1. District & Sessions Judge, Udaipur 04
2. Upper District & Sessions Judge, 04
3. Civil Judge & Chief Judicial 48
4. Additional Chief Judicial Magistrate 03
(1) , Udaipur
5. Additional Chief Judicial Magistrate 02
(2) , Udaipur
6. Additional Chief Judicial Magistrate 105
(3) , Udaipur
9.4.8 Upon perusing the details of the abovementioned cases the Committee
observed that the rate at which proceedings are initiated under the
Essential Commodities Act is low. The list of 166 cases given to the
Committee includes cases which are pending since 2002.
9.4.9 With regard to proceedings initiated by the Department against the
FPS dealers the following details were given for district Udaipur :
Year Pending Proceeding Dispo- FIR Suspen- Cancella-
from initiated in sion of tion of
before the year license license
2005 271 340 472 9 101 31
2006 139 314 395 2 38 18
2007 118 130 176 3 34 16
2008 64 47 66 8 8 8
2009 45 157 161 7 51 17
9.4.10 The Committee was not provided with details of departmental
proceedings against FPS dealers in any other district other than
9.4.11 The Committee found out through newspaper reports that 7540 bags
of red wheat each of 50 kg. were found in the premises of a floor mill
(Bhanvi Agro Industries Pvt. Limited) on 29.05.2008 through a raid
conducted by the DSO, Udaipur. This wheat was meant for PDS
purposes. The Committee enquired about the present status of the
case and was informed that currently only an FIR has been registered
but no further action has been taken since May 2009 as directions have
been issued to transfer the matter to the CID. The Committee did not
find any explanation for the delay.
9.5 Weights and Measures Department
9.5.1 The Weights and Measures department is responsible for ensuring that
the essential commodities being distributed through various retail and
wholesale points are weighed correctly. The department looks for
defaults on two counts. First, to check whether the weigh scales or
other weighing systems are aligned correctly and are giving correct
readings when the consumers purchase commodities from the shops.
Secondly, to check whether pre-weighed and pre-packaged
commodities are being sold at the correct weight, that is, at the weight
mentioned on the packed commodity. The officials of the department
have to inspect the various points like the FCI depots, Wholesale points
and FPS, from where essential commodities are disbursed, to check if
the commodities are being weighed correctly and that there is no
short-weighment at these points.
9.5.2 The department conducts annual camps where the FPS dealers are to
take their weights and weighing instruments for certification.
9.5.3 However, the Committee found that the Weights and Measures
department is not playing an active role in the supervision of PDS. The
FPS dealers in particular take advantage of this and do not get their
weights and weighing instruments certified regularly. This leaves scope
for manipulation of weights and weighing instrument by the FPS
9.6 Complaint Mechanism
9.6.1 A separate cell has been formed within the District Supply Office under
the Office Assistant to look into the complaints received with regard to
functioning of the PDS. Accordingly the following registers are
maintained for the purpose:-
(i) A register for complaints received from the office of the Chief
(ii) A register for complaints received from the office of the Food
(iii) A register for complaints received from the Food Department,
(iv) A register for complaints received from the office of the
vigilance office of the District Collector.
(v) A register for complaints received from the office of the District
9.6.2 Immediate verification is supposed to be done of the complaints
received from the above departments and steps be taken for their
immediate disposal by the Enforcement Staff.
9.6.3 The Committee was informed that a toll free helpline number – 1077 is
functional in some districts like Pali and Jodhpur however no response
was received from the same when the Committee attempted to call on
the said number. Apart from this, in some districts the Committee was
informed that the beneficiaries can complain at the office of the District
Supply Officer. However, this process is not methodical and is the
same as calling any other government department with regard to any
information or complaint. There was no system of registering the
complaint and following it up at a later date to find out the progress of
enquiry made on it.
9.6.4 The Committee was informed that in district Jaipur, 30 complaints were
received between 01.03.2009 to 25.10.2009 from the office of the
Chief Minister, Food Department and Vigilance Branch of the
Collectorate out of which 15 had been disposed off till the date of the
Committee‟s visit and the rest were being dealt with on priority by the
1. The Vigilance Committee are mostly non functional in all districts,
specially at the FPS level. For instance in village Rebario ka Guda,
Udaipur, upon perusing the register pertaining to meetings of the
Vigilance Committee, the Committee found that from January 2009 to
November 2009, only 1 meeting had taken place. The scope of the
Vigilance Committees at the village level must be enlarged by including
local NGOs and educated youth. Special instructions should be given
with regard to conducting regular meetings of the Vigilance
2. Currently the appointment of non-official members in the Vigilance
Committees has been put on hold. The Vigilance Committee should be
made fully functional immediately. It is suggested that in order to
create interest of the non official members, a suitable remuneration
may be given to such members for participating in the meetings.
3. The opening of the stock at FPS is to be certified in the presence of the
members of the Vigilance Committee however, at most places the
Committee found that the registers are taken to the members who sign
it at their home and are not present at the time of opening of t he
4. The enforcement functions of the Department suffer immensely on
account of shortage of staff to deal with the huge area of jurisdiction.
It is impossible for the enforcement staff and the DSO to meet the
target of inspections of PDS as they have to cover vast territorial area
as well non PDS inspections. There are a large number of vacancies of
Enforcement Inspectors that are lying vacant despite huge burden of
work on the enforcement staff.
5. The system of Utilisation Certificate does not exist in most districts,
and even where it is functional, its functioning is a farce as the
Committee found instances where Utilisation Certificates were signed in
advance even before the distribution of grain. Moreover, the allocation
of grain to the FPS is not dependent or does not get affected by the
Utilisation Certificate as the FPS dealer gets the monthly allocation
which is fixed for his shop on an annual basis.
6. There is no formal complaint mechanism where the beneficiaries can
register their complaints and get a feed back on the same. Upon
speaking to a number of beneficiaries in the various districts, the
Committee found that none of them were aware of any of the
complaint registers being maintained at the offices as claimed. In
particular, people in the rural areas did not know whom to approach
for the redressal of their grievances.
7. Though the Committee has always recommended „zero tolerance‟
approach to any infraction of the provisions of the control order it is
found that the State is very slack in taking action against the offenders.
Sometimes action is taken against FPS but the concerned official,
without whose connivance, FPS could not have indulged in violating
the provisions of the Control Order, goes scot-free. The Committee
came across only a few cases where stringent action under the law had
been taken against FPS dealers. The Committee did not come across
any case where strict action was taken against transporters,
wholesalers and the government officials. The Committee was not
provided with any data regarding any action for prosecution of the
10.1 The Public Distribution System (Control) Order, 2001 provides that the
State Government shall ensure monitoring of the functions of the
Public Distribution System at the Fair Price Shop level through the
computer network of the NIC installed in the District NIC centers. For
this purpose computerised codes shall be issued to each FPS in the
10.2 The Committee was informed that there is no computerisation of the
PDS in the State and thus no data regarding PDS is sent to the NIC
10.3 On visit to the various wholesale and retail points across the State the,
the Committee found that hardly any of these points has electricity or
telephone connection. So the question of computerisation of the PDS
at this stage is untenable. All records of distribution and weighment
were also maintained manually.
10.4 This Committee has been emphasizing the need for the use electronic
weighing systems and computerisation of the PDS to eliminate human
intervention in maintaining the record of transactions at various levels
to the extent possible, so as to check the diversions and leakages
which plague the system at present. It is necessary that each
wholesale point and each FPS has an electronic weighing system
connected to an online computer and all receipts and distribution is
recorded in the computer system.
10.5 Ideally, there should be a system by which the grain allocated to the
State can be equated with the grain distributed to the beneficiaries.
Since the scale of distribution is large, this cannot be achieved
manually. The Committee has recommended in all its reports that to
ensure a fool proof system of disbursement of PDS food grain to the
correct beneficiary, computerisation of the entire process is essential. A
carefully planned, implemented and monitored automation is
imperative for the successful implementation of PDS. The lesser direct
human intervention, the lesser is the scope for diversion and other
malpractices. The government must take steps towards introducing
computerisation of the PDS in the State at various levels.
10.6 This Committee has already submitted a separate detailed report on
computerisation of the Public Distribution System which may be read
as a part of this report. The Committee strongly recommends
computerisation of the PDS in the State to overcome the menace of
bogus ration cards and diversion.
1. PDS in the State is in disarray. It is mismanaged. It is
corrupt. There is large scale diversion of PDS foodgrain into black-
market, depriving the poor population of the State to their right to
PDS food. The mesh of corruption is woven around FPS,
wholesalers, officials of the department and transporters. To
untwine the mesh the State has to adopt Zero tolerance approach.
2. The Committee is of the view that Immediate steps are required to
be taken to strengthen PDS in tribal and drought prone areas of the
State. Particularly this year when there is acute drought condition
in many part of the State. Steps must be taken to identify the most
vulnerable groups in rural/tribal areas. In view of the large tribal
population living in remote and drought affected areas of the State
and also the inaccessible desert terrain of western Rajasthan, the
State must immediately introduce the concept of FPS through
mobile vans. This would have two advantages. First, in the remote
areas, ration can be distributed through the mobile vans where the
FPS may not be located in the immediate vicinity. Secondly where
an FPS licence has been cancelled or FPS is relocated, the said vans
will ensure timely delivery of essential commodities.
3. There is a requirement for need based PDS in Rajasthan. There are
a number of regions wherein apart from wheat, the local
consumption is that of maize and bajra. In such areas, PDS wheat
is simply sold off / diverted in the open market. Thus, in such
areas, the State should procure maize and bajra and supply the
same through PDS. A thorough study in this regard can be done by
the State in order to ascertain the local requirements of various
regions. As the coarse grains are also produced in these regions,
local procurement can be made by the State government on the
Minimum Support Price (MSP) decided by the Central government,
make a provision of storage of the coarse grains and supply the
same through PDS as per guidelines decided by the Central
government. A complete proposal in this regard may be made by
the State government for approval of by the Central government.
This will help the local agricultural community in getting
remunerative price of their produce and also help the Central
government in reducing the burden on supply of wheat. It will also
help in reducing the transportation cost as the grains produced
locally can be supplied after procurement to the consumers through
PDS. Further the wheat grain, which is not distributed in the areas
where coarse grain is distributed, can be allocated to other areas /
districts as per requirement.
4. Currently, the PDS food grain is being distributed to the FPS dealers
through wholesale points run by Cooperative societies. Upon
examining the functioning of various wholesale points in different
districts the Committee found their efficacy is not uniform in all
districts. The effectiveness of the functioning of the wholesale point
depends upon the efficiency of each Cooperative, which varies in
different districts. Further, the Cooperative Societies are governed
by the provisions of Rajasthan Cooperative Societies Laws. Thus,
there is dual control over these Cooperative Societies – one
exercised by the Collector/ DSO with regard to lifting of PDS food
grain and door step delivery, and the second by the Registrar of
Cooperative Societies and the Rules & Bye-laws applicable to the
Societies. The functioning of the wholesale points through the
Cooperative Societies is highly politicized. Members comprising the
Board of Cooperative Societies are political persons. When the
Cooperative Society, acting as wholesalers, makes profit, a
member of the Cooperative Department is deputed to the society
and acts as a General Manager/ Chief Executive Officer. When the
Cooperative Society is non profitable, an officer/ inspector is given
additional charge to look after the affairs of the society. There is
ample scope for the wholesaler to act under political influence. The
Committee is of the view that there is an urgent need to streamline
the wholesale distribution by creating a Food Corporation at the
State level under the Department of Food & Public Distribution for
facilitating proper procurement, lifting and distribution of PDS grain
for the entire State and to check corruption. Such State Food
Corporation should provide storage godowns in each block for
smooth and efficient running of the distribution system.
5. Diversion in the State mainly happens due to irregular/ untimely
issuance of foodgrain to FPS dealers. The Committee observed
that the full stock of foodgrain is lifted by the wholesalers from
the FCI. The wholesalers issue APL foodgrain to FPS dealers
almost every month, because most of the FPS dealers make
payment for APL grain regularly. The Committee observed that
the FPS dealers were not distributing APL foodgrain. The APL
beneficiaries informed the Committee that they are not getting
any foodgrain. However, the issuance of BPL and AAY foodgrain is
delayed and stock of many months is issued together to FPS.
Reason for this was that FPS dealers do not make payment
regularly for the AAY and BPL foodgrain or if they make payment
the wholesalers in order to save the transportation cost issue it
once in many months. As stock of many months is issued
together to FPS dealers the same is not distributed to the
beneficiaries and is siphoned off. The Committee suggests that it
should be made mandatory for the FPS dealers to lift the stock
every month from the wholesaler and distribute it to the
beneficiaries regularly. The Officials of the Food and civil Supply
should be made accountable for any irregularity so far as
payment and issuance of foodgrain to FPS dealers is concerned.
6. Presently, Atta is being distributed by the State to the APL
beneficiaries in urban areas. For proper distribution of atta in PDS
system the Committee suggests the following things
i. Upon meeting a number of beneficiaries in the urban and the
rural areas of the State, the Committee found that the demand
for atta was more in the urban areas whereas in the rural areas
the beneficiaries preferred wheat grain and get it ground into
atta as per their own requirement. The Committee thus,
recommends that in urban areas, atta should be distributed
instead of wheat to all the categories of ration card holders. In
rural areas, however, wheat grain should be distributed under
ii. The Committee suggests that there should be dedicated flour
mills for the purpose of grinding PDS wheat. The flour mills can
be established on Public Private Partnership (PPP) basis. The
date of grinding of the wheat and the expiry date should be
prominently given on the atta bag. The bag should also contain
a warning in bold letters that the atta must be consumed before
the expiry date.
iii. An officer of the Department should always be present in the
flour mill when PDS wheat is being ground to ensure that quality
of the PDS atta produced is good and that the date of packaging
mentioned on atta bags is correct. A sample should be taken
from the atta in three parts which should be sealed under the
signatures of an officer of the Department present and of the
flour mill owner. One part of the sample should be tested by an
independent agency. If any deficiency is found in the sample
upon testing it or if any beneficiary suffers on account of the
quality of atta supplied to him, the responsibility should be fixed
both on the officer concerned and on the flour mill owner.
iv. Wheat bags leaving the FCI should be bar-coded and when
these are delivered at the flour mill, bar-coding should be
checked by the officer of the Department present at the mill and
certify receipt of proper quantity and good quality of the wheat.
After the bags of atta are sealed / stitched, these are to be
transported to the wholesale godowns where the bags should
be counted and should be certified to have been received in
proper condition by the officer of the Department.
7. It was observed that the APL foodgrain is almost fully diverted in
the State. Hence, the initiative of distributing Atta inspite of Wheat
grain in APL category is a positive step to avoid diversion. However,
the Committee found that many poor households, who are
deprived of BPL ration cards, are ready to get atta at the same rate
as is being distributed to APL card holders as the the market price
of the atta ranges from Rs. 17/- to Rs. 20/- per kg. However,
under PDS atta is being distributed to APL beneficiaries @ Rs. 9/-
per kg in 10 kg bags in the municipal areas of seven districts. As
the number of poor households exceeds the number of BPL fixed
by the Central Government ration cards cannot be issued to all
persons above the poverty line. The Committee reiterating its
suggestion/recommendation made in its previous reports that the
category of APL be abolished. The Committee is aware of the fact
that there is going to be a great deal of opposition from the fair
price shop dealers and other vested groups against the abolition of
the APL category. If the Court is of the view that it may not be
possible or desirable to abolish the APL category altogether, it may
consider limiting the APL category to households whose annual
income is Rs. One lakh. This is based on the fact that a class IV
employee of the Central Government in Delhi gets a consolidated
salary of about Rs. 8000/- per month making it Rs. 96,000/-
annually. This category may be called “Marginally Above Poverty
Line (MAPL)”. This limit may however be revised as and when
required on a rational basis by the government. Reference may be
made to the said report for a detailed analysis of the said
recommendation and it may be added that the Committee in its
visit to state after State has found that the concept of APL is
serving no useful purpose for food security but is instead only a
8. One of the reasons for the failure of the system has been wrong
identification of beneficiaries. The Government of Rajasthan is
presently distributing PDS commodities to the BPL beneficiaries
identified on the basis of 1997 census. After that the MORD has
prescribed different criteria‟s in BPL census of 2002, 2007. The
state is has not revised the identification list yet. Urgent steps need
to be taken by the State government for proper identification so as
to ensure there is no inclusion or exclusion errors. A fresh survey of
AAY/BPL families should be conducted. The Committee is also of
the view that there is a need to revisit income criterion prescribed
for the BPL category. The government/MORD committee may also
consider using consumption criteria that is to say calorie intake per
person per day as an indicator of poverty as the minimal objective
to be achieved by TPDS is to ensure that every poor person gets
two square meals a day. This is recommended in as much as a
purely income based criteria may in certain circumstances be
misleading in terms of actual determination of persons below the
poverty line. However the estimation of poverty should not be
made on a criteria which is less than the minimum wage fixed by
the state for agricultural labourers or the wage fixed by the Central
Government under Section 6 of the NREG Act 2005. It may not be
out of place to point out that several states the minimum wage for
agricultural labour is in the range of Rs 100 and even the NSSO in
its estimate fixes the estimate of expenditure at Rs 20 per capita
per day which works out to Rs 100 per day per family (a family is
taken as 5 members).
9. There is thus urgent need to streamline procedure for issue of
ration cards and same should be issued after stringent and
meticulous verification. The DSO / BDO are authorized to issue
ration cards after due verification of the details submitted however,
in practice ration cards are issued only upon the recommendations
of the Sarpanch, a political entity in the rural areas and the Chief
Executive Officer in Nagarpalika (Municipal Board). Therefore,
political considerations and influence prevails in issuance of ration
cards. It was also noticed by the Committee that on the eve of
election, the State Government gives directions to issue ration cards
without proper verification resulting in a situation where the
number of cards exceeds in proportion to allocated foodgrain by the
centre. Thus, bogus / fake cards get circulated which results in
diversion of foodgrains to the black market depriving the poor of
their right to get the PDS foodgrain at affordable prices. PDS should
be apolitical. It cannot be treated as a vehicle to ride on to win the
10. There are number of bogus /fake ration cards in circulation which
impedes the functioning of the Public Distribution System.
Immediate steps need to be taken for identification and elimination
of bogus ration cards in the State. Amnesty scheme should be put
into operation to weed out bogus/ghost ration cards as these cards
result in diversion of PDS food-grain to black-market. If any
bogus/ghost card is found not only strict action be taken against
FPS dealer but also against officers of the Department who certified
issuance of these bogus/ghost ration cards.
11. The prevailing system of food coupons as in the various districts of
the State, is an eye wash and serves no purpose except adding the
cost of printing and circulating the same among beneficiaries and in
the end giving the FPS dealers a veil to cover up diversion as in
many places food coupons are distributed through FPS dealers and
the concerned authorities do not play any role in distribution of
coupon to the beneficiaries. The Committee suggest that
i. It should be ensured that all the coupons are distributed timely
and it should be made mandatory for the authorities
responsible (BDO/ Gram sabha) to distribute the coupons to the
beneficiaries and if it is found that the distribution of the coupon
is not done properly by the concerned authority strict action
should be taken again against the officials.
ii. The beneficiaries are given coupons which are devoid of details
such as ration card number and name of the beneficiary. These
details are required to be filled by the FPS dealer. Coupons
should contain the month and year printed on it and the issue
price for beneficiaries should also be printed on it. Name of
beneficiary and his ration card no. the name of the FPS to
which the beneficiary is attached and quantity of grain
entitlement should be printed on the coupon.
iii. The coupons should be submitted by the FPS dealers every
month at the office of the DSO on the basis of which the
monthly allocation of the FPS should be determined.
12. Once the grain is dispatched from the FCI there is no way to ensure
that the same quality of food grain reached the ultimate beneficiary
as has been allocated by the Centre. Upon visit to FCI godown the
Committee was informed that sealed samples of the food grain are
dispatched from the FCI to the wholesalers however wholesalers
denied the same. Further, it was observed that at the time the food
grain is dispatched from the wholesale points to the FPS, duly
sealed and stamped samples of the grain are not delivered at
various FPSs. Committee is of the view that :
a. That the provision of providing sealed samples should be strictly
followed at all the stages of distribution. Sealed samples of the
food grains should be provided to the FPS dealer by the
wholesaler who issues the food grains to the FPS dealers, to
display at his shop to facilitate the consumers, vigilance staff
and enforcement machinery to compare the quality being
distributed by the FPS dealer and the quality of grains received
by the FPS dealer from the Wholesaler for distribution.
b. As the FCI officials stated that they regularly issue samples to
the wholesalers and wholesalers stated that they never received
samples from the FCI the Committee is of the view that FCI
should mention the fact of issuing sample both in the gatepass
and the weight check memo along with the signatures of both
the FCI official and wholesaler‟s representative who come to the
FCI to lift the foodgrain.
13. Vigilance mechanism must be strengthened at all levels to monitor
PDS effectively. The role of these Committees should be specified.
Consumer organizations / NGOs and educated people should be
nominated to the Vigilance Committees at various levels. It should
be made mandatory for the Vigilance Committees to meet at
regular intervals and draw minutes of the meetings to be forwarded
and sent to the higher authorities. Non-official members of the
Vigilance Committee should be given some remuneration which will
be an incentive for them to attend the meeting. At the same time
rules should provide that any member who does not attend two
consecutive meetings would be replaced. The State Government
should fix the responsibly of the officials of the administrative
machinery to convene the meetings of the Vigilance Committees
and ensure the presence of the members.
14. A proper mechanism must be made available for reporting
malpractices and for redressal of the grievances. A complaint
redressal mechanism should be set up with a 24-hour helpline.
There must be a system where the complainant can follow up the
complaint / check the status of his complaint made. State
Government must take steps to settle the grievances of the people
earnestly and within a reasonable time. Special hearings may be
organized for PDS issues at the village level atleast once in a month
to address the grievances of the people.
15. A post of Ombudsman/Regulator should be set up as suggested by
this Committee in its Delhi Report. The Ombudsman/Regulator
should look into the complaints received through the helpline and
take appropriate action against the defaulting licensees and the
officials concerned. The Ombudsman/ Regulator would continuously
review the functioning of Vigilance Committees and if any Vigilance
Committee is not performing its functions property, the
Ombudsman/ Regulator would immediately recommend to the
Department the reconstitution of such Vigilance Committees. The
Department will be duty bound to act upon such recommendations
of the Ombudsman/ Regulator unless there are cogent reasons,
recorded in writing, for acting to the contrary. These reasons shall
be forwarded to t he Ombudsman/ Regulator who may after
examining the same either recall, modify or affirm this order.
16. A public hearing for PDS on the lines of the Lok Adalat
(Bijli/telephone/water) must be convened at a designated time and
day every 2 to 3 months where the general public can seek to
resolve outstanding issues pertaining to the PDS. These may
include those relating to their category/entitlements, non-issuance
of the cards, bifurcation of cards, wrong inclusion of APL,
complaints regarding short-weighment etc. PDS Lok Adalat so
constituted should be presided over by a senior Judicial Officer not
less than the rank of Additional Judge. The proceedings should be
attended by an officer not below the rank of DSO. A system of
accountability must be put in place to ensure the implementation of
decisions taken during these hearings.
17. For keeping a proper vigil on the transportation of the PDS food
grains from the FCI Godowns to the FPS, GPS system can be
introduced for tracking the movement of trucks carrying food
grains. For this, routes taken by the vehicles carrying food grains
have to be fixed. Attachment of GPS device in the trucks engaged
in Public Distribution System may be made part of the tender
conditions. An official of the department should accompany the
truck transporting the grain from the FCI godown to the flour mill.
18. A stand alone FPS is not viable. It should be in the condition of FPS
license that he runs a kirana/ grocery shop. He should be permitted
to sell all items except non PDS rice and wheat. This way the FPS
owner can earn profit and the shop will remain open through out
the month. It is no secret that an FPS dealer can not honestly earn
enough to sustain himself and his family. To avoid running into
losses he indulges in black marketing. Study of the Committee
shows that merely increasing the commission will not result in
making the FPS a profitable or viable proposition. The Committee
also recommends that the concept of Model FPS as successfully
running in Gujarat should be adopted.
19. Number of ration cards attached to a shop has a direct bearing on
the income of FPS. there should be rationalization of cards for each
FPS. There is a need for rationalization of the number of
beneficiaries attached to the FPS to make the shops financially
viable. Each FPS should have from 500 to 1000 cards. If number of
ration cards exceeds 1000, the FPS should be bifurcated.
20. Grant of licence is not a largess which the State is bestowing on the
FPS dealer. It is a well known fact that an FPS, if run honestly, will
result in loss to the owner. There is no rationalization of ration
cards. For an FPS owner to sustain himself and his family, black-
marketing or diversion of PDS food grain is a rule rather an
exception. In this unholy deal, there is collusion between the FPS
owners and the official concerned breeding corruption. Considering
these factors, it is meaningless to make categories for grant of
licence to run FPS. The licence should be granted to the local
resident of the place where the FPS shop is to be open. PDS food
grain in the FPS is meant for the beneficiaries and not for the
owner of the FPS.
21. There should a Village Secretariat in every village where all
government offices, including the FPSs should be located. This will
ensure that the FPS as well as the various government functionaries
working in the village such as village patwari, panchayat officer etc.
can be conveniently approached by the villagers. The said premises
may be constructed on the land to be made available by the village
free of cost and financial assistance received from the State
government under various development schemes. MLA
Development fund, MPLAD fund and other development funds may
also be used for the proposed Gram Sachivalaya (Village
Secretariat). Assistance under National Rural Employment
Guarantee Act (NREGA) which has a concept of 60% labour and
40% material cost, can also be taken in such a project. It is a
policy decision to be taken by the State and the Central
Government, which can go a long way in facilitating the working of
the government functionaries in the villages. A permanent FPS may
be constructed in the village sachivalaya which can be given free of
rent to the FPS dealer. This may help in proper monitoring by the
vigilance committee and also help in improving the viability of FPS.
22. The Committee observed that to give a family employment under
NAREGA a family has to show ration card. It was informed to the
Committee that job card under NAREGA is given to the family on
the basis of Ration cards. Families members often split and get
separate ration cards in order to get benefits of NAREGA. This has
lead to the increase of APL cards. The Ration card should not be
used as an identity proof or residence proof or for any other
23. The Committee observed that the monthly allocation of food grain
of each FPS was fixed by the DSO on an annual basis, irrespective
of whether the allocation was being lifted by the beneficiaries or
not. The monthly allocation of each FPS should be based on the
quantity of grain distributed by the FPS in the previous month. The
quantity of food grain sold by the FPS should be verified by the
DSO by checking the Stock Register and Sales Register of the FPS
of the previous month, the coupons submitted by the beneficiaries
to the FPS and the the Utilization Certificate duly signed by the
members of the Vigilance Committee.
24. Steps should be taken to create awareness amongst the
beneficiaries about their entitlements and the incoming allocation of
food grain. A press release should be issued by the Collector at the
beginning of the month indicating the quantity of PDS items
released to the various FPS dealers in the District, also indicating
entitlement of various categories alongwith the retail price of the
commodities. Local TV channels may also be requested to show
the details as mentioned above on their scroll to create the
awareness among the people. Hoardings be displayed and
pamphlets may be distributed in schools / colleges and to the
general public giving the above information to make people aware
of their entitlement. FPS dealers should be directed to show the
details of the total supply received by him of various items and also
the entitlement of various categories of the card holders alongwith
the price. To ensure the compliance of these instructions, NGOs,
self help groups and consumer forums can play a important role.
25. Public Distribution System has to be totally revamped and for this
end to end computerization would appear to be the only answer.
The Committee has submitted a separate comprehensive report on
Computerization. Immediate action is required to be taken on that
report. In order to ensure that there is no diversion, complete
automation of the system and linking of weighment systems with
automated allocation and distribution mechanism is of utmost
importance. Transparency in allotment of food stock to be sold at
FPS can be brought about by the computerization suggested by this
Committee in its report on Computerization.
26. The whole Public Distribution System must work on zero tolerance
basis. No one can be permitted to draw any benefit of any nature
by diverting the PDS food grains meant for the poor. It must also
be understood that FPS is not meant for the benefit of the owner of
the FPS but for the beneficiaries. If any person whether officials of
the Food and Civil supply Department, wholesaler, FPS dealer,
transporter is found diverting or hampering the functioning of PDS,
strict penal actions should be taken against him. Fast track courts
should be set up to try offices Under Essential commodities Act.
Issues raised during Public Hearing
During the visit of CVC to various districts of Rajasthan Public hearings
were organized in Jaipur, Udaipur and Jodhpur. The public hearing
however, not scheduled was also organized in Dungarpur. Informal
meetings were also held at various places during the visit with the various
stake holders – Behror (district Alwar), Ajmer, Tehsil Bhim in Rajsamand
District. The public hearing were attended by FPS dealers, wholesalers,
Consumers/card holders, NGOs, SHGs, Consumer Organisations, Media
persons and Women Organisations. The following are some of the issues
raised by different stake holders in these formal / informal public hearings-
No response of officials in case of complaints.
Less weighment by FPS dealers.
Overcharging by FPS dealers.
Rationalisation of FPS to make FPS viable.
Shops to be constructed by village panchayats / Municipal
Committees and no rent should be charged from the FPS dealer.
Items in PDS should be increased such edible oil, pulses, salt, cloth.
Entitlement of these commodities for various categories be
Distribution should be on unit basis not on the basis of ration card.
Transparency and honesty need to be brought out in allotment of
fair price shops.
Co-operatives and WSHGs be preferred in allotment of shops.
Vigilance mechanism needs to strengthened.
Vigilance committees be reconstituted increasing the scope by
including the NGOs, Consumer Organisations, educated youth etc.
Meetings of Vigilance committee‟s must be ensured at regular
There are excess /bogus ration cards.
No proper complaint mechanism.
Shops are not at prominent places.
Directions of Supreme Court regarding PDS are not being followed
by the FPS dealers.
Website is not updated,rather no information is available on the
Less distribution of wheat to BPL & AAY families, even less than 30
kg. per month, while the norm is 35 kg. per month.
Supply is not given regularly i.e. every month. Wheat is given for
3-4 months in one go.
Shops are not opened for full month which is a violation of the
direction of the Supreme Court.
Really needy / deserved people are not categorized in BPL /AAY
Fake entries are made in the Ration cards by the FPS dealers.
Fresh survey for categorization of BPL / AAY be done immediately.
Rates of wheat flour introduced in urban areas should not be Rs.9/-
per kg it should be on the basis of the supply rate of wheat plus the
actual cost of grinding & packing etc.
HIV+ve be given AAY cards immediately.
Toll Free helpline 24/7 be started to lodge the complaint against
any lapse with strong response mechanism.
Wide publicity be given about the entitlements / rates etc.
Kerosene and sugar be provided in packing.
Allocation of FPSs should be for maximum 5 years with a provision
of extension for another five years.
Priority be given to ladies / dalits for allotment of FPS.
Social audit be adopted in PDS.
Commission of FPS should be increased to Rs.100 per quintal for
wheat (the present rate is Rs.8 per quintal) and Rs.200 per kilolitre
on kerosene (the present rate of Commission is Rs.47 per kilolitre)
Wheat flour which has been introduced in 7 Divisional HQs recently
should be distributed through FPSs.
1000 rations cards per shop be allotted to make the shop viable.
Full quota be given to FPS.
Undue pressure of vigilance Committee members on FPS dealers
should not be there.
Transport rates are same since 2005 which needs to be revised as
demanded by wholesalers.
Commission rate of wholesalers which is Rs.5 per quintal since 2002
should be raised immediately.
Less weighment is received from FCI godowns.
Quota of APL wheat be increased.
APL beneficiaries are not receiving any foodgrain.
Food grains be supplied in HDPE bags of 20 and 10kg.
Consumer Protection Councils should be constituted at State level,
District level, Tehsil Level and Block Level.
Migrant labour be covered under the PDS.
Ration be allowed in installments.
Entitlement of kerosene oil be increased in urban areas.
Distribution of ration through FPS should be through -out the
Commission rate of wholesalers for kerosene should be minimum
40 paise per litre (at present the rate is 25 paise per litre since last
Annapurna distribution is not regular.
Sugar is not supplied regularly.
Diversion of kerosene oil in the open market.
Gas cylinders should be supplied through FPSs.
Dairy products may be distributed in PDS.
Rice should also be distributed.
FPSs are far away in some of the areas in Rajasthan from the
consumers, the distance is about 20-30 miles. The distribution of
PDS items should be done through mobile vans in such areas.
Senior officers of the Department are involved in the diversion.
Stringent laws be made to deal with those found indulged in