CENTRAL VIGILANCE COMMITTEE ON PUBLIC DISTRIBUTION SYSTEM REPORT ON THE STATE OF RAJASTHAN Justice Wadhwa committee on Public Distribution System STATE OF RAJASTHAN Chapter Chapter Page No. 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 Mechanism 10. Computerisation 87-88 11. Recommendations 89-103 12 APPENDIX 104-107 Issues raised in Public Hearing PREFACE 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 under: “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 the shops. 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 perspective. “ 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 April 2009. 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 computerization. 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 done. 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 answer. 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 politician. 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: Jaipur 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 (Saphiya). Alwar Mr. O.P. Chauhan, DSO Alwar. Ajmer 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. Jodhpur 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 Sansthan. Pali Mr. J.C. Garg, DSO and Mr. Govind Singh, Inspector. Dungarpur 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. Udaipur 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. Rajsamand 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. Delhi ____November, 2009 (Justice D.P Wadhwa) Chairman Central Vigilance Committee on Public Distribution System BROAD OVERVIEW 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 broad overview. 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 the PDS: 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 PDS. 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 below: 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 belts. 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 (MAPL). 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 properly verified. 17. Computerization: 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 category. (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. Chapter 1 INTRODUCTION 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 kilometres). 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 northwest Rajasthan. 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. Chapter 2 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 department) 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 present ; (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 decisions. (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 FCI. 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 wholesaler. 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 dates: 11.5.09 65000/- 10.6.09 60,000 8.7.09 60,000 13.8.09 60,000 ____________________ Total 2,45,000 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 months allocation 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 months. 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 Oct Mukesh 721 36Q 103 BPL 89.90 Q lifting of full stock is not done Parikh Nawal 2B 26 Q 76 34 Q lifting of full stock is not done Kishore 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 foodgrain. 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 the DSO. 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 kg wheat. 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 payment. 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 foodgrain foodgrain 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 Total 470 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 October 2009. 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 =644/30=21 months. 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 6 months. [176.77 Q=17677kg Quantity lifted per card = 17677/97 =182.23kg Number of months for which stock is lifted= 182 kg divided by 30 kg = 6 months] 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 them. 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 the DSO. 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 2. BPL-170 3. AAY- 9 Lifting of AAY wheat stock ( allocation 3.15 Q per month) Date on which Quantity Stock of the month grain was lifted 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 grain was lifted 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 April 09. 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 increased. 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 the wholesaler. 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 the foodgrain. 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 dealers. 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 wholesalers. 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 different ways. 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 security. 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 follows : "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 directions:- (1) Licencees, who (a) do not keep their shops open throughout the month during the stipulated period, (b) fail to provide grain to BPL families strictly at BPL rates and no higher, (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 person/organizations, shall make themselves liable for cancellation of their licences.The concerned authorities/functionaries would not show any laxity on the subject.” 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 from wholesalers. 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 rotational basis. 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 District. 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 cost. 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 lacs) Beneficiaries (10 kg. per month (MT) APL 122.16 64360 64.36 363200 (increased in the month of 3/09) 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 (In M.T.) 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 (In M.T.) 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 (upto Aug 09) 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. Chapter 3 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 consumers. 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/- per month. 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 card holders. 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 their satisfaction. 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 booth. (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 kg. (vi) It was stated that an official of the department visits the mill and checks the quality of atta and the weight of the bags (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 open market. (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. Chapter 4 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: Urban Area District Supply Officer President Nagar Nigam/ Parishad/ President of the Member Palika/ Administrator or a representative nominated by them Tehsildar Member (i) Social worker Members (ii) Consumer (One each) (iii) Woman consumer All nominated by the Government belonging to the same area. Rural area District Supply Officer President Concerned Gram Panchayat Sarpanch Member Tehsildar Member (iv) Social worker Members (v) Consumer (One each) (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 the government. 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 order : (i) Women Self help Groups recognized by the Women and Child Welfare Department, Rural Development Department, Social Justice department or any other government department. (ii) Cooperative Societies registered under the Cooperative Society Act (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 discretion. 6. The Advisory Committee keeps one application in reserve so as to ensure its immediate appointment in case a selected FPS dealer is suspended. 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 deceased (iii) Adult unmarried daughter who was dependent on the deceased (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 Observations 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. Chapter 5 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 viability. 1 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:- Commodity Commission 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 bags) Total 2840 Expenses Approximate 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 the Department. 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 District 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 Total 1694.80 Expenditure Amount Rent 150 Stationery & Miscellaneous Charges 100 Total 250 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 Total 3975.20 Expenditure Amount Helper 1000 Stationery & Miscellaneous Charges 100 Total 1100 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 High Court. 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. 5.18 Conclusions 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 of FPS. 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. Chapter 6 COUPON SYSTEM 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 State. 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 the beneficiaries. Chapter 7 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 list. 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 the applicant. 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 election. 7.8 The Committee in its Questionnaire asked the State government about the annual surveys for inclusion and exclusion from the BPL and AAY 2 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 reasons. 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. Chapter 8 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 open market. 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 implemented. 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 exhaustive. i. By using the cards of the people who are dead or have changed residence. 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 off. 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 Device, etc.3 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. 3 Eleventh Five Year Plan report of Planning Commission at pg 137. Chapter 9 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 Secretary 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 President 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 distribution. 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) Udaipur 3. Civil Judge & Chief Judicial 48 Magistrate, Udaipur 4. Additional Chief Judicial Magistrate 03 (1) , Udaipur 5. Additional Chief Judicial Magistrate 02 (2) , Udaipur 6. Additional Chief Judicial Magistrate 105 (3) , Udaipur TOTAL 166 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 sal 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 Udaipur. 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 dealers. 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 Minister. (ii) A register for complaints received from the office of the Food Minister. (iii) A register for complaints received from the Food Department, Jaipur. (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 Supply Officer. 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 enforcement staff. 9.6 Observations 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 Committees. 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 stock. 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 offender. Chapter 10 COMPUTERISATION 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 district. 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 Computer Centers. 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. Chapter 11 RECOMMENDATIONS 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 PDS. 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 diversion tool. 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 election. 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 purpose. 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. APPENDIX 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 increased. 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 intervals. 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 website. 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 categories. 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 month. Commission rate of wholesalers for kerosene should be minimum 40 paise per litre (at present the rate is 25 paise per litre since last two years. 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 diversion.
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