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									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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