Introduction

The discussion surrounding the National Food Security Act (NFSA), 2013 highlighted concerns about guaranteeing food security through the Public Distribution System (PDS) due to its poor track record. According to National Sample Survey (NSS) data from 2011-12, leakages in the PDS were alarmingly high at 41.7% at the all-India level.

Improvements in PDS through State Reforms

Despite the initial concerns, the argument for continuing with the PDS was bolstered by evidence from states that had undertaken reforms. Between 2004-05 and 2011-12, states like Bihar, Chhattisgarh, and Odisha saw significant reductions in PDS leakages, with Bihar reducing its leakage from 91% to 24%, Chhattisgarh from 52% to 9%, and Odisha from 76% to 25%. This improvement was attributed to a package of PDS reforms that were later mandated by the NFSA 2013.

Analysis of NSS Household Consumption Expenditure Survey (HCES) 2022-23

The HCES 2022-23 provided a comprehensive look at the impact of the NFSA on the PDS. The survey, which is the first large-scale nationally representative survey post-NFSA implementation, revealed that PDS leakages had decreased to 22% in 2022-23.

Methodology for Estimating Leakages

PDS leakages are calculated by comparing NSS data on household PDS purchases with the “offtake” data from the Food Ministry''s Monthly Food Grain Bulletin. During the survey period (August 2022 to July 2023), ration card holders received NFSA grain and Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) grain till December 2022. However, the survey acknowledged that these estimates could be underestimates due to factors like transport losses and lags in supply.

Impact of NFSA on PDS Coverage

One of the key reforms under the NFSA 2013, was the expansion of PDS coverage to reduce exclusion errors, which inadvertently helped reduce leakages. The coverage of the PDS improved significantly over the years—from 24% in 2004-05 to 40% in 2011-12. The NFSA further increased this to 70% by 2022-23. However, the Centre is still falling short of the NFSA-mandated coverage, with only 59% of households accessing the PDS as NFSA beneficiaries, according to administrative data and HCES.

Role of PDS Reforms in Reducing Leakages

Reforms undertaken by states like Chhattisgarh and Odisha included measures like reducing PDS prices, doorstep delivery of food grains, digitization of records, and management of PDS outlets by local bodies. These reforms, which were later incorporated into the NFSA 2013, contributed to a significant reduction in leakages. For example, Rajasthan, which had high leakages in the past, saw a reduction to 9% by 2022-23.

Controversy over Aadhaar-based Biometric Authentication (ABBA)

The integration of Aadhaar into the PDS, particularly through Aadhaar-based biometric authentication (ABBA), is often credited with reducing leakages. However, primary survey data, including studies conducted in Jharkhand in 2017, do not support this claim. These studies found that leakages were already low before ABBA was introduced and that the purchase-entitlement ratios were similar in both offline and ABBA villages.

Challenges and Future Directions

Despite improvements, the PDS still faces challenges. In states where the PDS traditionally worked well, like Tamil Nadu, leakages have actually increased from 12% in 2011-12 to 25% in 2022-23. The PDS remains vulnerable to various "innovations" like cash transfer experiments and the imposition of Aadhaar-based technologies, which could potentially derail the system. Instead of focusing on these measures, there is a need to expedite the delayed Census, which is excluding over 100 million people from the PDS, and to include more nutritious items like pulses and edible oil in the PDS offerings.

Conclusion

The PDS has evolved into a critical instrument of social policy, providing food security to a significant portion of the population. However, it remains under threat from various ill-conceived innovations. To ensure its continued success, the focus should be on addressing the remaining challenges, such as expanding coverage and including more nutritious food items, rather than on experimenting with potentially disruptive technologies.