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PMO Relief Fund and Ration Card Holders Scheme

The Finance Minister announced on March 26 that they would double the entitlements of PDS ration card holders for April-June months. Since then, this has been clear that the PDS has served as a lifeline for millions of people left high and dry when it was announced two days before the sudden and complete lockdown. When we reached the end of June, there was growing demand to expand this relief – not just from economists but also from civil society and chief ministers including those from the BJP. By June the Food Ministry passed the buck to the PMO when asked about the extension. The extension of this relief measure until November declared on June 30th, 2020, was also a major relief.

National Food Security Act

The National Food Security Act (NFSA) 2013 mandates that the central government provide two-thirds (67 per cent) of the Indian population with subsidized grains (5 kg per person per month for wheat at Rs 2 / kg and 3 / kg for rice at Rs). At around 80 crores, about 60 per cent of today’s population is subsidized by the central government. As the Food Security Act was rolled out, census estimates for 2011 were used to determine the number of people who will be included nationwide. Coverage has stayed stagnant since, despite a population surge. The centre’s under-coverage of 7 percentage points translates into approximately 10 crore people who need to be included.

A belated mid-May announcement to include eight crore migrants in the PDS has been a welcome step. They were only to be included for two months though – and even that hasn’t happened. Usage was less than 20 per cent due to ‘lack of demand’ according to government statistics. What is more likely is that this is because no method for identifying qualifying migrants has been established. At a time when we should consider expanding the PDS scope beyond the legally mandated 67%, even the legally mandated coverage of the centre is falling foul.

How would we go beyond PDS coverage of 67 per cent?

There are some possible explanations for this: One, a long-standing desire for a compulsory PDS. With as basic a right as a food it makes sense to have an open network where, if necessary, more people can be introduced.

Second, the shutdown has created both an economic and a humanitarian crisis. Millions of livelihoods were stolen overnight. Just 17 per cent of the people working in India are wage-earners; nearly half are self-employed – including cobblers, bicycle repairers, street vendors, urban petty traders and rural small and marginal farmers. Just a minority of self-employed people can be seen as better off. A third is casual wage labourers. Their earnings dried up for most of these people as soon as the lockout was declared, and none would have had savings to help them through the initial three weeks, let alone the extensions that followed.

Food Minister on Food Storage

Four, India’s Food Corporation maintains ‘buffer inventories’ to meet requirements. Standards on buffer stocks range from 21 million tons ( mt) on April 1 to 41 mt on July 1st. In comparison, at the end of April, we had over 70 mt, and after the wheat procurement began around that time, at the end of June, we have nearly 100 mt. What better time to use those stocks than now?

Four, the huge stocks have created the government’s new headache — safe storage. As per a mid-March PTI report, the Food Minister said that lifting six-month grain in one go “will ease central storage pressure as some quantity of wheat is kept open.” That was before the start of the new season of wheat procurement-the storage issue is likely to have worsened now. Cost-bearing (interest and storage) often places a burden on the exchequer of the country. At Rs 5.4/kg the excess stock (approximately 56mt) would cost a few thousand crores to the government.

Reports on Rotten Grain

Five, for some part of the grain, the lack of safe storage means there is a real possibility that some grain may go bad during the monsoon. Reports of rotting grain had begun to come in late May. What’s needed is very clear: to permanently add 8-10 crore people to the PDS roster. The center should notify shares of state wisdom for this, so states can use their waiting lists to expand the PDS.

For anyone who applies, the center might consider issuing temporary ration cards (valid, say, for 6 months). The entitlement ‘s transient existence is likely to act as a self-selecting filter. The establishment of community kitchens (like Amma’s canteens in Tamil Nadu and ‘dal-bhaat’ kendras in Jharkhand) is another way of going beyond the legally mandated two thirds.

About ONOR

The government has latched on to an ill-advised idea. It is from La-la Land – ‘one country, one ration’ (ONOR) instead of doing all this. Why La-la-la-Land? Many people believe migrants would not have suffered if ONOR had been operational. They are incorrect because the first condition is that migrant worker. It must be on the ration card list to benefit. The fact that the government announced that temporary ration cards. So, will be issued to eight crore migrant workers suggests that many workers did not have ration cards; consequently, they would not have been able to benefit from ONOR.

Portability between States would pose complicated logistics and entitlement concerns. Will Tamil Nadu ration cardholders, as migrant workers in Mumbai, get dal and oil? Can Odia employees in Rajasthan (which supply only wheat) get the “usna” rice they ‘re used to? What about cost-sharing when there is a supplementary state subsidy?

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