1. 1
Understanding and Bringing Greater Efficiency in the
Operations of Jeevika VO-run PDS
(Internship Study)
Submitted by
Avinash Shankar, M.A. (Development Studies)
Azim Premji University, Bangalore
E-mail: avinash.shankar@apu.edu.in, bobby.supaul@gmail.com
2. 2
Table of Contents
Title Page Number
Acronyms used in the report 3
About BRLPS and Jeevika 4-5
Acknowledgment 6
Abstract 7
Introduction 8-10
Wadhwa Committee Report 9-10
Rational & Context of the Study 10
Locus of the Study 11
Objectives of the Study 11
Methodology & Tools 12
Sampling 12
About VO PDS Covered within the
Study
13
Financial Viability of Jeevika VO PDS 14-30
Food Security & Community
Acceptance
30-36
Findings & Discussion 36-43
Jeevika- Vo-run PDS & Social &
Economic Empowerment of Poor
Village Women
40-41
Direct Cash Transfer, National Food
Security Ordinance & the future of VO
PDS
42-43
Suggestions & Recommendations 43-45
Limitations & Constraints of the Study 45-46
3. 3
List of Acronyms used in the report
AAY Antyodaya Yojana
ACs Area Coordinators
APL Above Poverty Line
BPL Below Poverty Line
BRLP Bihar Rural Livelihood Project
BSFC Bihar State Food Corporation
CCs Community Coordinators
CLF Cluster Level Federation
CIF Community Investment Fund
CRPs Community Resource Persons
DCT Direct Cash Transfer
DPCU District Project Coordination Unit
FPS Fair Price Shops
MO Marketing Officer
NFSO National Food Security Ordinance
PDS Public Distribution System
SDO Sub-Divisional Officer
SHG Self-help groups
SPMU State Project Management Unit
SRLM State Rural Livelihood Mission
TPDS Targeted Public Distribution System
UPDS Universal Public Distribution System
UNDP United Nations Development Program
VO Village Organization
4. 4
About Bihar Rural Livelihoods Promotion Society (BRLPS) and the
Bihar Rural Livelihoods Project (Jeevika)
BRLPS, the autonomous society under the Department of Finance, Govt. of Bihar, has been
designated as State Rural Livelihood Mission (SRLM) by Rural Development Department, Govt.
of Bihar to scale up JEEVIKA model in all 534 blocks of 38 districts in Bihar under National Rural
Livelihood Mission (NRLM). So far Jeevika, funded by the World Bank, has been able to reach
out to 11 lakh rural poor households by organizing them into 90000 women self-help groups
(SHGs) under 5700 Village Organizations (VOs) and 57 Cluster Level Federations (CLFs) in merely
six years since its inception. These community institutions have generated approximately RS 39
Crores as their own funds and have leveraged Rs 278 Crores from the banks. BRLPS would be
organizing, empowering, and promoting livelihoods for nearly 1.5 Crores rural households in
coming future. Jeevika VO PDS that I studied during my internship is an attempt to promote
livelihood, ensure food security and enhance economic and social empowerment of village
women. The objectives of Jeevika are briefly mentioned below
Creating Self-managed
community institutions
of the poorest of the
poor households
Enhancing income
through sustainable
livelihoods
Increasing access to
social protection
including food security
through a greater voice
5. 5
Dedicated support Structure of JEEVIKA
Dedicated Society
General Body & Executive
Committee
State Project Management Unit
PD Cum CEO Supported by thematic
experts & Support staff
District Project Coordination Unit (DPCU)
District Project Manager supported by specialists
Block Project Implementation Units (BPIU). A team
consisting of BPM, Area Coordinators (ACs), & Community
Coordinators (CCs)
Cadre of Community Resource Persons (CRPs), Book Keepers, and
Community Mobilizers (CMs)
6. 6
Acknowledgement
I extend my sincerest gratitude to Jeevika VO members and book-keepers
who helped me in my study despite their engagement in busy harvesting
season. I am also thankful to employees and staff at SPMU, Patna, DPCU,
Purnea, and BPIU, Banmankhi. My internship would not have been possible
without the guidance and support of State Project Manager (SD) Archana
Tiwari, my mentor Archana Chandola, APU faculty mentor Sankar Dutta,
APU Internship facilitator Rema Devi, Manager (SD, DPCU, Purnea)
Himanshu and Banmankhi Block Project Manager (BPM) Baijnath. I am
grateful to the BRLPS for giving me an opportunity to do the 6-weeks
Internship with Jeevika. It was a great learning experience working with
community and area coordinators, including Gaurav, Bhawani, and Parimal.
This internship experience has helped me in enhancing my knowledge as
development student.
7. 7
Abstract
Bihar Rural Livelihood Project, Jeevika, has initiated many livelihood interventions
in farm and non-farm sectors to promote economic and social empowerment of
poor villagers in Bihar. Community institutions like SHGs and VOs have been the
main drivers of such initiatives. Of late, Jeevika has also intervened in many other
areas which not only provide job opportunities, but also transparent delivery of
some government schemes including Mahatma Gandhi National Rural Employment
Guarantee Act (MGNREGA) and Public Distribution System (PDS). Jeevika VO PDS
was envisaged as the step that will ensure greater food security apart from
bringing economic and social empowerment to the members of VOs and SHGs.
When Jeevika VOs started to acquire PDS licenses in late 2011, it was believed
that beneficiaries will benefit from timely distribution of food grains and kerosene
at the price determined by the government. Jeevika VO PDS was also initiated
with the objective of bringing social and economic empowerment of VO members.
In the last two years, many VOs have acquired licenses for running fair price
shops (FPSs). In Purnea district of Bihar, many VOs have acquired PDS licenses
and are running the FPSs very successfully. This internship study was carried out
in the Banmankhi block of Purnea district with the objectives of assessing the
financial viability and community acceptance of five Jeevika VO FPSs functioning
within the block. The study also assessed whether VO PDS ensures greater food
security for beneficiaries. The study finds that Jeevika VO FPSs are financially
viable and addresses the issue of food security in much better way. No only this,
Jeevika VO FPSs have been able to ensure social and economic empowerment of
VO members. The study also identifies certain issues that act as deterrent to
proper functioning of Jeevika VO PDS. Weighing issues, malpractices at
procurement and distribution stage, and the issue of huge amount of VO’s money
stuck with Bihar State Food Corporation (BSFC) seem to be hampering the
profitability. Once these issues are addressed, VO PDS will emerge as one of the
successful interventions that not only ensure food security for VO members and
other beneficiaries, but also bring social and economic empowerment to village
women.
Key Words: Village Organizations, Self-help Groups, Public Distribution System, Fair Price
Shops, Store Issue Orders, Financial Viability, Community Acceptance, Govt. Liasoning, Social
Empowerment, Economic Empowerment, Social Capital
8. 8
Introduction:
The availability of food grains is not a sufficient condition to ensure food security to the poor. It
is also necessary that the poor have sufficient means to purchase food. The capacity of the poor
to purchase food can be ensured in two ways – by raising the incomes or supplying food grains at
subsidized prices. While employment generation programmes like MNREGA attempt the first
solution, the PDS is the mechanism for the second option. Under the PDS, essential commodities
to a large number of people are sold through FPSs on a recurring basis throughout the country.
PDS evolved as a major instrument of the Government's economic policy for ensuring
availability of food grains to the public at affordable prices as well as for enhancing the food
security for the poor. It is an important constituent of the strategy for poverty eradication and is
intended to serve as a safety net for the poor. With a network of more than 4.62 lakh FPSs
distributing commodities worth more than Rs 30,000 crore annually to about 160 million
families, the PDS in India is perhaps the largest distribution network of its kind in the world.
This huge network can play a more meaningful role only if it ensures the availability of food to
the poor households.
PDS is operated under the joint responsibility of the Central and the State Governments. The
Central Government has taken the responsibility for procurement, storage, transportation and
bulk allocation of food grains, etc. The responsibility for distributing the same to the consumers
through the network of FPSs rests with the State Governments. The operational responsibilities
including allocation within the State, identification of families below poverty line, issue of ration
cards, supervision and monitoring the functioning of FPSs rest with the State
Governments. PDS, till 1992, was a general entitlement scheme for all consumers without any
specific target. The PDS in its original form was widely criticized for its failure to serve the
weaker sections, its urban bias, negligible coverage in the states with the highest concentration of
the rural poor and lack of transparent and accountable arrangements for delivery. Realizing this,
the government streamlined the system by issuing special cards to weaker sections and selling
food grains under PDS to them at specially subsidized prices with effect from June 1997. Now
PDS is available for different categories of beneficiaries like Below Poverty line (BPL) and
Above Poverty Line (APL), Antyodaya (AAY), and Annapurna. The state wise quota is fixed by
the Planning Commission of India on the basis of official poverty line which is adjusted to
growth of population in interim. The poverty line is based on per capita daily Income standard.
Under this Targeted Public Distribution System (TPDS), each poor family was entitled a certain
quantity of food grains per month at specially subsidized prices. This was expected to benefit
about 60 million poor families. The state-wise poverty estimates of the Planning Commission,
based on the methodology of the expert group on the estimation of the proportion and number of
poor chaired by late Prof. Lakdawala, defined the number of poor in each state. The
identification of the poor is done by the states. The emphasis is on including only the really poor
and vulnerable sections of the society such as landless agricultural labourers, marginal farmers,
artisans/craftsmen in the rural areas and slum dwellers and daily wagers in the informal sector in
the urban areas.
9. 9
Wadhwa Committee Report & its Impact on PDS Operations: 1
The Central Vigilance Committee on PDS headed by Justice (Rtd.) DP Wadhwa came down
heavily on the PDS in its report submitted in 2007. The Hon’ble Supreme Court of India by order
dated 12.7.2006 in a Writ Petition constituted a committee to be headed by Supreme Court judge
Justice D P Wadhwa so as to look into the maladies affecting the proper functioning of the
Public Distribution System (PDS) and to suggest remedial measures. The SC's direction was
initially given for the Government of Delhi to be followed on an all India basis. The Wadhwa
Committee submitted its report on 21.8.2007. By an order dated 10.1.2008, Hon’ble Court while
accepting the report, directed the committee to do the similar exercise in terms of earlier order
for the entire country. The committee identified many issues hampering the smooth functioning
of PDS in India. The committee found that the whole system of procurement and distribution of
food grains is built on corruption and its benefits to the poor are low. The system lacks
transparency, accountability, monitoring. PDS has not yielded benefits to the extent intended.
This is on account of various reasons viz. collusion between persons involved in PDS supply
chain resulting in leakage and large-scale diversion of food grains.
The committee recommended that delivery systems under the PDS have to be improved so that
the real beneficiary gets its due entitlement at fixed price, fixed quantity, fixed time and
wholesome quality and called for least human intervention and end-to-end automation and
computerization of the complete PDS chain. The committee also recommended the abolition of
APL category. The report offers reasoning that many APL families don’t lift their rations from
FPS, and this food grain is diverted into black market.
The committee also made two recommendations for long-term implementation namely formation
of Civil Supply Corporation, and computerization of PDS operations. In the committee’s own
observation, “Diversion of PDS food grain in black market deprives the genuine beneficiary to
get his allotted quantity of food grain. Choice is thus between a corrupt fair price shop
functioning and State itself taking over the functioning of FPS.” Backed by this thought, the
committee recommended constitution of Civil Supply Corporation in every state. It was
proposed to be an independent body to distribute PDS food grain at FPS level and take over
existing FPS. The committee observed that once the corporation is established, all intermediaries
like wholesalers in some states must be abolished. 2
The committee also recommended several short-term measures also. These include identification
of beneficiaries/inclusion and exclusion errors, storage capacity, transportation of PDS food
grains, viability of FPS, strengthening accountability and monitoring mechanism, allocation of
food grain in accordance with number of members in a family, strengthening vigilance and
enforcement, elimination of bogus and fake ration cards, electronic weighing, and special
1
http://www.im4change.org/news-alert/justice-wadhwa-committee-slams-the-pds-1759.html
2
http://www.kartiklokhande.blogspot.in/2013/01/wadhwa-committee-recommends-abolishing.htm
10. 10
measures for poorest districts in the country. The committee also proposed a scheme for
providing cooked food to the poorer segments of the society ‘at nominal cost or free’ in
backward districts of the country. The scheme proposed to be called “Dal Bhat Kendra”,
envisaged that community kitchens should be run in selected urban and rural areas at district
headquarters like the Collectorate, city hospitals, bus stops, or cooked food should be provided
through vans in pockets inhabited by poor and vulnerable people. The committee also
recommended that food coupons should be kept with each Gram Panchayat in all poorest and
backward districts to meet any emergency situation.
The Wadhwa Committee report clearly suggested that the PDS was not working the way it was
envisaged and called for certain measures explained above. But many of the recommendations of
the committee were not put into place. The only outcome of the report was that the APL category
was excluded from entitlement of food grains. It also helped in preventing the diversion of food
grains to some extent. But the PDS irregularities cited by the committee still remain apparent and
the govt. has expressed concerns regarding that. Of late, govt. has been mulling whether Direct
Cash Transfer (DCT) scheme can efficiently replace the PDS and overcome the maladies
reported by the Wadhwa Committee. The scheme is intended to replace existing FPSs by directly
transferring certain amount in the beneficiaries’ account so that they could purchase grains from
the open market. The scheme has been implemented on the pilot basis by Delhi government in
the Raghuvir Nagar region. This pilot project has been funded by the United Nations
Development Programme (UNDP). But the implementation of DCT will not be an easy task
owing to issues that will appear at the end of this report. The National Food Security Ordinance
(NFSO) promulgated by the central government recently provides another string to the
discussion surrounding the PDS and greater food security.
Rational & Context of the Study
Despite the shift from Universal Public Distribution System (UPDS) to the TPDS, the objectives
of serving the poor could not be met. PDS dealers were found to be acting out of their own
whims and fancies while distributing the food grains and kerosene. Despite the findings and
recommendations of the Wadhwa Committee report, PDS operations continue to be marred by
operational irregularities and corruption rampant in the system. Bihar Rural Livelihood Project,
Jeevika, that is already involved in many poverty alleviations programs in Bihar through
community institution, has taken an another step toward food security and poverty alleviation by
facilitating its VOs in acquiring licenses for FPSs. Jeevika VO FPSs were envisaged as the
initiative that will ensure greater food security apart from bringing economic and social
empowerment to the members of VOs. It was believed that Jeevika VO FPSs will ensure timely
distribution of food grains and kerosene at the price determined by the government. It will be
interesting to see whether Jeevika VO PDS has been able to cope up with the issues cited by the
Wadhwa Committee report. In the wake of the recent FSO, the successful operations of Jeevika
VO-run PDS may hold key to the implementation of new food security programs. In the last two
years, many Jeevika VOs have acquired licenses for running FPSs. In Purnea district of Bihar,
many VOs have acquired PDS licenses and are running the FPSs very successfully. But this
study will focus primarily on five FPSs being run by different Jeevika VOs under Banmankhi
block of Purnea district.
11. 11
Locus of the Study
Purnia district is spread over 3202.31 sq. kms. It is bordered by Araria district in the north,
Katihar and Bhagalpur districts in the South, Madhepura and Saharsa district in the west and
West Dinajpur district of West Bengal and Kishanganj district of Bihar in east. The district is
divided into 4 sub divisions, 14 Blocks, 251 Gram Panchayats, and 1296 villages.
Banmankhi is one of the 14 blocks of Purnea district. The river Kosi and Mahananda and their
tributaries irrigate different parts of the district. Bihar is one of the most backward states of India,
but Purnia lags much behind in terms of state development indicators. The literacy rate of Bihar
is 43.9 per cent – 57.1 per cent for males and 29.6 per cent for females, whereas for Purnia the
overall literacy rate is 31.44 per cent, (males 42.16 per cent and females 19.63 per cent), which is
lower than the state average. The sex ratio of Bihar is 926 females per thousand males and that of
Purnia is slightly lower at 921. The average size of a household in the district is 5.10, which is
comparatively lower than the state average of 6. With a population of 32,73,127, including
16,95,815 males, Purnia is now the 12th most populous district in the state. The population grew
at the rate of 28.66% as against the state's population growth at 25.07%. However, the growth
dipped to 28.66% from 35.39% over the last decade. The district is overwhelmingly dependent
upon agriculture and around 90 per cent of the populations are directly or indirectly engaged in
agriculture related activities. However, contribution from these activities in the household
economy is not more than 20 per cent. A considerable number of people are living below poverty
line. This is the context in which the study was conducted in the Banmankhi block of Purnea to
understand the operational challenges, successes and bottlenecks faced by Jeevika VO PDS.
Objectives of the Study
The study was conducted with following objectives:
Assess the financial viability of VO PDS
Assess the acceptance level of these FPSs within the community
To see whether liasoning with govt. officials can improve the bottlenecks in the
operations of VO-run FPSs.
12. 12
Methodology & Tools
The study draws strength from the merits of mixed research design wherein both qualitative and
quantitative data were collected and analyzed to reach the findings. For assessing financial
viability, the study relied on SIO data and sales and stock registers of corresponding months. For
assessing PDS operations and their acceptance within the community, the study relied on
structured questionnaire that was administered to VO PDS beneficiaries and non-VO PDS
beneficiaries. Interviews with book-keepers and office bearers were conducted to assess the
bottlenecks in PDS operations. Direct govt. liasioning with the help of Jeevika officials was
helpful in assessing the effect of continued liasioning on PDS operations.
Sampling
For kerosene, data were obtained and analyzed since the inception of the PDS (October 2011)
and till May 2013. For food grains, data were obtained and analyzed since the inception of the
PDS (October 2011) and till March 2013. For administering questionnaire, random sampling was
done wherein 20 percent of SHG beneficiaries and equal percentage of non-beneficiaries were
randomly chosen from each PDS (Total 151 respondents). One book-keeper from each VO PDS
was selected for interviews along with one office bearer from each VO PDS.
How the Jeevika VO PDS Functions:
Jeevika VO PDS functions in the same way as any other PDS. VO applies for license to run the
FPS. License is generally issued in the name of President of the VO, but it can be issued in the
name of other members as well. There are five office bearers (President, Deputy-President,
Secretary, Deputy-Secretary, and Treasurer) at each VO. At least three office bearers will be
joint signatories for any monetary transaction. They look after the operations of VO PDS. Apart
from this, there is one book-keeper, who manages the accounts of VO PDS. There has to be a
PDS Committee to take care of the issues that may emerge from time to time. Though no such
committee has been formed by any VO PDS covered within the study. Procurement Committee
takes care of the issues of procurement. There is no separate PDS fund for VO PDS and the VOs
use money from other funds like Livelihood Fund, CIF, and Food Security Fund. Each month,
money is deposited in the account of BSFC for procurement of grains and the banks issue the
pay-in slip. Office bearers have to deposit the pay-in slip to marketing officer (MO) of the region
who issues the Store Issue Order (SIO) in the name VO PDS. Once the allotment for concerned
VO PDS comes, officer bearers need to go to BSFC go-downs along with SIO to receive the
procurement. Generally at least three office bearers go to the BSFC go-down for procurement.
The process is same for kerosene procurement, but the procurement site is the kerosene depot
fixed by the Sub-Divisional Officer (SDO). There is additional procurement cost involved like
carriage, loading-unloading etc. After the procurement, food grains and kerosene are distributed
from at the VO FPS. Book-keepers maintain sales register, stock register, and other financial
instruments and the same are audited periodically. The idea behind having VO PDS is to ensure
13. 13
social and economic empowerment of VO members apart from ensuring food security of each
beneficiary.
About VO PDS covered within the Study
So far five VOs under Block Project Implementation Unit (BPIU), Banmankhi have acquired
licenses for running FPS. These Jeevika FPSs are spread across four Panchayats of Banmankhi
block, namely Maharjganj II, Harimuri, Bishanpur Bishta, and Rampur Tilak.
Name of VO PDS Village Panchayat
Radhakrishna Gangaili Maharajganj II
Varsha Dhokardhara Bishanpur Bishta
Puja Rampur Tilak Rampur Tilak
Rupa Rampur Tilak Rampur Tilak
Chandramukhi Harimuri Harimuri
All the four villages are populated largely by scheduled caste and scheduled tribes followed by
other backward classes. These villages are economically backward and largely dependent on
agriculture. The area is known for growing sunflower that is primarily used for manufacturing
cholesterol-free oil. Maize and rice are the other two major crops grown in these regions. It was
harvesting time for both maize and sunflower when the study was conducted.
Beneficiary details of each VO PDS
VO PDS Total
Beneficiaries
APL
Beneficiaries
BPL
Beneficiaries
AAY
Beneficiaries
Radhakrishna 549 268 250 31
Varsha 657 281 339 37
Puja 629 245 336 48
Rupa 571 285 254 32
Chandramukhi 617 292 307 18
It is evident that each VO PDS covers significant number of BPL beneficiaries in terms of
percentage. Puja PDS is the one where BPL beneficiaries amount to 53.4% of total beneficiaries
followed by Varsha where 52% of beneficiaries have BPL cards. Puja PDS also has the highest
percentage (7.63%) of AAY beneficiaries followed by Varsha where 5.6 percent of beneficiaries
have AAY cards. The number of beneficiaries reflects that there are significant numbers of BPL
beneficiaries in each PDS. If we combine BPL and AAY beneficiaries, each VO PDS has more
than 50% of BPL+AAY beneficiaries.
14. 14
VO members being served by each PDS
Name of VO PDS Total SHG Members SHG Member
Beneficiaries
Percentage
Coverage
SHG Member Non-
beneficiaries
Radhakrishna 173 110 63.58 63
Varsha 141 23 16.31 119
Puja 134 97 72.38 37
Rupa 137 88 64.23 49
Varsha 149 69 46.30 80
Varsha VO PDS is the one where only 23 members out of 141 members are taking benefits from
the VO PDS. It amounts to 16.31% of total VO members. In contrast, Puja PDS has the
maximum coverage (72.38%) of VO members. VO members who are not the beneficiaries are
deprived of advantages of VO PDS. It is ironical that none of the VO PDS under study has 100
percent of member coverage.
Financial Viability of Jeevika VO PDS
Financial viability of VO PDS is necessary to ensure economic empowerment of VO members.
Since accounts of VO PDS FPSs were not maintained properly, it was very difficult to extract
financial data to assess financial viability. This study relied on available data from SIO registers,
stock registers, and sales registers to analyze the financial viability of each PDS. For kerosene,
data were collected from October 2011 till May 2013, whereas for food grains, data were
collected from November 2011 till March 2013. Receipt-payment analysis based on available
data was done to arrive at the profitability of each VO PDS.
15. 15
1509.75
1806.75
1729.75
1570.25
1696.75
1300
1400
1500
1600
1700
1800
1900
Average monthly procurement (In Litre)
Average monthly
procurement (In Litre)
493382
529475
558569
510662
548694
498606
529212
538582
499143
551994
460000
480000
500000
520000
540000
560000
580000
Payment
Receipt
Kerosene Procurement & Profitability
The study found that procurement of kerosene was regular in almost all VO PDS. The amount of
procurement was based on the number of beneficiaries who were purchasing kerosene regularly
from VO PDS.
When receipt-payment data were analyzed for the entire period, it was found that Radhakrishna
and Chandramukhi gave positive returns, whereas other three VO PDS showed negative results.
Varsha PDS showed negative result that cannot be called significant, but Puja and Rupa VO PDS
were cause for concerns. Puja PDS posted the loss of Rs19987 for the entire period, whereas
Rupa PDS posted the net loss of Rs11519 for the entire period. Office bearers and book-keepers
of Puja and Rupa PDS attributed the loss to the events of drum breaking that according to them
happened on at least three occasions leading to huge loss of kerosene. Apart from this, they also
cited lesser quantity of kerosene that they receive each month as one of the reasons of loss.
Ironically no incidence of kerosene drum breaking was reported by any other VO PDS covered
within the study.
Kerosene: Additional Procurement Cost
5223
3300
0
5000
10000
Profit/Loss (Kerosene)
Receipt & Payment (Kerosene)
November 2011-May 2013
16. 16
Each VO PDS has to bear the additional procurement cost that can be attributed to carriage,
loading-unloading, and filling charges apart from miscellaneous expenses. This procurement cost
is added to payment while doing payment-receipt analysis to arrive at profitability figures of
each VO PDS. The chart below shows the additional procurement cost borne by each VO PDS
toward kerosene procurement.
When the shortage of kerosene (due to various reasons) was analyzed for each PDS, it gave the
results that reflect in following graph.
Each VO PDS is losing some quantity of kerosene each month impacting the profitability. It was
interesting to see how many litres of kerosene VO PDS FPSs are losing each month. Puja and In
1190
1330
1373
1204
1400
1050
1100
1150
1200
1250
1300
1350
1400
1450
Radhakrishna Varsha Puja Rupa Chandramukhi
Additional Procurement Cost (Kerosene)
Additional Procurement Cost
101.75
409.5
1659.75
1186.75
175.76
0
500
1000
1500
2000
Loss of Kerosene for the entire period (In Litres)
Loss of Kerosene for the entire period
(In Litres)
17. 17
6778
6044 5573
6756
6005
0
2000
4000
6000
8000
Profit/Loss if Loss and shortage is reduced to zero
Profit/Loss
In terms of monthly loss, Puja and Rapa are losing 83.01 and 59.35 litres of kerosene
respectively, whereas Radhakrishna, Varsha, and Chandramukhi VO PDS are losing 5.08, 20.47,
and 8.78 litres respectively.
It is evident that shortage and loss of kerosene due to various reasons have contributed to the loss
of the VO PDS. Though the gravity of the issue cited by Puja and Rupa PDS is much higher than
the other three VO PDS, it will be interesting to see how the profit/loss figure emerges if the loss
of kerosene is reduced to zero.
5.08
20.47
83.01
59.35
8.78
0
50
100
Average monthly loss of kerosene (In Litre)
Average monthly loss of
kerosene (In Litre)
18. 18
The figure above shows that each VO PDS jumps into profit if loss of kerosene is reduced to
zero. The distribution of kerosene through VO PDS could be financially viable if the issue of
kerosene loss is addressed.
Procurement & Distribution of Food Grains & the Financial Viability of VO PDS
Procurement of rice and wheat for BPL and AAY segments are done by each VO PDS coovered within
the study. There were no beneficairies belonging to Annapurna categories in any VO PDS. Procurement
of food grains was not as regular as kerosene hampering food security and profitability of VO PDS. The
most disturbing thing was that procurement of wheat was not done since August 2012. This is the cause
of concern.
AAY Rice: The status of Procurement
None of the PDS reported 100 percent procurement. Varsha PDS was the one that made AAY rice
procurement for maximum number of months during the period. Puja and Rupa PDS again fared very
badly making procutrements for only 6 months. If VO PDS is the livelihood and food security
intervention, the procurement ratio of AAY rice is not the encouraging figure. The following two charts
will show the procurement status both in terms of months and percentage.
12
15
6 6
13
0
5
10
15
20
AAY Rice Procurement (In Months)
Number of procurement
months
19. 19
70.58
88.23
35.29 35.29
76.4
0
10
20
30
40
50
60
70
80
90
100
AAY Rice Procurement Percetage
Procurement Percetage
9
11
6 6
8
0
2
4
6
8
10
12
Procured Months (AAY Wheat)
Procured Months
There were many reasons cited by office bearers of VO PDS for the irregular procurement of
AAY rice. Since there is no separate PDS fund, VOs sometimes lack money that is needed to
make procurement. Sometimes money is needed for other livelihood interventions that VO
members think are more important than the PDS procurement. Another reason cited by office
bearers is that sometimes Stock Issue Order (SIO) lapses because there is no allotment for longer
period after making the procurement payment. Varsha and Rupa PDS reported at least 2
occasions each when the procurement lapsed because grains were not available in the go-down
for the longer period of time. This is the serious lapse on the part of the government agencies and
needs to be looked into.
AAY Wheat: The status of Procurement
None of the PDS reported 100 percent procurement. Varsha PDS was the one that again made AAY
wheat procurement for maximum number of months during the period. Puja and Rupa PDS again fared
20. 20
very badly making procutrements for only 6 months. If VO PDS is the livelihood and food security
intervention, the procurement ratio of AAY wheat is not the encouraging figure. The following two charts
will show the procurement status both in terms of months and percentage.
Like AAY rice, there were many reasons cited by office bearers of VO PDS for the irregular
procurement of AAY wheat. Since there is no separate PDS fund, VOs sometimes lack money
that is needed to make procurement. Another reason cited by office bearers is government has
not been providing wheat since August 2012. BSFC go-down managers have been saying that
there is temporary interruption in the supply of wheat and the same will be regularized in few
months. Varsha, Rupa, and Radhakrishna VOs reported that SIOs lapsed due to unavailability of
wheat in the go-downs. Since there is no supply of wheat for the past many months, poor SHG
beneficiaries have to purchase wheat from open market at very high prices.
Combined receipt-payment Status of AAY Rice and Wheat.
When receipt-payment data was analyzed to asess the profitability from the sales of AAY wheat and rice,
it was found that only Radhakrishna VO fared well whereas Puja and Rupa VOs again fared very badly.
Against the payment of 28944 for the entirev period, Radhakrishna VO showed the receipt of 34208
(Profit of 5264). In contrast Puja and Rupa VOs reported the loss of 11994 and 11366. Chandramukhi and
Varsha VOs posted the marginal loss of Rs313 and Rs410 respectively. The figure gain shows that Puja
and Rupa VOs have performed very badly. It is puzzling to hear why Puja and Rupa VOs are performing
so badly wheras other VOs are permorming much better. Office bearers of Puja and Rupa VOs cite the
same reason for the loss in terms of AAY rice and wheat. They say that each month they are receiving
53
65
35 35
47
0
10
20
30
40
50
60
70
Procurement Percentrage (AAY Wheat)
Procurement Percentrage
22. 22
The chart above shows that except Puja and Rupa, remaining three have reported profits from the
procurement and the sales of AAY food grains. In the case of Rupa and Puja VOs, loss would
have been converted into profit if weighing issues and other issues cited by office bearers were
addressed carefully. Other three VOs had also reported weighing issues hampering the profit.
The other valid reason why VO PDS are not showing better results is that significant amount of
every VO PDS money is stuck with Bihar State Food Corporation (BSFC) owing to different
reasons. If those stuck money are settled & adjusted, profitability chart will return positive
numbers in majority of cases. The following chart shows the profitability figure if weighing and
other cited issues would not have emerged. Chart shows that the profits of Radhakrishna,
Varsha, and Chandramukhi VOs would have become greater whereas the losses of Puja and
Rupa PDS would have been converted into profits.
One can easily see how the profit/loss figure changes once the stuck money is settled. It also
shows that stuck money is one of the valid reasons hampering the profitability. If the weighing
issues are also addressed the profit/loss chart will show even more positive figures. In the case of
Puja and Rupa VOs, change would be significant in positive direction. Steps need to be taken to
address the issues of stuck money and weighing losses. Better government liasioning holds some
promise. The issues cited by office bearers of Puja and Rupa VO PDS are not convincing at all.
These issues at Rupa & Puja VOs hint at some irregularities at operational level. The role of
book-keepers in these irregularities cannot be ruled out. Like kerosene, AAY figures of all five
VOs suggest that VO PDS is financially viable if the issues at hand are addressed carefully.
Greater vigilance by Jeevika officials can help in addressing the issues.
7347
9851
2790
3568 3812
0
2000
4000
6000
8000
10000
12000
Profit/Loss (AAY) if the issue of stuck money is addressed
Profit/Loss
23. 23
12
13
8 8
10
0
2
4
6
8
10
12
14
BPL Rice: Number of Procured months
Procured months
BPL Rice: Status of Procurement
None of the PDS reported 100 percent procurement. Varsha PDS was the one that made AAY rice
procurement for maximum number of months (13 months) during the period. Puja and Rupa PDS again
fared very badly making procutrements for only 8 months. Radhakrishna and Chandramukhi PDS have
done compratively well. The procurement ratio of BPL rice is not the encouraging figure. The following
two charts will show the procurement status both in terms of months and percentage.
10387 9851
5253
3700 3812
0
2000
4000
6000
8000
10000
12000
Profit/Loss (AAY) if the issues of stuck money & weighing issues are
addressed
Profit/Loss
24. 24
There were many reasons cited by office bearers of VO PDS for the irregular procurement of
BPL rice. Since there is no separate PDS fund, VOs sometimes lack money that is needed to
make procurement. Sometimes money is needed for other livelihood interventions that VO
members think are more important than the PDS procurement. Another reason cited by office
bearers is that sometimes Stock Issue Order (SIO) lapses because there is no allotment for longer
period after making the payment. Varsha and Rupa PDS reported at least 3 occasions each when
the procurement for BPL grains lapsed because grains were not available in the go-down for the
longer period of time. This is the serious lapse on the part of the government agencies and needs
to be looked into.
BPL Wheat: The status of Procurement
None of the PDS reported 100 percent procurement. Varsha PDS was the one that made BPL
wheat procurement for maximum number of months (8 months) during the period. Puja and
Rupa PDS again fared very badly making procurements for only 6 months. The procurement
ratio of BPL wheat is not the encouraging figure. The following two charts will show the
procurement status both in terms of months and percentage. When wheat procurement is seen in
percentage terms, it will become evident that none of the VO managed to procured wheat for
even 50 percent of total procurement months.
Like AAY rice, there were many reasons cited by office bearers of VO PDS for the irregular
procurement of BPL wheat. Since there is no separate PDS fund, VOs sometimes lack money
that is needed to make procurement. Another reason cited by office bearers is government has
not been providing wheat since August 2012. BFSC go-down managers have been saying that
70
77
47 47
59
0
10
20
30
40
50
60
70
80
90
BPL Rice Procurement Percentage
Procured Percentage
25. 25
7
8
7 7
6
0
1
2
3
4
5
6
7
8
9
Number of Procured Months (BPL Wheat)
Procured Months
41
47
41 41
35
0
5
10
15
20
25
30
35
40
45
50
BPL Wheat Procurement in Percentage Terms
Percentage Procurement
there is temporary interruption in the supply of wheat and the same will be regularized in few
months. Varsha, Rupa, and Radhakrishna VOs reported that SIOs lapsed due to unavailability of
wheat in the go-downs. Since there is no supply of wheat for the past many months, poor VO
beneficiaries have to purchase wheat from open market at very high prices.
26. 26
Additional Procurement Cost (Rice & Wheat (BPL+AAY)
VO FPS have also to bear certain additional procurement cost attributed to expenses such as carriage,
loading/unloading and other miscellaneous expenses. The study found that each VO under study has to
bear additional amount toward procurement of food grains for both BPL and AAY categories. The study
also found that every VO PDS procure both AAY and BPL grains at the same time. The chart below will
show the additional procurement amount that each VO PDS has to bear every month toward procurement.
Combined receipt-payment Status of BPL Rice and Wheat.
When receipt-payment data was analyzed to asess the profitability from the sales of BPL wheat
and rice, it was found that none of VO PDS is giving positive results. Against the payment of
497156, Radhakrishna VO PDS shows the receipt of 393218. Against the payment of 652164,
Varsha VO PDS shows the receipt of 598054. Against the payment of 449665, Puja VO PDS
shows the receipt of 348721. Against the payment of 437974, Rupa VO PDS shows the receipt
of 302656. Against the payment of 583551, Chandramukhi VO PDS shows the receipt of
411937. It will be interesting to know why none of the VO PDS has been able to post profits
from the sales of BPL grains. Except the extraordinary case of Rupa and Puja VO PDS, other
VOs are showing losses because huge amount is stuck with BSFC. Once the amount is adjusted
in next few procurments, the VOs will show profits. It gain highlights the negligence on behalf
of the government to provide regular procurement. Apart from hampering profitability, irregular
procurement and the stuck money often lead to huge problems for poor beneficiaries who have to
procure food grains from open market at much higher cost. Moreover it also shows how financial
viability is negated by such negligence.
2180
2100
2203 2220
2350
1950
2000
2050
2100
2150
2200
2250
2300
2350
2400
Average Add. Procurement Cost Per Month (AAY+BPL)
Add. Procurement
Cost
28. 28
found the same thing in the case of AAY procurement. The following chart shows the
profitability figure if the issue of stuck money is sorted out and the money is adjusted towards
future procurement.
Profit/Loss if the stuck money is adjusted
The chart shows that Varsha and Chandramukhi VOs jumps into profit if the amount is adjusted,
whereas Radhakrishna, Puja and Rupa VOs remain in losses. It clearly shows that profits of
Varsha and Chandramukhi PDS is not greatly marred by weighing issues, whereas weighing
issues look grave in other three cases. The study again tried to figure out the profitability once
the weighing issues are sorted out. It gives the figure that is pleasantly surprising to eyes. All
VOs jumps into profit once the weighing issues and losses incurred on account of that are ruled
out. The chart below shows how the profitability emerges for each PDS if the issues of stuck
money and weight loss are addressed.
-10431
25047
-38103
-26503
10682
-50000
-40000
-30000
-20000
-10000
0
10000
20000
30000
Profit/Loss
Profit/Loss
29. 29
7089
26887
16885
2977
10682
0
5000
10000
15000
20000
25000
30000
Profit/Loss
Profit/Loss
Profit/loss if the of stuck money is settled and weighing issues are addressed in absolute terms
Varsha PDS looks to post maximum profit (Rs26887) whereas Rupa PDS posts minimum profit
(Rs2977). But the bottom line is that each PDS jumps into profit if major issues at hand are
addressed properly.
After analyzing data for kerosene and food grains, the study has found that each VO PDS can be
financially viable if the weighing issues are sorted out. As far as the stuck money is concerned,
those will be adjusted in next few months and it will reflect in profitability numbers once the
amount is adjusted. The chart below shows the overall receipt-payment (both kerosene & grains)
status of each VO PDS as they stand as of now. The chart shows that Varsha VO PDS is ahead
of others in terms of receipt-payment ratio. But it does not mean that Varsha is the best
performing VO PDS because this receipt-payment chart has not taken into account the money
that is stuck with BSFC. In the discussion section, the author of the study will show how
financial viability can be ensured by addressing the two major issues through government
liasoning and proper monitoring by Jeevika fraternity.
30. 30
Overall receipt-payment (both kerosene & food grains) as they stand as of now
Food Security & Community Acceptance
VO PDS Vs Non-VO PDS
After analyzing the financial viability of VO PDS, the study tried to explore the acceptance of
VO PDS within the community. Apart from that, the study also tried to find out whether VO
PDS has been able to ensure better food security. A questionnaire was administered to VO
members after dividing them in two categories—those who are receiving grains and kerosene
from VO PDS and those who are receiving the same from non-VO PDS. It is to be noted that not
all VO members are beneficiaries of VO PDS because of their associations with different wards.
0
200000
400000
600000
800000
1000000
1200000
1400000
1019483
1236233
1045445 978504
1151999
926102
1176938
912579
820302
984096
Total Payment
Total Receipt
31. 31
11%
30%
59%
Ration Card Coupons Both
Since VO members belong to different wards, many of them find themselves in the beneficiary
list of non-VO PDS. Though it is unfortunate that not every VO member is taking benefits from
their own PDS, but it helped the study to assess the performance of the VO and non-VO PDS.
After analyzing the answers to the questionnaire, the study finds that the community acceptance
of VO PDS is very encouraging. Apart from this, VO PDS has been able to ensure greater food
security compared to non-VO PDS.
Availability of Ration Cards/Coupons
VO PDS Non-VO PDS
The data clearly suggest that higher number of VO PDS beneficiaries have ration cards
compared to non-VO PDS beneficiaries. In the absence of ration cards, VO members who are
taking benefits from non-VO PDS are being harassed by private dealers. In contrast, VO-
beneficiaries are having no such issues. Even if they don’t have ration card, they receive grains
and kerosene by showing coupons. But private dealers are sometimes harassing beneficiaries
even though they present their coupons.
14%
61%
25%
Ration Card Coupons Both
32. 32
81%
19%
Yes No
93%
7%
Yes No
63%
37%
2.75 Litre 2.5 Litre
35%
65%
2.5 litre 2 Litre
Whether beneficiaries receive kerosene regularly
The same question was asked to both VO PDS beneficiaries and non-beneficiaries. The answers
to the question show that VO PDS are much better than non-VO PDS. While 93 percent of VO
PDS beneficiaries are receiving kerosene regularly, the percentage is as low as 81 percent in the
case of non-VO PDS.
VO PDS Non-VO PDS
Quantity of Kerosene Received
When the question was asked as to how many litres of kerosene VO-PDS and Non-VO PDS
beneficiaries are receiving, the difference was easily visible. While 63% of VO PDS
beneficiaries said that they are receiving allocated quota of 2.75 litres, none of the non-VO PDS
beneficiaries told that they are receiving the allocated quota of 2.75 litres. Majority of non-VO
PDS beneficiaries told that they are receiving only 2 litres of kerosene.
VO PDS Non-VO PDS
33. 33
92%
8%
18 Rs Litre 20 Rs Litre
62%
18%
20%
Yes No Sometimes
0%
59%
41%
Yes No Sometimes
Rate at which beneficiaries are receiving kerosene
The study suggests that while majority of VO PDS beneficiaries (76%) are getting kerosene at
Rs17 per litre, 92 percent of non-VO PDS beneficiaries are receiving kerosene at Rs18 litre.
About 24 percent of the VO PDS beneficiaries are receiving kerosene at Rs 18 per litre. Most
surprisingly in certain cases, non-VO PDS beneficiaries have to pay as much as Rs20 for a litre
of kerosene. The data suggest that VO PDS beneficiaries are getting kerosene at better price in
majority of cases.
VO PDS Non-VO PDS
Whether beneficiaries receive rice regularly
The study found that majority of VO PDS beneficiaries (about 62%) are receiving rice regularly,
while majority of non-VO PDS beneficiaries (about 59%) told that they are not receiving rice
regularly. About 41% of non-VO PDS beneficiaries told that they sometimes receive rice. Again
the data suggest that VO beneficiaries are better placed when it comes to distribution of regular
rice.
VO PDS Non-VO PDS
76%
24%
17 Rs Litre 18 Rs Litre
34. 34
Quantity of rice received
When asked whether beneficiaries receive the allocated quota of rice, 100 percent of BPL VO
PDS beneficiaries told that they were receiving the allocated quota of 15 kg. In contrast only 83
percent of non-VO PDS beneficiaries told that they are receiving the allocated quota of 15 kg.
When the same question was asked to AAY beneficiaries, 62 percent of VO PDS beneficiaries
told that they received the allocated quota of 21 kg. In contrast, only 22 percent of AAY non-VO
PDS beneficiaries told that they were receiving the allocated quota of 21 kg. The data again
suggest better services offered by VO PDS.
Whether beneficiaries receive regular wheat
None of the VO PDS beneficiaries and non-VO PDS beneficiaries was satisfied with the
distribution of wheat. The primary reason for this irregular supply of wheat is that BSFC go-
downs were not receiving wheat since August 2012. When BSFC officials were contacted to
know about the issue, they said that there have been certain issues in procurement and the same
will be sorted out. Due to this irregular supply of wheat, poor beneficiaries have to purchase
wheat from open market at much higher prices. Majority of AAY VO PDS beneficiaries (75%)
told that they were getting the allocated quota of 14 kg (whenever procurement is done), whereas
only 22 percent of AAY non-VO PDS beneficiaries told that they were receiving the allocated
quota of 14 kg.
Whether the functionaries of VO PDS and non-VO PDS behave rudely with beneficiaries
While 33 percent of VO PDS beneficiaries were not satisfied with the behavior of PDS
functionaries, 77 percent of non-VO PDS beneficiaries were grossly dissatisfied with the rude
behavior of non-VO PDS functionaries. There were at least 67 percent of VO PDS beneficiaries
who were satisfied with the behavior. In contrast, there were very few (only 28%) satisfied non-
VO PDS beneficiaries.
How has been the experience of beneficiaries with VO PDS when compared to non-VO PDS.
This question was asked to only VO PDS beneficiaries who were earlier receiving rations and
kerosene from private dealers before Jeevika VO PDS came into existence. Answers given by
the respondents suggest that there has been very high acceptance of VO PDS. About 64 percent
of the beneficiaries told that the experience with Jeevika VO PDS has been good. About 13
percent of the beneficiaries told that experience has been better but they hope for greater
improvement in future. The data clearly hint at higher satisfaction level among beneficiaries.
35. 35
Experience with VO PDS compared to Non-VO PDS
Apart from above questions, respondents were asked other questions as well to assess the
acceptance level. Some of the questions that were asked are listed below.
How many days does it take to receive commodity from PDS after procurement from
BSFC
For how many days FPS remains open during distribution
If beneficiaries are unable to visit FPS during normal distribution days, do they receive
their quota later
For how many hours your FPS remains open during distribution
Do dealers/VO members inform whenever procurement is done
Answers to these questions also suggest that VO PDS are doing much better than the non-VO
PDS. While majority of VO PDS beneficiaries told that it took them maximum of 2 days to
procure grains & kerosene, non-VO PDS beneficiaries told that it took them 4 days to procure
grains and kerosene. While majority of VO PDS beneficiaries reported that PDS shops are open
for at least six days during distribution, non-VO PDS beneficiaries reported that PDS shops are
open for at least 3 days during distribution. Compared to non-VO PDS beneficiaries (6.5%),
higher percentage (27%) of VO beneficiaries reported that they received the missed quota at
some point of time. According to VO PDS beneficiaries, PDS shops remained open for 7 hours
during distribution. In contrast, non-VO PDS beneficiaries reported that PDS shops remain
opened for only 5-6 hours in majority of cases. While 64 percent of VO PDS beneficiaries told
that PDS functionaries informed them about procurement, only 8.3 percent of non-VO
23%
64%
13%
Chart Title
Better Good Better, but needs more improvement
36. 36
beneficiaries said so. Answers to the questionnaire clearly suggest higher acceptance of VO PDS
among beneficiaries. It also suggests that VO PDS better addresses the food security problems.
Findings & Discussion
The study suggests that VO PDS is financially viable and address the food security problems in a
much better way than the non-VO PDS. The study also found some of the major issues faced by
all five VO PDS that are hampering the financially viability and efficacy of VO PDS. Substantial
gap was noticed between payment of money by VO PDS and receipt of SIO and subsequent
procurement. The chart below will show the time lag noticed between receipt of pay-in-slip and
SIO and subsequent procurement. This is the main reason why so much of VO money is locked
with BSFC.
Time difference (Pay-in slip, SIO, and Procurement)
Since larger amount is always locked with BSFC, VO PDS have to forego procurements for few
months in the absence of money. It proves to be one of the biggest obstacles to ensuring food
security. Moreover, VO is also losing the interest of 1 percent that the VO would have received
on the stuck amount. Since there is no separate fund for PDS, VOs are deploying the money of
some other funds toward PDS procurement. Normally the money is used to provide loans to
beneficiaries. If such money is locked with BSFC, VO is losing on two counts—they are not
getting benefits from procurement and secondly VOs are also being deprived of one percent of
41 40
45
47
38
0
5
10
15
20
25
30
35
40
45
50
Difference Bw Payment &
SIO
Difference Bw SIO &
Procurement
37. 37
interest that the money would have otherwise fetched. The following table will show how much
interest VO is losing due to locked money.
Name of VO PDS Money Locked in BSFC VO Losing Interest each
month
Radhakrishna 95520 955.20
Varsha 85320 853.20
Pooja 77565 775.65
Rupa 123749 1237.49
Chandramukhi 185698 1856.98
If the issue of locked money is addressed through government liasoning, it will help VO PDS
achieve greater financial viability. The author of the study tried to address the issue through govt.
liasoning and was quite successful in doing so. The author of the study along with Jeevika
officials of Purnea district held several meetings with marketing officer (MO) Dhanushdhar Jha
and addressed the issue to a greater extent. After several rounds of talks, the stuck money of
every VO has been adjusted and VOs will receive future procurements without making any
payment till all the stuck money is adjusted. The result will show in financial figures in next six
months. MO has also ensured that time lag between payment of money and procurement will be
taken care of soon. In fact the time lag for the month of July has reduced substantially.
The availability of beneficiary list is another issue faced by all VOs. None of the VO PDS has
received updated beneficiary list. In the absence of beneficiary list, it is very difficult to verify
the authencity of people who are procuring the ration and the kerosene. It is very important to
have the updated beneficiary list with each VO PDS, else it will create issues going forward.
There is no roaster for procurement. It leads to waste of time and money for VO PDS
functionaries. In the harvesting season like the one when the study was conducted, PDS
functionaries cannot afford to make several visits to govt. offices to know about procurement.
Every visit made by functionaries to govt. offices leads to loss of income. It needs to be looked
into.
The author of the study tried to address the issues of beneficiary list and procurement roaster
through govt. liasoning. The MO has assured that each VO PDS will soon receive the beneficiary
list and there will be one fixed date of procurement for all VO PDS. In all probability, VO PDS
will be able to do procurement on 20th
of each month. It will save lots of money and time for VO
PDS functionaries. Moreover, VO functionaries can also exert pressure on BSFC go-down
manager to provide food grains in exact quantity. This can be possible because functionaries of
each VO will assemble on procurement date and can raise greater protest if they receive gunny
bags of grains short in quantity. Each VO PDS has submitted fresh application for the issue of
38. 38
beneficiary list and the MO has assured that the list will be provided to each VO PDS. BPIU,
Banmankhi will also receive the beneficiary list.
The study shows that weighing issues at procurement stage is one of the major issues hampering
the profitability of each VO PDS. Rupa and Puja VO PDS have shown that losses are mainly on
account of lesser quantity received from BSFC. Functionaries of Chandramukhi, Radhakrishna,
and Varsha PDS have also raised the issue, but the cases of Rupa and Puja VO PDS are different
and the study finds that book-keepers and office bearers of Puja and Rupa VO PDS are trying to
camouflage the malpractices under the garb of weighing issues. Jeevika officials need to look
into the cases of Rupa and Puja VO PDS to go into the root of the issue so that necessary actions
can be taken against those who are responsible for the malpractices. Nonetheless, the weighing
issue remains the major concern of VO PDS. The study found that even Jeevika officials know
about weighing malpractices hampering the profitability, but they believe that nothing can be
done in this regard. This issue needs to be taken up at the higher level so that the issue can be
VO PDS Weighing issues: The role of BSFC and Shubh Lakshmi Dharma Kanta
The cases of Radhakrishna and Puja VO PDS highlight how BSFC staff are
indulging in weighing malpractices with the help of staff of Shubh Lakshmi
Dharam Kanta in Banmankhi. First thing is that BSFC go-down managers don’t
allow weighing of gunny bags at the go-down. They insist on getting the weight
at the nearby dharam kanta. Staff of dharam kanta and BSFC staff have already
some agreement to match the weight of grains with the weight that appears on
the SIO whenever VO PDS staff take the tractor to dharam kanta for weighing.
During the two procurements for Rdhakrishna VO PDS and Puja VO PDS, the
study found that dharam kanta weight matched with the weight given on the
SIOs of respective PDS. When the author of the study weighed the gunny bags
randomly at the distribution centers of both VO PDS, each bag was found to be
short by at least by 5-7 kg in the case of Readhakrishna. In the case of Puja VO
PDS, randomly selected gunny bags contained grains short by at least 4-6 kg.
The table below will help to understand these two cases.
VO PDS
Empty
Tractor
Weight
Weight of
grains as
per SIO
Combined
Weight
(empty
tractor
+grains)
Weight
matches
or shows
extra
quantity
Shortage
found in
randomly
selected
bags.
Radhakrishna 2850 7335 10185 10220 5-7 Kg
Puja 2840 10080 12920 12922 4-6 kg
39. 39
sorted out at the earliest.
The study earlier highlighted how some of the VO members are not able to take benefits from
their VO PDS. During the study, many VO members urged to take steps so that their names
could be included in the beneficiary list of their respective VO PDS so that advantages could also
accrue to them. This issue arises because beneficiary lists are made by clubbing certain wards
and if the VO members don’t belong to the wards covered by their respective VO PDS, their
names won’t appear in the beneficiary list.
The author of the study along with Jeevika officials tried to address the issue through govt.
liasoning. When the weighing issues were taken up with MO and the BSFC staff and officials,
they were reluctant to believe that such malpractices are happening. The request to weigh gunny
bags at the go-down was also rejected by go-down managers citing feasibility issues. Since this
issue is of paramount importance for successful operations of VO PDS, the same needs to be
taken care of at higher management level. MO has however assured to address the issue of
universal coverage of VO members within their respective VO PDS. It will be done through
ward realignment. The MO has asked for the list of VO beneficiaries to see the ward numbers to
which VO members belong. After sorting the list, VO PDS will cater to the wards to which its
members belong. This ward realignment will ensure the universal coverage of VO members
within their respective VO PDS.
The study also found that book-keepers are not properly trained and PDS accounts are ill
maintained. Only Chandramukhi VO PDS has been able to manage accounts to some extent.
With the distribution of new ration and kerosene coupons recently, new issues have emerged.
Radhakrishna VO PDS has 250 BPL beneficiaries and 31 AAY beneficiaries. But when coupons
were distributed, 200 beneficiaries received BPL coupons whereas 81 beneficiaries got AAY
coupons. It will create huge problems in distribution leading to discontent among beneficiaries.
Problems could be the same with other VO PDS as well once the beneficiaries get their coupons.
Puja and Rupa VO PDS: A cause of concern
There is huge problem with Puja and Rupa PDS because they have reported
substantial shortage of grains and kerosene hampering the profitability. This
needs to be looked into. They reported breaking of kerosene containers.
Interestingly no other VO PDS cited this. Huge quantity of rice is lying at both PDS
shops owing to quality issues. Nothing has been done for the last 10 months to
replace or return the rice. When the author of this study contacted the book-
keepers of the concerned VO PDS, he cited an interesting reason for the loss
reported by these two PDS. He says that whenever stock of grains and kerosene is
40. 40
left, officer bearers distribute those among themselves. Though it is hard to
believe, but still deserves attention if the case is such. Since Puja and Rupa VO
PDS are far away from the BPIU, Banmankhi, there is no adequate observance by
Jeevika officials.
The findings of the study suggest that Jeevika VO addresses the problem of food security to
greater extent. Beneficiaries have been able to receive adequate quantity of grains and kerosene.
Prices paid by VO PDS beneficiaries are relatively accurate in line with govt. price guidance.
Supply of wheat has been the major issue, but this is not the VO specific problem. The supply of
wheat has been regularized from the month of July 2013. Beneficiaries are satisfied with VO
PDS operations and behavior of VO PDS functionaries. Acceptance of the VO PDS can be
gauged from the fact that non-VO PDS beneficiaries are making several requests for inclusion
within VO PDS. Moreover, due to VO PDS performance in terms of services, VO members are
creating pressure on non-VO PDS dealers for supplying adequate quantity of kerosene and grains
at govt.-determined prices. These findings reached through questionnaire suggest that issues of
food security can be addressed through VO PDS expansion. Moreover, it will also ensure
economic and social empowerment of SHG members. The role of Jeevika VO PDS is going to
be important in future because of the food security ordinance that will come into force very soon.
If the issues at hand are sorted out, Jeevika VO PDS will be the best place to implement new
food security policies.
Jeevika VO-run PDS & Social & Economic Empowerment of Poor Village Women
The PDS initiative by Jeevika has been able to socially empower VO members and has the
potential to bring greater economic empowerment once the issues highlighted by the study are
addressed. How the PDS has led to greater social empowerment of VO members can be gauged
from the fact that VO members who were shying away from common village people are now
interacting with government and bank officials. They know how to transact businesses with
banks. Training sessions held at BPIU, Banmankhi, has helped them attain functional and
signature literacy. Almost each member of the VOs covered within the study has attained
functional and signature literacy. VO members are coming out of villages and interacting with
government officials and staff. The author of the study was pleasantly surprised to see VO
members dealing with official documents. Regular interactions with officials have done their
confidence a whole lot of goods. Capacity building through regular trainings on FPS
management, procurement and distribution has also opened pandora box of job opportunities for
them. Some of VO members, after being trained, are also working in private offices as office
assistants located in Banmankhi block and are earning extra money. Sushila Devi and Geeta
Devi, officer bearers of Rupa and Puja VOs respectively, are also working in two different
offices of non-banking financial companies (NBFCs) as support staff, and are earning additional
money. Resultantly, they are able to fulfill their aspirations of sending their children to well-
41. 41
4.38
4.89
5.32
4.00 4.23
0.00
1.00
2.00
3.00
4.00
5.00
6.00
Net Profit in
Percentage
Net Profit in
Percentage
known private schools in Purnea. Not only that, the extra income has also helped them raise their
standard of living. It shows that VO PDS intervention has not only socially empowered VO
members, but has also helped them fulfill their aspirations. Moreover, social capital created in
the form of social relationship and community cadres speaks volume of the success of this
intervention.
Apart from socially empowering village women, VO PDS has the potential of generating
significant amount of money if all the operations are streamlined. After analyzing the data from
each PDS, the study found that each VO PDS can generate monthly profit of at least 4-5 percent
that is much higher than the normal interest that VO will gain by loaning the amount to
members. It will significantly add to the pool of funds that can be used for benefiting VO
members in many ways. The data show that Radhakrsihna VO can generate the monthly profit of
Rs2849 on the average investment of Rs65075. The monthly profit translates to yearly profit of
Rs34188 for Radhhakrishna VO. Following charts will show the profits from PDS operations
from each VO both in terms of monthly profit and percentage gains.
Monthly profits from investment
The study shows that PDS operations are financially viable and each VO PDS can gain
substantially from the operations. If the profits are calculated in annual terms, each VO PDS will
post the profit in the range of 32000-52000. This money can be utilized for many livelihood
promotions of VO members and they can fulfill their aspirations.
65075
80819 80924
6796571001
2849 3956 4302 2717 3002
0
10000
20000
30000
40000
50000
60000
70000
80000
90000
Total
Investment
Net Profit
42. 42
Direct Cash Transfer (DCT), Food Security Ordinance, & the Future of Jeevika VO-run PDS.
Recently there has been much talk about DCT as one of the solutions to the prevalent
malpractices in PDS. The magnitude of PDS troubles can be gauged from the fact that the
Planning Commission, in an estimate, had once said that 58 per cent of subsidized food grain
does not reach the intended beneficiaries, while another estimate maintains that 36 per cent is
simply siphoned off the supply chain. Those who favor DCT maintain that prevailing PDS
operations are so complex that it is impossible to weed out irregularities and corruption at
different stages of supply and demand chains. The government of Delhi had implemented the
DCT on pilot basis in 2011. The pilot project funded by the UNDP aimed at testing the viability
of giving food subsidy to BPL beneficiaries at the Raghubir Nagar region of New Delhi. The
scheme was inspired by similar such efforts in South America, particularly Brazil's Bolsa
Familia programme, which was fairly successful. Similar cash transfer schemes have been tried
out in other parts of the country in the past decade, notably the centrally funded Dhanalakshmi
programme being implemented in some of the states since 2008, which provides cash to families
against evidence that they have been taking good care of their girl children -immunizing them,
sending them to school and so forth. 3
The question arises whether PDS should be abandoned only due to its deficiencies or corrective
measures need to be taken. The second choice looks more rational because the DCT is not as
simple as it looks. It also comes with many complexities and has the potential to lead to
problems of even higher magnitude. The first issue is that when the amount is transferred to
beneficiaries’ bank accounts, it does not necessarily mean that they will necessarily buy the food
grains from the money. The money could also be utilized for purposes other than buying food
grains. In certain cases, males could have higher control over received money through DCT and
they can use the money for other purposes. The point is that the purpose of food security might
not be addressed through it in some of the cases. It is also important to understand the devaluing
effect of inflation or the role of intra-household dynamics when it comes to cash transfers. DCT
would also lead to issues related to procurement. It is very difficult to understand what would
happen to the agricultural commodities that are procured by the Food Corporation of India (FCI).
There will be huge issue with the procurement that the govt. makes each year. In the absence of
adequate procurement by government, farmers will be inclined not to produce more. It will lead
to inadequate supply of food grains and will also encourage hoarding. These issues combined
together will propel the food grain prices in the market. Consequently, beneficiaries will find
very difficult to purchase food from open market. In the present scenario, DCT approach to food
security looks premature in the context.
Instead of resorting to DCT, existing PDS need to be streamlined so as to make it more
transparent. The accountability factor that is missing presently need to be reinforced. Initiatives
such as Jeevika VO-run PDS have the potential to address the issues of food security in much
better way than the traditional FPSs. The outreach of Jeevika VO PDS to maximum people will
ensure that the objectives of the PDS are met. The acceptability of Jeevika VO PDS among VO
and non-VO beneficiaries is amazing because it holds the promise of greater food security.
3
http://businesstoday.intoday.in/story/cash-transfer-programme-lieu-of-subsidised-foodgrain/1/186383.html
43. 43
In the wake of the NFSO promulgated recently, the role of Jeevika VO-run PDS becomes very
important. Jeevika VO-run PDS has the potential to ensure the fulfillment of the objectives of the
food security ordinance. The NFSO, with a special focus on the needs of the poorest of the poor,
women and children, provides for grievance redressal mechanism and penalty for non-
compliance by public servants or any authority. The NFSO gives right to subsidized food grain
to 67 percent of India’s 1.2 billion people, and promises to ensure food and nutritional security.
Up to 75 percent of the rural population and up to 50 percent of the urban population will have
uniform entitlement of five kg food grain per month, at highly subsidized prices of Rs.3, Rs.2,
Rs.1 per kg for rice, wheat and coarse grains, respectively.
There is a special focus on nutritional support to women and children. Pregnant women and
lactating mothers, besides being entitled to nutritious meals as per the prescribed nutritional
norms, will also receive maternity benefit of at least Rs.6,000 for six months. Children in the age
group of six months to 14 years will be entitled to take home ration or hot cooked food, as per
prescribed nutritional norms. The ordinance also contains provisions for reforms in the Public
Distribution System (PDS) through doorstep delivery of food grain, application of information
and communication technology (ICT) including end-to-end computerization, leveraging
'Aadhaar' for unique identification of beneficiaries, diversification of commodities under the
Targeted PDS (TPDS) for effective implementation of the ordinance. 4
Jeevika VOs can act as the implementation unit of various provisions of the NFSO. The
provisions like nutritional support, doorstep delivery of food grains, and nutritional cooked food
for children can be easily implemented by community institutions like Jeevika VO. Since the
Jeevika project will be expanded in near future, one can expect increase in the outreach of VO
PDS. To sum up, VO PDS looks financial viable and it address the issues of food security to
greater extent. Apart from this, social and economic empowerments of VO members are also
ensured through VO PDS. The acceptance of VO PDS among village community is higher than
the non-VO PDS. Jeevika model of VO PDS has the potential of replicability and scalability of
larger scale especially in the wake of the NFSO. Having said all this, the study still sees certain
scope of improvement suggestions for which appear below.
Suggestions & Recommendations
There is a need to form a full-fledged PDS committee mention of which is
given in VO PDS guidelines.
One member of VO PDS has to be made solely accountable for all lapses.
There has to be proper coordination between CCs, ACs and VO office
bearers.
There has to be separate fund for PDS to ensure continued procurement. It
will ensure food security.
Book-keepers should be properly trained to maintain PDS accounts.
4
http://india.nydailynews.com/newsarticle/149b9b96803c65c40cd42bd21c60010e/national-food-security-
ordinance-salient-points
44. 44
VOs have to be continuously and regularly trained on FPS management,
procurement & distribution of ration/kerosene, accounts/books/records-
keeping, financial literacy, regulatory compliances, coupons’ management,
handling issues of ration cards/coupons, and problem solving at the field
level as well as at the govt. officials level.
There has to be a separate cashbook for PDS for proper accounting.
Sales, stock, and cash registers have to be closed on daily basis during
procurement and need to be verified by Jeevika officials occasionally.
The study realizes the need to have one CC who will solely look after PDS
operations right from procurement to distribution. It will also work as a vigil
and act as a deterrent to any malpractices at VO PDS.
There is no incentive for Jeevika employees for looking after PDS. Jeevika
employees’ role in PDS operations are not accounted in their performances
and therefore they are least interested in devoting time to PDS. The study
suggests Jeevika employees’ contribution toward PDS operation be
accounted in their performance appraisal.
There has to be some incentive provision for VO members involved in
distribution and procurement. One solution could be to allow associated
SHGs to take responsibility of procurement and distribution on rotational
basis. Certain percentage of VO PDS profits may go to the SHG that will
make procurement and distribution for particular month.
Book-keepers’ role should be limited to accounting and VO members
should be properly trained to manage PDS operations. There has not to be
any role of book-keepers in distribution. It will ensure fairness in
distribution and also lead to reduction in malpractices at distribution level.
Area Coordinators (ACs) should make periodic visit to PDS (It is lacking at
the moment)
There is a need to have one electronic weighing machine at each VO. VO
members can also carry this on tractor at the time of procurement. It will
create some pressure on go-down managers. Moreover, it will also help
them easily weigh each bag to find the exact shortage before distribution.
Since VO PDS is a food security intervention, expansion of operations will
ensure greater food security, especially in the wake recent food security
ordinance that will be implemented soon. Jeevika VO PDS can work
wonders as the implementation unit of the new food security ordinance.
VOs have to be in proper communication network with the concerned govt.
offices so that members could directly access all kind of updated
45. 45
information in real time and could take appropriate decisions accordingly.
There has to be feedback mechanism system too under this communication
network so that in case of any issues /problems, VO members could
approach the concerned officials directly and get their grievances
redressed.
As the concept of PDS being run by SHGs is totally novel, liaising with
concerned govt. offices is the need of the hour. JEEVIKA, in its facilitating
role, has to ensure frequent interactions of members with concerned govt.
officials so that pragmatism could prevail and the mutual mistrust vanishes.
Therefore, workshops have to be conducted on regular basis.
There has to be performance parameters at the FPS level and at the
facilitating level for CCs /ACs. For this purpose, a proper monitoring and
evaluation system has to be designed and put in place. Based on
monitoring & evaluation (M & E) reports, corrective steps could be taken
on time. This will help in streamlining PDS running by VOs.
Limitations & Constraints of the Study
Though every care has been taken in collecting financial data, poor upkeep of records by book-
keepers led to enormous delay in data collection. It was difficult to fetch the entire data owing to
unavailability of certain records and poor maintenance of books of records. Due to busy
harvesting season, the author of the study could administer questionnaire to only 20 percent of
beneficiaries instead of 30 percent of beneficiaries. Due to the time constraint and busy
harvesting season, the study could not include non-VO beneficiaries (beneficiaries who are not
the members of VO). The district and block teams are burdened with host of other works under
different themes. PDS occupies just a small part in their roles and responsibilities. Additionally,
this is the most complicated programme of the government where multiple government
offices/departments are involved at different levels of the delivery channel. So, it’s very difficult
to accord priorities to PDS on part of the DPCU and BPIU particularly when they have multiple
tasks in hand. Because of this the author of the study had to face some problems striking co-
ordination with the district/block teams. It’s generally difficult to attend all VO meetings on
scheduled dates. So, the author through the concerned CC/AC convinced members to convene
meetings. However, because of their own pre-scheduled works, VO members often came in very
low numbers to attend meetings. This has the potential to skew the findings of the study. In some
of the meetings, the attendance of members was very thin (35-55%). It’s not easy to catch hold
of govt. officials in their offices because of their busy schedules. This does consume time and
energy. In some cases, the author had to return from the govt. offices without meeting concerned
46. 46
officials. In some cases, the author found that the officials tried try to evade few important
queries. The findings of the study are entirely based on the views of VO members who are taking
benefits either from VO PDS or Non-VO PDS. These limitations and constraints can have some
bearing on the findings of the study.
References:
1. http://bihar.ozg.in/2010/01/public-hearing-on-public-distribution.html
2. http://articles.timesofindia.indiatimes.com/2011-04-19/patna/29446535_1_literacy-rate-
purnia-males
3. http://www.im4change.org/news-alert/justice-wadhwa-committee-slams-the-pds-
1759.html
4. http://www.im4change.org/news-alert/justice-wadhwa-committee-slams-the-pds-
1759.html
5. http://www.kartiklokhande.blogspot.in/2013/01/wadhwa-committee-recommends-abolishing.htm
6. http://businesstoday.intoday.in/story/cash-transfer-programme-lieu-of-subsidised
foodgrain/1/186383.html
