National Food Security Act (NFSA) on the Public Distribution System (PDS) (GS Paper 2, Governance)
Context
- The National Food Security Act (NFSA) of 2013 aimed to overhaul the Public Distribution System (PDS) in India, addressing long-standing issues of inefficiency and leakage in food distribution.
- This article reviews the effects of NFSA on the PDS, highlighting improvements and persistent challenges.
Introduction
- The NFSA 2013 was introduced to tackle the inefficiencies in the PDS, which had a history of high leakage rates.
- Prior to NFSA, data from the National Sample Survey (NSS) indicated that 41.7% of food grains released by the Food Corporation of India (FCI) did not reach intended beneficiaries.
- The Act was designed to address these issues by expanding coverage and improving transparency.
Key Findings from Recent Data
Reduction in Leakages:
- Survey Results: Data from the Household Consumption Expenditure Survey (HCES) 2022-23, the first large-scale survey post-NFSA implementation, shows a reduction in PDS leakages to 22%. This figure represents a significant improvement from the previous 41.7% leakage rate.
- Measurement of Leakages: Leakages are calculated by comparing NSS data on household PDS purchases with the offtake data from the Monthly Food Grain Bulletin of the Food Ministry.
Factors Affecting Leakage Estimates:
- NFSA Provisions: Under NFSA, beneficiaries receive five kilograms of grain per person per month. Additionally, the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) provided extra relief during the COVID-19 pandemic.
- Variation in Estimates: Leakage estimates may vary depending on how offtake data is matched with NSS data.
Expansion of PDS Coverage:
- Increased Access: NFSA significantly expanded PDS coverage. In 2011-12, less than 50% of households had ration cards, and only about 40% accessed PDS. By 2022-23, HCES data indicated that 70% of households accessed PDS, largely due to NFSA.
- Coverage Gaps: Despite this expansion, the NFSA's full coverage mandate has not been met, with 59%-61% of beneficiaries accessing PDS as NFSA cardholders.
Impact of Early Reforms
States Leading the Way:
Chhattisgarh and Odisha: These states implemented PDS reforms early, resulting in significant leakage reductions by 2011-12. Reforms included:
- Reducing PDS prices.
- Ensuring doorstep delivery of food grains.
- Digitizing records.
- Deprivatizing PDS management.
Incorporation of Reforms: These successful strategies were later adopted nationally under NFSA, contributing to improved performance in other states by 2022-23.
Role of Aadhaar in PDS Improvements
Aadhaar-Based Authentication:
- Initial Improvements: While Aadhaar-based biometric authentication (ABBA) is often credited with improving PDS efficiency, surveys indicate that improvements in PDS leakages began before ABBA's implementation. For example, Jharkhand achieved leakage rates below 20% prior to ABBA.
- Impact of ABBA: Surveys from 2017 showed similar purchase-entitlement ratios in both ABBA-enabled and non-ABBA villages, suggesting that Aadhaar did not significantly alter leakage rates.
Counterintuitive Trends:
- Tamil Nadu: In Tamil Nadu, a state with a historically strong PDS, leakage estimates paradoxically increased from 12% in 2011-12 to 25% in 2022-23. This highlights that improvements in some areas were not uniform across all states.
Conclusion
- The NFSA has made significant strides in transforming the PDS into a more effective instrument of social policy, particularly during crises like the COVID-19 lockdowns.
- However, challenges remain, including the potential impact of new technologies and cash transfer experiments on PDS effectiveness.
- Overall, while the NFSA has improved PDS performance, continued attention to systemic issues and careful consideration of technological interventions are essential for ensuring sustainable food security.
