Study of supply chain ineffeciencies in PDS Bangalore, Karnataka

Abstract

The Aim of the project was to analyze supply chain activities of Public Distribution System (PDS) in Bangalore, Karnataka and suggest improvements to reduce diversions resulting in loss of quantity actually delivered to the consumers. The need of the project was derived as PDS is one of the major government subsidy mechanisms of serving the socially challenged populace, it is extremely essential to eliminate these avoidable diversions. At the same time, there are certain states within the country which have successfully streamlined their PDS and are experiencing positive inclusive effects. For instance, Tamilnadu and Chhattisgarh have successfully upgraded their PDS channels to meet demand of BPL population with extremely high service levels while Bihar and Jharkhand are still reeling under inefficient systems. Thus, there is need to look upon key success drivers for PDS in successful states and replicate them in their struggling counterparts. We studied the demographic and economic features of Bangalore along with detailed analysis of the each of the stakeholders within the PDS. An effort was made to analyze strategically the fit of PDS ecosystem within the Bangalore context, identification and study of zone split up of the entire district. Thus, given the constraint of access to other district centres, the focus of project was limited to these four urban zones only. The project covered all strategic as well as tactical policies of PDS in Bangalore Urban district only. Based on our secondary research the main entities involved in the supply chain of PDS in Karnataka are Food Corporation of India (FCI), Karnataka Food and Civil Supplies Corporation (KFCS), Taluk Agricultural Produce Cooperative Marketing Societies (TAPCMS) and Fair price shops (FPS). Distribution machinery allocation study was done so as to get information about allotment criteria as defined in the legislation for awarding licenses to operate a wholesale shop, Fair Price Shop and transporting agency. As one of the major subsidy expenses of the government, the aim of PDS is to ensure food security of the marginal class of people in the society. While there is an uniform criteria described by the national planning commission for the identification of these sections, states have been granted an autonomy to define their own criteria based on socio-economic conditions prevailing in the state. There are generally three categories of people identified within Karnataka as the beneficiaries: • APL: - Above Poverty Line. • BPL: - Below Poverty Line. • AAY: - Anantodaya Anna Yojana. It is the responsibility of the state governments/union territories to identify the BPL as well as AAY sections of people and allocate ration cards to them. Traditionally, the ration cards are the conventional copy books types wherein the family details as well as other income, professional and demographic details of the individual are enlisted. However, given the spurt of findings in the bogus as well as long time temporary card bearers in the country, the transition has slowly begun towards using biometric ration cards. The city of Bangalore has successfully implemented allocation of 100% biometric ration cards to all the BPL and AAY populace resulting in significant reduction in the bogus cards as well as malpractices. Likewise, it has led to improvement in the efficiency of the PDS system with delivery and the benefits actually reaching out to the neediest. In order to understand day-to-day operations of the FPS shops, a field visit was conducted in the North Bangalore zone, Nandini layout with the help of Center for advocacy and research (CFAR). Likewise, an overview of FPS in Shanthi nagar region and Yeshwantpura regions was obtained from the Civic NGO and Paraspara Trust respectively working in these areas on various social causes. An analysis of the findings from the field visit revealed a dark picture in sync with the concerns raised by the owners during the visit. It was observed that majority of the FPS shops are running in losses and are not economically viable. Thus based on the findings from our primary and secondary research we have come up with an incremental approach to reform which would consist of the present PDS model but with a host of improvements in the policy and implementation systems to increase efficiency from its present state.