News Brief
India’s PDS Leakage Hits Rs 69,108 Crore, With 29 Per Cent Grains Missing Beneficiaries, Reveals ICRIER's Latest Study
India's Public Distribution System
A recent report by the Indian Council for Research on International Economic Relations (ICRIER) has unveiled a troubling inefficiency within India's Public Distribution System (PDS). Nearly 29 per cent of grains supplied by the Food Corporation of India (FCI) and state governments fail to reach the intended beneficiaries.
This massive shortfall translates into a staggering financial loss of Rs 69,108 crores, equivalent to approximately 20 million metric tons of rice and wheat.
Drawing from data collected through the Household Consumption Expenditure Survey (HCES) and FCI’s monthly offtake figures between August 2022 and July 2023, the report highlights that despite improvements, the leakage of subsidised grains remains substantial, causing both financial and logistical strain.
State wise data of PDS leakage shows that, North-eastern states Arunachal Pradesh, Nagaland, and Gujarat are the top three states in terms of PDS leakage. Meanwhile, in absolute quantity of grains leaked, Uttar Pradesh tops the list. The report attributes these shortfalls to the lack of digitization of distribution system as one of a consequential reasons for higher leakage in the north-eastern states.
On the other side, States like Bihar and West Bengal saw significant reductions in the PDS leakage in the past decade from 2011-12 to 2022-23. In Bihar, leakage dropped sharply from 68.7 per cent to 19.2 per cent, whereas West Bengal achieved a decrease from 69.4 per cent to 9 per cent.
"Despite the implementation of digital tracking system, leakage persists, highlighting the need for not only improved monitoring but also structural reforms to address PDS corruption." the research report noted.
1. Improving the accuracy of targeting beneficiary and reducing the excessive coverage of current PDS, which would help reduce inclusion and exclusion errors.
2. Giving an alternative option of DBT to beneficiaries, which would minimize leakage and drastically reduce the administrative cost.
3. At least 10 per cent of the fair price shops shall be transformed into nutrition hubs by linking it with food coupons approach, which would minimize the possibility of fake or duplicate beneficiaries who might siphon off grain meant for needy.
Public distribution system of India is perhaps the largest in the world which caters to a population of more than 80 crores.
