Parliamentary Standing Committee on Decentralized Procurement Scheme (DCP)

Context:

The Parliamentary Standing Committee on Food, Consumer Affairs and Public Distribution (Standing Committee) flagged the only 23 states have implemented the Decentralized Procurement Scheme (DCP) so far — 15 to procure rice and eight to procure wheat — despite the scheme being in place for 23 years.  

Relevance:

GS-III: Agriculture (Public Distribution System PDS, Buffer Stocks & Food Security, Government Policies & Interventions)

Dimensions of the Article:

1. Decentralized Procurement System (DCP)
2. States implementing DCP
3. Public Distribution System (PDS)
4. How PDS System Functions?

Decentralized Procurement System (DCP)

• The scheme of Decentralized Procurement of foodgrains was introduced by the Government in 1997-98 with a view to enhancing the efficiency of procurement and PDS and encouraging local procurement to the maximum extent thereby extending the benefits of MSP to local farmers as well as to save on transit costs. 
• This also enables procurement of foodgrains more suited to the local taste.Under this scheme, the State Government itself undertakes direct purchase of paddy/rice and wheat and also stores and distributes these foodgrains under NFSA and other welfare schemes.
• The Central Government undertakes to meet the entire expenditure incurred by the State Governments on the procurement operations as per the approved costing.
• The Central Government also monitors the quality of foodgrains procured under the scheme and reviews the arrangements made to ensure that the procurement operations are carried smoothly.

States which are under DCP system (as of August 2021)

Public distribution system (PDS)

• The Public distribution system (PDS) is an Indian food Security System established under the Ministry of Consumer Affairs, Food, and Public Distribution.
• PDS evolved as a system of management of scarcity through distribution of food grains at affordable prices.
• PDS is operated under the joint responsibility of the Central and the State Governments. 
• The Central Government, through Food Corporation of India (FCI), has assumed the responsibility for procurement, storage, transportation and bulk allocation of food grains to the State Governments.
• The operational responsibilities including allocation within the State, identification of eligible families, issue of Ration Cards and supervision of the functioning of Fair Price Shops (FPSs) etc., rest with the State Governments.
• Under the PDS, presently the commodities namely wheat, rice, sugar and kerosene are being allocated to the States/UTs for distribution. Some States/UTs also distribute additional items of mass consumption through the PDS outlets such as pulses, edible oils, iodized salt, spices, etc.

How PDS system functions?

• The Central and State Governments share responsibilities in order to provide food grains to the identified beneficiaries.
• The centre procures food grains from farmers at a minimum support price (MSP) and sells it to states at central issue prices. It is responsible for transporting the grains to godowns in each state.
• States bear the responsibility of transporting food grains from these godowns to each fair price shop (ration shop), where the beneficiary buys the food grains at the lower central issue price. Many states further subsidise the price of food grains before selling it to beneficiaries.

Role of Aadhar In PDS: 

• Integrating Aadhar with TPDS will help in better identification of beneficiaries and address the problem of inclusion and exclusion errors. According to a study by the Unique Identification Authority of India, using Aadhaar with TPDS would help eliminate duplicate and ghost (fake) beneficiaries, and make identification of beneficiaries more accurate.

Technology-based reforms of TPDS implemented by states:

• Wadhwa Committee, appointed by the Supreme court, found that certain states had implemented computerisation and other technology-based reforms to TPDS. Technology-based reforms helped plug leakages of food grains during TPDS.
• Tamil Nadu implements a universal PDS, such that every household is entitled to subsidised food grains.
• States such as Chhattisgarh and Madhya Pradesh have implemented IT measures to streamline TPDS, through the digitisation of ration cards, the use of GPS tracking of delivery, and the use of SMS based monitoring by citizens.

-Source: Down to Earth Magazine