Modi Government implements major PDS Reforms in 2015

The Government achieved significant mile stones in the reforms of PDS by making it more transparent and leak proof. During 2015, digitisation of ration cards completed in 29 States while it was just touching two- digits in the beginning of the year, 16 states even  stared online foodgrains allocations and online grievance redressal introduced in 26 states. Direct cash transfer of food subsidy to the beneficiaries started in Chandigarh and Puducherry in September this year.

Based on the recommendations of high level committee on restructuring of FCI, procurement policy for paddy modified to ensure reach of MSP operations to more farmers. Millers levy on rice was abolished. The Government also provided relief to the farmers during the year by relaxing procurement norms for their crops affected with the unprecedented rains and hailstorms.

Due to sustain efforts to facilitate payment of sugarcane arrears to the farmers, arrears came down to Rs. 5406.24 as on November 15, 2015 from Rs. 66,003 crore in the sugar season of 2014-15.

Highlights of other initiatives are:

Improving foodgrain management

• High level Committee under the chairmanship of Shanta Kumar, MP was constituted to make recommendations on re-structuring of FCI. Based on the recommendations of High Level Committee on restructuring of FCI, several measures have been initiated to improve the functioning of FCI and to bring in cost efficiency in its operations.
• Sustained efforts have resulted in significant reforms in TPDS. As a result by first week of December 2015,

-Digitisation of ration cards completed in 29 States/UTs, over 32 crore ration cards have been digitized and over 8.5 crore ration cards have been seeded with Aadhaar,

–Supply chain management implemented in 8 states/UTs.

–Online allocation of foodgrains implemented in 16 states/UTs.

– 56,146 FPS automated by installing ‘Point of Sale’device to swap the ration card.

–Toll free help lines installed in 32 States/UTs.

–Online grievance redressal implemented in 26 States/UTs

– Transparency portal to display all operations of TPDS launched in 27 States/UTs

• In the month of September, 2015, online formats for obtaining the information related to various aspects of implementation of TPDS in the States introduced.  The information is now available online. This has brought more transparency in implementation and facilitates quick decision making
• In order to check of leakage and diversions and to facilitate direct cash transfer of food subsidy to the beneficiaries, Government has notified “Cash Transfer of Food Subsidy Rules, 2015” on 21.08.2015 under the NFSA. These rules provide that DBT scheme will be implemented in a State/UT with the consent of the concerned State Government/UT Administration. Under the scheme, in lieu of foodgrains subsidy component will be credited to bank accounts of beneficiaries who will be free to buy foodgrains from anywhere in the market. For taking up this model, pre-requisites for the States/UTs would be to complete digitization of beneficiary data and seed Aadhaar and bank account details of beneficiaries. The scheme has been launched in Chandigarh and Puducherry in September, 2015. Dadra and Nagar Haveli, is also in full readiness for implementation of this pilot cash transfer/ DBT scheme.

• National Food Security Act in 24 States, at the end of one year after National Food Security Act, 2013 (NFSA) came into force, i.e, upto July, 2014, implementation of the Act had started in 11 States/UTs. Since then, 11 more States/UTs have joined NFSA the total number of States/UTs now implementing the Act is 23. Sikkim has also notified the implementation from Jan 2016, the number is going to increase to 24.
• To ensure that beneficiaries of the National Food Security Act get entitled foodgrains positively,rules for payment of food security allowance to the beneficiary in the case of non-delivery of foodgrains notified in January, 2015.
• The Central Government also decided to share 50% (75%  in the case of Hilly and difficult areas) of the cost of handling & transportation of foodgrains incurred by the states and the dealers’ margin so that it is not passed on to the beneficiaries and they get coarse grain Rs1/kg, wheat at Rs2/kg and rice at Rs 3/kg
• Department Food & PD’s ‘Group’ namely “Food Security” was opened @ myGov portal i.e.www.myGov.in for engaging with citizens by inviting their comments/suggestions on various issues from time to time. Under the said Group ‘Food Security’ a discussion thread namely ‘Improving the TPDS’ was opened for a period of one month during February, 2015. Suggestions /comments received from citizens have been shared with the States/UTs as well as within the Department for action for an improved TPDS.
• To bring all operations of FCI Godowns online and to check reported leakage, “Depot Online” system initiated and integrated security system is being set up in all sensitive depots.
• The Government of India approved approximately 111 lakh MT of wheat and 20 lakh MT of Grade-A rice for sale in the year 2015-16 under Open Market Sale Scheme (OMSS), out of which, 16.93 lakh MT of wheat and 0.40 lakh MT of Grade-A rice was sold by the end of Oct, 2015.
• As a result of progressive procurement policy of the Government, sufficient food grains are available in Central Pool Stocks of FCI. Stocks as on 01.12.2015 are 504.99 lakh MT, comprising 268.79 lakh MT wheat and 236.20 lakh MT rice.
• Besides 12 States/UTs already under Decentralised Procurement, Telangana became a new DCP State this year for procurement of rice. Andhra Pradesh & Punjab have also adopted this system partially during 2014-15 to improve the efficiency of foodgrains procurement and distribution operations.
• Adequate supply of foodgrains made using multi-modal transport in North Eastern States despite disruption in rail route due to gauge conversion from Lumding to Badarpur. 80,000MT foodgrains moved through roads every month besides creating additional storage of 20,000 MT in the region. Foodgrains also inducted into Tripura via riverine route passing through Bangladesh.
• 1, 03,636 MTs of Rice moved from Andhra Pradesh to Kerala for the first time through riverine/coastal movement.
• The Government revised the buffer norms in January, 2015 for better management of foodgrain stocks. During 2015-16 both storage and transit losses have been reduced to (-) 0.03% due to storage gain in wheat and 0.39% against MoU target of 0.15% and 0.42% respectively.
• 100 MT of rice sent to Myanmar to help the flood affected pocket near Manipur border.
• Storage capacity for central pool stocks of food grains increased to 796.08 lakh MT.
• New godowns having capacity of 10 lakh MT under Private Entrepreneur Guarantee Scheme (PEG) constructed in 20 States. Besides this storage capacity of 62,650 MT in North East under Plan Scheme and 1.78 lakh MT in 12 States added through CWC.
• The FCI has successfully completed the RFQ stage for construction of 6 silos of a total 2.5 lakhMT capacity at 6 different locations in the country- Changsari, Narela, Sahnewal, Kotkapura, Katihar and Whitefield on PPP model, for a modernized system of storage as also for bulk movement of foodgrains through specialized wagons which will help in maintaining the quality of foodgrains, minimize losses and ensure rapid movement of foodgrains.
• 590.41 lakh MT of foodgrains were allocated to States/UTs for distribution under TPDS and other Welfare Schemes during 2015-16 (upto 28.10.2015).
• The Central Warehousing Corporation (CWC) also achieved all time high turnover of Rs. 1562 crore in 2014-15 and added a record dividend payment of 54% to the Govt.
• A transformation plan for the Warehousing Development and Regulatory Authority (WDRA) has been initiated to streamline the warehousing sector. The work on for creation of IT platform and rewriting of rules and procedures has been initiated.

Relief to the farmers

• In order to give relief to the farmers affected by the unprecedented rains & hailstorms this year, Government relaxed Quality norms for the wheat procurement.  The Central Government decided to reimburse amount of value cut on such relaxation to the State Government so that farmers con get full Minimum Support Price (MSP) even for shrivelled and broken wheat grains or grains having lustre loss. Such a farmer’s centric step was taken first time by any Central Government.
• Govt. agencies procured 280.88 lakh MT wheat during RMS 2015-16, providing a saviour for the farmers affected by freak rains and hailstorm.

Millers levy on rice abolished

• To ensure payment of minimum support price to more paddy farmers, millers levy on rice abolished from October, 2015. This will save farmers from exploitation and now they will not depend on millers for selling their paddy.

• This initiative has improved delivery of MSP to the farmers for paddy even in the situation of market prices ruling below the MSP, especially in the states of Andhra Pradesh, Telangana, Uttar Pradesh and West Bengal, where the farmers are substantially dependent on millers for selling their paddy.

• During Kharif Marketing Season (KMS) 2013-14 only a quantity of 8.52 lakh MT of paddy had been purchased directly from the farmers by the State Agencies in unified Andhra Pradesh, but in KMS 2014-15, such direct purchase of paddy has gone upto 36.76 lakh MT in Andhra Pradesh and Telangana together. The reduction of levy in KMS 2014-15 has not resulted in any substantial reduction of overall procurement of rice in these two States till date compared to KMS 2013-14.

• Similarly in Uttar Pradesh, the procurement of paddy has gone up from 9.07 lakh MT in previous season to 18.18 lakh MT in current season and overall procurement of rice has gone up from 11.05 lakh MT of previous season to 16.10 lakh MT till April, 2015.

• In West Bengal also, the procurement of paddy has gone up from 5.79 lakh MT in previous season to 13.29 lakh MT in current season and overall procurement of rice has gone up from 8.27 lakh MT to 13.31 lakh MT till April, 2015

Outreach of MSP increased in eastern states for paddy farmers:

• In a bid to increase reach of minimum support price (MSP) operations to more farmers and increase procurement of paddy, a policy for engagement of private players in procurement in Eastern States has been formulated this year. Private firms have been allowed to procure paddy from farmers in a cluster, indentified by the respective state government in the states of Assam, Bihar, Eastern Uttar Pradesh, Jharkhand and West Bengal, where the Food Corporation of India (FCI) does not have a robust procurement mechanism which often forces farmers to go for distress sale. Private firms would deliver custom milled rice (CMR) at the FCI or state government-owned agency godowns. 

• FCI started procurement pulses from farmers at market price and also working on procurement plan for oilseeds to ensure MSP for farmers.

• In order to have better targeting of “other welfare schemes’ for poor, a committee of ministers set up under the chairmanship of Consumer Affairs, Food and Public Distribution. The Committee not only decided continuation of foodgrain allocation for other welfare schemes but also nutritional support by providing milk and eggs etc under the schemes.

• The drop in international prices of imported oils was affecting the prices of domestically produced edible oils consequent upon which farmers’ interests were affected. Department of Food and Public Distribution had recommended an increase in the import duty. Accordingly, the import duty on Crude oils increased from existing 7.5% to 12.5% and the import duty on refined oils from existing 15% to 20%. on 17.09.2015

Steps taken to liquidate cane price arrears of farmers

• The Government has taken several measures to facilitate payment of cane price arrears by infusing liquidity into the sector.

• To facilitate clearance of cane price arrears of the farmers,  a scheme for extending soft loans to the extent of Rs. 6000 crore to the sugar industry was notified on 23.6.2015. Rs 4047 crore have been disbursed under the scheme. The government also extend period by one year for achieving eligibility under the soft loan scheme and decided to bear the interest subvention cost to the extent of Rs. 600 crore for the extended period. This will extend benefits to larger number of farmers by enabling more mills to avail the benefits of the scheme. It has also been decided that after clearing cane dues of farmers, subsequent balance, if any, will be credited into the mill accounts. This will benefit about 150 additional sugar mills which had proactively liquidated more than 90 percent of their cane dues payable. This would ensure that mills are incentivized for arranging bridge finances for timely clearance of cane dues to farmers.
• Direct Subsidy to farmers, Government decided to pay a production linked subsidy of Rs 4.50 per quintal in 2015-16 seasons, to sugar mills to offset the cost of cane and facilitate timely payment of cane price dues of farmers for sugar season 2015-16. A notification in this regard issued on 2.12.2015. Funds released under the scheme shall be directly credited into farmers’ accounts.
• The export incentive on raw sugar has been increased from Rs 3200/MT to Rs. 4000/MT. Funds have been allocated to support 14 lac MT (LMT) of raw sugar exports as against 7.5 LMT achieved last year. In September 2015 Government also announced quotas for mills and co-operatives for mandatory exports of four million tonne of sugar in 2015-16.
• The Government has enhanced import duty on sugar from 25% to 40% to discourage imports. Also, to prevent leakages of sugar in the domestic markets, the export obligation period has been reduced from 18 months to 6 months under the Advanced Authorization Scheme.
• Blending targets under Ethanol Blending Programme scaled up from 5% to 10%.
• Remunerative prices for Ethanol supplied for blending have been increased to Rs. 49 per liter, a substantial increase over previous years. As a result, the supplies of ethanol for blending have increased from about 32 crore liters per year to 83 crore liters per annum. Excise duties on ethanol supplied for blending in the next sugar season has been waived, to further incentivize ethanol supplies for the blending program. This would further increase the ex mill price of ethanol and help improving liquidity in the industry facilitate payment of cane price arrears.
• In order to mobilized more funds for various intervention to facilitates liquidation of cane arrear, such as interest subvention based soft loans, export incentives  and production assistance, amendment in the Sugar Cess Act, 1982 introduce in the parliament.
• As a result of sustain efforts, the cane price arrears which were Rs. 66,003 crore in sugar season of 2014-15 came down to Rs. 5406.24 crore as on December 15, 2015.     

New provisions to promote quality of consumer products and services

• In order to ensure quality of products and services for common consumer, the Government introduced Bureau of Indian Standards Bill, 2015 in Parliament to replace 29 years- old BIS Act. The new Bill has been approved by Lok Sabha. In the new Bill provisions have been made for simpler self-certification mechanism, mandatory hallmarking, and product recall and product liability for better compliance to standards.
• More items concerning health, safety, environment, prevention of deceptive practices, security have been brought under the mandatory certification. Hallmarking of precious metal articles has been made compulsory. To improve “ ease of doing business”, simplified conformity assessment schemes, including self- certification and market surveillance instead of inspectors visiting factories introduced, thereby ending the inspector raj on standards.
• New provisions proposed will promote harmonious development of standardisation activities, enabling GoI to bring mandatory certifications regime for goods or service considered vital from viewpoint of health, safety, environment, and prevention of deceptive practices. Provision to prevent import of below par products, providing mandatory hallmarking of precious metal articles, increased scope of conformity assessment, and enhancement of penalties and implication of provisions in the Act. The new Bill has also made increased penal provisions for better and more effective compliance and compounding of offence for violations
• New Bill provides for recall, including product liability of products not conforming to relevant Indian Standards
• Registration for manufacturers of electronic products to safeguard consumer / industry against sub-standard imports provided.
• Under the Swacch Bharat Abhiyan, steps taken to formulate/upgrade standards on potable water, street food and garbage disposal.

Boost to consumer protection 

• Consumer Protection Bill 2015 that seeks to simplify and strengthen consumer grievance redressal procedure introduced in the Parliament this tear. Setting up of a Central Protection Authority which will have powers to recall products and initiate class suit against defaulting companies, including e-retailers proposed. E-filing and time bound admission of complaints in consumer courts is another important provision made in the Bill.

• Joint campaign organised with Heath, Financial Services and other departments for greater consumer awareness.  During the year the Department of Consumer Affairs intensified its multimedia campaign under the banner of Jago Grahak Jago.  With special emphasis on rural areas, tribal areas and North East, the campaign makes consumers aware of their rights/obligations.  Joint campaigns were organized with the Reserve Bank of India, the Ministry of Health and the Ministry of Finance to focus on specific issues of consumer interests.

• An inter-ministerial monitoring committee constituted for key sectors that matters to consumers viz Agriculture, Food, Healthcare, Housing, Financial Services and Transport, to facilitate policy coherence and coordinated action on consumer.

• To tackle the menace of misleading advertisement, a dedicated portal www.gama.gov launched. It enables consumers to register their grievances against misleading advertisements in six key sectors viz. food and agriculture, heath, education, real estate, transport and financial services have included for this purpose. The complaints lodged are taken up with the relevant authorities or the sector regulators and the consumer is informed after the action taken.

• To provide a host of consumer services under one roof, Grahak Suvidha Kendras launched in six locations: Ahmadabad, Bangalore, Jaipur, Kolkata, Patna and Delhi on March 18, 2015. Such centres will be set up in every State in phased manner.  They will provide guidance to consumers regarding consumer laws, the rights of the consumers, the procedure of approaching Consumer Courts and various other consumer related issues including quality assurance and safety of products.

Measures to ensure availability of essential food items at reasonable prices

In order to ensure availability of essential food items at reasonable prices the Government took flowing decisions recently:

•  5000 Tur imported, decision taken to import 10000 MT more pulses.
• Decision taken to procure 1.50 lakh MT of pulses for creating buffer stock. Export of edible oil in bulk is prohibited except coconut oil
• MSP increased for kharif pulse by Rs 275 per qtl for Tur & Urad, and by Rs 250 per qtl for Moong.
• Ban on export of all pulses, except Kabuli Chana; and Organic Pulses & lentils up to 10,000 MTs
• Zero import duty extended till 30^th September, 2016.
• States/ UT’s empowered to impose stock limits, on Onion and Pulses to check hoarding and black marketing under EC Act, 1955..
•  Other edible oil in branded consumer pack of up to 5kgs is permitted with MEP of USD 900 per MT w.e.f. 6.2.2015.