The Federation of Indian Chambers of Commerce and Industry (FICCI) wants the Centre to withdraw from grain procurement, storage and distribution under the Public Distribution System. Instead, it must “outsource” procurement and distribution to private operators, it says.

It favours ‘food stamps' rather than price subsidy for the Below Poverty Line (BPL) beneficiaries, under the PDS, based on the models adopted by some developed countries like the United States.

The scheme could be launched on a pilot basis to cover the 24.3-million beneficiaries of the Antyodaya Anna Yojna, the FICCI says.

In a study of revamping the PDS, which was released here on Saturday, FICCI suggests that the issuance of ‘food stamps' should go with compulsory participation of adult members of the BPL families in social sector schemes. This, it argues, will insulate them and their families from the rising food prices.

The study goes against the opinion of several State governments that issuing ‘food stamps' was ‘unviable,' and the views of political parties, especially the Left parties, against the government pulling out of the PDS.

‘Food stamps' are pieces of secure paper issued for purchase of a fairly wide range of specified foods. Consumers are free to use ‘food stamps' to buy any quantity of foods they want at market rates from any store. The stores are bound by contract to adhere to the terms of usage. They cannot give anything other than what has been specified; nor can they encash the stamps or give back change on purchases.

The FICCI suggests that such a system should be introduced in India, especially in view of the widespread criticism of the PDS for “its failure to serve the population [living] below the poverty line (BPL), its urban bias, negligible coverage in the States with the highest concentration of rural poor and lack of transparent and accountable arrangements for delivery.”

It recommends that the targeted distribution of food be done away with as food prices have been showing a large increase during the 52-week period ending May 8. “The latest official data on the wholesale prices show that during the past 13 months, the prices of pulses have gone up by 33.65 per cent, rice by 7.72 per cent, wheat by 4.74 per cent, cereals by 6.37 per cent, milk by 21.12 per cent and fruits by 17 per cent.”

The study points out that the most crucial element of such a programme will be the identification of the BPL population. The number of ‘food stamps' and their value should be determined by the existing number of ration cards. Enforcement and monitoring should be strict.

While authorised stores may sell non-food products, ‘food stamps' cannot be used to buy non-food items such as toiletries, household paper products, prepared foods or medicine, it says.

‘Food stamps' should be given for an array of products, including pulses, cereals, oilseeds and sugar. However, they should not be a permanent entitlement programme. The government, especially the State governments, should regularly (on a yearly basis) assess the status of beneficiary households. Those households that have significantly enhanced their economic status should be removed from the scheme, or assistance for them should be limited to certain key activities such as education of children.

Keywords: FICCI

More In: News | Industry | Business