To prevent leakages in the public distribution system, the Union government has decided to allow the States to construct intermediary godowns under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) for storage of grains.

For this, the Rural Development Ministry will provide Rs. 450 crore in the first phase for the creation of a capacity of 15 lakh tonnes.

The decision has been taken as the States were slow to construct intermediary godowns under a scheme that involved their taking a loan from Nabard.

Rural Development Minister Jairam Ramesh and Food Minister of State (Independent) K.V. Thomas will send a joint letter to the States, urging them to take the offer, which will help them roll out the National Food Security Act in an effective manner.

The Food Corporation of India (FCI) had been asked to indicate a standardisation of the godowns that would be constructed in a 60: 40 wages to material ratio. The States would have to provide the land free of cost for the venture. Schedule 1 of the MGNREGA would be amended to include the construction of intermediary godowns for which guidelines would be issued soon, Mr. Ramesh told journalists last week.

“This is an administrative decision,” he said. It would depend on a State if it wanted to avail the scheme or not. FCI would provide PDS food grains to the intermediary godowns, which would, in turn, distribute them to fair price shops. Currently, there was a leakage of 25-30 per cent in distribution of PDS grains meant for the poor.

South fares better

Mr. Ramesh said grains leakage was directly proportional to the distance travelled from godowns to ration shops. Godowns were necessary in the northern and eastern States where PDS leakage was higher. “By and large, the southern States have a better PDS.” An estimated 44,000 capacity could be created as there were 6,612 blocks in the country.

Asked if there could be overcapacity as the government had launched a Private Entrepreneurs Guarantee (PEG) scheme besides the Gramin Bhandaran schemes in the rural areas, Mr. Thomas said there was not much progress in the construction of intermediary godowns so far.

Creation of pucca godowns for storage of PDS grains as well as reforms of the PDS system were the key factors for the successful implementation of the food law. At present, the government had a storage capacity of 76.79 million tonnes of grains. More capacity would be added by next year. With this, FCI’s responsibility of providing quality grains would be till the intermediary godowns. After that it would be the responsibility of the States to ensure that full and quality supplies reached the fair price shops.

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