A system in peril

thriving and well-organised racket involved in smuggling huge quantities of rice and wheat meant for ration card holders is marring Kerala's much-lauded Public Distribution System (PDS).

It is also eating away hundreds of crores worth of government subsidies that go into the PDS. Police vigil in some pockets has led to the seizure of small portions of the smuggled foodgrains. As per police investigations, the diverted PDS foodgrains are given a facelift at mills to reach the open markets as branded rice.

It means that the same rice which should have reached beneficiaries for Re.1 or Rs.3 a kg is being sold in open markets for more than Rs.30 a kg. In fact, large quantities of rice meant for card holders never reach the ration shops. Yet no complaints are aired by card holders that ration shops are denying them their quota of foodgrains.

One reason is, too many people are now ignoring ration shops. Beyond having it as an identity proof, ration cards are not being used by a good majority to make purchases from ration shops. At the same time, ration shop operators have to compulsorily take their prescribed quota every week for all card holders registered with them.

This compulsion is for the purpose of creating a record to maintain the supply of the State’s subsidised foodgrain quota from the Centre. The situation has resulted in the subsidy on PDS foodgrains provided by the Central and State governments for Kerala going down the drain. For instance, in Kollam district alone the subsidy provided by the State government touches Rs.450 crore a week as per a police report.

The mafia operates through a nexus between ration shop operators and a section of the civil supplies authorities. As per police investigation, PDS foodgrains are procured by the mafia from ration shop operators on a margin of Rs.2 to Rs.3 a kg over the subsidised rate. That means 200 or 300 per cent profit for the latter.

The grains are then sold to mills for a margin of around Rs.8 a kg and the rice, after touch-ups and attractive packing, reaches supermarkets as branded rice with a price tag of Rs.32 to Rs.35 a kg. PDS wheat also gets a value addition for reaching the open market as quality atta.