PDS likely to remain under strain

C. Gouridasan Nair

THIRUVANANTHAPURAM: The current price spiral has exposed the vulnerability of the highly weakened public distribution system (PDS) in Kerala and indications are that the PDS will remain under strain unless there is some major policy shift at the national level.

The distress purchases that the Kerala State Civil Supplies Corporation (Supplyco) and the Kerala State Consumer Cooperative Consumers’ Federation (Consumerfed) made from Andhra Pradesh, West Bengal and other sources might at best help the State only tide over the immediate crisis. Kerala was getting 1,13,420 metric tonnes of rice meant for distribution to above poverty line (APL) category cardholders till March, 2006. The Centre had cut the quota for the following month by 92,056 metric tonnes and followed this up with a further cut of 4,278 metric tonnes in April this year. The two cuts together resulted in an 86 per cent (96,364 metric tonnes) reduction in the State’s APL rice quota and the State is now left with a quota of just 17,056 metric tones of APL rice every month.

The story how the once vibrant PDS in Kerala got demolished is as heartbreaking as the way the escalating prices are wreaking havoc with family budgets. Till 1997-’98, Kerala was getting 1.50 lakh metric tonnes of rice and 50,000 metric tonnes of wheat every month. The first sign of trouble for the universal rationing system in Kerala came on June 1, 1997, when the Centre announced introduction of the BPL (below poverty line) ration cards and effected a drastic cut in Kerala’s foodgrains quota.

Ration sugar was also taken beyond the reach of APL families by restricting it to BPL cardholders beginning January 1, 1998. The LDF government that was in power at the time purchased 30,000 tonnes of rice from the open quota of the Food Corporation of India (FCI) during August, September and October of 1997 to prevent the system from collapsing.

Worse was yet to come. The Centre soon came up with another blow—a hike in the price of ration rice meant for APL cardholders to Rs.12.40 a kilo, almost the same as the price of rice in the open market at the time. That triggered the withdrawal of APL families from the once-winding queues before ration shops dotting ‘God’s Own Country’. The LDF government did not give up. It introduced a subsidy scheme and supplied rice at Re.1 less than that offered by the Centre. The government had to cough up as much as Rs.108 crore in a single year to keep the subsidised rice supply going.

The subsidy could not go on given the State government’s poor finances. The government also put an end to the practice of supplying different quality rice to different levels of consumers. Almost instantly, ration shops started having fewer APL cardholder patrons and rice off-take from ration shops dwindled to a mere 5 per cent of the earlier quantity. The LDF government had tried to avert further cut in the State’s ration foodgrains quota by compelling the wholesalers to lift as much as possible, but this too came to a halt later. The outcome: almost virtual collapse of the rationing system.

Kerala’s rice need is put at 44 lakh metric tonnes a year. During the best of times, roughly 24 lakh tonnes used to be met through the rationing system and another 10 lakh tonnes through internal production.

The people used to depend on the open market for the remaining 10 lakh metric tonnes. With the cut in Kerala’s rice quota and fall in paddy production within Kerala, the people are now dependent on the open market for almost all of its rice needs.

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