CENTRAL VIGILANCE COMMITTEE

ON

 

PUBLIC DISTRIBUTION SYSTEM

 

 

 

REPORT

 

ON

 

THE STATE OF ANDHRA PRADESH

 

 

 

 

 

 

 

 

 

JUSTICE WADHWA COMMITTEE

ON

PUBLIC DISTRIBUTION SYSTEM

 

ANDHRA PRADESH

 

Index

 

Chapter No.

Particulars

Page no

A

Preface

1-5

B

Broad overview

i-ix

1

Introduction

1-3

2

Legal Regime Governing the Public Distribution System

4-28

3

Whole sale Distribution

29-58

4

Mode of Appointment of FPS dealers

59-66

5

Viability of Fair Price Shops

67-88

6

Retail Distribution

89-109

7

Identification of beneficiaries of TPDS and  Bogus Ration cards

110-123

8

Bar Coded Iris Ration Cards

124-127

9

Food coupon System

128-145

10

Diversion of food grain

146-149

11

Vigilance, Enforcement and Social Auditing

150-166

12

Computerization

167-169

13

Findings of the Committee

170-176

14

General Recommendations

177-187

 

 

 

 

 

 

 

PREFACE

 

In the matter:

           

            Writ Petition(C) No.196/2001 – People’s Union for Civil Liberties sV/S Union of India and Ors.

 

 

1.      Hon’ble Supreme Court of India by Order dated 12.7.2006 in the aforesaid Writ Petition constituted a Committee to be headed by me to look into the maladies affecting the proper functioning of the Public Distribution System (PDS) and to suggest remedial measures.

 

2.      Hon’ble Court’s direction was initially given for the Government of Delhi to be followed on an all India basis.

 

3.      Committee submitted report on Delhi on 21.8.2007.

 

4.      By order dated 10.1.2008, Hon’ble Court while accepting the report directed  the Committee to do the similar exercise in terms of earlier for the entire country.

 

5.      Scope of the task assigned to the Committee thus having been enlarged, the Committee projected to the Department of Food & Public Distribution, additional requirements of staff, space and delegation of financial powers for its smooth functioning.  The Department dilly dallied and  did not meet the requirements.  The Committee had to approach the Hon’ble Court again and again.  It was only after a peremptory Order dated 25.8.2008 was passed by the Hon’ble Court that  the Department started taking steps for creating necessary infrastructure.  It was only thereafter that the Committee could start functioning in right earnest.  The Hon’ble Court extended the time for  submitting  the report till  April 2009.

 

6.      The Committee submitted its report for the States of Uttarakhand, Jharkhand Orissa and Karnataka.  Thereafter the Hon’ble Court has been pleased to extend the time further till December 2009.  The Committee is now submitting the report of the State of Andhra Pradesh.

 

7.      The Committee has already submitted a separate comprehensive report on Computerisation of PDS.

 

8.      No one has doubted the utility of PDS being the need for supply of food grains to the poor of the country at affordable rates.  Procurement and distribution of food grains is a huge and gigantic task but then the whole system  is built on corruption.  There are more leakages and maladministration and benefits to the poor are low.  Inefficiency and corruption has made PDS corrupt at several levels.  The system lacks transparency, accountability, monitoring and enforcing.  Survey is not being conducted regularly and properly with the result people Above poverty Line (APL) have been issued Below Poverty Line (BPL) cards and those eligible for BPL cards have been ignored.  Bogus cards are in abundance.  Immediate measures are required to reduce the diversion of food grains.  Delivery systems under the PDS have to be improved so that the real beneficiary gets its due entitlement at fixed price, fixed quantity, fixed time and wholesome quality.  Innovative methods are required to improve the system.  The whole system has to be totally revamped and modern technology would appear to be the only answer.

 

9.      Committee has suggested that in order to combat corruption and strengthening PDS there has to be zero tolerance approach.  Everything appears to be fine on paper but its implementation is faulty. 

 

 

 10.  During its 11 days visit to the Andhra Pradesh the Committee visited the areas of  Hyderabad, Adilabad, Anantapur, Chittoor (Tirupati mandal) and Visakhapatnam.  A few kilometers before reaching Paderu, our convoy was abruptly stopped and we were told that it was done to remove the red light on the vehicles.  This was a precautionary measure as we were informed that we were passing through the naxal infested area.  Our visit beyond Paderu was not allowed as we were told by the ASP of the area stationed at Paderu that naxalites were in revengeful mood in as much as their leader Patel Sudhakar Reddy had been killed in an encounter with the police near Hyderabad on 24.5.2009.  Naxalites in the area were full of vengeance and were indulging in reprisals.  They were retaliating and were indulging in kidnapping, looting, burning of vehicles and buildings and had also laid landmines.  In these circumstances the Committee could not proceed further and inspect the D.R. depots and meet the people. The Committee, thereafter, visited Araku valley and inspected D.R. Depots in this GCC area.

 

11.    During its visit the Committee held discussions with the officers of the State Government, Andhra Pradesh State Civil Supplies Corporation (APSCSC) and FCI.  Committee interacted with NGOs, FPS owners and beneficiaries.  Committee also inspected the godowns  and the FPSs.  Committee got full cooperation from the officials of the State Government, APSCSC and the FCI.  We record appreciation  to the assistance rendered to the  Committee by various officials of the State Government.  The officers are   -- Mr. P. Ramakaanth Reddy, Chief Secretary; Mr. Sanjay Jaju, Commissioner and Ex-officio Secretary,  Food & Civil Supplies;  Mr. M Subramanyam, Director Civil Supplies & Ex-Officio Additional Secretary, Food & Civil Supplies; Dr. Rajat Bhargava, Resident Commissioner;  Mr. S.A. Huda, Controller, Legal Metrology;  Mr. S.K. Jayachandra, Director General, Vigilance & Enforcement;  Mr. A.K. Tigdi, Principal Secretary Tribal Welfare Department; Mr.V.  Harikrishan  Prasad, Deputy Director (PDS), Food & Civil Supplies;  Mr. D.S. Lokesh Kumar, Chief Ration Officer; Mr. Deepak Kumar Panwar, Chairman-Cum Managing Director, FCI, New Delhi; Mr.  B. Kalyan Chakravarthy, General manager (AP Region), FCI; Ms B. Udaya Lakshmi, Vice Chairman & Managing Director, APSCSC;  Mr. S. Chandra Sekhar Rao, Regional Manager, Central Warehousing Corporation;  Mr. Kamlakar, Consultant, Food & Civil Supplies Department; Dr. B. Kishore, Vice Chairman & Managing Director, Girijan Cooperative Corporation Ltd. Vishakhapatnam; Mr. S. Adinarayana, General manager, Girijan Co-op Corporation Ltd., Vishakhapatnam; Mr. Nadeem Ahmed, Collector, Adilabad; Mr. G.S.R.K.R. Vijay Kumar, Joint Collector, Adilabad; Mr. S. Suresh Kumar, Joint Collector, Chittoor; Mr. T. Chiranjeevulu, Joint Collector, Anantpur; Mr. P Satyanarayana Reddy, Joint Collector Vishakhapatnam and Mr. D.V. Reddy, Revenue Divisional Officer & Sub Divisional Magistrate Vishakhapatnam. 

 

         12.    The Committee  also got assistance from the lawyers appointed by the District  Judges  of the places the Committee visited.  The names of the lawyers are Mr. T. Pradyumna Kumar Reddy  and Ms. Shanthi Neelam, Advocates, Hyderabad; Mr. S. Rajaram and Mr. N. Pratap Reddy, Advocates, Adilabad; Mr. P Guru Prasad and Mr.  K. Lakshsamanachar, Advocates, Anantapur;  Mr. G.V.S. Kishore Kumar and Mr. D.V.S.S. Somayajulu, Adovcates Vishakhapatnam.

 

13.  Members of the Committee  who visited the State are Mr. Dinesh Dayal,   Ms. Meenakshi Chauhan, Ms. Naomi Chandra and Mr. Shohit Chaudhry, members of Legal Team;  Mr. K.K. Mittal, Director (Deputy Registrar) and Mr. J.K. Bhutani, Section Officer.  Mr. Dayan Krishnan though could not visit the State,  collaborated  in preparing the report.  Mr. S.C. Rawal, a former Registrar of Delhi High Court and appointed as Consultant, performed functions of the Secretary of the Committee.

 

14. The Committee is submitting its report which has been divided into various Chapters like  Viability of FPS; Appointment of FPS dealers; Wholesale  & Retail distribution of PDS foodgrains; Vigilance & Enforcement; Computerisation  (IRIS & Coupons); Findings  and Recommendations.

 

 

 

Delhi

Dated 10th July 2009

(Justice D.P Wadhwa)

Chairman

Central Vigilance committee

on Public Distribution System

 

 

 

 

 

BROAD OVERVIEW

 

1.       PDS (Public Distribution System) in Andhra Pradesh is plagued by colossal amount of bogus cards in circulation.  It is in fact a fraud of gigantic proportion.   Even the Civil Supplies Commissioner of Andhra Pradesh is reported to have stated   existing 2.35 crore ration cards falsely reflected a population of 9.8 crores while the State’s population was 8.3 crores.   There were only 1.9 crore households in the State which implies that 45 lakhs ration cards are fake.”

 

           2.     So far no serious attempt seems to have been made to get rid of these cards which are causing great drain  not only on the exchequer of the State but also in functioning  of the PDS in the State.

 

3.       Recent newspaper report (dated 24th June 2009 – Dateline Hyderabad) reported that a BPL card has been issued in the name of Sania Mirza – an ace tennis star of the country.  This led the Chief Minister to remark “who is responsible for issuing the ration card  in the name of Sania Mirza?  Has he gone mad?”  But then this madness appears to be quite widespread taking into account the abundance of bogus cards.  No such card or for that matter no ration card  can be issued  unless it is  verified by the official concerned.  Whenever a bogus card is found, except to cancel it  no action is taken against the official and the FPS owner  which is plainly and unquestionably  a criminal offence.

 

4.       As noted above no serious attempt has been made to weed out the bogus cards.  Issue of these cards is a matter of serious concern but no one so far has been made responsible.    There should be zero tolerance in the functioning of PDS which is meant for poor but this appears to have lost much of its meaning in the State with 20 -25% of cards, which are bogus ,being in abundance.    Whenever any process is undertaken to eliminate bogus cards, elections are announced and then more such cards get issued.   It was confided to the members of the Committee by some of the officers themselves that they had unwritten instructions not to make verification and issue white cards to whosoever applies. As per news-paper report   Chief Minister is reported to have given   a 3 months deadline for the Civil Supplies Department to complete the task of delivering ration cards to families that  have not received them so far (Hindu/ Dateline Hyderabad dated 24.6.09).   Another  newspaper report (The Hindu Dateline Hyderabad  29.6.2009) also mentions that the Civil  supplies Minister attributed this to ‘mistakes’  that had crept into the issuance  of cards at the Mandal level, where, in some cases cards were given in the name of the dead and affluent persons, including those owning Mercedes Benz cars!

 

5.       That obtaining white cards issued to the members of BPL families in bogus and fictitious name is a common feature.  Aforesaid newspaper report (The Hindu dated 29.6.09) also mentions that obtaining white cards issued to members of BPL families in bogus and fictitious name was common feature.    It added that the dealers and middlemen in Andhra Pradesh have gone a step ahead .  In spite of the mandatory use of IRIS technology for issuance of ration cards, dealers and middlemen managed to get ration cards affixing photographs of hillocks, trains and trees! No blame is sought to be put on officials without whose connivance such ration cards could not have been issued.  It is bizarre that it is only the FPS owner who    should be considered iniquitous in this skullduggery.  An official file records that “due to activities of some FPS owner  and some other unscrupulous  traders  food grains  under PDS scheme  is diverted/misappropriated “.

 

         6.       Newspaper reports suggest that  weeding out one bogus card will  result  in immediate cash saving of Rs.8,400/-  per year in the form of essential commodities worth of Rs.6,000/- and a pensions  of Rs.2400/-.  Further, State Government will also save Rs. One lakh in the form of educational facilities and ‘Rs.2 lakh as healthcare.  In a meeting with the Chief Secretary and officials, the Committee has suggested an amnesty scheme.  One month should be given to all concerned to declare bogus/ghost cards.  After expiry  of this period survey should be made and if any bogus card is found not only the FPS  owner but  even the officer concerned who had verified the application should be prosecuted for offences under the  Essential Commodity Act and  the Indian Penal Code.  Action should also be taken against the card holder if he is aware of diversion of food grains on the basis of his card.

 

7.       Iris technology to streamline the system  was introduced  four years ago.  It has failed in its purpose.  By introducing coupon  system an unnecessary layer  has been added.  The beneficiary now has to go to Fair Price Shop not only with ration card but with coupons as well.  These coupons are available   in the market/FPS  and  are obvious source of diversion.  To get rid of the maladies  affecting the PDS there has to be  end to end computerization.    The Committee has already submitted  a report on computerization of PDS.

 

          8.      When the State Goverment wanted  to rationalize the FPS   by limiting  the number of cards per shop,  it issued a G.O. 35/2007.  This was challenged  by a batch of Writ Petitions in the Andhra Pradesh High Court.   Though the Writ Petitions were dismissed, the Court  observed that minimum number of cards and the economic viability of  Fair Price Shop always be kept in mind “though the public interest involved may have to be given due weight”.  Even though referring to the stand taken by the State in its counter-affidavit the Court “does again emphasize the economic viability to be kept in mind while adjusting or arranging the FPSs”. 

 

9.       One of the issues referred to the Committee to examine was, the ideal commission  or the rates payable to the dealers.  The Committee did examine the whole aspect of the matter and is of the  view  that FPS dealer must sell grocery  items  in addition to  PDS items, to make the shop viable.

 

           10.    The Committee finds it difficult to suggest any increase in the commission as it found that even if  the commission is increased 100% still FPS owner  will not be able to earn sufficient income to sustain his family of 4 – 5 members.  No PDS shop is self-sustainable unless income  is earned by illegal means, which aid leakages.  Otherwise running a Fair Price Shop  is not remunerative at all and the system is designed to fail and leakages to persist.  To weed out  bogus cards, massive door to door survey is required and is immediate  need of the hour.   FPS owners at various places also represented that their shops be made hereditary .  It is a difficult proposition to accept .  For one, FPS owner is merely a licencee for a fixed period and secondly, when he says he is not earning from the FPS and sometime even incurs loss it is not  understood as to why any one would  like to pass  on   such business to his heirs.  FPS owners did not have  any explanation to offer.

 

 11.    The allotment of FPS is done in a most arbitrary manner. There is infact no transparency. FPS is not a largess. Why there is clamour for allotment of FPS when there is no profit.    Reason is not far to seek.  

 

12.     BPL Card, which is a White Card, is used not only for PDS but  for other benefits for the BPL.  There is a tendency to use white card for medical purposes and other purposes.  A person may not take rice and use the card for the purposes like free medical treatment.  FPS owner uses   that card to divert the rice.  Use of white cards should preferably  therefore be de-linked from other benefits.

 

13      Government of India issue rice @ 35 Kg. per family.  State Government has rationalized   and issue of rice at the rate of 4 Kg. per person totaling to 20 Kgs. per month per family.  However for AAY families  other allotment remains at 35 Kg. per month.    Now the BPL (white) cards  exceed the estimate of the Planning Commission, therefore  for additional requirement of rice State Government  draws from APL allotment and  adds further subsidy.  From 2nd October 2009, the quantity per unit is to be increased to 6 Kgs. per person making it to 30 Kgs. per family of 5 and that would be maximum.  Unless Government of India allots more rice, burden of subsidy will be on the State Government and that may amount to Rs.35 crores.  It is, therefore, all the more incumbent  on the State Government  to weed out bogus  cards  that should apply both to pink and white cards.

 

14.     There is persistent  complaint by the beneficiaries of under-weighment  by FPS owner.  He in turn  complains of  under-weighment of supply made to his shop by  about 2-3 Kgs in each bag of 50 Kgs.  There is certainly pilferage of PDS food grain during  transportation from FCI godowns to MLS points in the  first stage and in the second stage from MLS points to FPSs.  Except  for  Metropolis of Hyderabad, Vishakhapatnam and Vijaywada there is door step delivery of PDS in the  State of Andhra Pradesh.  In these Metropolis, FPS   dealers  have to make their own  arrangement to lift  their stock of PDS from MLS points.  For this they get Rs. 5/- per quintal  extra  as commission.  It is stated that  steps are being taken to have door step  delivery in these three metropolis as well by the Corporation.  Managing Director of the APSCSC said that Corporation was ready to make door step delivery  to FPSs in Metropolis but the FPS  owners themselves do not want the same because of lack of storage space in their shops.  It  was suggested  that there should be some allowance for shortage of PDS foodgrains at MLS point as such allowance is admissible in FCI godowns.  This may relate to stock of rice only.  It is stated that  allowance to FCI is given both for transportation and storage.  In FCI godowns storage is for more than   six months which is not so in MLS points.  Allowance for  storage and transportation from FCI to MLS point in the first stage  may be considered.

 

15.     Everything appears to be in order in the official papers but in practice this is not so.  It is the implementation that  is more important.  There is no monitoring and no accountability. There is failure in implementation with the result that corruption has crept deep in the system.  A separate vigilance/enforcement department is required in the Civil Supplies Department.  Delivery system has to be proper and timely.

 

16.     The Committee did not find samples at the MLS points or at Fair Price shops contrary to the PDS Control Order.   These samples should be available at FCI to MLS points and FPSs, which should be displayed.

 

17.     PDS feeds two systems – (i) PDS and (ii) black market.

 

18.     Mere cancellation of bogus cards would not suffice.  Action has to be taken against those responsible for issuance of these cards. The State Government seems to be hesitant in taking action against officers and the FPS dealers in as much as it was confided before us that cards were issued without any verification.  Knowing fully well the menace of bogus cards, the State Government  is looking  the other way.

 

19.     PDS is corrupt.  Corruption  is woven around the mesh of FPS by the shop owner and officials of the department and the transporters. The whole system has to be revamped. As per instructions of the Collector Civil Supplies Chittoor, all household cards were got verified.  As per verification reports 8608 White House hold supply cards ( all cards with 5 or more units i.e having entitlement of 20 kg per card) and 1299 AAY cards ( having entitlement of 35 kg per card ) were found bogus, as the Card holders were non residents or had left the village or were above poverty line. Thus the total subsidized rice to these bogus card holders works out to  1721.60 quintals of BPL rice and 454.65 quintals of AAY rice per month.  Proceedings of ASO dated 29.4.09 recorded that these cards had been surrendered to the District Collector, Chittoor along with connected coupons.  Proceedings further recorded that Fair Price Shop dealers concerned were directed not to distribute the Essential Commodities to the Card holders and to take back the cards whenever the card holders present the cards for essential commodities.

 

20.     In spite of request of the Committee to show some of the bogus cards it was not done.  No action was shown to have been taken against the defaulting card holders, FPS owners or the officials.

 

21.     Earlier eligibility criteria   for BPL  family  for obtaining ration cards was that  in the  urban area, families with annual income below Rs.24,000 would meet eligibility criteria.  In the case of rural areas, the criteria would be annual income below Rs.20,000 or land holding not exceeding 2.5 acres wet or five acres dry land.  Cultivators  possessing land more than the ceiling would not be eligible for white cards under BPL.  Persons owing two, three or four wheelers and persons whose electricity consumption is over Rs.6,000 per annum, persons having a pucca building with a plinth area of 500 square feet or more and those in permanent employment in either government or organized sector would also be ineligible  for BPL.

 

22.     The State Government has now revised the eligibility criteria for white (BPL) card. Families with income upto  Rs 75,000 in urban areas and upto Rs 60,000 in Rural areas are now eligible for White Cards. Committee was not informed if any other criteria  has been set.

         

23.     In the tribal areas of Andhra Pradesh, it is GCC (Girijan Cooperative Corporation) which has taken the task of PDS.  Tribal Welfare Department is quite concerned that there  are no irregularities  in the PDS through Daily Requirement Depot s (DR Depots)  run by GCC.  In these depots not only PDS   foodgrains but other items of daily requirement are also sold to the tribals.  In one of the meetings of the members of Tribal  Welfare Department it was recorded; “there was serious concern shown with regard to the proposals  for  privatization of GCC and its services to PDS.  DR Depots should not be  handed over to private bodies or contractors or even to community institutions like    Women Thrift Societies as they cannot deal with the corrupt bodies in the PDS.”

 

          24.     This Committee examined    some of the DR Depots  managed by Women Self-help groups. No doubt there  have been complaints about the functioning  of  DR Depots but we could not suggest any alternative except to say that wherever possible DR Depots should be managed by the GCC directly through its employees.  We find there is shortage of salesmen and one salesman handles more than two depots to the great inconvenience of the tribal beneficiaries.  Committee has recommended  deployment of mobile  vans  for PDS  in remote  villages (like tribal areas) on  shandy days (week market days).

 

25.     In a  public meeting organized by the Committee there were complaints of non-functioning of PDS and also against FPS owners.  For immediate redressal of the grievances the Committee  has suggested PDS Lok Adalat on the lines of Bijli/Telephone Adalats to redress the  grievances of the  beneficiaries on the spot, whenever possible.

 

                                                                                    FINAL REPORT

                                                                                      ***********

 

Chapter 1

INTRODUCTION

 

1.1             Andhra Pradesh is a state situated on eastern coast of India and is bordered by Maharashtra, Chhattisgarh and Orissa in the north, the Bay of Bengal in the East, Tamil Nadu to the south and Karnataka to the west. Andhra Pradesh is historically called the "Rice Bowl of India". The State has the longest coastline (972 km) among all the States in India.

 

 

1.2     The total population of the State is 8.3 crores having approximately 1.82 crore families, but the state has 2.35 crore ration cards.

         

 

1.3     The Committee visited the State of Andhra Pradesh from May 31, 2009 to June 11, 2009. During this period the Committee visited the Districts of

(i)     Rangareddy

(ii)   Adilabad

(iii)                         Medak

(iv)                         Anantapur

(v)   Chittoor

(vi)                         Visakhapatnam

 

1.4     The Committee had discussions with the Chief Secretary, Commissioner Food and Supplies, Collector Food and Supplies and other senior officers of the department of Food and Supplies Government of Andhra Pradesh connected with the Public Distribution system.

 

1.5     The wholesale storage and transportation and distribution of food grain in the State are managed by the Andhra Pradesh State Civil Supplies Corporation (APSCSC).

 

The Committee met the Vice Chairperson cum Managing Director of the Andhra Pradesh State Civil Supplies Corporation (APSCSC) and other functionaries of the Corporation.

 

1.6     At the district level the Public Distribution System is managed by the Joint Collector. He is also ex-officio an Executive Director of the APSCSC. In the Integrated Tribal Development Agency areas (ITDA) the affairs of PDS are managed under the supervision and control of the Project Officer ITDA. The Committee held discussions with the Collectors and Joint Collectors of the Districts and Project Officers of the ITDA areas visited by the Committee.

 

1.7     The retail distribution of PDS items is done through authorised Fair Price Shops in the State. In the Integrated Tribal Development Agency (ITDA) areas the whole sale and retail distribution is with the Girijan Cooperative Corporation Limited (GCC). Retail distribution is done through the Daily Requirement Depots (DR depots) of the GCC. The GCC also maintains the MLS points in ITDA areas.

 

1.8     In order to get public opinion, the Committee invited the views of the general public through news papers. The Committee also held Public meetings in Hyderabad, Utnoor, Anantapur and Paderu. The Committee also went to the villages to meet the consumers / beneficiaries and to the FPS retail shops, Mandal Level Stockist points of the APSCSC and GCC. The Committee also studied the working of DR depots of the GCC.

 

1.9     The State of Andhra Pradesh introduced the Coupon system for distribution of PDS rice and kerosene in 1999. The Committee studied the working of the system during its visits to various districts.

 

1.10   The ration cards issued in the State of Andhra Pradesh are based on the Iris Technology and the Committee studied the same.

 

 

 

 

 

 

 


Chapter 2

LEGAL REGIME

 GOVERNING THE PUBLIC DISTRIBUTION SYSTEM

 

2.1     Entities Involved In The Supply Of Food Grains To Consumers:

Various entities are involved in the process of distribution of food grains. Their role and functions are set out in brief.

 

2.1.1  The Food Corporation of India (‘FCI’): The FCI was set up under the Food Corporations Act, 1964, inter alia for the purpose of distribution of food grains throughout the country under the Public Distribution System. The FCI is responsible for making food grains available to the State Governments in terms of the allocations fixed by the Central Government.

 

2.1.2  The Andhra Pradesh State Civil Supplies Corporation Limited (APSCSC):

1.       The Andhra Pradesh State Civil Supplies Corporation Limited was incorporated in the year 1974, as a Limited Company under the Companies Act, 1956.The share capital of the Company was fully contributed by the Government of Andhra Pradesh.

 

2.       The company is being managed by the Board of Directors consisting of not less than 2 and not exceeding 8 members at any time. The Chairman is appointed by the Government from time to time specifically and in the absence of such an appointment, the Commissioner of Civil Supplies is the Chairman of the Company.

 

3.       Normally the Board consists of Officials and Non-officials as appointed by the Government. Presently the Board consists of the following members:

 

(i)    Commissioner of Civil Supplies                            :        Chairman

(ii)   Vice Chairman & Managing Director           :        Director

(iii)             Director of Civil Supplies                      :        Director

(iv)             Addl. Secretary (Finance)                     :        Director

 

4.       The Vice Chairman & Managing Director is the Chief Executive of the Corporation. At the corporate office, 4 Functional Managers, an Executive Engineer and 8 mangers assist him / her. The Corporation has District Offices in all the 23 Districts in the State. The District Managers maintain a close liaison with the District Administration with regard to distribution of Essential Commodities like rice, wheat, palmolien oil and levy sugar. They are under the administrative control of the Joint Collectors who are nominated as Ex-Officio Executive Directors of the Corporation.

 

5.       The Andhra Pradesh State Civil Supplies Corporation is a State Agency appointed by the State Government for lifting of rice and wheat from FCI and levy Sugar from factories under PDS. It is the responsibility of the Corporation to undertake transportation, storage and delivery of the stocks under PDS at the doorstep of the Fair Price Shop Dealers.

 

6.       The transportation of stocks from FCI / Factories to MLS is called as Stage–I transportation, which is being undertaken through the district-wise Transport Contractors appointed for food grains and Levy Sugar.

 

7.       The transportation from MLS Point to the doorstep of the FPS is called Stage–II transportation. Except for the Corporation areas of Hyderabad-Secunderabad,  Visakhapatnam and Vijaywada where the transportation from the MLS point is done by the FPS dealers, in other areas there is door step delivery  which is being undertaken Corporation Vehicles and also Stage-II contractors appointed by the Collectors on approval of the rates by the Head Office of APSCSC.

In some districts the direct lifting of the food grains is also being undertaken from certain FCI Godowns to FPS within the radius of 25kms by avoiding Stage-I transportation and handling charges.

 

8.       In Corporation areas of twin cities Hyderabad and Secunderabad, Vijaywada and Vishakapatnam, FPS dealers themselves are lifting directly the stocks from MLS Points.

 

2.1.3 Mandal Level Stockist (MLS) Points: The APSCSC has 436 Mandal Level Stockist Points in the State for storage of stocks. Out of the 436 MLS points, 28 MLS points are being handled by GCC and the remaining 408 MLS points, by the Corporation.[1]

 

2.1.4  Fair Price Shops (‘FPS’): The Fair Price Shops are the final link in the chain of distribution of food grains to the consumers. The State of Andhra Pradesh is divided into 23 districts and there are 42,930 Fair Price Shops[2]. The reservations as provided in the APSPDS (Control) Order, 2008 are as under –

 

Scheduled Caste               - 15%

Scheduled Tribes              - 6%

Physically Handicapped      - 3%

Backward Classes              - 25%

Women                            - 30%

 

2.1.5  Girijan Cooperative Corporation Limited (GCC):

The Girijan Co-Operative Corporation Limited (GCC) is a public sector undertaking of the government of Andhra Pradesh established in 1956.

 

 

1.       Objectives

(i)                To ensure payment of remunerative prices for the Non Timber Forest Produce collected by the Tribals by eliminating the middlemen and private traders who were indulging in unfair trade practices. (Forest produce like Gum, Honey, Mohwa Flower, Mohwa seeds etc. are purchased from the Tribals)

(ii)              To ensure availability of Essential Commodities even in the interior agency areas through a network of Daily Requirement Depots. (DR Depots) (These Depots sell essential commodities as well as commodities of day to day needs of the tribals like soap, detergent, etc.)

(iii)            To provide support to the Tribals in their agricultural activities by extending credit facilities.

 

2.       Organisational Hierarchy

(i)                GCC is a State level organization with its Head Quarters at Vishakhapatnam governed by the Board of Directors nominated by the Government of Andhra Pradesh

(ii)              The affairs of the Corporation are administered by the Vice- Chairman and Managing Director

(iii)            The Project Officers of the Integrated Tribal Development Agencies (ITDAs) act as Executive Directors of GCC in the area of their operation.               

 

For effective administration, GCC has established 10 Divisional Offices and 43 Girijan Primary Cooperative Marketing Societies across its area of operation.

 

3.       Daily Requirement Depots

GCC has established 839 Daily Requirement Depots (DR Depots) in tribal areas to cater to the needs of the tribals by supplying essential commodities under the PDS and other daily requirement commodities. 

4.       Self Help Groups

In order to strengthen Self Help Groups to generate rural employment in the tribal areas, some DR Depots have been handed over to Self Help Groups, many of which are Women Self Help Groups which are run entirely by women.

 

2.2     Broad Overview of the Statutory Regime

 

The statutory framework governing and regulating the different aspects of the Public Distribution System is contained in the Essential Commodities Act 1955, Public Distribution System (Control) Order 2001 as amended in 2004 and Circulars issued by the Department of Food & Public Distribution in the Ministry of Consumer Affairs, Government of India and the Andhra Pradesh State Public Distribution System (Control) Order, 2008 as well as various Circulars, Orders and Notifications issued by the Andhra Pradesh State Civil Supplies Corporation.

 

2.2.1  Essential Commodities Act, 1955: The Essential Commodities Act 1955 (Act) is an Act to provide, in the interest of general public, for the control of the production, supply and distribution of, and trade and commerce, in certain commodities.

 

i.        Section 3 of the Act confers powers on the Central Government to control production, supply, and distribution etc. of essential commodities.  Central Government has issued an order called  the Public Distribution System (Control) Order 2001, which was amended in 2004.

 

ii.       Stringent provisions exist in the Act and the Control Order, to deal with any infringement of the provisions of the Act or the Order.

 

iii.      Section 7 provides for penalties.  Any person contravening the Order is liable to be sentenced to imprisonment, which may extend upto 7 years and shall also be liable to fine.  Sentence of imprisonment cannot be less than 3 months unless there are adequate and special reasons.  The property in respect of which contravention of the Order has taken place, is liable to be forfeited to the Government and so also any vehicle used in carrying such commodity.  If a person commits offence second time then imprisonment cannot be less than 6 months subject to, adequate and special reasons.

 

iv.      Section 8, similarly makes liable a person who attempts to contravene or abets any contravention of the Control Order.

 

v.       Section 9 provides for punishment upto 5 years or fine or both, if the record is not maintained in terms of the Control Order or any statement or information furnished, which is not true.

 

vi.      Section 10 deals with offences by Companies.

 

vii.     Section 10A has made any offence punishable under the Act cognizable.

 

viii.     Section 10C provides that Court may presume the existence of such mental state where an offence under the Act requires culpable mental state on the part of the accused.  “Culpable mental state” includes intention, motive, knowledge or reason to believe a fact.

 

ix.      Under Section 11, a Court can take cognizance of an offence under the Act not only on a complaint made by a public servant but also by any person aggrieved or any recognized consumer organization. 

 

x.       An offence for contravention of the Control Order is to be tried summarily (Section 12A).

 

xi.      If an accused is sentenced to imprisonment for a period not exceeding one month and of a fine not exceeding Rupees two thousand, no appeal can be filed.

 

xii.     Section 14 provides that when a person is prosecuted for contravention of any order which prohibits him from doing any act or being in possession of a thing without lawful authority or without a permit, licence or other document, the burden of proving that he has such an authority, permit, licence or other document, shall be on him.

 

2.2.2      The Public Distribution System (Control) Order, 2001: The Public Distribution System (Control) Order, 2001 (hereinafter referred to as the ‘PDS Order 2001’) has been issued by the Central Government in exercise of powers conferred by Section 3 of the Essential Commodities Act, 1955 for maintaining supplies and securing availability and distribution of essential commodities under the Public Distribution System. The said Order has been amended in 2004.

 

2.2.3      The Andhra Pradesh State Public Distribution System (Control) Order, 2008: The Andhra Pradesh State Public Distribution System (Control) Order, 2008 has been issued by the Government of Andhra Pradesh in pursuance of the PDS (Control) Order 2001 in exercise of the powers conferred by Section 5 of the Essential Commodities Act, 1955, for the purpose of maintaining supplies and securing equitable distribution of essential commodities in the State of Andhra Pradesh. The government has issued certain guidelines for selection and appointment of Fair Price Shop dealers.

 

2.2.4  Guidelines for appointment of FPS dealers (GO No.52 dated 18.12.2008): The State government has issued guidelines for appointments of FPS Dealers vide the above said GO, salient features of which, are as under:

(a)              All vacancies of FPSs to be notified on the first day of every month by the appointing authority and invite applications for walk in interview with original certificates on a specified date.

(b)              Issue interview letters and appoint FPS purely on merit.

(c)               Appointing authority to verify antecedents.

(d)              Eligibility – unemployed persons or from registered rural area groups of women, voluntary consumer women organizations, women thrift groups – applicant should be financial sound to lift the allotted commodities.

(e)              Minimum educational qualification Xth pass.

(f)         Age limit 18-40 years.

(g)              Reservations SC- 15%, ST-6% , physically handicapped -3%

          Backward classes-25%, Reservation for women 30% (out of this 1% for widows of ex-servicemen.

(i)      Candidate shall be resident of Gram Panchayat or Municipal limits of the town in which the shop is located. Physically handicapped persons shall be residents of the Mandal concerned but shall shift the place of residence to the place where FPS is situated.

(j)      Preference to be given to residents of the revenue village or hamlet in which the shop is located or the Ward in the Municipality where the shop is located - candidates belonging to the families of freedom fighters, DWCRA groups, thrift groups, hawkers/ NRs having licence under the APPP rules, 1980.

 

2.2.5      Guidelines to be observed in Tribal Areas:

FPS to be run through the Daily Requirement Depots of the Girijan Cooperative Corporation or where no such depots exists through the part time depots of GCC manned by tribal candidates in the absence of  both Project officer ITDA to identify suitable tribal beneficiaries.

The order also gives general instructions to be followed for appointment of dealers.

 

2.2.6      Criteria for BPL cards as under :  Vide GO No.57 dated 13.5.2005, the

State Government fixed the eligibility criteria for BPL cards popularly known as White cards.

          Urban areas            -             Rs. 24,000/- per annum

          Rural areas             -             Rs.20,000/- per annum or

land holding not exceeding 2.5 acres wet and 5 acres dry land

 

Exclusion norms

(a)                          Cultivators possessing the land more than the above ceiling.

(b)                          Persons owning two wheelers, three wheelers, four wheelers (other than provided under govt. schemes).

(c)                           Persons whose electricity consumption is more than Rs.6,000/- per annum.

(d)                          A pucca building having plinth area of 500 sq.ft. or more either owned or rented out .

(e)                          Permanent employment in govt. / organized sector like companies, industries and firms.

 

The State government felt the necessity to revise the eligibility criteria for BPL in order to ensure total food security and adequate nutrition to its entire population to the needy and thus, revised the eligibility criteria for BPL cards vide GO No.27 dated 23.7.2008:

Urban areas            -        Rs.75,000 per annum

Rural areas             -        Rs.65,000 per annum

 

2.2.7  In order to provide access to the records of Fair Price Shops, some important instructions were issued vide Memo No.3396 dated 20.10.2003 as under:

(a)      List of beneficiaries to be displayed at FPS / Panchayat offices / Municipal Ward Offices.  MRO (Tehsildar) to be responsible in rural areas and Assistant Supply officers to be responsible in Hyderabad, Secunderabad, Visakapatnam and Vijayawada.

(b)     Selection criteria for identification of BPL families (including AAY and Annapoorna) to be properly publicized.

(c)               Notice board at Fair Price Shops to display working hours and weekly holidays

(d)              Wall paintings at Fair Prices Shops indicating number of cards, allotment, entitlement of various essential commodities, prices, working hours, weekly holidays etc.

(e)              MRO to permit furnishing of documents pertaining to FPS on payment of actual Xerox charges.

(f)                Complaint / suggestion book to be maintained at the FPSs.

(g)              MRO to arrange inspection of FPS against whom complaint has been made by authorized enforcement officials in the presence of complainant and members of Food Advisory Committees.

(h)              Strict implementation of working hours of FPS

 

2.2.8  Movement of Stocks maintenance of records, physical verifications of stocks during transportation and at MLS points is governed by the instructions issued vide GO No. 83 dated 21.12.2006 as under:

 

(i)      Food Corporation of India

(a)              FCI to deliver stocks against release order only to the representative of APSCSC.

(b)              Stocks to be weighed in the presence of representative on electronic bridge.

(c)               Register to be maintained at loading point (FCI) to record all transactions month-wise / MLS point-wise- data to be computerized – computerized monthly statement to be sent to APSCSCL.

 

(ii)      Legal Metrology Department

Enforcement officials checks electronic weight bridges at FCI and electronic / weighing machines at MLS points and conduct surprise checks of trucks carrying stocks.

 

(iii)     APSCSCL Head Office

Electronic platforms are to be installed at each MLS points within a period of six months.

 

(iv)     District Manager, APSCSCL

(a)                       Depute one representative at each loading point of FCI-depute in-charges at MLS points.

(b)                       Ensure that the representatives furnish particulars of movement to MLS points daily.

(c)                        Reconcile movement particulars with reference to the stocks received at MLS points.

(d)                       Ensure that necessary entries are made in the goods received register, stock register and issue register at MLS point.

(e)                        Ensure receipt of stock report from MLS point every month and send a consolidated report for the entire district to the VC and MD of APSCSCL.

(f)                         Ensure proper securitization of the bills of the transporters with reference to the registers at the MLS points.

 

(v)      MLS points operated by APSCSCL / GCC

(a)                          Stocks to be received at MLS points by 100% weighment.

(b)                          Entries of all transaction to be made in all the registers – Truck Chits and release orders to be maintained date-wise.

(c)                           Delivery stocks to FPS under various schemes by 100% weighment.

(d)                          Carefully prepare the claims of Hamali (loaders) and transporters

 

(vi)     Physical verification of stocks at MLS points

(a)               Joint Collector                                     2 in a month.

(b)              District Supply officer                           4 in a month.

(c)                Revenue Divisional Officer                    4 in a month.

(d)               Any other Divisional Officer nominated by District Collector

 

2.2.9  Accountability of various functionaries in the implementation of PDS has been fixed vide order dated 21.12.2006. This order describes the duties and responsibilities of Collectors (CS) / Chief Rationing Officer, Hyderabad, District Supply Officers, District Managers of APSCSCL, Revenue Divisional Officer (RDO), Mandal Revenue Officers (MRO), Assistant Supply Officer / Deputy Tehsildars, Revenue Inspectors, MLS point In charge and Panchayat Secretary.

 

2.2.10 Rupees 2 per kg scheme w.e.f. 7.4.2008:- GO No.11 dated 18.3.2008:

Financial sanction for incurring an expenditure of Rs.1980 Crores was accorded vide this GO for:

(i)      Subsidized rice to about 1.72 crore BPL families of White card holders at the rate of 4 kg per head subject to a maximum of 20 kg. per family per month at Rs.2 per kg.

(ii)      Subsidized rice to 15,27,800 AAY families @ 35 kg. per month at Rs. 2/- per kg.

          Also for other rice subsidy schemes such as Social Welfare hostels, infirmed and crippled weavers and National Child Labour Project and Residential Bridge Courses.

 

2.2.11 Complaint Monitoring Cell and toll free telephone number were established by Order No. 8100 / 2008:

A complaint monitoring cell was set up in the Commissionerate of Civil Supplies, Hyderabad with a toll free number 1800 4252977.

 

2.2.12  Regulation of Commodities (Licensing, Storage and Regulations) Order, 2008:

This order was published in the Gazette on 18.8.2008 and repealed the Andhra Pradesh Pulses (licensing, storage and regulation) Order 2007.

 

2.2.13 Food Advisory Committees:

The Food Advisory Committees were originally constituted vide G.O. Ms. No.470 dated 10th November 1995. The constitution of the Food Advisory Committees were revised from time to time. Vide Order No.93 dated 13.7.2005:, the constitution of the following Committees were provided:

 

Constitution of Food Advisory Committees:-                                          

(i)      District Level                   

(ii)      Mandal Level

(iii)     Village level

(iv)            Municipal Corporation Level

(v)              Circle level

(vi)            Division Level

(vii)          Municipality level

(viii)        Ward level

(ix)            FPS (urban level)

 

          District level and Mandal level committees are required to meet bi-monthly and all other level to meet monthly.  Days have been fixed for the monthly meetings, a standard agenda is provided, Collectors / CRO have been made responsible for these meetings.

 

2.2.14 Opening of Shops:

Circular No.864 dated 21.6.2002 provides that all Collectors /Chief Rationing Officer should issue instructions to ensure        that ration shops remain open through out the month during fixed hours and display details on the notice board.

 

2.2.15 Duties and Obligations of a Fair Price Shop Licencee:

i.        The PDS Order, 2001, under Clause 7 read with paragraph 5 of the Annexure to the Order lays down the procedure for issue of licences or authorization to the Fair Price Shops for the distribution of essential commodities under Public Distribution System. The duties and responsibilities of the Fair Price Shop owners are also provided in the PDS Control Order, 2001.

a.       Para 5(i) provides that the essential commodities must be sold as per the entitlement of ration card holders and at the retail issue prices fixed by the concerned State Government.

b.       Para 5(ii) of the Annexure provides that each FPS will display the following information on a notice board which is to be put up at a prominent place in the Shop on a daily basis:-

(i)      List of BPL and Antyodaya beneficiaries,

(ii)      Entitlement of essential commodities,

(iii)     Scale of issue,

(iv)     Retail issue prices,

(v)      Timings of opening and closing of the Fair Price Shop,

(vi)     Stock of essential commodities received during the month,

(vii)    Opening and closing stock of essential commodities and

(viii)   The authority for redressal of grievances/lodging complaints with respect to quality and quantity of essential commodities under the Public Distribution System.

c.       Under Para 5(iii) of the Annexure, a FPS owner is required to maintain records of ration card holders (APL, BPL and Antyodaya), stock register, issue or sale register.

d.       Para 5 (iv) requires the FPS owner to furnish copies of specified documents such as the ration card register, stock register, sale register to the office of the Gram Panchayat or Nagar Palika or Vigilance Committee or any other body authorized by State Governments for the purpose.

e.       In terms of Para 5 (v) the FPS owner is obliged to display samples of foodgrains being supplied through the Fair Price Shop.

f.        Para 5(vi) provides for the production of books and records relating to the allotment and distribution of essential commodities to the inspecting agency and furnishing of such information as may be called for by the designated authority.

g.       Para 5(vi) deals with the accounting of the actual distribution of essential commodities and the balance stock at the end of the month to the designated authority of the concerned State Government with a copy to the Gram Panchayat.

h.       Para 5(vii) requires the Fair Price Shop to be opened and closed as per the prescribed timings displayed on the notice board.

i.        Clause 7(2) lays down that the  Fair Price Shop owner shall not refuse to supply the essential commodities, lying in stock, to the ration card holders, as per their entitlement. Clause 7(3) provides that the Fair Price Shop owner shall not retain ration cards after the supply of the essential commodities.

 

2.2.16 Ration Cards

i.        The Government has for the purpose of issuing ration cards divided the target population into 3 broad categories, Above Poverty Line (‘APL’), Below Poverty Line (‘BPL’) and Antyodaya Anna Yojana (‘AAY). Clause 2(d) of the Public Distribution System Order, 2001 defines 'Above Poverty Line Families' as those families which have been issued Above Poverty Line (APL) ration cards by the State Governments for issue of foodgrains under the Public Distribution System, Clause 2(g) defines 'Below Poverty Line families' as those families which have been identified by the State Government for issue of foodgrains at specially subsidized rates adopting the estimates of poverty given by the Central Government Clause 2(e) defines 'Antyodaya families' as the poorest families from amongst the Below Poverty Line (BPL) families identified by the State Governments. Such families are entitled to receive foodgrains under the Antyodaya Anna Yojana.

 

ii.       Clause 3 of the Public Distribution Order 2001 states that State Governments shall identify families living Below Poverty Line as per paragraph 1 of the Order. Para 1(1) requires State Governments to formulate suitable guidelines for the purpose of identification of families living Below the Poverty Line (BPL), including the Antyodaya families, as per the estimates adopted by the Central Government. It is further provided that care be taken to ensure that the families so identified are really the poorest. Para 1(2) requires the State Governments to get the lists of BPL and Antyodaya families reviewed every year for the purpose of deletion of ineligible families and inclusion of eligible families.

 

iii.      Clause 4 of the Public Distribution Order 2001 requires the State Governments to issue distinctive ration cards to Above Poverty Line, Below Poverty Line and Antyodaya families and further mandate that a periodical review and checking of the ration cards be conducted as per paragraph 2 of the Annexure to the Order. Para 2(3) provides that State Government shall issue distinctive ration cards to APL, BPL and Antyodaya families.

 

iv.      Para 2(4) of the Annexe to the Control Order provides that the designated authority shall issue a ration card within one month of the date of receipt of the application after necessary checks and verification.

 

v.       Para 2(6) of the Annexe to the Control Order requires the State Government to conduct periodical checking of ration cards to weed out ineligible and bogus ration cards and bogus units in ration cards.

vi.      Para 2(8) lays down that elimination of bogus ration cards as well as bogus units in the ration cards shall be a continuous exercise by the State Governments to check diversion of essential commodities.

 

vii.     Clause 11 (2) of the PDS Order 2001 provides that any person aggrieved by an order of the designated authority denying the issue or renewal of a ration card or cancellation of the ration card may appeal to the Appellate Authority within thirty days of the date of receipt of the order.

 

2.3     Monitoring the Functioning of the Public Distribution System and Other Procedural Aspects

 

2.3.1  Public Audit

i.        Para 6(9) of the PDS Order, 2001 states that the designated authority shall direct the concerned Fair Price Shop owner to provide relevant extracts of the documents maintained by him on an application made by a beneficiary, on payment of a prescribed fee.

 

ii.       It is pertinent to note that Clause 7(4) of the PDS Order, 2001, confers on any ration card holder desirous of obtaining extracts from the records of a Fair Price Shop owner, the right to obtain the same by making a written request to such owner along with deposit of the fee specified by the State Government. Clause 7(4A) imposes an obligation upon the Fair Price Shop owner to provide extracts of records to the ration card holder within fourteen days from the date of receipt of a request and the specified fee under sub-clause (4).

 

iii.      Para 6 (7) of the Order requires State Governments to educate the ration card holders regarding their rights and privileges under the Public Distribution System by use of electronic and print media as well as display boards outside Fair Price Shops.

 

2.3.2  Social Audit 

In terms of the provisions of the Control Order 2001, the government of Andhra Pradesh provided for the Social Audit of the FPS shops vide Memo No.1242 dated 7.5.2008. This memo provides for the social audit of FPSs by Praja Committees. The Praja Committee consists of 10% of the total card holders in the FPSs who are selected by lot.  One third of the FPS in a Mandal are to be covered every month.  Dates and place for the social audit have to be fixed. The following issues are to be covered in the social audits:

(a)              Scrutiny of the appointment letter of the FPS.

(b)              Number of cards category-wise.

(c)               Checking the date of stamping done by weighs and measures department.

(d)              Quantity of stocks received during the month.

(e)              Checking the registers of the FPS.

(f)                Scrutinising the aspects relating to quantity, quality, scale of distribution, price and timings of operation.

(g)              Complaints / suggestions books.

A check memo has also been provided for social audit

 

 

 

 

2.3.3  Inspections

i.        Clause 23 of the Andhra Pradesh State Public Distribution System (Control) Order, 2008 provides for regular inspections of the FPS by the Joint Collectors, District Supply Officers / Revenue Divisional Officer, Tehsildar / Assistant Supply Officer, Deputy Tehsildar (CS) (Enforcement), Revenue Inspector and team of Food Advisory Committee. This Clause also provides that the Senior Revenue Inspector / Civil Supplied Inspector shall ensure opening of the Fair Price Shops on time and running of the shop in distributing the commodities as per scheduled timings.

ii.       The Enforcement staff is required to maintain a strict vigil, watch and ward to ordain the connivance between the members of Food Advisory Committees at Mandal and Village Levels.

iii.      The Collector, (Civil Supplies) shall ensure monitoring the functioning of the PDS at the FPS level through the computer network of the National Informatic Center installed in the district National Informatic Center. For this purpose computerized codes shall be issued to each FPS in the district.

iv.      The Collector (Civil Supplies) and other officers of the Civil Supplies department shall direct the concerned FPS owners to provide relevant extracts of the documents maintained by him on an application made by a beneficiary on payment of the fee prescribed.

 

2.3.4  Computerisation

i.        Para 6(6) of the PDS Control Order, 2001  requires State Governments to ensure monitoring of the functioning of the Public Distribution System at the Fair Price Shop level through the computer network of the NIC installed in the District NIC centres and to issue for this purpose computerized codes to each FPS in the district.

ii.       Similar provision has also been made in the Andhra Pradesh Control Order, 2008.

 

2.3.5  Vigilance Framework

a.       Clause 8 of the PDS Order 2001 provides that the procedure for monitoring of the Public Distribution System including the functioning of the Fair Price Shops by the State Governments shall be as per paragraph 6 of the Annexure to the Order.

 

b.       Para 6 (1) of the Annexure to the PDS Order requires State Governments to ensure a proper system of monitoring of Fair Price Shops and prescribes model sale register, stock register and ration card register. Para 6(2) requires State Governments to ensure regular inspections of Fair Price Shops, not less than once in six months by the designated authority. State Governments may issue orders specifying the inspection schedule, list of check points and the authority responsible for ensuring compliance with the said orders. Para 6 (3) provides that meetings of the Vigilance Committees on the Public Distribution System at the State, District, Block and FPS level shall be held on a regular basis at such dates and periodicity as notified by State Governments. However, it is stated that the periodicity shall not be less than one meeting a quarter at all levels. Para 6(4) imposes upon State Governments the duty to ensure a periodic system of reporting and it further lays down that the complete information in this regard is be sent in the prescribed form as follows:

 

(i)      By Fair Price Shops to the District Authorities by the 7th of the month following the month for which allocation is made in Form ‘A’.

(ii)      By the District Authorities to State Government by the 15th of the month following the month for which allocation is made in Form ‘B’.

(iii)     By the State Government to the Central Government by the end of the month following the month for which allocation is made in Form ‘C’.

 

 c.      Clause 6(8) lays down that State Governments shall issue and adopt the Citizen’s Charter based on the Model Citizens Charter issued by the Central Government.

 

d.       In the State of Andhra Pradesh the vigilance committees are called Food Advisory Committees. In its reply to the queries by the Central Vigilance Committee, the State of Andhra Pradesh has stated that the government has issued instructions for reconstitution of State Food Advisory Committees with official and non-official members. The government has also issued instructions for the constitution of the Food Advisory Committees at various levels. The district level Committees and Mandal level Committees are required to meet bi-monthly and all other Committees are required to meet every month. Evaluation of the function of the FAC has been taken up by all the Collectors / Chief Rationing Officer, Hyderabad to ensure that action is taken on the minutes of the meetings of the FAC’s.

 

2.3.6  Search And Seizure

i.        The Essential Commodities Act, 1955 provides that any essential commodity and any package, covering or receptacle in which the essential commodity is stored and any animal, vehicle, vessel or conveyance used for transporting the essential commodity may be seized and confiscated under Section 6A pursuant to an Order passed under Section 3. However, prior to confiscating any essential commodity, package or vehicle, Section 6B requires that a show cause notice be issued to the person from whom it is seized.

 

ii.       The PDS Order 2001, under Clause 10 (1) empowers the authority authorised by State Government, to inspect or summon such records or documents as may be considered necessary for examination and take extracts or copies of any records or documents produced before it. Clause 10(2) lays down that if the authority has reasons to believe, on receipt of a complaint or otherwise that there has been any contravention of the provisions of the Order or with a view to securing compliance with the Order, it may enter, inspect or search the Fair Price Shop or any premises relevant to transactions of business of the Fair Price Shop. Clause 10(3) empowers the said authority to search, seize or remove such books of accounts or stocks of essential commodities where such authority has reason to believe that these have been used or will be used in contravention of the provisions of this order. Clause 10(3A) lays down that the authority conducting search and seizure under sub-clause (3) shall inform the State Government or an officer authorised by it in this behalf, about the details of the search conducted and the stocks of essential commodities so seized under that clause. Clause 10(4) lays down that the provisions of Section 100 of the Code of Criminal Procedure 1973, relating to search and seizure shall so far as may, apply to search and seizure under the Order.

 

iii.      Clause 16 of the Andhra Pradesh State Public Distribution System (Control) Order, 2008 provides that any person, authorised by the Appointing Authority of the rank as mentioned in this Clause, has the following powers –

 

a.      To enter and inspect the premises of any establishment or shop

b.     To summon and enquire from any person with the relevant and necessary questions

c.      To require production of any document and take or cause to be taken extracts from or copies of such documents.

d.     To take or cause to be taken the weight or measure of the scheduled commodities found on the premises

e.      The provisions of Section 100 of the Code of the Criminal Procedure, 1973 relating to search and seizure shall so far as may be, apply to search and seizure under this Order.

 

2.3.7  Appeal

i.        The Essential Commodities Act, 1955 under Section 6C provides that a person who is aggrieved by the confiscation of any essential commodity, package or vessel may file an appeal to any judicial authority appointed by the State Government concerned and the judicial authority shall, after giving an opportunity to the appellant to be heard, pass such Order as it may think fit, confirming, modifying or annulling the Order appealed against.

ii.       The PDS Order 2001, under Clause 11(1) provides that appeals (arising out of the denial of issue/renewal of ration cards, denial of issue/renewal of licence to run a FPS) may be filed before the Appellate Authority appointed under Para 7 of the Annexure to the Order. Clause 11(4) provides that the appeal shall not be disposed off without providing the person aggrieved a reasonable opportunity of being heard. Clause 11(5) provides that the Appellate Authority may stay the operation of the order appealed against pending disposal of the appeal or till such time as the person aggrieved is given a hearing as provided under Clause 11(4). Para 7 of the Annexure to the Order lays down that the State Governments shall appoint an officer of that Government not below the rank of Additional District Magistrate of a District as “Appellate Authority” for exercising the powers conferred upon and discharging the functions assigned under the PDS Order, 2001.

 

iii.      Clause 20 of the Andhra Pradesh State Public Distribution System (Control) Order, 2008 provides that any person who is aggrieved by an order passed by the Disciplinary Authority viz. Tehsildar / Assistant Supply Officer may within 7 days from the date of receipt of such order prefer an appeal to the Appointing Authority.

 

iv.      Any person aggrieved by the Order of the Appointing Authority under Clause 5 of the Control Order, may within 30 days from the date of receipt of such order appeal against such order where it is passed by the Revenue Divisional Officer or Sub-Collector or District Supply Officer to the Collectors (CS) in the District or to the Chief Rationing Officer in Hyderabad District.

 

2.3.8  Revision

i.        Clause 21 of the Andhra Pradesh State Public Distribution System (Control) Order, 2008 provides for a revision against an order passed under Clause 20(2). The revision can be preferred within 30 days before the Commissioner of Civil Supplies, Andhra Pradesh.

 

2.4     Important Orders passed by the Hon’ble Supreme Court in W.P. (C) NO. 196/2001.

 

2.4.1      The Hon’ble Supreme Court by the order dated 02.05.2003 directed as follows,

i.        That the licences of those Fair Price Shop owners who do not keep their shops open throughout the month during the stipulated period, fail to provide grain to BPL families strictly at BPL rates, keep the cards of BPL households with them, make false entries in the BPL cards, engage in black-marketing or siphoning away of grains to the open market and hand over such ration shops to such other person/organizations, will be liable to be cancelled.

 

ii.       The Government of India was directed to place the under mentioned classes of persons in the AAY category,

a.      Aged, infirm, disabled, destitute men and women, pregnant and lactating women,

b.     Widows and other single women with no regular support,

c.      Old persons (aged 60 years above) with no regular support and no assured means of support,

d.     Households with a disabled adult and no assured means of subsistence,

e.      Households where due to old age, lack of physical or mental fitness, social customs, need to care for a disabled, or other persons no adult member is available to engage in gainful employment outside the house.

f.       Primitive tribes

 

2.4.2      By the order dated 08.05.2002 the Hon’ble Supreme Court has directed that Shops will remain open during fixed hours and also has fixed the responsibility of the CEO/Collector for implementation of the orders of this Court and further directed that the Chief Secretary will ensure compliance of the Order of this court.


Chapter 3

WHOLESALE DISTRIBUTION

 

3.1     This Chapter deals with the process of whole sale distribution of the public distribution system in the State of Andhra Pradesh and the inference drawn by the Committee from its field visits within the State. The whole sale distribution could be understood by looking at the functioning of the various entities involved in the Public Distribution System in the State of Andhra Pradesh. The entities are:

·        Food Corporation of India (FCI)

·        Department of Consumer Affairs, Food & Civil Supplies

·        Andhra Pradesh State Civil Supplies Corporation (APSCSC)

·        Girijan Cooperative Corporation Limited (GCC)

 

3.1.1      Food Corporation of India          

1.       FCI Andhra Pradesh falls under the South Zone of FCI with its Head Quarters at Chennai. The General Manager of FCI is the Regional Head who is supported by four Deputy General Managers (DGMs) in the Regional Offices.

 

2.       There are 15 FCI District Offices and 1 FCI District Office for Andaman and Nicobar Islands. The 15 FCI District Offices look after the 23 Revenue Districts of Andhra Pradesh. Each district is headed by a District Manager and Quality Control is entrusted to the Assistant General Manager. FCI has its own storage facility in addition to hired capacities available with the State Warehousing Corporation (SWC) and Central Warehousing Corporation (CWC).

 

3.       The PDS is operated under the joint responsibility of the Central and the State Governments. The Central Government has taken the responsibility for procurement, storage, transportation and bulk allocation of food grains. It is responsible for procurement storage and transportation of grain up to the Principal centres of FCI. It is also responsible for allocation to State and maintenance of a buffer stock. Thus, the role of FCI is very restricted. The FCI procures food grain from farmers and supplies the same to the State government as per the allocations made for the State.

 

4.       Recently the Central Government issued a notification vide its D.O. Letter dated 24-10-07 that a system of regular inspection be put in place for not only FCI godowns but also for State government/authorized wholesale godowns. In reference to the said notification, the FCI issued instructions to all regional general managers vide Letter dated 31-10-07 to conduct inspections of FCI godowns and other wholesale godowns and FPS. However, during the visit of the Committee to the State of Andhra Pradesh and various MLS Points and FPS, it was observed that no such inspections were being carried out by the officials of the FCI.

 

5.       The Committee observed that the FCI were issuing handwritten weigh check memos, to the trucks carrying PDS goods to the MLS godowns.

 

3.1.2  Department of Consumer Affairs, Food & Civil Supplies

 

1.       The following Heads of the Departments and Corporations are functioning under the administrative control of the Consumer Affairs, Food and Civil Supplies Department –

             

i.        Commissioner of Civil Supplies for C.S. Department

ii.      Controller Legal Metrology for Legal Metrology Department

iii.    President for A.P. State Consumers Disputes Redressal Commission.

iv.    Vice-Chairman & Managing Director of APSCSC Ltd.

 

2.       The Commissioner of Civil Supplies is also the ex-officio Secretary to Government in Consumer Affairs, Food and Civil Supplies Department. APSCSC Ltd. is a government undertaking functioning under the control of the Consumer Affairs, Food and Civil Supplies Department.

 

3.       Brief Functions of the Consumer Affairs, Food and Civil Supplies Department with respect to PDS are as follows:–

i.                    Procurement of Rice under Mill Levy for Central pool by FCI

ii.                  Distribution of Essential Commodities to card holders through FPS

iii.                Monitoring of prices of Essential Commodities and Market Intervention Operations for controlling the open market prices wherever necessary.

iv.                Implementation of Consumer Protection Act through State Commission and District Consumer Forum and other Consumer Welfare Schemes.

v.                  Implementation of Packaged Commodities Rules and MRP and ensuring correct measures and weights through stamping by Legal Metrology Department.

vi.                Implementation of various Control Orders entrusted to the department administering the affairs of APSCSC.

 

4.       The Joint Collector is incharge of the Public Distribution System in the districts. He is assisted by the District Supply Officer, Assistant Supply Officer, and Mandal Revenue Officer and other such officials. The Joint Collector is also the Ex- officio Executive Director of APSCSC. The District Manager (DM) of the Corporation is the operational head in every district. DM APSCSC assists the Joint Collector. DSO assists the Joint collector (every file goes to Joint Collector through DSO).  For each Revenue Division there is a Revenue Divisional Officer (RDO, also the SDM). He is the appointing and disciplinary authority. Each Revenue Division has 5-10 Mandals (previously there were Talulks which were later divided into Mandals.) Under the RDO there is a Mandal Revenue Officer (MRO)/Tehsildar and he is the card issuing authority in all the Districts. In the twin city areas of  Hyderabad and Secundrabad the ASO is the  ration card issuing authority. The MRO releases stock to the dealers and issues Release Orders for FPS.

 

5.       As per the Release Order, the MLS incharge releases stock.  There is one Deputy Tehsildar for every 3 Mandals. Each Mandal has 2 Revenue Inspectors. The Revenue Inspectors are required to do regular inspections. The Tehsildar issues the Release Order. Then the Route Officer accompanies the stock in Stage II transportation. After the delivery of the stock he brings the acknowledgment and hands it over to the MLS   point in charge. MLS point in charge are posted at the MLS itself and it is the Route Officer of department who is supposed to go with the truck.  As per the norms, the Route Officer shall not be lower than the rank of Junior Assistant.  However, during its visit to the State, the Committee was informed that the Route Officer may be of any rank and may be appointed from any department under the control of the Tehsildar.

 

6.       The Village Revenue Officer (VRO) assists the Tehsildar and also Revenue inspector in field work. The VRO assists the staff in verification and inspection. He distributes the Food Coupon to the beneficiaries. The FPS dealers submit the Food coupons, the details of food grain sold and the closing balance, to the Tehsildar.

 

7.       G.O Ms. NO. 84. dated 21.12.2006 provides for detailed responsibilities of the  Collector, the Chief Rationing Officer, the DSO, the District Manager of  APSCSC, the RDO, the MRO, the ASO , the Revenue Inspectors, the MLS incharges and the Panchayat secretary.

 

 

3.1.3  Andhra Pradesh State Civil Supplies Corporation (APSCSC)

1.            The Andhra Pradesh State Civil supplies Corporation is a State agency appointed by the State Government for lifting of rice and wheat from FCI and Levy Sugar from factories under the Public Distribution System. It is the responsibility of the Corporation to under take transportation, storage and delivery of the stocks under PDS at the doorstep of the Fair Price Shop Dealers.

 

2.            The transportation of stocks from FCI / Factories to MLS Points is called as Stage-I Transportation, which is being undertaken through the district wise Transport Contractors appointed for food grains and levy sugar.

 

3.            The transportation from MLS Points to the doorsteps of the FPS dealer is called Stage-II transportation which is being undertaken by the Corporation through Stage-II contractors appointed by the Collectors (CS) on approval of rate by the Head Office.

 

4.            In some Districts, the food grain is lifted directly from FCI godowns to the FP shops if the distance between the two is within a radius of 25 kms. By this method of avoiding Stage-I transportation, handling charges are also avoided. In the Metropolitan areas,  that is in the Twin Cities, rationed area of Ranga Reddy District, Vijaywada and Visakhapatnam, FPS dealers themselves directly lift the stocks from MLS point.

 

5.            Organisational Set up

(i)           Andhra Pradesh State Civil supplies Corporation Limited, is being managed by the Board of Directors consisting of not less than 2 (minimum) and not exceeding 8 (maximum) members at any time. The Chairman , who is also the member of the Board is appointed  by the Government  from time to time specifically and in the absence of such an appointment the Commissioner of Civil supplies is the Chairman of the Company. Vide GO Ms No. 17, Consumer Affairs, Food & Civil Supplies (CS Department dated 26.01.2005, the Government appoints non-official Chairman and 3 others as non-official Directors on the Board. The tenure of the Chairman and the Directors is two years.  The tenure of the present Chairman & non-official Directors expired on 25.1.2007.  Apart from the Vice Chairman & Managing Director, the Director of the Civil Supplies and the nominee from Finance Department are the other Official Directors.  The Chief Executive of the Corporation i.e. the Vice Chairman & Managing Director, who is an appointee of the Government of Andhra Pradesh, manages the day-to-day activities of the Organization subject to the control and directions of the Board.

 

(ii)          Normally the Board of Directors constitutes the officials and non-officials as appointed by the Government. Presently the Board consists of the following officials:

a.      Commissioner of Civil Supplies                       Chairman

b.     Vice Chairman & Managing Director                 Director

c.      Director of Civil Supplies                                Director

d.     Addl. Secretary (Finance)                                Director

 

(iii)     The Vice Chairman & Managing Director is the Chief Executive of the Corporation. At the Corporate Office, 4 Functional Managers, an Executive Engineer and 8 Managers assist him/her. The Corporation has District Offices in all the 23 Districts in the State. The District Managers maintain a close liaison with the District Administration with regard to distribution of Essential Commodities like rice, wheat palm oil and levy sugar. They are under the administrative control of the Joint Collectors who are nominated as Ex-Officio Executive Directors of the Corporation.

(iv)     Apart from Functional Heads at the Head Office and the District Managers at the District level, there are eight Zonal Managers, who are responsible for internal audit and close supervision of activities in the Districts under their zone. The District Managers are assisted by one Assistant Manager (Accounts) in charge of the office accounts and one Assistant Manager (General) /Assistant Manager (Technical) who looks after the office administration, warehousing, movement and other such activities.

 

(v)      The Zonal managers are also assisted by these Assistant Managers, i.e., Assistant Manager (Accounts), Assistant Manager (General), Assistant Manager (Technical), and they are assigned certain districts in each region.

 

(vi)     The FCI maintains the stock necessary for the PDS and the APSCSC lifts the stock on behalf of the government of Andhra Pradesh as per the allocation made for the State under various schemes. The Commissioner Civil Supplies, Andhra Pradesh allocates monthly allotment district-wise. The District Manager, APSCSC Ltd. lifts the food grain from the godown of the FCI as per the allocation made by the Collector (CS) and positions the stock at various MLS Points. The transportation of the stock from the FCI Godowns to the MLS Points is done through Stage-I Transport Contractors appointed by the APSCSC Ltd.

 

(vii)    The FPS Dealers remit the value of the stock as per the allocation given by the Assistant Supply Officers / Tehsildars in favour of the District Manager, APSCSC Ltd. Release orders are issued and the MLS Points deliver Essential Commodities at the doorsteps of the FPS except in the twin cities of Hyderabad & Secunderabad and in the city of Visakhapatnam where the FPS dealers have to lift the Essential Commodities directly from the MLS Points. The FPS dealers are paid Rs. 5/- per quintal for rice towards arranging their own transport at these places. The transportation from MLS Points to the FPS is done through Stage-II Transport Contractors appointed through tender process by a Committee headed by the Joint Collector.

 

6.       Storage

The APSCSC has 436 Mandal level Stock Points in the State for storage of stocks. Out of the 436 MLS points, 28 MLS points are being handled by GCC and the remaining 408 MLS points, by the Corporation.[3]

         

3.2     Allocation and lifting price

3.2.1   The GOI has been allocating 87,674 Mts. of rice per month for BPL families @ Rs. 5,650/- per Mt., 54,524 Mts. of rice per month for AAY families @ Rs. 3000/- per Mt., 131,334 Mts. of rice per month for APL families @ Rs. 8,300/- per Mt. And 932 Mts. of rice per month for Annanpurna beneficiaries @ Rs. 5,650/- per Mt.

 

3.2.2      APL allocation:

The GOI has also been issuing 2,754 Mts. of APL wheat @ Rs. 6100/- per Mt. The GOI has also allocated 2.60 lakh Mts. of rice ad-hoc additional allocation of APL rice from October 2008 to March 2009. The GOI has also allotted 2.40 Mts. of APL rice @ 40,000 Mts. per month as ad-hoc / additional allotment from April 2009 to September 2009.

The following are the issue prices fixed by Government of India for lifting food grain from FCI

 

Scheme

Prices

APL rice

Rs. 8.30 per quintal

BPL rice

Rs. 565.per quintal

AAY

Rs. 300 per quintal

Wheat

Rs. 610 per quintal

 

The following are the end prices of various commodities of the TPDS scheme

Scheme

Prices

APL rice

Rs.9.00 per kg

BPL rice

Rs.2.00 per kg

AAY

Rs. 2.00 per kg

Wheat (APL)

Rs. 7.00 per kg

 

3.2.3  Rs. 2/- a Kg Rice scheme

          The Government of Andhra Pradesh has been reallocating the above allotment to districts under various schemes as detailed below.

          The State Government is releasing a quantity of 3.11 Lakh Mts. of rice to districts for distribution to the 1.92 crore BPL card holders under Rs. 2/- per Kg. rice scheme. The scale of distribution to AAY card holders is @ 35 Kgs. per family per month irrespective of number of members in the card under subsidized rice scheme. Rice is distributed to AAY/White card holders @ Rs. 2/- per Kg.

         

3.2.4  Unit System 

          The scale of distribution to White card holders is @ 4 Kgs. per member subject to a maximum of 20 Kgs. per family per month. The system is similar to Unit system followed in the State of Karnataka.

          The scheme of allotting rice per unit per month has merit but it has to be ensured that it does not violate the Order of the Supreme Court which requires that the beneficiaries must get their full entitlement which is 35 kgs. per family per month.

 

3.2.5  Annapurna Rice

The GOI allocation of 932 Mts of rice per month for 93,200 Annapurna beneficiaries is being re-allotted @ 10 Kgs. per beneficiary per month, free of cost.

 

3.2.6  Free Rice to infirm / crippled weavers

As per orders of the Government of Andhra Pradesh rice is being released to 4000 infirm/ crippled weavers @ 25 Kgs   per month per beneficiary free of cost w.e.f. January 2006.

 

3.2.7  APL Wheat

The GOI allocation of 2,754 Mts. of APL wheat is being re-allotted to districts for distribution to the BPL/APL/AAY card holders of urban areas up to a maximum of 10 Kgs. per family per month @ Rs. 7/- per Kg. i.e. on economic cost without incurring any subsidy. The GOI has allotted additional allocation of wheat @ Rs. 1080/- per quintal at Minimum Support Price (MSP) for a quantity of 2,250 Mts. from March 2009 to June 2009. This wheat is being distributed to card holders at end consumer price of Rs. 12/- per Kg.

 

3.2.8  Commissioner of Civil Supplies (CCS) issues a notification of monthly district wise allocation of food grain for each scheme. Based on the district wise allocation, Collector makes FPS wise allocation. On receipt of this order the District manager of APSCSC deposits a demand draft against the value of food grain to be lifted for Public Distribution with concerned Area Manager of FCI. The FCI issues the Release Order after obtaining the stocks from FCI. The District Manager positions the Stock at the various Mandal Level Stock (MLS) points. The stocks are transported from the FCI godown to the MLS points through transporters appointed on contract by APSCSC known as Stage I transporters.  No officer of the department accompanies/ escorts the truck while transportation of foodgrain from FCI to MLS and Stage-I Transport Contractor is responsible for any short delivery of food grains. The District Supply Officer thereafter makes allocation for each FPS. The District Manager APSCSC issues release order for each FPS in terms of the allocation. The FPS owner deposits the money to get the foodgrain through a Demand Draft with the District Manager APSCSC. In accordance with the release order the foodgrain is transported by Stage -II transport contractors to the FPS. At the time of transportation to the FPS, the truck is accompanied by a Route Officer who is appointed by the Mandal Revenue Officer/ Tehsildar.

 

3.2.9  Before visiting the State of Andhra Pradesh the Committee    had sent a letter dated 8th February 2008 and a   questionnaire dated July 2008 seeking information about      the working of the TPDS in state. The committee had received copies of district wise allocation orders issued by the Commissioner Civil Supplies. The Committee visited the Suroor Nagar MLS points in Hyderabad, (Circle 1)  ,Ramayampet Medhak District, Utnoor  MLS point, Adilabad district, Anantapur  Urban and Rural (subdivision), MLS point Singarmala (Anant pur district), Chandragiri MLS point Chittoor District, MLS point Modugula Vishakhapatnam  and  MLS operated by GCC, Paderu.

         

3.2.10 MLS Points

i.        The Committee observed that the MLS points had manual weighing scales of 0.3 MT capacity. There was no system of weighing the PDS grain on receipt at MLS point.

 

ii.       No samples are received by the MLS point from the FCI along with the stocks. There is no system of issuing any samples by the MLS points while issuing stocks to the FPS.

 

iii.      The District Manager at Hyderabad informed the Committee that to ensure that the Stage I contractor delivers the stock from FCI godown, she monitors the stock through phone, this in fact means that there is no system of informing the MLS point incharge about the stocks to be delivered to his depot on any particular day. No document was prepared to show the quantity which would be delivered to MLS  point on any particular day. The committee was informed that the incharge of the MLS point has to submit a daily receipt and issue statement to the District Manager for reconciliation purposes. The truck driver also produces a receipt of delivery. The claim of the Hamalies (loaders) is verified according to the supply received and the stock released from the MLS point.

iv.      During the visits to the MLS points, meetings with the various District Officials and even in the public meetings held by the committee there was a general Complaint of short weighment at every stage. The MLS point incharge complained that they receive short supply from FCI. The FPS owners complained that they did not receive full quantity of food grain from the MLS points and the general public also complained of short weighment.

 

v.       At Anantapur District, the Committee was informed that an error had been found in the weighbridge of the FCI depot in the previous month and maintenance contractor was penalised with fine.

 

vi.      The Committee immediately directed the Inspector of the Legal Metrology Department to check the weighbridge again and submit a report within 3 hours. The weighbridge at FCI godown was checked by the Legal Metrology Department and was found to be in order.  The committee was informed that the Legal Metrology department checks the weighing system annually and the FCI has given an annual maintenance contract for all its weighbridges at different depots.

 

vii.              The Assistant Controller, Legal Metrology, Anantapur submitted a statement showing the number of cases booked against different traders. Extract of the statement for the 2006-07, 2007-08 and 2008- 09 are as under :

 

 

Trade

Upto 3/2006-07

Upto 3/2007-08

Upto3/2008-09

 

No. of Inspections 

No. of

Cases     Booked        

No. of Inspections 

No. of

Cases     Booked        

No. of Inspections 

No. of

Cases     Booked        

F.P.S.

982

249

1210 

233

1091  

146

Kerosene  Dealers

493

96

408 

        6

299   

22

FCI Godowns

2 

        2

1 

1

4  

0

 

viii.     During the visit to the MLS point Anantapur (Urban) the committee found 60 hand stitched bags of PDS rice said to contain 60 kg each. The Committee got one of the bag weighed and found that it contains 66 kg of Rice. It may be mentioned here that normally the gunny bags containing PDS grain are stitched with machines and are supposed to contain an average of 50 kg of grain. The explanation given for the hand stitched bag was that it contained the grain which spills out from the bags and falls on the floor at the FCI depot. The incharge of the MLS point informed the Committee that 5-6 such bags are received in each truck. It may be stated that the Committee has not found such large number of hand stitched bags stored in any other whole sale depot or MLS point visited by the Committee in the State of Andhra Pradesh or even in other States.

 

ix.      Diversion of food grain can take place in two ways. One, by outright sale of PDS grain in open market and secondly, by substitution of good quality grain by inferior quality food grain.

 

x.       The allegations of short weighment by FPS dealer show that they are not getting full quantity of grains from the MLS points. The possibility of Diversion at the Stage I transportation are immense. The Committee came across a report of diversion of 60 truck loads of PDS rice in Siddipet in Medhak District. During meetings with the district officials it was admitted that there are cases of variation in stocks at MLS points and FPS which have been dealt under section Section 6A of the Essential Commodities Act, 1955. It appears that cases are rarely sent to Court for prosecution under section 7 of the Essential Commodities Act, 1955. Thus there is no fear of punishment or imprisonment. Similarly no action appears to have been taken against the guilty officials though it is admitted that diversion can not take place without the connivance of the officials.

xi.      The MLS points are not equipped to weigh the food grain received from the FCI as they have weighing scales of only 0.3 MT capacity. The MLS points have no way of ensuring that they have received the full quantity from Stage I transport contractor. The MLS points also do not receive any samples from the FCI along with the stock and hence no verification of proper quality can be made. Thus, there are possibilities of diversion by both the methods described above. There is a great need for installing electronic weighing systems at the MLS points and indeed there was a demand at every public meeting by the FPS owners for installing electronic weighing systems at MLS points. As per the G.O 83 issued in 21.12.2006 the FCI shall ensure that Electronic Weigh Bridges are installed at all loading points by replacing the existing “Mechanical Weigh Bridges” within a period of 6 months and it shall further be ensured that the “Electronic weigh Bridges’ are not operated manually at any point of time. The Committee found that the Truck Chits, and the Weight Check Memo’s received at MLS point Utnoor were handwritten and not electronically printed.

 

xii.     Greater the difference in the PDS price and the market price the greater is the incentive for diversion. In Andhra Pradesh rice is being distributed under the PDS at Rs 2/ kg where as the price of similar quantity in open market is about 17 per kg. Thus, there is a great lure for diversion of the PDS grain. Steps are required to be taken to avoid such diversions.

 

xiii.     The in-charge of Suroor Nagar MLS point, Circle 1, Hyderabad informed the Committee that earlier electronic weighing system was installed at his MLS point but it did not function properly due to fluctuations in voltage of electric supply. He also stated the electronic weighing system is very sensitive and when the Hamalies (loaders) throw the bag of grain on the scale, it develops snags or errors. These statements only show that poor quality weighing systems were deployed earlier. The Committee reiterates its view expressed in earlier report relating to the State of Orissa that Complete Automation of weighing and delivery system is necessary to prevent any diversion of PDS foodgrain.

 

xiv.     The Committee found that the MLS points did not have any computer systems. All the records were kept manually. Moreover none of the MLS point had landline phones installed at the premises.

 

3.3            Transportation

 

3.3.1      Stage- I

i.        Government of Andhra Pradesh is incurring, on an average a subsidy of Rs. 1872 crores per annum. Out of this, the transport cost is Rs. 76.95 crores, the percentage being 4.11%.

 

ii.       The APSCSC Ltd. appoints Transport Contractors under Stage I for transportation of food grain from FCI godowns to MLS points by floating tenders every year. Along with the Tender, the transporter has to furnish earnest money of Rs.6 lakhs. The main criterion prescribed for transporters is that he must have minimum 5 trucks of his own and 5 hired trucks. He has to furnish a security deposit of Rs.15 Lakhs and a Bank guarantee of Rs.20 Lakhs. Tender process involves calling of technical and financial bids.

 

iii.      In its Reply to Committee’s queries, the Government of Andhra stated that the movement of vehicles is being presently monitored through SMS messages from the officials at FCI godown to the District Manager’s Office. Once the vehicle is received, it is informed by the official at the MLS point to the District office about the receipt. It is further stated that stocks received are weighed at the MLS point and if there is any variation in stock, double the value of the stock at actual cost is collected for that shortage from the contractor. However it was observed during its visit by the Committee that the said SMS system which even the APSCSC officials claimed existed, actually does not exist in practice. The Committee found that MLS point incharge and other officials do not use SMS system as they found it very cumbersome to type SMS. Similarly, the weighment at MLS point while receiving stock from FCI is not done in practice as they do not have weighing machines to weigh such huge quantity of foodgrains and hence weighment is not practically possible by using small weighing machines.

 

iv.      The Head office appoints by way of publishing tender notification in newspapers and Tender is taken out separately for each MLS point.

 

v.       Transportation cost paid is as follows:

For 1-16 Km distance – Rs. 61 per metric tonne

16 km onwards – Rs. 3 per metric tonne per km

 

3.3.2  Stage II

i.        The District Manager of APSCSC is responsible for entering into contract with Transporters. The Transport contractor is responsible for transporting essential commodities from MLS Points to Fair Price Shops within the Mandals attached to MLS points. Separate agreements are done for each MLS point.

 

ii.       Distribution and transportation of foodgrain to the retail units from MLS points is done as per norms of Stage II transportation.

 

iii.      Except for the cities of Hyderabad, Secundrabad and Vishakapatanam the transportation of PDS foodgrain from the MLS point to the FPS is done by APSCSC Ltd through Stage II transport contractors. The appointment of Stage II transport contractors is done MLS point wise/Mandal wise by District Administration by floating tenders. The period of contract is two years (Circular No. PDS 2/MOVT/F.G.5(9)/599/2005-06  dated 20-05-2005) The criteria is that the transporter must have at least 2 Vehicles for transportation from MLS points to Fair Price Shops. The tender has to be accompanied by earnest money. The rates of earnest money, security deposit and Bank guarantee are as under:

 

 

Allotment of Essential Commodities at MLS points

Earnest Money Deposits

(in Rs.)

Security Deposits

(in Rs.)

Bank Guarantee

(in Rs.)

Below 500 Mts

15,000.00

30,000.00

1,00,000.00

500-800 MTs

20,000.00

75,000.00

1,25,000.00

Above 800 Mts

25,000.00

1,00,000.00

1,75,000.00

 

iv.      The individuals / firms who are blacklisted by APSCSC Ltd. at any time are prohibited from participating in the tenders. The Rice Millers Association / Rice Millers Lorry owners Associations or their Associates are also prohibited from participating in tenders. The contractors are prohibited from engaging the Trucks of the Stage I contractors existing in the Districts or the Rice Millers or their Associations or persons involved in diversion of stocks or with criminal record or issues involved in 6-A case under EC Act for the purpose of transportation of foodgrains under PDS and they should not have any tie-up arrangements with the above said person.

 

3.3.3  Rates of Transportation

It differs from district to district. However, rates currently applicable in few districts is as follows:

 

In district Medhak the District Tender Committee comprising of 3 members – headed by Joint Collector (who is ex-officio executive director for district), DSO, District Manager, Civil Supplies and representative of Road Transport Authority appointed the transport contractor through the process of tender. Currently, the flat rate is applicable which is Rs. 4.75/- per Quintal per km.

In Adilabad rate of payment to Contractor is Rs 8.30 per quintal irrespective of distance.

 

3.3.4  Norms regarding Stage II transportation

i.        As per norms Stocks should be transported under stage II transportation from MLS point to door step of the FPS as per the route plan evolved under escort of a Government official to ensure proper delivery without diversion or leakage en-route. The Committee, however, found that at some places the Route Officers were not reporting.

 

ii.       The Validity period allowed by the GOI for lifting of stock allotted to State is 50 days i.e. from 1st day of the preceding month to 20th of the month for which the allocation pertains.  To ensure that allocated food grain is delivered to FPS within the first week of the month for which allocation is made the FPS dealers are instructed by the State Government to file their Demand Drafts on 18th of preceding month.  The release orders are sent to the MLS points on the same day to commence transportation from MLS point to F.P shop.

 

iii.      On receipt of the Demand Draft from FPS owner the release Order is required to be issued by the Mandal Revenue Officer on the same day. MRO is required to issue Release Order/ Allotment orders FPS wise with reference to the net requirement based on the gross allotment of FPS the closing balance available with the dealer on the last day of the month. MRO /ASO has to report the allotment, lifting and distribution for each FPS commodity wise duly totaling for the Mandal for the particular month by 3rd of the next month to the Collector / CRO, Hyderabad to consolidate and report the district wise position to the commissioner of civil supplies by 5th of every month.

 

3.3.5  Functioning of e-seva centres

i.        e-seva centres send their daily consolidated reports to the Tehsildar who is also the MRO.  Tehsildar prepares the R.O based on the payment slips / DD submitted by FP dealers. As there is no man to man interaction, there is no problem of bribery.

 

ii.       Earlier FPS owners were using bank services and they had to pay commission to the bank for preparing DDs. Now, as they are making payment through e-seva centres, which charge Rs. 10/- per month, so it is cheaper mode of payment.

 

iii.      Regarding the delay in issuance RO, once the money is paid, Tehsildar cannot delay the issuance R.O. so it has led to faster issuance of Release orders.

 

3.3.6  Responsibilities of Route Officer

i.        The MRO shall arrange for a Route Officer, who should not be lower than the rank of Junior Assistant, who shall be responsible for delivering stock at FPS and to ensure that there is no diversion en-route and full quantity is delivered at FPS.

 

ii.       The Route Officer shall obtain acknowledgement from the FPS dealer after delivering the foodgrains at FPS under the witness of the Sarpanch of the Village or ward Member or the Panchayat Secretary. Acknowledgement from the FP shop dealer and two other persons like Gram Panchayat Sarpanch /Members, Ward Members or Vigilance (Food Advisory) Committee members or elders of that area is to be taken in token of receipt of the stocks.

 

iii.      The Route Officer shall also immediately get entered the details of the stocks delivered in the stock register of the FPS dealer and attest the entry. Similarly, the stocks should also be written on the board maintained at the FPS.

 

iv.      The Route Officer is required to ensure that one sealed sample given by the MLS point in charge prepared in duplicate containing the signature of MLS point-in-charge and Route Officer at the time of the weighment is also delivered along with the stocks.

 

v.       Though the Route Officer has to accompany the truck, the Committee observed that this rule is not followed strictly and often Route Officers do no accompany the trucks. For instance the Committee observed after checking records in Utnoor MLS godowns that Route Officer was not accompanying the truck and there was no signature of Route Officer on Truck Chits and the Weigh Check memo. 

 

3.4     Complaints of short weighment

          Committee observed that there is no computerization at the MLS point. The MLS points had small weighing machines on which weighment of huge quantity of foodgrain is not possible. Except in the Hyderabad-Secunderabad and Vishakhapatnam where the FPS dealers themselves come and pick their allocated foodgrains. In all other districts of Andhra Pradesh the responsibility of distributing the foodgrains up to FPS doorstep is on APSCSC.   As the weighment is not done properly at MLS points there was general complaint by the FPS owners that there is always shortage of quantity of foodgrains.

 

3.5     Sampling

          The provision of sampling is not followed in practice. While issuing foodgrains and transporting them for FPS by trucks of stage II contractors, the various MLS point incharges do not issue samples of foodgrains. All the FPS owners who attended public hearings conducted by the Committee and owners of Fair Price Shops visited by the committee informed that they never received any sample from MLS godowns. This was admitted by most of the MLS point in-charges. However, few MLS point in-charges stated that they issue samples but in those cases also committee observed that they did not even know the procedure of sample making and issuance, which clearly showed that they were not issuing samples.

 

3.6     Hamalis (Loaders)

3.6.1  Hamalis are engaged at every MLS point in groups. The entire group is paid remuneration on the basis of work done. They are paid Rs. 2/- per quintal for unloading the grain from the truck when grain is received from FCI. They are also paid Rs.4/- per quintal for loading and unloading the truck at the time of delivery to the FPS. On an average a Hamali earns Rs. 3000/- per month. Besides this it was reported that the Hamalis force the FPS owners to give them Rs. 2/- per quintal as tip. The total amount is then divided between the Hamalis working at the MLS point.

 

3.6.2  The APSCSC has been undertaking the coverage of Group Insurance Scheme under Jansree Bima Yojana to the Hamalis working at CSC/GCC MLS points as a nodal agency w.e.f. 2006 by paying an annual premium @ Rs. 100/- per Hamali.

 

3.7     During the Visit to the  MLS  Point, Ramayampet, Medhak District, Andhra Pradesh on 03.06.2009 committee found :

 

3.7.1  The APSCSC procures paddy from local farmers at MSP (Rs. 930/- per quintal) and sends the same to the FCI for the purposes of the PDS.

 

3.7.2  The MLS had electricity. No landline was available at the MLS. MLS incharge Sachin Haran informed the Committee that he does not receive samples of grain from FCI. The Committee observed the following -

a.                  No stock board displayed outside.

b.                 There were no boards on sacks to distinguish which category grain is lying i.e. whether it is BPL rice, AAY rice, or Annapurna food grain, ICDS or MDM.

c.                  The entire stock of grain was stacked together irrespective of the date of arrival.

d.                 The stock does not stay at the MLS for more than 7 days. Thus no sampling is done in the godown.

e.                  Stock as on 3rd  June lying in MLS – 141.224 MT Rice and 20.778 MT wheat

f.                   Farthest FPS under this godown is at a distance of 40 km

g.                 Till 03.06.2009, 78 shops had lifted the food grain for the month of June

h.                 Advance allocation to FPS for the Month of June, 2009 had started on 22.05.2009

i.                    The MLS catered to 103 FPS

·          Ramayampet - 40 shops

·          Chegunta - 37

·          Shankaranpet - 26 shops

 

j.        Every truck of Stage- II cateres to around 1-2 FPS.

k.       The weighing machine was lying in the godown. However, the Committee observed that weighment of the entire stock received from the FCI was not possible on such a small weighing machine. The Godown Incharge later stated that weighment is done at FCI and he relied on the Truck Chit.

l.             In Stage-I transportation, no officer of APSCSC accompanies the transport vehicle and it is only the contractors who are responsible and accountable for any shortage of the food grains.

 

m.        Committee then checked the various registers and also the list of FPS and randomly observed / noted the stock issued.

n.          FPS Owner - Rajinder Reddy

          Stock issued -

PDS Rice

AAY

Annapurna

Red Gram Dal

Palmolein oil

59.40 Q

10.85Q

10kg

2 Q

200 Packets

 

3.7.3  Sugar was not lifted as money had not been deposited (The MLS in charge informed that the FPS owner may lift it later).

                           

3.7.4  The Committee Members also spoke to the farmers who had come to the procurement center for selling their grains. It was informed that the farmers used to get the grain on carts. Some of them came from a distance of 25 kms away. One of the farmers stated that he had brought 67 bags of paddy and would sell the same at Rs.9.30/- per kg., since it was a Grade A food grain. The said farmer had traveled a distance of 1 km. It was stated that one bag contains 40 kgs. of grain. The farmer stated that they receive the payment within 15 to 20 days by cheque.

 

 

 

3.8     Visit to MLS point, Utnoor (Adilabad)

 

3.8.1  Deputy Tehsildar, incharge of the MLS point, had been posted at the godown since November 2006. 

Committee’s observations:

  1. Godown incharge informed that he does not receive any sample from FCI. However, he said he gives the samples to the FPS.

 

  1. Total allocation at the MLS point – 2062.98 quintals (4201 Bags).The FPS dealers take their allocation from the MLS points and themselves accompany the truck carrying their stock.
  2. The Committee observed that hundreds of small packets of rice in polythyne pouches were nicely displayed on a bench lying exactly in front of the entrance. As stated by the godown Incharge these packets were prepared as sample packets by the godown Incharge to distribute to FPS and he stated that these packets are left overs and he had issued samples to the shops. However, the Committee observed that the said displayed packets were new packets probably prepared for the display during Committee’s visit. No seal on the samples and no description was present on those displayed packets so that no one can correlate for which stock it is prepared. As per standard sampling procedure two samples are to be taken out by the MLS point at the time of delivery of stock to the FPS. Each sample has to be marked showing the particulars of the MLS point, the FPS, the month for which the commodity has been issued, the date on which the sample is drawn and should bear the signature of the in-charge of MLS point .The samples have to be sealed with the seal of MLS point. Once sample has to be handed over to the FPS owner and the other corresponding sample has to be kept at the MLS point.

 

  1. Manual weighbridge is used in this godown.

 

  1. Electronic weighment receipt is not issued by FCI and the Truck Chits and WCM were handwritten receipts.

 

  1. The godown premises/ building was of GCC .

 

  1. Seeing the Truck Chits of Stage II it was observed that no Route Officer accompanies truck as no signature was present on Truck Chit.

 

  1. On the query of the Committee the MLS point in-charge informed us that when he receives foodgrains from FCI, he does not weigh stock while receiving from FCI and stock is directly positioned in the godown without weighment as weighment is not possible in the available weighing mechanism available with the MLS point and they rely on the weight check memo given by FCI.

 

  1. The Committee asked as to how communication about issuance and dispatch of stock is done. MLS incharge stated that they use their cellphone. MLS incharge said that they don’t use any SMS system (It is submitted that MD of APSCSC stated they have a very good SMS system for checking the dispatch and transportation of goods which was found to be not existing at this MLS point.) The Claim of the APSCSC that they have a SMS system to track dispatch of stock and that the same is uploaded on the website, stood falsified upon inspection by the Committee

 

  1. The Committee members observed that a truck was parked just outside the MLS point. On enquiry, the Committee was informed that the truck was waiting to be loaded with grain, which would be done after the inspection of the Committee was over. The Committee members spoke to the owner and driver of the truck, Nirmal, who stated that the capacity of the truck was 10 tonnes. The truck supplies grain to the FPS located at Gutti, Karsapur, Gadiguda and Lokhari. In a single day it delivered grains to 2-3 FPS and it took about 15 days to complete the distribution. In case, more trucks were required, the same are taken on lease. The FPS were supplied the grain on the basis of the Release Orders issued. Apart from the release order the truck driver would also carry a Truck Chit with him. It was stated that at the time of issuance of grain, the FPS dealer is present at the MLS point and the weighment is done before him and his signature is taken.

 

  1. The Committee perused the list of FPS, Goods Received Register and other documents at the MLS point.
  2. The Trucks at the said MLS point come from Nizamabad (FCI). However, only when the truck reached the MLS point does the godown incharge get to know the exact quantity which has been sent in the said truck

 

  1. No computerized Weight Check Memos are received from FCI. All Weight Check Memos are hand written.  The said MLS point has a storage capacity of 2,200 quintals of grain. The building is owned by GCC and Rs.1,339/- is given as the monthly rent.

 

3.9     Visit to the MLS point, Singanamala Mandal

 

3.9.1  The godown incharge, Mr. Hazi Vali, informed that he did not have the list of FPS to which his godown caters. The Committee went through the Issue Register at the godown observed that rice was being delivered to the respective FPS from 1st to 10th Sugar is delivered from 13th onwards. The Committee also inspected the Goods Receipt Register and observed that White eraser fluid had been used at a large number of places to make variation in the figures. The godown incharge stated that it was only on account of mistake in calculations. It was stated that at the time the stock came from the FCI, it was not weighed at the MLS point. The Committee observed that there was no stock board at the godown. The stacks of bags also did not have stack cards and the bags were stacked in bulk without any fixed pattern of layering. Thus the godown incharge had no means to keep a tab on the number of bags present in the godown.

 

3.10   Visit to MLS Point, Mango Mandi, Agricultural market Tirupati on 7th June 08

 

3.10.1The Committee met the godown incharge, Mr. B. Sundar Raju. Total Capacity of MLS point was 1000MT.  No samples were found in that godown and MLS incharge stated that no samples were received from the FCI along with stock. There are 101 FPS attached to this MLS point (72 urban and 29 rural).

 

3.10.2 The MLS point was storing both PDS and non-PDS commodities, all of which were properly stacked and labeled. However, the FCI norm that the grain should be stacked on wooden planks and also that the grain should not be placed at the corners/adjacent to the walls, was not being followed at the MLS point. When the grain was transported /sent to the FPS, the truck was accompanied by a Route Officer.

 

3.10.3 There were two godowns within the premises of the MLS, one of which only contained PDS Rice. It was stated that the entire stock of rice was lifted within one month

 

3.11   Visit to Chandragiri MLS point on 7th June, 2009

 

3.11.1 Godown Incharge, Mr. B. Raja, informed that he had been working there for the past one and a half years. Apart from him, there was only one more attendant at the godown plus 5 hamalis. The Committee members also went through the registers and account books of at the godown. Committee observed that as per records the allocation received in April and May was not clear. It is strange that MLS incharge mentioned that maximum allocation for April was done in March for which no record was present. Maximum record for allocation for the month of May 2009 was also not present. He stated that it has been delayed so same will be entered in June month. Thus, allocation received in MLS point for a month was not clear from the records.

 

3.12   Weighment

 

3.12.1 As per the G.O 83 issued in 21.12.2006 the FCI shall ensure that Electronic Weigh Bridges are installed at all loading points by replacing the existing “Mechanical Weigh Bridges” within a period of 6 months and it shall further be ensured that the “Electronic weigh Bridges’ are not operated manually at any point of time. Committee found that Truck Chits, and weight check memo’s received at MLS point Utnoor were handwritten and not electronically printed.

 

3.12.2 Similarly same G.O 83  also in Para 6.1  provides “APSCSC is responsible to curb and prevent shortages, misappropriation and diverson of stocks, hence it should duly and diligently exercise  internal controls, improving the procedures, installation of computers, electronic weighing scales and training of the staff to ensure clean Public Distribution System without any scope for loss of the Government. At any cost the system failure should not come in the way of protecting the interest of the consumers”

 

3.12.3 It further provides that stock should be released to FPS on 100% weighment basis, duly recording on Weighing Check Memo /backside of Release Order.

 

3.12.4 Vice Chairman and Managing Director, APSCSC Ltd. Hyderabad is to ensure that Electronic Platform Scales are installed at each MLS point with in a period of 6 months from the date of issuance of the Order. 

 

3.12.5 Inspite of the clear provisions of the G.O 83, electronic weigh bridges were almost non-existent. The mandate of installation of computers / electronic weighing scales envisaged in the said G.O which was more than two years old was given a total go-by by the department.

 

3.13   Sampling 

 

3.13.1 The Committee in its Questionnaire asked the Government of Andhra Pradesh about the checks to ensure that stocks of essential commodities issued by FCI are not replaced by stocks of inferior quality grain during storage, transit or any other stage till delivery to the ration card holder. In its reply the Government of the State stated that “Stocks are lifted from FCI duly following the procedure laid down for joint sampling. The Transport contractor is also required to bring the sealed samples of the rice lifted from the FCI godown and hand over to the MLS Point in charge for verification of the quality. The truck wise dispatches from FCI godowns and its receipt at MLS point are being monitored on daily basis. Samples fo stocks lifted from MLS points are also kept in FPS to be checked by the beneficiaries.” However, during its visit Committee found that there is no system of sampling of stocks neither during Stage I transportation nor Stage II transportation. Samples are not sent by FCI to the MLS points of APSCSC. Similarly MLS points also do not send any samples to FPS shops thus there is no mechanism for quality control.

 

 

 

 

3.14       Observations

 

3.14.1     There is no check on the quality of foodgrain distributed to the consumer. The MLS godowns do not receive any sample from the FCI. No samples are issued while issuing the stocks from the MLS Point to the FPS.

 

3.14.2     The weighment mechanism is not electronic and it is not possible to weigh the large quantity of foodgrain received from the FCI. Thus the MLS points do not weigh it while receiving foodgrains from FCI.

 

3.14.3             Most of the Mandal level Stockist Points do not have electricity connection and there is no telephone connection in any of the MLS points.

 

3.14.4             As per the records maintained at the MLS point, it was not clear as to by what date the entire stock of a particular month was received at the MLS point and the Committee observed that it comes randomly as per the requisitions sent by the MLS. All the commodities like daal, sugar and  oil, are not supplied regularly.

 

3.14.5             Records regarding the quantity of grain received and issued is not properly maintained by all godowns. For example the Committee observed in Singanamala MLS point that there were corrections by using white fluid at many places in each sheet of the stock register. Similarly in Chandragiri MLS point, the Committee observed that as per records the allocation received in April 2009 and May 2009 was not clear. It is strange that the MLS point in-charge mentioned that maximum allocation for April was done in March for which no record was available, and the maximum record for May allocation was also not available as, he said it has been delayed so the same is entered in June month. Thus allocation received at the MLS point for a month was not clear from the records.


 

Chapter 4

MODE OF APPOINTMENT OF FAIR PRICE SHOPS DEALERS

 

4.1     The Andhra Pradesh PDS control order 2008, in its Clause 2(d) states that in respect of FPS, Appointing Authority means District Supply officer (city) having jurisdiction over the area in respect of Hyderabad district, the District Supply Officer (City) having jurisdiction over the area in respect of Vishakhapatnam city and the Revenue Divisional Officer or the Sub- collector concerned in respect of other districts.

 

4.1.1  Clause 5 of the same says that with a view to control and ensure proper distribution of scheduled commodities owned by the State government, the Appointing Authority may issue authorizations to Fair Price Shops.

 

4.1.2  Government of Andhra Pradesh issued guidelines for selection and appointment of Fair Price Shop Dealers under Andhra Pradesh state Public Distribution system( control) Order 2008 vide Annexure G.O.MS 52, CAF and CS (CS.I)Dept., DT:18-12-2008.

 

4.1.3  The said notification says that all the vacancies of FPS shall be notified on the 1st of every month by the Appointing Authority and invite applicants for walk in interviews along with original certificates on a specified date atleast after ten clear days time of the notification. The results shall be announced on the next day of the interview. There shall be no postponement of date by the Appointing Authorities.

 

4.1.4  The notification shall be affixed on the notice Boards of the RDO, the Collector and copy be sent to the Sarpanch, Mandal level FAC, members of the FAC attached to FPS and to the MLA and the MP of the area. In twin cities of Hyderabad and Secunderabad, the notification shall be published at the office of the Chief Rationing Officer, the ASO having jurisdiction and the Commissioner of Civil supplies, copies of the notification shall sent to the members of the Corporation, Circle Level FAC and also to the MP and the MLA of  the area.

 

4.1.5  As per Para 7 of Annexure to G.O.MS 52, CaF and CS (CS.I)Dept., DT:18-12-2008, following reservation shall be observed

 

1.     Scheduled Castes- 15%

2.     Scheduled Tribes -6%

3.     Physically Handicapped 3%

4.     Backward class -25%

5.     Women 30%

However, the data given by officers of different districts differs from the criteria regarding the reservation in appointment of dealer provided in the abovementioned guidelines which shows that the officers were ignorant of the above mentioned criteria. As per the officials the reservation criteria was as follows : SC 17%, ST- 7 %, Backward class 25 %, Minority – 5 %, Physically handicapped – 3 %.

 

4.2             Eligibility to be appointed as FPS dealer

 

4.2.1      As per the  Para 4 of Annexure to G.O.MS 52, CAF and CS (CS.I)Dept., DT:18-12-2008,  only unemployed persons or from persons from Registered Rural area groups of Women’s voluntary Consumer Organisations (which have only women as members) or Women’s thrift groups, Co-operative societies, run exclusively by women, shall be eligible for appointment as Fair Price Shop dealers.

 

4.2.2      Applicant should be financially sound to lift the allotted essential commodities by the authority and should not leave essential commodities unlifted due to financial constraints.

 

4.2.3      Para 5 of the abovementioned document says person should be qualified upto to 10th Standard, which is the minimum general educational qualification required for appointment as Fair Price Shop dealers. The said para further says that persons possessing the minimum general educational qualifications and the persons having higher qualifications, if applied, shall be treated equally to the purpose of appointment. Where no candidate is available with the said minimum general educational qualifications, a candidate possessing a lesser educational qualifications which shall not be less than a pass in 7th class, may be considered for appointment.

 

4.2.4      The minimum age for applying for grant of a FPS is 18 years.

 

4.2.5      The Candidate shall be a resident of the Gram Panchayat or the Municipal limits of the town as the case may be, in which the shop is to be located.

 

4.3             Guidelines to be observed in Tribal Areas:

 

4.3.1      In tribal areas the FPS shall function through the DRD of the GCC wherever they exist. Where there is no DRD, Project Officer of ITDA shall identify suitable tribal beneficiary and the FPS be entrusted to him,  who shall be provided with Institutional Finance from A.P scheduled tribes finance corporation/ ITDA /GCC or through a commercial bank

 

4.3.2      Selection of beneficiary to run FPS shall be done by the Project Officer, ITDA concerned and the candidates thus selected will be appointed as FPS dealer by the Appointing Authority. 

 

4.3.3      In respect of those villages where no tribals are residing in the tribal areas, the GCC alone shall run the FPS through their DRD. The said guidelines also says that immediate action be taken to replace all FPSs which are now being run by Non- tribals.

 

4.4             General instructions regarding all kind of retail dealers

 

4.4.1      Every candidate appointed as FPS dealer shall be required to work for a minimum period of 5 years unless authorization is suspended or cancelled.

 

4.4.2      The candidate should not have adverse antecedents.

 

4.4.3      The applicant should personally run the FPS and not run in benami or through agent. However the same is relaxed in case of women FPS dealers.

 

4.4.4      The Candidate shall not have any connections with any other business dealing with Rice, sugar, wheat etc. directly or indirectly.

 

4.4.5      Clause xviii (e) of Para 12 states that FPS shall use only those registers in which all the pages are stamped and the total number of pages are certified by the concerned Tehsildar / ASO

 

4.5     Tenure/ period

As per the norms, the validity of the licence given to FPS is for 2 years and the same needs to be renewed after that period.  If it is not renewed within that period, the licence of the FPS is cancelled and the amount deposited is forfeited. At the public hearing at Hyderabad in a representation made by the Greater Hyderabad Fair Price Shop Dealers Welfare Association, it was suggested that after the death of the FPS dealer, his licence should be given to his legal heirs / dependents as they face hardship due to sudden death of the dealer. However, the Committee is unable to accept the request. An FPS owner is merely a licencee for a fixed period. The FPS owners claim that they are not earning sufficiently from the FPS and sometimes they are even incurring a loss, in such circumstances it is difficult to understand why there is a demand to pass on such a business to their heirs. The reason is not far to seek. It is the earning from the black market.

 

4.6     Procedure of appointment

 

4.6.1  It was stated that on receiving authorization from the RDOs, applications are called for FPS dealership. Thereafter, the antecedents and qualifications of the applicants are verified. It is also verified whether they have been convicted under Section 6A of the Essentials Commodities Act. The Tehsildar also makes inquiry about the applicant’s character, family members etc.[4] Thus it is done in the following stages-

         

i.                    Advertisement in newspaper

ii.                  Walk in interview

iii.                Before appointment – verification of antecedents by Tehsildar

iv.                Deposit of prescribed fee

v.                  Issuance of licence

 

4.6.2  On selection as FPS dealer, the applicant is made to give a Trade Deposit which is Rs. 4000/- in Urban areas and Rs.3000/- in Rural areas. A renewal fee of Rs.250 is taken after 2 years.

 

4.6.3  At, Hyderabad, the CRO informed about the process of appointment of dealers. He stated that notice is published in the newspaper and candidates submit applications for a walk-in interview. The Committee also inspected few files and observed that alongwith applications the following documents were deposited:-  

 

1.                 Solvency Certificate

2.                 SSC 10th Certificate

3.                 Bonafide Conduct Certificate

4.                 Caste Certificate

5.                 Residential Proof

6.                 Affidavit

 

4.7     Observations of Committee

 

4.7.1  One of the Fair Price Shop dealer at Hyderabad informed the Committee about the malpractices in the appointment of dealership. The Committee was informed that in response to the advertisements, one has to apply for a shop and applicant is called for an interview. There are several recommendations from MLA’s/ VIPs and also the political influence on the officers. On the basis of political influence, the FP shops are allotted. Further for those, who do not have such influence, officials of Civil Supplies contact the applicant and after knowing the bank balance and the status of applicant, they demand an amount of Rs. 60,000-70,000 as bribe. If the applicant wants a ration shop he has to pay this amount to the ASO/DS0. Apart from this he has also to pay Rs. 5000/- to the Area Inspector. Only after that can he get a licence of Fair Price Shop. Further he has     also to pay Rs. 1000-1500 every month (depending upon the number of ration cards) to the local area inspector

 

4.7.2  Officials of the Civil Supplies department make bogus ration cards and handover these bogus cards to the FPS dealers at the rate of Rs. 1000/- to Rs. 1500/- per card. Normally, these bogus ration cards are made for five years. To recover this amount, FPS dealers grain on these cards and sell these commodities in the open market at the higher/market rates.

 

4.7.3  The Committee met the Appointing authorities in districts Adilabad, Medhak, Ananthpur, Chittoor, and also in Hyderabad and Vishakhapatnam. The authorities informed that there is political influence in appointment of dealers and usually the dealers are recommended by the political persons.

 

4.7.4  In the light of the above, urgent steps need to be taken to rectify the anomalies such as:-

 

1.     There should be explicit and proper guidelines for appointment of dealers prescribing qualifications for eligibility.

·        The dealer should be a resident of the area and

·        The applicant should have a running kirana / Grocery business.

·        The applicant should be financially sound so that he can lift all the PDS items in one lot.

·        The applicant should have sufficient storage space to store PDS commodities for the entire month.

 

2.     The applications received for appointment as a dealer should be verified at the spot.

 

3.     Political interference in appointment of dealers should be completely eliminated.

 

4.     There should be a properly constituted committee for recommending the suitable person for appointment as a Fair Price Shop dealer.

 

5.     The Appointing Authority should carefully consider the recommendations and thereafter appoint the FPS dealer.

 


Chapter 5

VIABILITY OF FAIR PRICE SHOPS

 

5.1     In the memorandum dated 31.03.2008 submitted by the State Government to the Committee the number of PDS ration cards category-wise as on 31.12.2007 was given as under:

          a. While (BPL)                            :        1,70,28,078

          b. Antodaya Annayojana             :           15,57,800

          c. Annapurna                                       :                93,200

          d. Pink (APL)                             :           38,28,661

                                                                   ----------------

                             Total                      :        2,25,07,739          

                                                                   ----------------  

5.2     With regards the amount of commission to be paid to FPS dealers, the Commissioner of Civil Supplies in his letter dated 31.3.2009 gave the following margins for the FPSs.

Per Quintal

Rice

In Hyderabad, Visakhapatnam and Vijayawada        Rs. 17.11 + gunny

In other areas                                                     Rs. 12.92 + gunny

 

Wheat  

In Hyderabad, Visakhapatnam and Vijayawada      Rs.18.00 + gunny

In other areas                                                   Rs. 13.00 + gunny

 

Sugar   

In Hyderabad, Visakhapatnam and Vijayawada   Rs.23.96 + gunny

In other areas                                                Rs.15.53 + gunny

 

K.Oil                                                            Rs.0.25 ps.litre.

 

Upward revision of margins is under active consideration of Government of A.P.

         

5.3     Government of Andhra Pradesh has issued instructions (G.O. Ms. No.35 dated 17.9.2007) for rationalization of the Fair Price Shops.  This has been done keeping in view the economic viability of the FPSs and also the convenience of the card holders. This G.O. was the subject matter of challenge in the A.P. High Court in various Writ Petitions filed by individual FPS owners and Association of FPS owners. To understand the scope of challenge by the FPS owners it would be appropriate to set out the G.O. 

 

“…In the reference 1st read above orders have been issued directing the District Administration to follow certain guidelines in opening Fair Price Shops basing on the need at the village level in the districts.  In the ref 2nd read above instructions have been issued for opening new Fair Price Shops or for bifurcation of the existing Fair Price Shops in the districts keeping in view the economic viability of Fair Price Shop and also in reorganizing the Fair Price Shops wherever necessary.

 

2.       Government have issued orders in the reference 3rd and 4th read above, directing that IRIS based ration cards shall be issued to all eligible families in the State with IRIS technology and bio-metric system.  In the system all families have been issued IRIS based laminated cards as per the eligibility thereby the PDS network is further strengthened.

 

3.       Prior to issue of Iris based ration cards, 1.98 crore cards were in circulation and they were attached to 41,618 Fair Price Shops in the State.  After the issue of Iris based ration cards to all eligible families, 2.23 crore iris cards are in circulation, thus there is an increase of nearly 25 lakh ration cards in the State.  It is noticed that there is no uniformity on attachment of BPL and APL cards to the Fair Price Shops.  Hence, there is every need to rationalize the existing Fair Price Shops under PDS network, with minimum number of BPL cards not only to make the Fair Price Shop economically viable but also to open Fair Price Shop in the areas accessible to the card holder in the public interest.  The Collectors (CS) / Chief Rationing Officer, Hyderabad have been frequently seeking permission for creation of new shops by rationalizing the existing Fair Price Shops due to increase of Iris based ration cards, for smooth functioning of public distribution system.

 

4.       The paramount consideration in creating the new F.P. Shop should be the convenience of the card holders, to strengthen the public distribution network further it is decided by the Government   to open 2850 F.P. Shops additionally on account of the rationalization.  This is only an indication of possible number of F.P. Shops approximately to be opened.  But the number may be more or less depending on the need.  Collectors are requested to examine the requirement of FP Shops for each and every village / ward keeping in view of the following guidelines and create new shops and intimate the number of shops finally opened in the district to the Government within 45 days.  All the card holders of the newly created shops shall be intimated on the creation of new shops locality where they can draw the commodities.

 

 

5)       Government after careful consideration of the matter, hereby order for rationalization of existing Fair Price Shops in the State by attaching the required number of cards to each shop for convenience of the card holder in the locality and keeping in view the economic viability of the Fair Price Shop.  The following instructions shall be scrupulously followed in the rationalization of the Fair Price Shops.

 

a)  Rural areas: The number of Iris based ration cards to be attached to each Fair Price Shops is 400 to 450 BPL and 50 pink cards.

b)  Urban areas:  The number of Iris based ration cards to be attached to each Fair Price Shops is 500 to 550 BPL and 250 pink cards in Municipalities and erstwhile Taluk Headquarters.

c) Corporations:  The number of Iris based ration cards to be attached to each Fair Price Shop is 600 to 650 BPL Cards and 400 pink cards.

 

6)      The following norms shall be followed in the process of rationalization of Fair Price Shops:-

 

(i) Hyderabad  city – If the cards of the existing Fair Price Shop  is more than the minimum of 600 cards (White / AAY / AP/ crippled weavers) and 400 pink cards, the excess number of cards of such Fair Price Shop shall be transferred to a new Fair Price Shop to be located in the same locality.

(ii) Opening of a Fair Price Shop within one kilometer radius of the residence of the card holder shall be scrupulously followed.

(iii) In Municipalities / erstwhile taluk headquarters (urban) each Fair Price Shop should have a minimum of 500 BPL Cards.

(iv) In Mandal headquarters each Fair Price Shop should have a minimum of 500 BPL cards and 250 pink cards.  Keeping in view the guidelines already issued, new Fair Price Shops can be opened based on the need.

(v)  Rural areas – Each Gram Panchayat (v) should have at least one F.P. Shop with a minimum of 400 BPL cards and 50 APL cards.  In case, there are more number of cards in excess of the minimum number of cards i.e. 400 BPL and 50 APL in a village there can be two FP Shops, provided the total number of BPL cards in that village is not less than 600 and the number of BPL and APL cards should be attached to the two Fair Price Shops equally.

 

7.       All the District Collectors, Collectors (CS) / Chief Rationing Officer, Hyderabad, hereby requested to review the position keeping in view the orders now issued and reorganize by creating new Fair Price Shops wherever necessary…”

 

5.4     The High Court dismissed the whole batch of Writ Petitions. The operative portion of the judgment dated 25.03.2008 read as under:

          The contents of G.O. already specified above need not be repeated.  As can be seen from the said G.O. the State Government had thought of issuing the said G.O. as a policy measure in public interest.  While balancing the public interest or individual interest normally preference to be given to the public interest when compared to the individual interest.  However, it does not mean that the interest of the Fair Price Shop dealer to be totally ignored.  The harsh conditions imposed on a Fair Price Shop dealer also had been highlighted in elaboration.  The minimum  number of cards  and the economic viability  of such Fair Price Shops always to be kept in mind though the public interest involved may have to be given due weight.  Inasmuch as this is a policy decision taken by the State Government this Court is not inclined to disturb the same.  But at the same time even in the light of the specific stand taken in the counter-affidavits this Court does again emphasize that the economic viability to be kept in mind while adjusting or arranging the Fair Price Shops.

 

          Except emphasizing  and making this observation  the impugned G.O. cannot be found fault and especially in the light of the  limitations imposed on this Court while interfering with policy matters while exercising power under Article 226 of the Constitution of India these Writ Petitions are liable to be dismissed and accordingly hereby dismissed subject  to the above observations.  No costs. 

 

5.5     During the course of the discussions, the Court also observed as under:  

          Even in the light  of the stand taken in the respective counter-affidavits, this court does hope and also emphasize that the respondents are bound to keep in mind the economic viability of the respective Fair Price Shops and Fair Price Shop dealers.  This Court is making this observation in the light of the specific stand taken in the counter-affidavits in these Writ Petitions.  Elaborate submissions were made relating to non-viability data and non-application of mind before issuance of the G.O. impugned in the present batch of Writ Petitions.

 

5.6     It is not necessary for the Committee to refer to various contentions raised in the Writ Petition challenging the G.O. except to note the allegations and counter-allegations regarding viability of FPSs.  It was submitted that that FPS owners were getting a meager commission and the shops were not economically viable and if rationalization as proposed by the aforesaid G.O was done their position would be worse. 

 

5.7     The following statement shows the exact position of commission, income and expenditure[5]:

 

 


COMMISSION:

COMMODITY

URBAN AREA

RURAL AREA

P.D.S. Rice (per Qtl.)

Rs. 17.11

Rs. 12.99

A.A.Y. Rice (per Qtl.)

Rs. 17.11

Rs. 12.99

Sugar (per Qtl.)

Rs. 22.95

Rs. 14.52

Wheat (per Qtl.)

Rs. 18.00

Rs. 13.00

K.Oil (per ltr)

Rs. 0.25

Rs. 0.25

         

5.8     Statement showing the income of the dealer having 618 cards attached (rural area):

 

COMMODITY

ALLOTMENT

(in Qtl/Kg/Lts)

COMMISSION

(in Rs.)

INCOME

(in Rs.)

P.D.S. Rice

90-00

12-92

1162-00

A.A.Y. rice

10-50

12-92

135-00

Sugar

600

14-52

87-00

K. Oil

1600

0-25

400-00

Total Commission

 

 

1784-00

By selling empty gunny bags

200 xRs.8/-

 

1600-00

By selling empty sugar bags

6 x Rs.15/-

 

90-.00

Total income

 

 

3474-00

 

5.9.    Statement showing the expenditure of the dealer having 618 cards attached (rural area):

 

SL. NO.

PURPOSE

AMOUNT (IN Rs.)

1.

Rent for shop/mulgi

650-00 (minimum)

2.

Electricity charges

150-00

3.

Assistant salary

1000-00

4.

Hamalies

360-00

5.

D.D. charges

200-00

6.

Interest on loans

600-00

7.

Stationery

50-00

8.

Licence fee, seals for weighment etc.

150-00

 

TOTAL

3160-00

 

5.10   It was alleged before the High Court that while there was no enhancement of commission, maintenance expenditure of FPS shop had increased i.e. rent, electricity, wages for unloading, storage, handling charges and licence fee.  The number of cards per shop were sought to be reduced by the G.O. which would seriously affect the viability of the shop.  Reference was made to another G.O. regarding minimum wages payable to employees of shops and commercial establishments (G.O. Ms. No.80 dated 2.12.2000) as under:

         

CADRE

MIN.WAGE

VDA

TOTAL

HELPER

2020/-

1554/-

3574- 00

SALESMAN

2733/-

1554/-

4287-00

 

5.11   It is stated that at present no commodity is issued to the pink card holders and the dealers are also not getting any commission for pink cards.  These pink cards are being used by the card holders as identity proof only. The dealers questioned the tentative income shown by the Government as Rs.2062.32 on 400 cards (White cards) and said that Government very cleverly was silent as to how much amount the dealer has to invest for getting an income of Rs.2062.32 and out of which what will be the net income for survival of FPS dealer after incurring the expenditure.   As to the amount that has to be invested by the dealer on 400 cards, was given by the dealer is as under (based on the quantum of commodities that may be allotted presumably on 400 cards):

         


 

Sl.No.

Commodity

Quantity x price

Total

1.

Rice

Qtls.64 X  512-08

32,773-12

2.

Wheat

Qtls. 2 X 687-00

1,374-00

3.

Sugar

Qtls. 4 X  1334-47

5,337-88

4.

K.Oil

Lts. 1200 X 9.50

11,400-00

 

Total investment

 

50,885-00

5.

Expenses

Rent

600-00

6.

 

Commission to Bank on D.Ds

200-00

7.

 

Stationery

50-00

8.

 

Asst. Salary

900-00

9.

 

Authorization fee/weight & measurement fee (average per month)

100-00

10.

 

Interest on investment

500-00

11.

 

Electricity charges

150-00

12.

 

Hamalies charges

300-00

 

Total

 

2,800-00

 

 

5.12   It is stated that it would be seen from the above  statement that on 400 cards an FPS dealer has to invest Rs.50,885/- upon which he gets an income of Rs.2062-32/- per month as calculated by the Government which was not even sufficient for the expenses incurred by  an FPS dealer.

 

5.13   It is stated that the FPS Dealer Association requested the authorities to increase the card position to FPS dealers as under:

 

a)     400 to 450 BPL and 50 Pink cards to 600 to 650 + 50 pink cards.

b)     500 to 550 BPL and 250 pink cards to 700 to 750 + 300 pink cards.

c)      600 to 650 BPL and 400 pink cards to 800 to 850m + 500 pink cards.

 

5.14   Further it is stated that the petitioners are not getting more than Rs.3,000/- per month as on today.

 

5.15   It is relevant to note that the Committee was informed by the State government that the commission has been enhanced to Rs 25 per quintal for cities and Rs 20 per quintal for other areas.

 

5.16   FPS owners have demanded a further enhancement of their commission in respect of rice from Rs. 25/- to Rs.50/- per quintal in respect of three cities – Hyderabad, Vijaywada and Visakhapatnam and for rest of State Rs.20/- to Rs.40/- per quintal.

 

5.17   The Committee also examined some FPSs in the course of its visit to Andhra Pradesh. The details of FPS No. 1, 1st road near Shivalayam Temple, Anantapur, having 600 White (BPL) cards is as under:

 

Calculation of income for the month of May, 2009

Commodities /Qty.

Rate of Commission

Total

Rice (BPL) 79 quintal

Rs.20/qtl.

Rs.1580/-

AAY rice 14.35 qtl.

Rs.20/qtl.

Rs.287/-

Sugar 6 qtl.

Rs.15 /qtl.

Rs.90/-

Palm oil 550 kg.

Rs.1 /kg

Rs.550/-

Dal 570 kg.

Rs.0.55/kg

Rs.313/-

Kerosene 1300 litre

Rs.0.25/ litre

Rs.325/-

Total

 

Rs.3135/-

Sale of empty gunny bags

170@10.50 per bag

Rs.1785/-

Gross Total

 

Rs.4920/-

 


Expenditure

1 labour

Rs.1300/-

Electricity

Rs.150/-

Hamalli Charges

Rs.200/-

Draft Charges

Rs.200/-

Total

Rs.1850/-

 

Net Income from the FPS = Rs. 4920 - Rs. 1850 = Rs.3070/-

 

5.18   It would be seen that apart from PDS items like rice, wheat, sugar, the dealer was also selling other items.  If only PDS items are taken into consideration, the income of the dealer would come to Rs.1892/- per month as shown under –

 

Commodities /Qty.

Rate of Commission

Total

Rice (BPL) 79 quintal

Rs.20/qtl.

Rs.1580/-

AAY rice 14.35 qtl.

Rs.20/qtl.

Rs.287/-

Sugar 6 qtl.

Rs.15 /qtl.

Rs.90/-

Total

 

Rs. 1957/-

Sale of empty gunny bags

170@10.50 per bag

Rs.1785/-

Gross Total

 

Rs.3742/-

 

Expenditure

1 labour

 

Rs.1300/-

Electricity

 

Rs.150/-

Hamalli Charges

 

Rs.200/-

Draft Charges

 

Rs.200/-

Total

 

Rs.1850/-

 

Net Income from the FPS = Rs. 3742 – Rs. 1850 = Rs.1892/-

5.19   Government Order No.35 limits the number of cards in every FPS considering its location either in the Corporation areas, city or rural areas.

 

5.20   Government has allowed sale of non-PDS items in FPS but it would appear that the dealers are not interested in selling the items. As noted in one representation given by Fair Price Shops Owners Association, their only demand has been to increase the commission. Government Order issued on 27.2.2009, in effect, specifically allows the FPSs Owner to expand his basket of commodities which he can sell from the shop that include salt, tea, toiletry, etc. The idea is to have village mall concept. It is a matter of common knowledge that owner of a grocery shop even in village makes sufficient money to run his household and also to make some savings.  It is certainly necessary that FPS is financially viable which, in turn, will prevent diversion of PDS commodities.

 

5.21   During the course of the Public Hearing at 01.06.2009, the Hyderabad Fair Price Shop Dealers Welfare Association gave the Committee following worksheet as to the Net Profit earned in each FPS –

 

A- Income

 

Commodity

Allotment

(in Quintals)

Rate of Margin (in Rs.)

Total amount of Margin per Month (in Rs.)

Sub-Rice

130

25.00

3,250.00

AAY-Rice

4

25.00

100.00

Wheat

5

18.00

90.00

Sugar

3

23.00

70.00

Kerosene

6500 Ltrs.

0.38

2,470.00

Total

8,280.00

 

 

 

 

B- Expenditure

 

Transport and Hamali Charges on Rice, Wheat & Sugar (142 Quintals x Rs.14.00)

Rs.1990.00

6500  x  0.14 Kerosene Transport Charges   

Rs.910.00

Shop Rent

Rs.2000.00

Helper for weighment etc.

Rs.1500.00

Electricity

Rs.100.00

Stationary

Rs.150.00

Interest on capital investment of Rs.25,000/- @ 18% per annum as per norms of the banks on loans

Rs.375.00

Total

Rs.7,025.00

                            

                             Gross Income         :        8,280

                             Expenditure            :        7,025

                                                                   ­-­--------

                             Net profit               :        1,255

                                                                   ----------

5.22   An increase in commission from Rs.25 to Rs.50 per quintal in corporation areas and Rs.20 to Rs.40 per quintal in other areas in the State will not make the FPS viable as the following calculation would show.

 

Rural Areas (450 BPL Cards)

Commodities

Quantity

Rate of Commission

Income

@40/qtl.

Rice (BPL)

90 quintals

20/qtl.

1800

3600

Rice (AAY)

0 quintals

20/qtl.

0

0

Sugar

4.5 quintals

15.53/qtl.

69.88

69.88

Wheat

0 quintals

13/qtl.

0

0

Gunny Bags

180 bags

10.50/bag

1,890

1890

Total

3,759.88

5,559.88

 

Particulars

Expenditure

Rent

1,000

Labour

1,500

Electricity

500

D/D

300

Hamali (Rs. 3/- per quintal)

300

Total

3,600

 

                                                                                   Rate of Commission

 

@20/qtl.

@40/qtl.

Net Income (Income – Expenditure)

159.88

1959.88

 

Urban Areas (550 BPL Cards)

Commodities

Quantity

Rate of Commission

Income

@40/qtl.

Rice (BPL)

110 quintals

20/qtl.

2200

4400

Rice (AAY)

0 quintals

20/qtl.

0

0

Sugar

5.5 quintals

15.53/qtl.

85.41

85.41

Wheat

0 quintals

13/qtl.

0

0

Gunny Bags

220 bags

10.50/bag

2,640

2,640

Total

4,925.41

7,125.41

 

Particulars

Expenditure

Rent

1,000

Labour

1,500

Electricity

500

D/D

300

Hamali (Rs. 3/- per quintal)

300

Total

3,600

 

                                                                                   Rate of Commission

 

@20/qtl.

@40/qtl.

Net Income (Income – Expenditure)

1,325.41

3,525.41

 

Hyderabad / Vishakhapatnam / Vijaywada (650 cards)

 

Commodities

Quantity

Rate of Commission

Income

@50/qtl.

Rice (BPL)

130 quintals

25/qtl.

3250

6500

Rice (AAY)

0 quintals

20/qtl.

0

0

Sugar

6.5 quintals

23.96/qtl.

155.74

155.74

Wheat

65 quintals

18/qtl.

845

845

Gunny Bags

 390 bags

12/bag

4,680

4,680

Total

8,930.74

12,180.74

 

Particulars

Expenditure

Rent

1,000

Labour

1,500

Electricity

500

D/D

300

Hamali (Rs. 3/- per quintal)

300

Transportation

900

Total

4,500

 

                                                                                   Rate of Commission

 

@25/qtl.

@50/qtl.

Net Income (Income – Expenditure)

4,430.74

7,680.74

 

5.23   It is proposed by the government to increase the entitlement of rice to the beneficiaries i.e. 6kg per person and 30 kg per unit w.e.f 02.10.2009. The viability on the proposed basis is as under:

 

Rural Areas (450 BPL Cards)

Commodities

Quantity

Rate of Commission

Income

@40/qtl.

Rice (BPL)

135 quintals

20/qtl.

2,700

5,400

Rice (AAY)

0 quintals

20/qtl.

0

0

Sugar

4.5 quintals

15.53/qtl.

69.88

69.88

Wheat

0 quintals

13/qtl.

0

0

Gunny Bags

 270 bags

10.50/bag

2,835

2,835

Total

5,604.88

8,304.88

 

Particulars

Expenditure

Rent

1,000

Labour

1,500

Electricity

500

D/D

300

Hamali (Rs. 3/- per quintal)

300

Total

3,600

 

                                                                                   Rate of Commission

 

@20/qtl.

@40/qtl.

Net Income (Income – Expenditure)

2,004.88

4,704.88

 

 

 

Urban Areas (550 BPL Cards)

Commodities

Quantity

Rate of Commission

Income

@40/qtl.

Rice (BPL)

165 quintals

20/qtl.

3,300

6,600

Rice (AAY)

0 quintals

20/qtl.

0

0

Sugar

5.5 quintals

15.53/qtl.

85.41

85.41

Wheat

0 quintals

13/qtl.

0

0

Gunny Bags

 330 bags

10.50/bag

3,465

3,465

Total

6,850.41

10,150.41

 

Particulars

Expenditure

Rent

1,000

Labour

1,500

Electricity

500

D/D

300

Hamali (Rs. 3/- per quintal)

300

Total

3,600

 

                                                                                   Rate of Commission

 

@20/qtl.

@40/qtl.

Net Income (Income – Expenditure)

3,250.41

6,550.41

 

Hyderabad / Vishakhapatnam / Vijaywada (650 cards)

 

Commodities

Quantity

Rate of Commission

Income

@50/qtl.

Rice (BPL)

195 quintals

25/qtl.

4,875

9,750

Rice (AAY)

0 quintals

20/qtl.

0

0

Sugar

6.5 quintals

23.96/qtl.

155.74

155.74

Wheat

65 quintals

18/qtl.

845

845

Gunny Bags

 520 bags

12/bag

6,240

6,240

Total

12,115.74

16,990.74

 

Particulars

Expenditure

Rent

1,000