JUSTICE WADHWA COMMITTEE

ON

PUBLIC DISTRIBUTION SYSTEM

 

 

Report

 

On

 

THE STATE OF TAMIL NADU

 

 

 

 

 

JUSTICE WADHWA COMMITTEE

ON

PUBLIC DISTRIBUTION SYSTEM

 

State of Tamil Nadu

 

Index

 

Chapter no.

Topic

Page no.

A

Preface

1-7

B

Executive Summary

i-xiii

1.     

Introduction

1-7

2.     

Legal  Regime of the PDS in Tamil Nadu

8-13

3.     

Beneficiaries of PDS in Tamil Nadu

14-25

4.     

Distribution of Foodgrains

26-54

5.     

Fair Price Shops

55-73

6.     

Allotment of Fair Price Shops

74-80

7.     

Vigilance, Enforcement and complaint mechanism

81-114

 

8.     

Supply of Fortified Atta

115-122

9.     

Computerisation

123-130

10.                        

Recommendations

131-139

11.                        

Annexure A:

Issues raised in Public Hearings

140-142

12.                        

Annexure B:

Higher Allocation of Foodgrain Through TPDS

143-147

13.                        

Annexure C:

Working paper which deals with possible linkages UIDs can have with the PDS with a view to clean up the system forwarded by Mr. R.S. Sharma, IAS, Director General & Mission Director, Unique Identification Authority of India (UIDAI)

148-159

 

 

 

 

 

PREFACE

 

In the matter of:

Writ Petition(C) No.196/2001 – People’s Union for Civil Liberties V/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 a comprehensive 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 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 the Committee to submit its reports.

 

6.                The Committee submitted its reports for the States of Uttarakhand, Jharkhand, Orissa and Karnataka in February/ March 2009.  Thereafter the Hon’ble Court was pleased to extend the time further till December, 2009.   During this extended period, the Committee thereafter submitted the reports for the States of Bihar, Andhra Pradesh, Gujarat and Rajasthan.  Time of the Committee  was again extended till June 2010.  The Committee has submitted reports on the States of Haryan and  Kerala and Union Territory of Chandigarh.  The term of the committee has now been extended till December 2010. The Committee is presently submitting the report on the State of Tamil Nadu.

 

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

 

8.                The Committee visited the State of Tamil Nadu from 14th to 21st March 2010. During the visit the Committee had meetings with State Govt. officials, District officials concerning PDS, officers of the Tamil Nadu Civil Supplies Corporation (TNCSC), officers of FCI posted in various districts in Tamil Nadu  and Chennai.  Formal / informal meetings with various stake holders were also held to discuss the issues concerning PDS.  The Committee visited District Cuddalore, Trichy, and Madurai and  the city of Chennai in the State of Tamil Nadu to study the Public Distribution System. The Committee also conducted public hearings at Chennai, Madurai and Trichy.

 

9.                The State Government of Tamil Nadu follows Universal Public Distribution System in place of Targeted Public Distribution System envisaged by the Government of India. The State Government has done away with the identification of APL and BPL families to avoid errors of exclusion of eligible and vulnerable families. However, State has identified AAY beneficiaries. The Universal Public Distribution System ensures food security to every family cooking separately. It is left to the choice of the families to opt for the type of cards they can hold based on their need and preferences.

 

10.           The salient features of Public Distribution System in Tamil Nadu are :

a.             Universal Public Distribution System is followed in Tamil Nadu, whereas targeted PDS exists in other states. Universal Public Distribution System connotes distribution of subsidized PDS commodities to all residents without classifying them into different categories.

b.             The distribution of quality rice at the lowest price of Rs. 1/- per kg.

c.             No private trader is engaged in the Public Distribution System   activity. The Tamil Nadu Civil Supplies Corporation (TNCSC) lifts and transports Food grain from FCI godown to their godowns. From TNCSC Godowns the cooperative Societies lift the food grain and deliver the same at the Fair Price Shops (FPSs). FPSs are mainly run by the cooperative societies and TNCSC.

 

11.           Presently State issues four kinds of ration cards viz. rice cards, sugar cards, Police cards and No-commodity cards. Antodaya families are given Rice cards. In the State there are 1,96,32,951 cards in total. Out of this 1,65,80042 are rice cards, 18,63,185 AAY cards, 10,67,821 Sugar Cards, 59,460 Police cards and 62443 No-commodity cards.

 

12.           The State of Tamil does not follow the Central PDS Control Order 2001. It is not possible to do comparisons between State of Tamil Nadu and other states. However, Committee examined the role of Tamil Nadu Civil Supply Corporation in wholesale distribution and retail distribution, Role of Cooperative societies in Transportation and running Fair price shops, functioning of Vigilance Committees, Enforcement mechanism and complaint redressal system pertaining to the Public Distribution System in the State.

 

13.           TamilNadu has a vast area. It comprises 32 districts. Committee could visit only City of Chennai and districts of Cuddalore, Madurai, Tirchichirappalli and Karur. Committee feels it has got a fairly good idea of functioning of PDS in the State even visiting small area of the Districts. If time permitting and if any necessity is felt, Committee may visit other areas in the State as well.

 

14.           The official to whom the  Committee met are as under:

        CHENNAI

        Mr. K.S. Sripathi, Chief Secretary; Mr. K. Shanmugam, Principal Secretary, Food & Consumer Protection Department; Mr. K. Rajaraman, Commissioner, Civil Supplies & Consumer Protection Department; Mr. D.S.L. Prasad, ED at SLC, Govt of Tamil Nadu; Mr. K. Jayaraman, Superintendent of Police CBI / EOW; Mr. T.P. Sundaramurthy IG P (Civil Supply, CID); Mr.T. Radhakrishnan, Addl. DGP, Civil Supplies (CID); Mr. M.Veera Shanmugha Moni, MD, Tamil Nadu Civil Supplies Corporation Ltd.; Mr. R. Pichaikkannu, Genl. Manager (QC), Tamil Nadu Civil Supplies Corporation Ltd.; Mr. Jatindra Nath Swain, Registrar, Cooperative Societies;  Mr. L.Sitherasenan, Addl. Registrar; Ms. Vanitha,  Dy. Registrar (North Zone); Ms. V. Chamundeeswari, Deputy Registrar/General Manager, Triplicane Urban Co-op Society Ltd.; Mr. R.G. Sakthi Saravanan, Joint Registrar/ Special Officer Triplicane Urban Co-op Society Ltd; Mr. Hariram Rathod, General Manager, FCI; Mr. V. Thamaraikkannan, G.M. South –II, FCI; Mr. C. Manoharan, SRM (North) FCI; Mr. M. Vimal Arumugam, AGM (Comm), FCI Mr. S. Ravichandran, DGM, FCI; Mr. Jaichandran; Mr. L. Sitherasenan, Addl.   Registrar; Mr. Hariram Rathod, General Manager, FCI; Mr. T.P. Sundramurthy, IGP (Civil Supplies CID);  Mr. G. Ramar, Supdt. of Police, Chennai               

 

        CUDDALORE

        Mr. P. Seetharaman, District Collector; Mr. G. Sekar, SRM, TNCSC; Mr. S. Baskaran, Manager (QC), TNCSC; Mr. K. Jayaraman, Asstt. Manager TNCSC; Mr. M. Mohamed Rafi, Coop Sub Registrar; Mr. S.R. Venkalery, Joint Registrar Cooperative; Ms. S. Elanselvi, Dy. Registrar Cooperatives; Mr. S. Natarajan, DRO Cuddalore; Mr. G. Ramar, Supdt. of Police, Civil Supplies CID; Mr. R. Purushotham, Inspector of Police, Civil Supplies, CID; Dr. V. Elumalai, Area Manger, FCI, Cuddalore; Mr. M. Rajendran, Manager (Tech), FCI; Mr. V. Ramachadran, Manager; Mr. K. Devarajan, DSO.Mr. M. Pandiammal, Special Tehsildar; Mr. P. Moorthy, Special Tehsildar; Mr. G. Rangaathan, Taluk Supply Officer; Mr. S.G. Ramalingam, Taluk Supply Officer; Mr. S. Ambazhahn, Taluk Supply Officer; Mr. S. Venkaturnalay, TSO; Mr. V. Chezhian, Mr. Kameswaran, Branch Manger, Elcot Cuddalore; Mr. S.R. Venkapery, Joint Registrar  Coop; Mr. Nohamad Rafi, Sub Registrar, Cuddalore; Mr. G. Ramarm Supdt. of Police, Chennai; Mr. Purushotham, Inspector of Police, Cuddalore; Ms A. Rani, PA to DSO, Cuddalore

 

        TRICHY

        Mr. T. Soundiah Collector, Trichi; Mr. R.M. Jeyem Pandian, Joint Registrar, Trichi;        Mr. R. Ilango, S.P. CS  CID, Madurai; Mr. Manikandam, Inspector of Police, CID; Mr. V. Annamalai, Manager, FCI Thanjavur; Dr. V. Elumalai, Area Manager, FCI, Tanjavur; Mr. K. Rajendaran Area Manager I/c FCI Thanjavur; Mr. V. Dhakshina Moorthy, Distt. Revenue Officer, Trichi; Mr. S. Pandiyan, PRO, Trichi                                                        

 

        MADURAI

        Mr. K.V. S. Kumar, Joint Registrar of Cooperative; Ms. P. Uma Maheshwari, Joint Registrar/ Special Officer; Mr. T, Jeyaraman, Deputy Registrar (PDS); Mr. S. Mumgaiah, Distt. Supply & Consumer Protection Officer; Mr. P Subramanian, Area Manager, FCI, Tuticorn, Mr. R. Thangamalai, Manager (QC), FCI; Mr. T. Charles Simon, SRM, TNCSC; Mr. M. Harikrishnan, Asstt, Manager, TNCSC; Mr. M. Devdas, Manager (Depot), Central Warehousing Corporation, Madurai;   Mr. Dinesh Ponraj Oliver, D.R.O.; Mr. I. Sali Thanatuhs Asst. PRO      

                               

16.           Committee has separately recorded various suggestions given at public hearings.  Names of some of the public bodies whom the committee met are Consumers Rights Protection Council, Marumalarchi Labour Front, Elders forum for Social Awareness and Action, Tamil Nadu Consumer Co-operative Employees Federation, Consumer Association of India, Centre for Study of Social Exclusive and Inclusive Policy, Bharathidasan University, Thiruchi Payaneetalar Iyakkam, All India Democratic Women’s Association, Tamil Nadu consumer welfare Association,  Thiruchi District Cooperative Employees Association etc.

 

17.           Members of the Committee who visited the State are Ms. Meenakshi             Chauhan, Mr. Aashish Arya, Advocates (Member of the Legal Team), Mr. J.K. Bhutani, Section Officer and Mr. J.C. Uprety, P.S. to Chairman.  Mr. S.C. Rawal, a former Registrar of the Delhi High Court, acted as Secretary to the Committee. Mrs. Susheela Bhatt Advocate from State of Kerala, Mrs. G. Thilakawati and Mr. N.L Rajah Advocates from State of TamilNadu  were associated with the Committee. They also submitted their views in separate reports. Ms. Meenakshi Chauhan consolidated all the reports which is now being presented in this Hon’ble court.

 

18.           The Committee is submitting its report on the State of Tamil Nadu which has been divided into various chapters like Legal Background, Beneficiaries of PDS in the State, Distribution system of PDS food grain, functioning of Fair Price Shops, Allotment of Fair Price shops, Vigilance, Enforcement and Complaint mechanism, Computerization, and Recommendations.

    

New Delhi

Dated      July 2010

 

 

(Justice D.P Wadhwa)

Chairman,

Central Vigilance Committee

on Public Distribution System 
 

 

EXECUTIVE SUMMARY

 

1.     The Central Vigilance Committee visited Chennai, Cuddalore, Trichy and Madurai in the State of Tamilnadu from 14th April 10  to 21st April10 to study the functioning of the Public Distribution System (PDS) in the state. The Committee interacted with the State Government officials, FCI representatives, NGOs, visited fair price shops, godowns and also held public hearings at Chennai, Madurai and Trichy.

 

2.     Structure of PDS: The structure of  PDS in the state of Tamilnadu follows a functional pattern involving procurement, storage , distribution of foodgrains on the one hand and distributing the food items to people through an extensive network of Fair Price Shops (FPSs) and monitoring of movement of essential commodities and enforcement actions against infraction of guidelines, procedure and malpractices. Agencies involved in the PDS operation are i) Civil Supplies and Consumer Protection Department; ii) Tamilnadu Civil Supplies Corporation; iii) Food Corporation of India; iv) Cooperative societies; and v) Women Self Help groups. While the Civil Supplies & Consumer Protection Department regulates the PDS operation, the Tamilnadu Civil Supplies Corporation (TNCSC) has the responsibility of procurement and storage of foodgrains and their allocation to FPSs. The monitoring and enforcement functions are carried out by State level inspection teams, District level flying squads and Civil Supplies CID wing. The District Collectors coordinate enforcement work and the Vigilance Cells monitor movement of essential commodities from FCI godowns to TNCSC godowns. Surprise raids are also undertaken and a Grievance Redressal Mechanism also exists.

 

 

 

3.     Categorisation of Beneficiaries : Universal PDS in Tamilnadu: The State of Tamilnadu follows Universal PDS and classifications such as BPL, APL, do not exist.  However, State has identified AAY and presently they have 18,63,185 AAY beneficiaries. As informed to the Committee the  main reason  why State did not adopt the categorization of APL- BPL  was   that  Poverty being a relative concept, there is no acceptable criteria or methodology for error free enumeration, as indexing method is also not free from defects.  There are chances in the existing system for larger number of exclusion error resulting in high social cost. Presently four types of cards are in use: Rice Cards, light green in colour, are issued to those who opt to lift rice from the FPS, inter-a-lia, also making them eligible to  draw other commodities. As on 28-02-2010, the number of cards in circulation in this category, including AAY cards is 1,84,43,227. The next category is white cards entitling the holders to draw 3kg extra sugar over the normal quota as also all other commodities except rice. The number of such card holders, as on 28-02-2010 is 10,67,821. The third category is No Commodities Card which does not entitle its holders to draw any commodity from the PDS. Such cards serve the purpose of address proof cards. As on 28-02-2010, 62,443 such cards are in circulation. Taking these categories together, the total number of family cards as on 28-02-2010 works out to 1,96,32,951. The fourth category is Khaki cards given to police personnel up to the level of Inspectors who can draw essential commodities like rice, sugar, wheat, palm oil, toor dal, urad dal at 50% of the PDS issue price. Kerosene is made available at PDS rate. As on 28-02-2010, 59,460 khaki cards are in circulation.

 

4.     Entitlement of Ration: Rice is sold through FPS to the beneficiaries at the lowest price of Re.1/- per kg. Apart from rice, wheat, sugar, kerosene, and other items made available through PDS network are Toor Dal, Urad Dal, Palm oil, Fortified Atta and spices packet.   Presently the total Quantity of foodgrain given to card holders is not 35 Kg as fixed by the Government of India. The rice cardholders get 12 kg to maximum of 20 kg rice  depending upon the number of units in the family. Apart from this they can get 5 kg of wheat@ Rs 7.50 and 2 kg of atta @ Rs 11 per kg.  Beneficiaries  of Sugar card are entitled to get 3 kg of sugar @ Rs.13.50 instead of rice. State should ensure that 35 kg  foodgrains be given to the beneficiaries of PDS. The state charges Rs. 11 for atta to PDS beneficiaries which is on the higher side seeing the rates fixed for  issue of wheat  to beneficiaries by the Government of India.

 

5.     Unit based entitlement for Cardhholders: The rice cardholders get 12 kg to maximum of 20 kg rice depending upon the number of units in the family.  One adult member gets 12 kg. Minor members of family are counted has half unit. Thus, 14 kg is given to 1.5 unit, 16 kg to 2 units, 18 kg rice to 2.5 units,20 kg for 3 and above units.

 

6.     No Private  Party/ Person is involved in PDS

FPSs are managed  mostly by cooperative societies, such as primary agricultural cooperative societies, consumer cooperatives and marketing societies or by Tamilnadu Civil Supplies Corporation. Women self-help groups also run limited number of shops. Private persons are not permitted to run such shops. The total number of FPSs in Tamilnadu is 30781 including 6,807 part-time shops. Part-time FPSs serve the purpose of improving public access to PDS outlets particularly in far flung areas of the state.

 

7.     Attempt towards Modernisation of FPS:

a)     Hand –held Billing Machine has been introduced to streamline billing process, minimize the accounting work and monitor stock position on line in all FPSs in Chennai city and its suburbs and in all kerosene bunks in the state.

b)     Surveillance cameras have been installed in 20 FPSs on a trial basis that have yielded good results. It has shown reduction in rice and kerosene offtake, menace of outsiders at reduced level, improved cleanliness in shops and improved behaviour on the part of sales person and customers in general.

 

8.     Vigilance, enforcement and complaint mechanism

The vigilance committees at FPS level are not constituted as the State experienced that they became parasites to the PDS.  The need is for proper vigilance at FPS level to check that foodgrain is fully distributed and stock is accounted fully.  Possibilities of Boguls Billings were not denied by the Officers though State has introduced some modernised methods of electronic Billing, Sms sytem, installation of surveillance camera etc at FPS and State is in initial stage of the  process of making the whole system computerized. State has PDS Advisory Committees operating at the State , District and Divisional levels. Members from NGOs, Peoples’ representatives and officials are members of these committees who look into any irregularities in the functioning of PDS for taking appropriate remedial action. Further, Panchayat Presidents and local representatives are authorized to inspect the shops at any time and report the matter to TSOs/DSOs in case any irregularity is found. The Cooperatives and Civil Supplies Department is having its own state level inspection teams and district level flying squads that maintain close vigilance on PDS operations.

 

9.     Each month FPSs are identified based on complaints/offtake for 100% sales verification with reference to ration cards and registers maintained by FPSs. Teams are dispatched to carry out such audits. Officials connected with PDS also carry out checks on a periodical basis and interact with customers to ascertain their problems.

 

10. Quality checks on food grains is exercised before they are bagged in standardized bags in TNCSC godowns. Similar quality checks are also carried out at PDS outlets.

 

11. Storage of food grains is done more efficiently as compared to the position obtaining in other states. TNCSC has properly built godowns but there are also instances of shortage of space for storage.

 

12. Transportation: Transportation contracts for movement of essential commodities from FCI to TNCSC godowns are awarded by TNCSC through an open tender process. Rates are fixed every year for each region. Transportation is done in two phases; the first phase involves lifting of food grains from FCI godowns to TNCSC godowns and expenditure incurred on this account is borne by TNCSC.  The second phase relates to transportation of food grains from TNCSC godowns to FPS and the expenditure in this regard is met by Lead Society, a nomenclature given to specified cooperative society among the cooperative societies, entrusted with the responsibility of door step delivery of stock at PDS outlets.

 

13. Viability: Viability of FPS is dependent on income derived from commission on sale of food grains, sale of empty gunny bags and subsidy given by the government to loss making FPSs.

 

14.  Bogus cards: There are more ration cards in operation than the population of the State. The state government has initiated the process to weed out bogus ration cards  through door to door verification. However, large number of such cards are still in circulation. The foodgrain allocated for such ration cards gets diverted.  

 

15.  Diversion/ Pilferage/ Smuggling: Despite putting in place an effective monitoring system, diversion/smuggling of PDS food grains has not stopped which is evident from the various incidents of diversion like:

a.      Smuggling to Foreign countries through the Madras Port Trust,

b.     PDS rice illegally procured in Tuticorin and stored in warehouse at Pondicherry

c.      Diversion also happens with the connivance of Salesman which is evident from the incident such as salesman going on strike when few shops were locked by authorities on receiving information of Diversion

Diversion of food grain takes place at every level of the system. The different ways in which diversion takes place would show that Government Officials, the Salesman and the Transporters are all involved in the diversion of food grain in some manner or the other. The malady of diversion is prevalent in the system in such large scale that it has become a menace and threat to the system.

(i)                The first and foremost reason for diversion is the difference in the price of TPDS grain and market rate. This serves as an incentive for the unscrupulous persons connected with the implementation of the system to connive with the traders to divert the TPDS food grain into open market.

(ii)              The second reason for diversion is the lack of any system of accounting for the grain allocated under the system. Ideally there should be a system by which the grain allocated to the State can be equated with the grain distributed to the beneficiaries. Since the scale of distribution and the number of beneficiaries is very large, this can not be achieved manually. Thus there is need for complete automation and computerization of the Public Distribution System.

(iii)            The third reason is that the functions of implementation, enforcement and vigilance are not properly implemented.

(iv)            Standardization of bags done by the TNCSC was found to be unnecessary considering the time and financial burden. It also provides opportunity for diversion / replacement of foodgrain.

(v)              More than 50% of the people in higher category do not take their food grains from the FPS and this provides the opportunity to people indulged in malpractice to divert the foodgrain. 

 

16. Deficiencies observed: The Committee during its visits to FPSs, Godowns and in Public Hearing observed certain deficiencies in the functioning of PDS  at FPS level which  are:

 

                                i.            Non-display of stock position;

                              ii.            non- functional electronic measurement scale particularly in the rural areas;

                            iii.            long  wait for consumers for drawing food articles; compulsion to visit FPS more than once to draw full quota; and non-display of timing and non-adherence to working hours;

                            iv.            supply of poor quality of food items;

                              v.            rice is made available mostly in the first fortnight; and

                            vi.            kerosene is made available on one day in a month.

                          vii.            misappropriation of food grains under AAY and  Annapoorna schemes;

                        viii.            under weighment by 5kgs of bags supplied to FPS by the TNCSC Distribution of food grains to beneficiaries is often less than their entitlement. Weighment of food grains is not done in public view leading to complaints of under weighment.

                            ix.            Instances of wrong entries in the FPS registers as well as non-maintenance of daily sales register were also found in some districts. Even the drawl register at the FPS did not contain the signature of beneficiaries.

                              x.            interference by politicians in the working of PDS;

                            xi.            delay in issue  or renewal of ration cards;

                          xii.            diversion of PDS commodities to open market;

                        xiii.            irregular timings of FPS; and

                        xiv.            supply of poor quality of food grains through FPS;

                          xv.            and disparity in payscale of employees of shops  run by Civil Supplies Corporation and employees of shops run by cooperatives causing widespread discontentment.

 

17.             Unique Identification Authority of India (UIDAI):

17.1        Central Government have recently constituted the Unique Identification Authority of India (UIDAI). The mandate of the UIDAI is to issue unique ID numbers to every resident of the country. The assurance of uniqueness being promised by UIDAI will ensure that there are no duplicates and no fakes in the databases of UIDAI. If the PDS authorities, in their domain, make the UID numbers of the ration card holders and their family members as mandatory, they can clear up their databases of bogus ration cards. Secondly, the UIDAI is also going to provide authentication facilities which will be available on ubiquitous devices such as mobile phones. This could also be helpful in ensuring that the ration meant for the consumers is actually distributed to them.

17.2        While the UIDAI will provide enrolment and authentication infrastructure, it is for the Consumer Affairs Department of the States to align their systems and processes to leverage the advantage which the UIDAI offers.

17.3        We would recommend that all the State Governments should start working and actively participate with the UIDAI so as to clean up their databases and improve their delivery system.

17.4        From the draft approach of the UIDAI, we find that UIDAI is going to build its database through a number of agencies, both at the State and the Central level, described as “Registrars”. These Registrars are agencies which deal with public in their normal course of activities and they are considered as the most appropriate agencies to enroll their “clients/customers” into UID system. The Departments of Food and Supply at the State level should, therefore, become Registrars of the UIDAI so as to enroll the existing cardholders into UID system.

17.5        The specifications of the Smart Transaction Terminals for retail ration shops (STT) need to be standardized and all the State Units may follow the uniform specifications so that the state terminals are compatible with each other and can be booked up to a national network, for monitoring the smart card based PDS system at national level.

17.6        Procurement of equipment and other infrastructure for providing such network shall be the responsibility of the state concerned. The funding mechanism between centre and States need to be decided suitably.

17.7        In case of regional and interstate transfers of the subscribers, new smart card can be issued as per eligibility after verification by previous units. The old card may have to be surrendered for issue of new one or else the date in the same card may have to be updated. The delay in present system of issuing new paper ration cards can as well as be avoided. If this is done their regional and interstate transfers can be taken care of.

17.8        Mr. R.S. Sharma, IAS, Director General & Mission Director, Unique Identification Authority of India (UIDAI) has forwarded two documents--(i) Creating a Unique ID Number for every resident in India and (ii) Working paper which deals with possible linkages UIDs can have with the PDS with a view to clean up the system. This second document is attached to this report as Annexure C.

17.9        The Committee would suggest that a meeting of NIC and UIDAI be ordered so as to arrive at the specifications of the STT which need to be standardized by all. State Units must follow the uniform specifications so that State Terminals are compatible with each other and can be hooked to a national network, for operating Smart Card based PDS at national level.

17.10    For transaction in PDS modern technology in the shape of smart card is required to be used. Central Govt. has already financed the programme of issue of Smart Card in the State of Haryana and Chandigarh Union territory.

 

18.     General Observations and recommendations of the Committee:  

1.                 Tamilnadu  has adopted universal PDS which entails a recurring annual cost of Rs. 4000 crores to the state government. It is not known whether any detailed study has been done regarding its financial feasibility in the long term. There is an urgent need to work out its financial feasibility lest other states also follow suit. TPDS should be put in place if universal PDS is not found financially viable.

2.                 More than 50% of the people in higher category do not take their food grains from the FPS and as such allocation for this category gets diverted to the black market. This emphasizes the need to target the PDS only to the poor and needy.

3.                 Introduction of coupon system was also advocated during public hearings but the Committee is not in a position to fall in line with this view since its efficacy in helping the poor is yet to be established.

4.                 Double boiled rice supplied through FPS is not liked by consumers. But having regard to its nutritive value, there is a need to educate people in this regard in order to improve their acceptance to this type of rice.

5.                 Further, despite a massive exercise by the state government to weed out bogus ration cards, a sizeable number of such cards is still in circulation It would be worth consideration to introduce an amnesty scheme providing option for surrender of bogus ration cards within a period of two months without any penalty. Stringent action, however, should be taken against those still  found to be in possession of such cards, through door to door survey, on expiry of the amnesty period. Further no action seems to have been taken against officials responsible for issuing bogus ration cards or against fair price shop dealers who have issued ration against such cards. An effective solution to this problem, however, is possible only through application of appropriate technology.  The committee requests that the Hon’ble Court may consider passing appropriate orders in this regard.

6.                 Despite putting in place an effective monitoring system, diversion/smuggling of food grains has not stopped. The Committee is of the view that more effective steps like canceling of registration of the vehicles or licence of the drivers need to be taken to act as a deterrent against persons indulging in such malpractices.

7.                 During the public hearing It was  suggested to distribute commodities in a sealed packet. The State authorities, however, felt that the cost of packing all the commodities would be prohibitively high.

8.                 The Committee was also apprised of the activities of anti-social elements who target fair price shops. There is a general perception that such elements enjoy political patronage.. Installation of closed circuit TV’s at sensitive locations in the shop may provide the answer .

9.                 The Committee is of the view that the role of TNCSC should be enlarged to include both wholesale and retail distribution of food grains. This would eliminate the role of lead societies in transportation of food grains to PDS outlets.

10.             The Committee further feels that the FPS should be run by corporation rather than cooperative societies and women self-help groups in order to check diversion and malpractices. The Committee found that most of the shops run by cooperative societies are incurring losses and subsidy from the government provides life line to such shops.

11.             The Committee is also of the view that the current practice of standardization of bags casts financial burden and serves no useful purpose. Proper weighment of food grains on electronic weigh bridges is a better option.

12.             Sealed samples should be ensured up to FPS level to check malpractices on the part of intermediaries and guard against tinkering with the quality of food grains released through PDS outlets.

13.             Mobile FPS should be pressed into operation in areas which are isolated and number of cards is not sufficient to justify opening of FPS.

14.             Public hearing on PDS issues on the pattern of Bijli adalat must be held every 2-3 months under the chairmanship of a judicial officer not below the rank of Additional District Judge along with Collector and DSO as members.

15.             A zero tolerance approach in the matter of enforcement of various provisions of PDS orders must be observed.

16.             Special squads to oversee PDS operation should be placed directly under the District Magistrate. These squads should be made responsible for launching criminal prosecutions and also recommending departmental action/suspension etc. There should be dedicated special squads in every district for enforcement of penal provisions of the Essential Commodities Act 1955.

17.             End to end computerization of PDS operation holds the key for eliminating current malpractices .

18.             Creation of an office of Ombudsman to deal with public grievances with regard to PDS may bring relief to PDS beneficiaries, particularly, at the cutting edge level.   

 Lastly, Notwithstanding the deficiencies pointed out in the report, the Committee did not received any complaint for non-supply of PDS foodgrain. By and large people appear to be satisfied.

 

                                                                       FINAL REPORT

 

CHAPTER 1

 

 INTRODUCTION

 

1.1             The Committee visited District Cuddalore, Trichy, and Madurai, Karur and  the city of Chennai in the State of Tamil Nadu to study the Public Distribution System. The Committee also conducted public hearings at Chennai, Madurai and Trichy.

 

 

1.2            TARGETED PUBLIC DISTRIBUTION SYSTEM (TPDS)

 

1.2.1 The Targeted Public Distribution system was introduced w.e.f June 1st 1997. TPDS envisaged that Below poverty line population would be identified in every State and every BPL family would be entitled to a certain quality of foodgrains at subsidized price.

 

1.2.2  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 foodgrains to the states.  Central Government is responsible for procurement, storage, transportation upto principal centres of FCI, allocation to State and Union Territories and maintenance of buffer stock.  State and UT Governments are responsible for identification of AAY and BPL families; issuance of ration cards to eligible families; storage in State/UT godowns; licensing and supervision over Fair Price Shops; distribution of ration to identified beneficiaries through FPS, eliminating ghost or bogus ration cards and curbing the diversion of  the PDS foodgrain etc.

 

1.2.3 For, TPDS beneficiaries are classified in three categories- Above poverty line (APL), Below Poverty line (BPL) and Antodaya Anna Yojana (AAY). The price at which they get the subsidized foodgrain is different for each Category. Since 1997, the Scale of issue of BPL families has been gradually increased from 10kg to 35 kg per family per month. The scale of issue for APL, BPL and AAY beneficiaries has been revised to 35 kg per family per month with effect from 1.4.2002 by the Central Government with a view to enhancing the food security at the household level and liquidating surplus stocks of food grains in the Central Pool[1]. Under all these schemes, presently beneficiaries are entitled for 35 Kgs of food grains per month per card. However, each State distributes different quantity of foodgrain depending upon the number of beneficiaries and the quantity of allocation of foodgrain. A Copy of the written reply of Parliament Question giving the information regarding allocation of foodgrains through TPDS is annexed with the Report as Annexure B.  The Reply was given by Minister of States  for Agriculture Consumer Affairs Food and Public Distribution in Lok Sabha on 24.11.2009

 

1.3     PUBLIC DISTRIBUTION SYSTEM IN STATE OF TAMILNADU

 

1.3.1 The State Government of Tamil Nadu follows Universal Public Distribution System in place of Targeted Public Distribution System envisaged by the Government of India. The State Government has done away with the identification of APL and BPL families to avoid errors of exclusion of eligible and vulnerable families. The Universal Public Distribution System ensures food security to every family cooking separately. It is left to the choice of the families to opt for the type of cards they can hold based on their need and preferences.

 

1.3.2  The unique features of Public Distribution System in Tamil Nadu is :

a)                 Universal Public Distribution System is followed in Tamil Nadu, whereas targeted PDS exists in other states. Universal Public Distribution System connotes distribution of subsidized PDS commodities to all residents without classification of them into different categories.

b)                 The distribution of quality rice at the lowest price of Rs. 1/- per kg.

c)                  No private trader is engaged in the Public Distribution System   activity. The TamilNadu civil Supplies Corporation (TNCSC) lifts and transports Foodgrain from FCI godown to their godown. From TNCSC Godowns the cooperative Societies lift the foodgrain and delivers the same at the Fair Price Shops (FPS). FPSs are mainly run by the cooperative societies and TNCSC.

 

1.3.3  In the State Targeting is made only in the case of AAY beneficiaries. Identification of AAY is done as per the Government of India guidelines. AAY identification exercise is done by the local bodies and the list is approved by the Gram Sabhas. No district level BPL/APL identification has so far been done in the entire State due to multiple reasons such as unpredictable natural calamities that drive large number of vulnerable groups to the level   of the poorest of the poor, errors in enumeration, exclusion of genuine BPL families due to rigid exclusion methods etc. Hence, no BPL data is so far available in the State. All rice card holders get equitable distribution of rice at Re.1/kg. Since Central allocation is low, State is procuring grains from other sources to meet the requirement.

 

1.3.4  Presently, there are 4 types of cards in force, namely:

 

        i.            Rice Cards (Green Cards):  The Cards of light green colour are issued to those who opt to lift Rice from the FPS. These card holders are entitled to draw rice and all commodities. As on 28.2.2010 there were 1,84,43,227 cards in circulation in the State. Figure includes  18,63,185 AAY  cards.  Antodaya Anna Yojana (AAY) beneficiaries gets 35 kg Rice @ Re. 1 per kg.

 

      ii.            Sugar Cards (White Cards):  Card holders who have opted for sugar cards, in lieu of rice cards are entitled to 3 kgs of extra sugar besides their normal quota of sugar. They are also entitled to draw all other commodities except rice. As on 28.2.2010 there were 10,67,821 Sugar Cards in circulation in the State.

 

 

    iii.            No Commodities Cards (white card):  Card holders who opted no commodity are issued white colour cards. These card holders are not entitled to draw any commodity from the PDS.  As on 28.2.2010, there were 62,443   No-Commodity cards in circulation in the State of Tamilnadu.

 

    iv.            Police Cards (Khaki Cards): Police personnel are supplied essential commodities like Rice, Sugar, Wheat, Palm oil, Toor Dhal, Urad daal at 50% of the PDS issue price. Rava and maida are sold at Rs.3/- less than the PDS issue price. Kerosene is issued at the rate applicable to PDS. The Police personnel  upto the level of Inspectors are issued Khaki Cards. As on 28.2.2010 there were 59,460 Police Cards in circulation.

 

1.3.5  Ration Cards in Circulation as on 28.2.2010 in Tamil Nadu

I

Rice Cards

1,65,80042

 

AAY

18,63,185

 

Total Rice Cards

1,84,43,227

II

Sugar Cards

10,67,821

III

Police Cards

59,460

IV

None Cards

62,443

 

Total number of Family Cards in Tamil Nadu

1,96,32,951

 

1.3.6  Distribution of Rice at the rate of Re.1/kg commenced with effect from 15.9.2008 through out the State of Tamil Nadu. The quantity of rice to be given to one family having Rice Card (Green Card) is decided according to the number of units in the family. Adult member is counted as one unit and minors as half unit. Below mentioned Table provides the Unit based Supply of Distribution of  Rice for Green Card Holders: unit based system (12kg-20kg)

Sl

No

No. of Units in Family ( child being taken as half unit

Rice in kg

Sugar in kg

Wheat in kg

Atta in kg

1

1

12

0.5

5

2

2

1.5

14

1.0

5

2

3

2

16

1.0

5

2

4

2.5

18

1.5

5

2

5

3

20

1.5

5

2

6

3 and above

20

2.0

5

2

7

Kerosene: 3 litres for families having 1 Cylinder. Families having double cylinders are not entitled to kerosene.

 

1.3.7  Price of commodities

S.no.

Commodities

Rate/Kg

Rs.Ps.

 

Retail Margin allowed to

Co-operatives

(in Rs)

1

Rice

 1.00

0.45

2

Sugar

13.50

0.12

3

Wheat

         7.50

0.60

4

Atta

11.00

1.00

5

Kerosene

8.60/litre to 8.80/litre according to the distance.

 

 

1.3.8  Fair Price shops  (FPS) in Tamil Nadu:  In Tamil Nadu Fair Price Shops are run mostly by the Co-operative Societies or by the TNCSC. Few of the shops are run by women self help groups.  Table below shows the number of FPS  run by different  Institutions :-

1

Co-operative

28,752

2

TNCSC

1,251

3

Other shops

138

4

Mobile shops

10

5

Women shops

630

 

                 Total

30,781

 

 

1.3.9  Commodities distributed under PDS in Tamil Nadu

FPS distributes mainly rice, wheat, sugar and kerosene. Special PDS items to meet price rise, are also distributed. Items are Toor Dal, Urad dal, Palmolien oil, Fortified Atta and Masala Packets at subsidized rates. 2500MT of wheat is utilized for fortified Atta from Central allocation and about 2500MT procured under OMS by the State.

 

 

 

 

 

 

 

 

 

 

 

 

CHAPTER 2

 

LEGAL REGIME OF THE PDS IN TAMIL NADU

 

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 Public Distribution System (Control) Order 2001 (Order), which was amended in 2004.

ii.       Stringent provisions have been provided in the Act and the 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 a second time then imprisonment cannot be less than 6 months subject to, adequate and special reasons.

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

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, in which case every person who at the time of contravention was in charge, is responsible for the contravention and shall be deemed to be guilty.

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            THE PUBLIC DISTRIBUTION SYSTEM (CONTROL) ORDER, 2001:

 

2.2(a) 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. The PDS control order 2001 promulgated by Government of India, provides for:-

2.1.          Distinctive Ration Cards

2.2.          Terms for Functioning of FPS

2.3.          Distribution mechanism to be adopted

2.4.          Identification of beneficiaries

2.5.          Licensing to dealers

2.6.          Monitoring of System

2.7.          Grievance Redressal

 

2.2(b) The Government of Tamil Nadu is following Universal Public Distribution  System based on the policy that targetting of BPL families will lead to large scale exclusion errors if rigid exclusion criteria is implemented in the State. Hence the State proposes to notify a new regulatory order namely, Tamil Nadu Scheduled Commodities [Regulation of Sale and Distribution by Card System through Licensing] Order 2008, to replace the existing control order namely, Tamil Nadu Scheduled Commodities [Regulation of Distribution by Card System] Order 1982. The regulation had been sent to the Government of India for prior concurrence before implementation. However, the Government of India vide its letter No.9[20] 2008-PD II dt.13.1.2009 has stated that in order to implement orders under PDS[Control] Order 2001 approval of Government of India is not required and directed the State Government to issue  the proposed control order in consonance with the PDS[Control] Order 2001. It was informed that the Government of Tamil Nadu is now examining the proposed order in the light of the proposed Legislation where acceptable methodology for enumerating BPL has been drawn.

 

 

 

 

2.3            ORDERS ISSUED BY THE GOVERNMENT  IN TAMIL NADU.

 

1.              Tamil Nadu Government has issued an order T.N. Scheduled Commodities  (Regulation of Distribution by Card System] Order 1982.

2.              T.N.Pulses (storage control] Order 2007.

3.              T.N.Rice (Storage Control) Order 2008.

4.              T.N. Edible Oil Seeds & Edible Oil (storage control) Order 2008

5.              Sugar (Storage Control) Order 2009

 

2.3.1     FPS run by Self Help Groups of Women

Women Self Help Groups are allowed to run the FPS and the same is regulated by G.O.(MS)No.254/Coop Food & Consumer Protection Department dated. 6.11.2000. In such cases FPS will not be allowed to run in the individual name of Women Self Help Group members.

 

2.3.2     Tamil Nadu Scheduled Commodities (Regulation of Distribution by Card System) Order 1982

 

(1)    As per Clause 2 of the Order ‘Authorised Officer’ means in the City of    Chennai, the Deputy Commissioner of Civil Supplies and elsewhere the District Revenue Officer, D.S.O. and R.D.O. within the jurisdiction of a district.

 

(2)    As per Section 2[b] authorized dealer is a dealer appointed by the Collector in the District [other than Chennai] and the Deputy Commissioner [for the area in Madras City) and includes the Co-operative Societies and Tamil Nadu Civil Supplies Corporation running fair price shops.

 

(3)    Power of Entry, seizure, search : Clause 13 empowers the inspection officer to enter, seize and search illegally procured ration cards, stock of PDS items, and search any vehicles used for the same. Clause 14 stipulates the conditions under which an FPS shop dealer has to work.

 

(4)    Suspension of Authorisation to FPS: Clause 14A empowers the Authorized Officer to suspend the authorization issued for the distribution of Essential Commodities through FPS for a period not exceeding 90 days for contravention of the conditions. The grounds of suspension shall be communicated within three days. Apart from interim suspension Clause 14[B] empowers the authorized officer to suspend the dealership  for a period not exceeding six months after affording opportunity of being heard.

 

(5)    Appeal: Right to appeal is provided in Clause 15 against such suspension.  Aggrieved person can appeal to authorized officer against the Decision of Inspecting officer and can appeal to Collector against decision of Authorized officer. Appeal lies to Commissioner of Civil supplies and consumer protection against the decision of Collector and against decision of Commissioner Appeal lies to the Government.

 

(6)    Vide Clause 13[A] G.O.[MS] No.315/Coop: Food & Consumer Protection dt.29.11.88] various terms under which FPS are authorized to supply PDS items are specified. The FPS shall maintain: A Register showing the details of the cards attached to the shop.

                                   i.         Sales Register

                                 ii.         Drawal Register

                               iii.         Stock Register which shall be maintained and filled up on daily basis by the Shop Keeper.

                               iv.         Inspection Register for recording remarks of inspecting officials and complaints by public is provided for under Clause 8 (of the G.O.)

 

(7)    Clauses 11 to 16 deal with the do’s and don’t’s to be observed strictly by an FPS owner like display of stocks and price of commodities, maintenance of register exhibition of samples of commodities weighment, etc.

 

2.4                  The Tamil Nadu Rice [Storage Control] Order 2006 was passed with the concurrence of the Central Government for maintaining the supplies of rice and securing their equitable distribution and availability at fair prices and to provide for the control and storage of the said commodities. As per the order power is given to authorized officers to control, procure and allocate specified quantities of rice from millers and dealers for equitable distribution to the public and availability at fair prices. Clause 10 prevents hoarding by millers and dealers  of rice. Clause 15 empowers the competent officer to enter, search and seize the commodities hoarded by any miller or Dealer.

 

            FCI, TNCSC, Companies owned by Central or State Governments or Central level or State level Co-operative Societies engaged in the production, procurement, sale, purchase or distribution of rice are exempted  from the purview of the order.  Similar orders are in force in respect of wheat and pulses vide Tamil Nadu Pulses and Wheat [Storage Control] Order 2007.

 

 

 

 

 

 

 

 

 

 

 

 

Chapter 3

 

BENEFICIARIES OF PDS IN TAMILNADU

 

3.1     Tamil Nadu is following the Universal Public Distribution System instead of Targeted Public Distribution System. There is no distinction of BPL or APL in the State. However, limited targeting is made only in the case of AAY beneficiaries who are identified among the poorest of the poor.

 

3.2     Selection of AAY Beneficiaries:

3.2.1  The selection procedure of the AAY beneficiaries is as per the Government of India guidelines. As per the Govt. of India directives, the number of AAY families estimated and allotted to Tamil Nadu is 7.45 lakhs. District Collector was empowered to allot the number of beneficiaries to the Panchayaths and Municipal areas of each district. [Vide Order G.O.(MS) No.321 of Coop. Food & Consumer Protection (B2 Department) dt.14.9.2001 ].         

 

3.2.2  Vide D.O. Letter No.168/B2/2001-14 dt.11.10.2001, District Collectors were instructed to identify the AAY families as per the guidelines in rural areas and get the same approved by the respective Grama Sabhas. The list of eligible beneficiaries from poorest among the poor after enquiry by local bodies is placed before the Grama Sabha for approval and after approval the beneficiaries are included in the scheme by the district collector. The same  process is followed in Urban areas with respect to AAY families already identified. Hence in urban areas the scheme commenced in the Districts from November 2001 and in rural areas from December 2001 onwards.

 

3.2.3  Extension of the AAY Scheme : While expanding the AAY scheme Govt. of India had allocated 3,73,000 additional beneficiaries to the State of Tamil Nadu.

 

3.2.4  The estimated number of BPL households in the State of Tamil Nadu is 48.63 lakhs families. Out of this the estimated number of AAY households after inclusion of Expansion Scheme beneficiaries w.e.f. 1.8.2004 is 14.76 lacs families [Cf D.O. No.6(1)2004-ID-1 dt.3.8.2004 issued by J.S., Govt. of India, M.C.F. & P.D).

 

3.2.5  Civil Supplies and Consumer Protection Department of State of Tamil Nadu as on 31. 01.2010 have identified 18,97,985 families eligible for the AAY scheme while the beneficiaries of AAY schemes allotted is 18,64,600. Periodic verification is conducted by the respective District Collectors to eliminate ineligible families and include the eligible ones. The off take under AAY scheme is monitored online and reviewed every month during the monthly meetings of DSOs and ACs.

 

3.2.6  AAY Rice allotment and off take for the month of February 2010

            Allottment            :  64,962 MT

            Off take               :  58,334 MT

            Percentage of Off take     :    90%

 

3.3     Targeting is not followed in the State for the following reasons:

                            (i)            Poverty being a relative concept, there is no acceptable criteria or methodology for error free enumeration, as indexing method is also not free from defects.  There are chances in the existing system for larger number of exclusion error resulting in high social cost.

                          (ii)            Poverty being a dynamic one, the status at the time of enumeration keep changing especially, natural calamities like drought, flood which may alter the position drastically and push large number of vulnerable otherwise APL families into poverty trap.  The rigid Government system may not be effective  to react quickly to such a situation.

                        (iii)            Problems of agency bias, in enumeration and the field level problems in enumeration etc. makes its administratively a difficult task and more risky to ensure better food security to the people.

 

3.4     The State out of its own experience feels that universal PDS assures better food security system compared to TPDS. Food subsidy provided by the State Government for the year 2009-10 is Rs.4000 crores which includes price control measures like special PDS.

 

3.5     Individual families are given option either to choose “rice card” or to    choose “sugar card” for which no rice is supplied.  They can also choose “no commodity cards” which are generally used as identity cards. Presently, there are 4 types of cards in force, namely:

 

                                i.            Rice Cards (Green Cards)- The Cards  of light green colour are issued to  those who opt to lift rice from the FPS. These card holders are entitled to draw rice and all commodities. As on 28.2.2010 there were 1,84,43,227 cards in circulation in the State. Figure includes  18,63,185 AAY  cards.  Antodaya Anna Yojana (AAY) beneficiaries gets 35 kg rice @ Re. 1 per kg.

 

                              ii.            Sugar Cards (White Cards)- Card holders who have opted for sugar cards, in lieu of rice cards are entitled to 3 kgs of extra sugar besides their normal quota of sugar. They are also entitled to draw all other commodities except rice. As on 28.2.2010 there were 10,67,821 Sugar Cards in circulation in the State.

 

                            iii.            No Commodities Cards (white card) Card holders who opted no commodity are issued white cards. These card holders are not entitled to draw any commodity from the PDS.  As on 28.2.2010, there were 62,443   No-Commodity cards in circulation in the State of Tamilnadu.

 

                            iv.            Police Cards (Khaki Cards)-Police personnel are supplied essential commodities like Rice, Sugar, Wheat, Palm oil, Toor Daal, Ural dal at 50% of the PDS issue price. Rava and maida are sold at Rs.3/- less than the PDS issue price. Kerosene is issued at the rate applicable to PDS. The Police personnel  upto the level of Inspectors are issued Khaki Cards. As on 28.2.2010 there were 59,460 Police Cards in circulation.

 

3.6     Ration Cards in Circulation as on 28.2.2010 in Tamil Nadu

I

Rice Cards

1,65,80042

 

AAY

18,63,185

 

Total Rice Cards

1,84,43,227

II

Sugar Cards

10,67,821

III

Police Cards

59,460

IV

None Cards

62,443

 

Total number of Family Cards in Tamil Nadu

1,96,32,951

 

 

3.7     The allocation of rice made by the Government of India for the BPL and APL families are drawn and supplied to all such card holders from 12 to 20 Kg. per month at Re.1/- per Kg. based on the number of adults and children in the family.

 

No of members in Family

Entitlement in Green card

One adult

12 kg

One adult &one child

14 kg

2 Adults

16 kg

1 adult &2 children

18 kg

3 Adults and more

20 kg

 

3.8     Foodgrain issued by GOI under APL category to the State:

It was informed that as the APL allocation was reduced for the State of Tamil Nadu from 01.04.2008, but the offtake of rice is on the increase due to increasing rice price in the open market the Central allocation is not adequate to the requirement now and the State Government buys rice from other sources in order to meet this gap. It was stated that they are utilizing the APL allocation fully.

 

3.9     ELIMINATION OF BOGUS CARDS

       

3.9.1  As per the Government instructions to Eliminate Bogus Cards, the Commissioner of Civil Supplies and Consumer Protection Department, Chennai vide Circular No.E4/18690/2008 dt.20.5.2008 has issued instructions for verification of family cards. Cards which are identified as bogus are being weeded out.  The officials informed the Committee that there are many cases whereby the families or the cardholder doesn’t reside in the place as mentioned in ration card. As such ration cards are not cancelled, the Fair price shops gets the allocation for those cards too. The officials preferred to name such cards as dead cards and also accepted that the bogus cards are in existence in the State and they are working upon the weeding out process for Bogus cards.

           

3.9.2  The State Government has made periodical arrangements for weeding out bogus cards by making 100% verification in selected shops regularly. Apart from this a Statewide drive was launched in 2008, 100% door to door  verification undertaken in  four phases covering all the families as a result of which 2 lakhs cards have been finally cancelled, 5.66 lakhs cards are under notice of cancellation and 19 lakhs cards are under orders of stop supply for which public appeal is being received now. After observing judicious procedures, in two stages family cards which are confirmed as bogus are being finally cancelled.

                             i.               After 100% door-to-door verification, list of cards, where families are not residing are issued stop-supply orders with 30 days opportunity to file representation.

                           ii.               After verification of representations, eligible cards are restored and ineligible cards list is published in shops as cancelled with time limit of 30 days for appeal.

                         iii.               Appeals are verified and cards related to eligible appeals alone are restored.

                         iv.               The List of Bogus cards identified for cancellation is published at PDS outlets and other public places. Bogus cards are finally cancelled after observing formalities.

 

3.9.3  Cuddalore District: As per the indication made out by the District Administration of Cuddalore, elimination of bogus cards has been initiated by the district administration and more or less successfully completed whereby till April 2010 they have cancelled 82,070 cards after verification.  The collector, Mr. Seetharaman indicated that the administration is aiming to complete the exercise, with remedy for appeal at two stages (First Appeal & Second Appeal).  Door to Door enumeration work commenced from October 2008 and 1,14,722 cards found to be bogus. The list of such cards were published in the respective Fair Price Shop and the card holders were given an opportunity to appeal before the T.S.O. with 31.8.2009 as the last date. 53,381 card holders appealed against the orders of suspension. After receiving  the appeal, verification was done by field inspection through officials appointed for the purpose. Stop supply orders have been issued in respect of 61,341 card holders who did not prefer appeal at the first instance. After due enquiry and verification, 32,652 family cards were found to be eligible and hence included. Now, 82,070 cards have been eliminated out of the 1,14,722 cards suspected to be bogus cards.

 

3.9.4  Madurai District: Elimination of bogus cards commenced in september 2009. 9,59,431 cards were identified as bogus in circulation in July 2009. Steps to eliminate 2,14,352 cards were taken in November 2009 which were found to be Non-living cards after verification. The list was published in the respective shops. 1,27,556 appeals petitions were received. Enquiry is on and the process is expected to be over by March 2010.

 

3.9.5  Trichy District: It was informed by the officers that 2678 bogus cards were cancelled recently in the district.  Beneficiaries and representatives of other social institutions like ‘Centre for Study of Social Exclusive and Inclusive policy’, Bharathidasan University suggested the introduction of smartcards in place of rationcards. They also demanded that card holders be allowed to draw their quota of commodities from any shop.

 

3.10   Issuance of Ration Cards:

3.10.1 Eligibility to get a ration card-

a)      The applicant and his/her family must be Indian citizens

b)      The applicant and his/her family must be living and cooking separately

c)       The applicant and his/her family must be ordinarily resident in Tamil Nadu

d)      The applicant or his family members must not possess any family card in any State in India

e)      The applicant or any of his/her family members must not be a member in any other family card in Tamil Nadu

f)        The applicant and members of the family must be close relatives

3.10.2 Authorities to which applications are submitted: Government of Tamil Nadu has prescribed an application form for it. In Chennai city,  applications with documents must be filed with Assistant Commissioner of Civil Supplies of the zone in which the applicant lives. In districts other than Chennai, Taluk Supply Officers of the Civil Supplies and Consumer Protection Department or Assistant Rationing Officers (in Coimbatore city) concerned of the area in which the applicant lives is competent to receive applications for family cards.

3.10.3 The following documents need to be attached:

1.                 Proof of applicant's current residence in Tamil Nadu (copy of original document)

a.      Election Photo Identity Card (EPIC), OR

b.     Property tax payment receipt in case of own house (current year), OR

c.      Electricity Bill (last month), OR

d.     Telephone Bill (last month) , OR

e.      Front Page of Bank Pass Book, OR

f.       Allotment orders in respect of persons residing at houses allotted by Slum Clearance Board, OR

g.     Passport, OR

h.     Currently valid tenancy agreement (in case of rented house), AND

2.                 Surrender Certificate along with relevant family card issued by the card issuing authority if any card is issued in the previous address, OR

3.                 Name Deletion Certificate from the parent or guardian of family card or non-inclusion of name Certificate issued by the card issuing authority in the previous address, OR

4.                 No card certificate issued by the card issuing authority, if there is no family card in the previous address, AND

5.                 Particulars regarding earlier application for family card, including registration number and details of rejection, if any,  AND

6.                 Details of LPG connection, if any, with details of name of consumer in whose name it is registered, consumer number, LPG agency and Oil Company name. AND

7.                 Mobile Number or Email addresses may be filled up in the format to enable the department to send an automated message (to be activated by end 2008) to the applicant on the status of the application. AND

8.                 A self addressed and stamped postal cover or postcard to enable the office to communicate the results to the applicant.

3.10.5 The procedure for issuing card:

         i.            The application is sent for field verification. The officer carrying out the field verification is supposed to inspect the applicant's house and kitchen to ensure that the applicant is living and cooking separately and also to verify the use of LPG by the family.

       ii.            The inspection is to be carried out with 30 days of the application being filed with the AC or TSO office. In case, the inspection by the officer concerned does not happen within 30 days, matter may be taken to the Assistant Commissioner or Taluk Supply Officer concerned.

      iii.            If the application is found fit by the Assistant Commissioner or Taluk Supply Officer concerned as per the above eligibility conditions, then the application is approved and sent for printing of the family card.

 

3.10.6 Time schedule :

Government of Tamil Nadu has fixed the time limit for passing orders on applications for new ration as 60 days from the date of application. As soon as the printed card arrives in the office, the Assistant Commissioner or Taluk Supply Officer has to send a post card to the applicant requesting him/her to collect the ration card in person with the acknowledgement slip within 15 days. In case the application is rejected, the Assistant Commissioner or Taluk Supply Officer has to send a post card to the applicant indicating the reasons for rejection within 60 days of the application date. If a Mobile Number or Email address has been specified in the application format, Civil Supplies and Consumer Protection department has to send an automated message to the applicant on the status of the application as soon as the application is decided upon.

3.10.7 Fee for a new ration card : Government of Tamil Nadu have prescribed Rs 5 as the fee for a new ration card. This amount has to be paid to the AC or TSO office concerned

3.10.8 Remedy for delay : If there is delay beyond 60 days from the application date. Applicants may contact the Assistant Commissioner or Taluk Supply Officer concerned and find out the reasons for the delay. Officers and staff of the department are liable for action if they delay applications.

3.10.9 The  consequences of filing false or misleading information in applications: Applicants must be aware that every family card means a subsidy expenditure of approximately Rs. 2000 per year for a green card. Hence, diversion of public resources by filing false information about members of family or giving fictitious addresses is wrong and would be liable under section 7 of the Essential Commodities Act. Such applicants would be liable for criminal prosecution and consequent punishment under the law. Therefore, applicants are requested to file correct information about members of family living with them to avoid the following:

a.      Prevent inclusion of family members who are already included in any other family card in Tamil Nadu or elsewhere

b.     File correct addresses

c.      Disclose information on LPG connections

d.     Desist from applying for a new card, when the family is in possession of another family card elsewhere or in the same address.

3.10.10The committee also received complaints about delay in issuance of ration cards.  In Madhurai one of the persons attending the public Hearing conducted by this Committee  showed his grievance by saying “ when we get passport within 45 days why should it take 2 years for getting ration card?”   Another representative of All India Democratic women’s Association demanded  strict penal and disciplinary action against the officers  or other persons involved in issuance of  bogus ration cards. While inspecting the files and records pertaining to the complaints received by the Department by the beneficiaries or general public regarding PDS, Committee found that there were large number of complaints pertaining to the delay in issuance of ration cards.  Many participants in the public hearing also demanded that at least No-commodity cards be given easily.

 

3.11   OBSERVATIONS:-

                                     

1.     The State of Tamilnadu Follows different system and there is no categorization of APL and BPL baneficiaries. Income based categorization is done only in the case of Antodaya Anna Yojna. The State has four kinds of Ration cards based upon the kind of commodity opted by the beneficiaries i.e whether rice or sugar or No-commodity cards and one category of Police Cards.

 

2.     There are more ration cards in operation than the population of the State. Despite a massive exercise by the state government to weed out bogus ration cards, a sizeable number of such cards is still in circulation Mere withdrawing a bogus ration card, is not enough. Strict penal actions should be taken against the officials responsible for issuing bogus ration cards who have issued ration against such cards or against fair price shop dealers who issue ration against such cards who deliberately do not disclose about bogus cards and take undue advantages from such cards.  State should introduce an amnesty scheme providing option for surrender of bogus ration cards within a period of two months without any penalty. Stringent action, however, should be taken against those still found to be in possession of such cards, during door to door survey on expiry of the amnesty period.  The Committee would request the Hon’ble Court may consider passing appropriate order.

 

3.     Central Government have recently constituted a Unique Identification Authority of India (UIDAI).  The mandate of UIDAI is to issue unique ID number to every resident of the country.  It is stated that if  PDS authorities, in their domain make ration cards on the basis of UID number of the ration card holders and their family members as mandatory, they can clear up their data base of bogus ration cards.  If a State decides to have UID in all its  ration cards, then somebody who has a ration card with the UID  cannot come again on another ration card with another UID. Duplication and bogus ration cards  would be eliminated.

 

 

 

 

 

 

 

CHAPTER 4

 

DISTRIBUTION OF FOODGRAINS

 

4.1 AGENCIES INVOLVED IN PDS

1.                       Civil Supplies and Consumer Protection Department

2.                       Food Corporation of India

3.                       Tamil Nadu  State Food and civil supply Corporation

4.                       Cooperative Department and Cooperative societies

5.                       Women Self Help groups

 

4.2 CIVIL SUPPLIES AND CONSUMER PROTECTION DEPARTMENT

Civil supplies and Consumer protection Department is implementing and regulating Public Distribution System in this State.

 

4.2.1 Organogram

 

Minister

 

 

Secretary

 

CS&CPD

TNCSC

Cooperatives

Civil supplies

CID

 

 

 

 

At District Level

 

DM

 

 

ADM

 

 

 

 


 

DS&CPO

RM TNCSC

JR-Coops


 

TSOs

Godowns

Sub Staff

 

FPS

FPS

 

4.2.2 Responsibilities of  District Supply Officers / Deputy Commissioners :

1.                 Issue of allotment orders for commodities to all taluks in the district every month.

2.                 Monitoring effective movement of commodities to FPS and sufficient stocks in all FPS

3.                 Effective redressal of Public Grievances relating to PDS and FP

4.                 Monitoring Selection of eligible beneficiaries for AAY and Free LPG scheme

5.                 Elimination of Bogus cards, Smuggling and Black-marketing prevention

 

4.2.3 Responsibilities of Taluk Supply / AROs / Assistant Commissioner’s offices:-

1.                 Issue of Allotment orders of commodities to all FPS in that taluk.

2.                 Selection of eligible beneficiaries for AAY and Free LPG scheme as per norms laid down by Government.

3.                 Monitoring effective movement of commodities and ensuring sufficient stocks in FPS to meet entitlements.

4.                 Redressal of Public Grievances relating to PDS and FPS.

5.                 Elimination of Bogus cards, Smuggling and Black-marketing prevention.

 

4.3     FOOD CORPORATION OF INDIA

 

4.3.1 The Government of India is allotting Rice and wheat to Tamil Nadu for distribution under PDS, every year. Based on the said allocation, the FCI issues district wise allocation orders, as per the requirement furnished by the TNCSC. On receipt of sub-allocation from the General Manager, FCI the TNCSC gets the release orders from the District Offices of FCI after making payment and the rice is lifted from the depots through the approved transport contractors appointed by the TNCSC for each Region.

 

4.3.2 FCI in TamilNadu has sufficient storage capacity and presently they are utilizing 98% of their storage space. It was Stated by the officials that every month around 2.90 lakhs MTs. of rice  and 13783 MTs. of wheat is lifted regularly with out any problem with the full Co-operation of FCI and as such there is no problem in lifting the Central pool allotment from Food Corporation of India. Though FCI has to keep bufferstock of foodgrain, it is suggested that FCI should keep issuing foodgrain in time considering the fact that same do not get spoiled by the time it reaches beneficiaries.

 

4.3.3 It was informed to the Committee that at State level, the Principal Secretary, Co-operation Food and Consumer Protection Department conducts the Co-ordination meeting every Monday with the General Manager, FCI, Chennai, and with the Managing Director, TNCSC and review the stock position and lifting problems if any at state level are sorted out and solved then and there.  Similarly at the district level the Area managers of Food Corporation of India hold monthly Co-ordination meetings with the Senior Regional Managers / Regional Managers of TNCSC.

 

 

4.4     TAMIL NADU CIVIL SUPPLIES CORPORATION (TNCSC)

 

4.4.1 Tamil Nadu Civil Supplies Corporation (TNCSC) is functioning as the, storage and distribution agency under the Public Distribution System.  TNCSC was incorporated on 24th April 1972 under the companies Act.1956. Later, in 1975 it was converted as a Stated owned public Undertaking. The main functions of the  TNCSC  are procurement of essential commodities , storage, movement of stocks to godowns and transporting the stocks to fair price shops. It also procures and distributes pulses and other commodities required for the various welfare schemes of the Government.

4.4.2  Managing Director and the Board of Directors of this Corporation are appointed by the Government of Tamil Nadu. For administration convenience and decentralization, the Corporation has 31 regions headed by Senior Regional managers/ Regional managers in the Cadre of District Revenue Officers/ Deputy Collectors. There are 9754 regular employees on the rolls of the TNCSC. 

4.4.3  TNCSC is the wholesale agent for moving commodities like Rice, Wheat from the depots of Food Corporation of India and sugar from sugar mills to 212 operational Godowns and to distribute it to Public Distribution System outlets owned by TNCSC. TNCSC is running 1251 Fair Price shops in the state out of the total 30,781 FPSs in the State.

4.4.4  In Tamil Nadu FPS distributes Rice, Wheat, Sugar and Kerosene. Apart from the above, as a price control measure ,the Government of Tamil Nadu distributs Toor Daal, Urad Daal, Palmolein, Fortified Atta and spices packet containing 10 items at concessional rates.

 

a.      Rice, wheat and PDS commodities: Tamil Nadu Civil Supplies Corporation  lifts rice from Food Corporation of India godowns and stores it in 212 operational godowns under its control throughout the State. Co-operative Lead Societies move essential commodities from the TNCSC godowns and deliver these commodities directly to Fair Price Shops.

b.     Sugar: So far as sugar is concerned TNCSC lifts sugar from Co-operative and Private Sugar Mills and through its godowns supplies Sugar to Fair Price Shops. Every year, TNCSC appoints transport contractors for the movement of essential commodities from Food Corporation of India godowns to TNCSC godowns.

c.      Kerosene: In respect of kerosene, Co-operative Societies and Tamil Nadu Civil Supplies Corporation purchase kerosene from wholesalers in barrels and move them to Fair Price Shops. In certain areas, kerosene is supplied to Fair Price Shops  by wholesalers through tanker lorries. Government of Tamil Nadu has set up kerosene bunks in urban areas to enable quick and correct supply of kerosene to cardholders. For these kerosene bunks, supply of kerosene is effected by tanker lorries directly by wholesale dealers.

 

4.4.5  Transportation contracts:

Transportation contracts for movement of essential commodities from FCI to TNCSC godowns are awarded by TNCSC through an open tender . The Appointed transporters lift foodgrain from  FCI as well as sugar mills and to deliver at TNCSC godowns as well as for transportation of foodgrains from TNCSC godowns to TNCSC FPS. Rates are fixed every year for each region.

 

4.4.6  Standardization of bags: 

1.       The standardization of foodgrain bags received from FCI is done at TNCSC godown. Standardization of bags means making each bag weigh 50.6 kg. If the bag contains more  the grain is taken out and if it weighs less grain is filled in the bag. Standardized bags are then supplied to the  FPS run by Cooperative societies or TNCSC FPS. The foodgrains are transported from the FCI godowns to TNCSC godowns. Due to long storage and transit loss the bags  often  have less then the 50 kg foodgrain as packed initially. Moreover bags which get torn are stitched after collecting and filling the spilled foodgrain may contain more than 50 kg as labourers just fill bags without weighing quantity.  TNCSC thus started Standardisation of bags.  Sugar alone is supplied from the sugar mills in standardized bags. Standardization is done by the TNCSC and the bags are machine stitched with colored twine for identification.

 

2.       For instance the committee was informed at Ramnathpuram in Madurai   that on receipt of bags from FCI godown the bags are weighed before sending  them to Cooperative outlets. The weight of one bag should be 50.665 Kg. (including gunny bag).  If a bag contains less quantity then it is  made good  by putting extra rice in it and the bag is stitched with coloured thread at the  TNCSC Godown . The Colour of thread is changed every month and the colour selected for different months  for the year 2009-2010 is as follows:

                         Mark                               Colour

October 2009                              Yellow

November 2009                          Blue

December 2009                           White

January 2010                              Pink

February 2010                             Yellow

March 2010                                 Blue

April 2010                                  white

May2010                                    Pink

June 2010                                  Yellow

July2010                                    Blue.

 

3.       It was stated by the officials in the wrap up meeting  that colour of the thread  does not help  much in preventing diversion but only helps the officers in identifying the month to which the stock belongs. If the same is kept for long duration. The same can be checked.

            

4.       TNCSC incurs  cost of Rs. 1.29 per quintal towards standardization charges in the godowns which involve the operations of de-stacking, weighment, stitching and stacking. This constitutes 0.07% in respect of rice and 0.18% in respect of Wheat.

 

5.       At Chennai an NGO from the Pazhamuthir Panchayat Union represented that the system of  ‘Standardization of bags’ can be eliminated and was of the view that it was only because of that, pilferage happens at the supply level. A representative of the Fair Price Shop Owners Association in chennai was of the view that Pre-packed articles should be distributed at the fair price shops. There were other people who also gave similar suggestions  to the Committee.

 

4.4.7 Committee visited TNCSC godowns at 

                                i.            Anna Nagar in Chennai,

                              ii.            Gopalapuram, south region chennai

                            iii.            Vridhachalam Taluk in cuddalore ,

                            iv.            Subramanya puram in Tiruchi

                              v.            Advaram in Trichy, and

                            vi.            Ramnathpuram in Madurai

 

4.4.8  Some of the observations are as under:

  i.                  At TNCSC godown  Vridhachalam Taluk , Cuddalore it was observed by the Committee that the foodgrain procured by TNCSC is packed in 50 kg gunnies. There was no indication about the packaging date/ year. No crop year was written on the bags.

 

ii.                  TNCSC godowns at Subramanya puram in Trichy and Advaram godown in Trichy, it was found that FCI does not follow double threading system. Some of the bags were found to be having bad quality rice. It appeared that    spilled rice was put back after sweeping the floor and filling the same. It was observed that some of the bags were having FCI stamp on one side & millers stamp / TNCSC stamp on other. On asking about the same the officials of TNCSC informed that they purchase gunnies from Corporative stores & re-use it for next procurement.  It was also observed that TNCSC does not put stamp of the year of procurement i.e. crop year. There was no indication on bags to know the year of procurement & from where it was procured & brought. The committee is of the view that  packaging & branding system needs improvement.

 

iii.                  Visit to the TNCSC Godowns Situated in Annanagar

There are two units of godowns. Unit I is used for stacking special PDS items like Toor Daal, urad dal etc., While Unit II is for stacking PDS items. Deputy Manager, [QC] was present at the time of inspection. The committee observed that Issue memo issued in respect of the Bags loaded and to be delivered was drawn manually.

Lorry number was TN-74/C 4482. Zone - GP 042994, Issuing Godown - Anna Nagar I Godown, Party's name- CRP, Location - OBAMA Nagar. Transportor’s name and charges were left Blank. The entire issue memo was drawn manually. There was over-writing with respect to total number of bags, quantity, etc. Even the signature of the receiver was lacking.

Electronic Weighing Machine, when examined showed some trouble. Movement Assistants who are employees of TNCSC are accompanying the vehicle. Upto 5% shortage is allowed for the entire stock. Automatic loading machines were seen installed in the godowns. The above details found out by the Committee showed that all was not that perfect as was presented by the officials. Scope for pilferage and diversion is still there at the godown level of the TNCSC about which the top officials have to be vigilant.

 

4.4.9  Sampling: The prevalent system of sampling is not an effective method of quality control. Even if FCI issues the sample to 212 godowns of TNCSC, it is not practically followed by the  Godown keepers to issue sealed and signed samples to  about 100 or more FPS attached to one TNCSC godown. It was observed that FPS salesman usually pick grain from one of the received bags and display the same in some bowl and it serves no purpose so far as sampling for quality control is concerned.  There is need for better ways to attain quality control. Better packaging system appears to be one solution.

 

4.4.10 Weighment: The grain is weighed at FCI godowns. The TNCSC godowns do not have weighbridge. The weighment is not done when grain is received. However all the TNCSC godowns have electronic weighing machines for the pupose of standardization of bags and weighment while issuing  the same  to FPS.

 

4.4.11Storage conditions:

Storage system of foodgrains was comparatively better than what is found in  other states.  TNCSC has properly built godowns.  As such there were no major shortcomings so far as storage conditions in godowns are concerned. However, at some godowns complaints of shortage of space  were made. For instance the Committee visited TNCSC South Region Chennai, godown at Gopalapuram. The capacity of the godown is 1650 MTs and both PDS and special PDS commodities were stored in that godown. 130 FPS were attached to the godown. It was told by the godown officials that there is shortage of space in the godown and therefore constant transportation is resorted to avoid storage problem due to lack of space and the commodities are taken in and out from the godown very frequently.

 

4.5       ROLE OF COOPERATIVES IN TAMIL NADU

 

4.5.1     In Tamil Nadu no private persons are permitted to run the Fair Price Shops. The Fair Price Shops are run mostly by the Cooperative Societies like Primary Agricultural Cooperative Societies (PACS), Consumer Cooperatives and Marketing Societies or by the Tamil Nadu Civil Supplies Corporation. Very limited number of shops are run by the Women Self Help Groups. Hence the Cooperatives play a predominant role in the functioning of Public Distribution System. PDS came under the Co-operatives in 1987.    Details of shops run by the different agencies are given below:-

 

1.

Cooperatives

28,752

2.

TNCSC

1,251

3.

Other Shops

138

4.

Mobile Shops

10

5.

Women Shops

630

 

Total

30,781

 

4.5.2     The Shops under Co-operatives are controlled by Joint Registrar of Co-operatives in the District. He is assisted by Deputy Registrar (PDS),  Co-op sub- Registrar(PDS) controls the liftment and distribution at the block level. Joint Registrars of Co-operatives monitor allotment and movement of PDS items to cardholders through the Co-operative outlets. He is also vested with the power to conduct periodical inspection of the shops.

 

4.5.3     Part time FPS

To improve the public access to PDS outlets particularly in far-flung areas State has allowed to open part time shops if number of cards are 150 and above and the distance from existing shops is more than 1.5 KM.  During 2009-10, the State opened 132 part time shops. Out of 30781 FPS, 23,974 shops are full time shops and 6,807 are part time shops.

 

4.5.4     Lead Socities, Link Societies and Self Lifting socities

In each district among the cooperative societies running FPS some societies are nominated as lead society which takes responsibility for doorstep delivery of stock at PDS outlets A representative of the cooperative society also accompanies lorries to ensure supply of essential commodities at correct weight. Totally 5060 societies are engaged in PDS, of which 86 are lead, 434 are self-lifting and 4050 are link societies.

 

4.5.5     Functions of Lead Societies

The Societies which undertake the function of transportation of essential as well as Special PDS commodities from TNCSC Godowns to the Fair Price Shops are named as Lead Societies. Usually Taluk level or District level societies  are entrusted with the functions of lead society as they have the sufficient infrastructure, man power and financial resource. They also run FP Shops independently. In Cuddlore District,  as per the figures furnished by the officials, there are 4 lead societies which transport  foodgrains to 121 Fair price shops.

 

 

 

4.5.6     Schedule of lifting foodgrain

The lead societies lift the commodities from the TNCSC godown as per the allotment orders of the Taluk Supply Officer and deliver the goods at the doorstep of Fair Price Shops. The movement for the forthcoming month  starts in the previous month and this will be called as advance movement. Usually advance movement starts on 26th of previous month and during this period 60% of tentative allotment is lifted. The remaining 40% is lifted from the TNCSC godowns from 5th to 20th of current month. The lead societies pay to the TNCSC on the date of liftment from their own funds.

 

4.5.7     Transportation of foodgrain

1.       The transportation is done in two phases. First phase relates to lifting of PDS items from FCI Godowns to TNCSC godowns. The expenditure on this count is met by TNCSC.

2.       The second phase relates to transportation from TNCSC godowns to FPS. The entire expenditure on this phase is borne by the Lead Societies. The transport for lifting the commodities is arranged by lead societies through tender. The expenses for transport and delivery of the goods is borne by the lead societies. An open tender system is followed by Cooperative Societies for movement of PDS commodities from TNCSC godowns to FPS.  Rates fixed every year by lead and self-lifting societies based on tenders. The rates differ in every district and some of them are mentioned below:

a)     For eg. TUCS Chennai fixed   rates on  the basis of distance  for 2010-11 which starts from Rs. 103 per MT for 0-5 km slab to Rs. 123 per MT for distance of 10 km and above.

 

b)     Lead Societies like Cuddalore District Wholesale stores and Ponnuruti Cooperative Marketing Society bear the transportation charges upto 8km at the rate of Rs.60/MT while Rs.90/MT is paid for more than 8 km distance. Unloading charge/MT is Rs.60/-. Usually the period of contract is 1 year.

 

c)      Rate Contract System  is followed by Lead Societies like VridhaChalam and Chidambaram Cooperative marketing Societies.

Weight                                                       Amount

Weight upto 10 Tonnes                        Rs.350

For every additional Tonne                    Rs.50/MT

For Fuel

For every  3km                                    1 litre of Diesel charges

Unloading charges/MT                          Rs.20/-

 

5.    Movement Clerk:     The lead society appoints one movement Clerk in the TNCSC godown for providing lorry and effecting the movement as per the allotment order and movement schedule. The godown movement Clerk of the lead society has to ensure that only standardized bags are lifted for movement and also he is made responsible for the quality and weighment of commodities lifted.

 

6.    Assistant provided by Lead society to accompany vehicle: Each vehicle involved in the movement  is to be escorted by an assistant from the lead society who is responsible for the goods of the vehicle upto the delivery point, i.e. Fair Price Shops.

 

4.5.8     Function of The Link Societies

1.     The Societies which are running the Fair Price shops and receiving commodities from TNCSC godowns through another society are called link societies. These are small societies and are usually attached to a Taluk  level society within their area of operation for liftment.

 

2.     They run Fair Price Shops ranging from minimum of 1 to maximum of 20. The Fair Price Shops of link societies are supplied with commodities except kerosene by the lead societies for which payment is made by the link societies by adjustment through District Central Cooperative Bank then and there.

 

3.     The margin provided by the Government for all commodities is shared by them with lead societies in the ratio of 60: 40. In addition to the margin the empty gunnies are given to link societies.

 

4.5.9     Self Lifting Societies

Sometime by Special Orders of the District Administration certain societies are allowed to lift commodities from TNCSC godowns directly from their own shops. These societies are called self lifting societies. They bear all expenses of lifting and avail the margin in full.

 

4.5.10   Commission  and Subsidy received by Cooperative societies

For running the PDS outlets, the respective institutions are entitled to get a retail margin.  For instance, in the case of rice, Rs.45/- per quintal is provided as retail margin.   Similarly for all the commodities, retail margins are fixed. In Public Distribution System Societies have to bear expenses like salesmen salary, rent; electricity bills, books and forms etc., to run the Fair Price Shops. Committee observed that the FPSs run by Co-operatives usually suffer loss, the difference in the expenses incurred in running the FPS and the income  (commission  and sale of empty gunny) is compensated as PDS subsidy by the State Government.   For instance during 2008-09, Rs.93.50 crores was released as PDS subsidy to cooperatives.

 

4.5.11   Salesmen at FPS

Most of the Salesmen are employees of the Cooperative Societies. Approximate Gross salary of a salesman is Rs.5,025/-  Apart from Salesman Packers are appointed in  those shops in urban areas which  have more  than 800 cards .

 

4.5.12 Viability of the FPS:

1.       The Commission paid to the FPS is the source of income from which expenditure of the shops are met. Some of the shops are incurring loss. The loss is met by the Government by giving subsidy.

 

2.       The following figures paid as subsidy by the Government as made available to the CVC by the District Collector, Cuddalore is a pointer to the viability of the FPS run by the Cooperatives.

 

Sl. No

   Year

No. of

 Rural

FPS

Urban

Total

Amount

Paid by State to the FPS

1

2006-2007

816

222

1038

Rs.3,26,20,547/-

2

2007-2008

775

225

1000

Rs.4,59,07,869/-

3

2008-2009 [proposed]

803

223

1023

Rs.5,07,95,392/-

 

4.                 The percentage of commission which is paid to the lead society and the link society and the margin of the share in each commodity between the lead and link societies is as follows:

 

 

 

 

 

 

Margin to Lead Societies and Link Societies

 

Sl. No.

Commodity

Selling Price (Per Kg)

Margin Amount (Per Kg)

Share of Lead Society (Per Kg)

Share of Link Society (Per Kg)

1

Rice

1.00

0.45

0.17

0.28 + Gunnies

2

Sugar

13.50

0.12

0.10

0.02 + Gunnies

3

Wheat

7.50

5.00

2.30

2.70 + Gunnies

4

Kerosene (per litre)

8.70

--

--

0.39

 

 

8.80

 

 

0.40

5

Tea

13.00

1.20 (per packet)

0.80

0.40

6

Toor Dal

40.00

0.50

0.20

0.30

7

Urad Dal

40.00

0.50

0.20

0.30

8

Pamolein Oil (Litre)

30.00

0.50 (per packet)

0.20

0.30

9

Atta

11.00

0.50

0.20

0.30

10

Rava

17.00

0.50

0.20

0.30

11

Maida

16.00

0.50

0.20

0.30

12

Salt

3.50

0.45

0.30

0.15

 

 

 

5.                 It was observed that in South Chennai 222 ration shops are there and all are running  in loss,  get Govt. subsidy to make up the loss.   Subsidy per shop is Rs.1 lakh  per year per shop. Income and Expenditure statement of the Shop DBO 24 at Annanagar III, Chennai for the year 1.4.2008 to 31.3.2009 and similar details of shop No.DB022, Annanagar II, DB 023 Annanagar II, shop No.DBO17, and DB019 were inspected by the C.V.C. All these shops are owned by the Park Town Cooperative Wholesale Stores Ltd., Chennai.  It was observed that these shops are running in losses and the amount of Loss is given by Government as Subsidy to the Fair price shops.

 

6.                 The expenditure details of one shop namely, DB024 are given below:

 

Expenditure Statement for the year from 1.4.2008 to 31.3.2009

Sl.

No.

Expenditure items

Amount

Rs. Ps.

1

Salesman salary

35,098.00

2

Packer salary

41,440.00

3

Movement Clerk Salary [properties of fair price shops]

10,275.00

4

Liability Clerk salary[properties of fair price shops]

2,855.00

5

Pay Bill Clerk salary [Proportionate of fair price shops]

3,720.00

6

Total Provident Fund for Salesman and packer

8,889.00

7

Total Bonus Gratuity and surrender of EL for salesman and packer

8,353.00

8

Total Family Benefit Fund for Salesman and Packer

1,861.00

9

Provident Fund for Movement Clerk, Liability Clerk, Pay Bill Clerk [Proportionate of Fair Price shop]

1,958.00

10

Bonus, Gratuity and surrender of EL for Movement Clerk Liability Bill Clerk [Proportionate of fair price shop]

1,656.00

11

Family Benefit Fund for Movement Clerk Liability clerk, Pay bill clerk [Proportionate of fair price shop]

245.00

12

Rent

36,000.00

13

Electricity

1,560.00

14

Interest on Cash Credit

 

15

Public Distribution System License fee

 

16

Printing and Stationery [for PDS operation – bill vouchers/Register at shop and also related Registers at Head Office

9,958.00

17

Transport charges for Rice, Sugar, Wheat and SPL PDS items and other related charges

17,364.00

18

Transport charges for kerosene

3,888.00

19

Depreciation on furniture

300.00

20

Depreciation on Barrels

350.00

21

Depreciation on Billing Machine – 1/3rd of purchase cost if out of own funds

..

22

Stock and information Board

335.00

23

T.A. to Salesman

 

24

Insurance premium

191.00

25

Telephone

605.00

26

Stamping charges

194.00

27

Purchase of standard weights Depreciation on Electronic Machine 1/3rd of purchase cost. If purchased out of own funds

 

28

Building Repair Charges-White washing and any repairs

 

29

Miscellaneous [specify]

27,341.00

 

Total

2,14,436.00

 

The Details of income received on PDS are given below:

Sl

No.

INCOME ITEMS

Rs. Ps.

1

Margin on sale of:

 

 

a)  Rice           -  127917x0.45

57,562.65

 

b)  Sugar        -   27967.5x0.12

3,356.10

 

c)  Wheat        -   11826x0.50

5,913.00

 

d)  Kerosene   -   43022x0.39

16,778.58

 

e)  Toordhal    -   7967x0.50

3,983.50

 

f)   Urid dhal   -   4535.5x0.50

2,267.75

 

g)  P.Oil           -   6640x0.50

3,320.00

 

h)  Malligai pkt -   750x1.00

750.00

 

i)  Atta             -  1500x0.50

750.00

 

j)  Rava            -   305x0.50

152.50

 

k) Maida          -   586x0.50

293.00

2

Sale of Empties

 

 

a)  Rice           -  2558x10.52

26,910.16

 

b)  Sugar        -   279x23.68

6,606.72

 

c)  Wheat        -   236x10.52

2,482.72

 

d)  Kerosene   

 

 

TOTAL

1,31,126.68

 

Expenditure

2,14.436.00

 

Loss

Rs.83,309.32/-

 

An amount of Rs.83,309.32 (Rupees Eighty three thousand three hundred and nine) is shown as loss incurred by the Cooperative Society for the year 1.4.2008 – 31.3.2009 in respect of the shop no. DBO 24 at Annanagar III alone. This amount is re-imbursed by the Government on the recommendation of the authorized officer after audit to the Society. This happens in most of the Fair Price Shops owned by the Society. The Income & Expenditure statement shows that the Society is a self lifting society bearing its own transportation charge and getting full commission charges over all PDS items. The Societies in spite of full receipt of commission in respect of PDS and special PDS items are incurring loss over the sale of the products. But grant of subsidy is a great attraction to such stores. Since auditing is done at Government level, scope for manipulation of the accounts is minimal. But the Income and Expenditure accounting is not so far computerized. And the Statements made available to the Committee were manually filled up. Hence there is need for linking the Income and expenditure statements of all the FPS shops run by the Cooperative stores to the online system already available to ensure transparency and prevent false accounting in the system. The State has introduced online billing system but it was informed by the officials that fake billing is still possible and if salesman generate fake bill he can easily manipulate records in his favour.

 

7.                 FPS no. A 2942 , Pudur PACS., Karpaga Nagar, Cuddalore. Total Cards in the shop are 1598 .The Profit and Loss as on 24.08.2009  is shown below

            

 

 

 

 For Period 2008-2009

Expenditure Items

Rs.

1.

Salesman Salary

67200/-

2.

Packer Salary

48384/-

3.

Movement Clerk Salary (Proportionate of Fair Price Shop)

8252/-

4.

Liability Clerk Salary (Proportionate of Fair Price Shop)

7179/-

5.

Pay Bill Clerks Salary (Proportionate of Fair Price Shop)

_____

6.

Total Provident Fund for Salesman and Packer

13248/-

7.

Total Bonus, Gratuity and Surrender of E.L. for Salesman and Packer

11810/-

8.

Total Family Benefit Fund for Salesman and Packer

1292/-

9.

Provident Fund for Movement Clerk, Liability Clerk, Pay Bill Clerk (Proportionate of Fair Price Shop)

2568/-

10

Bonus, Gratuity and Surrender of E.L. for Movement Clerk, Liability Bill Clerk (Proportionate of Fair Price Shop)

2294/-

11.

Family Benefit Fund for Movement Clerk, Liability Clerk, Pay Bill Clerk (Proportionate of Fair Price Shop)

190/-

12.

Rent

12000/-

13.

Electricity

2028/-

14.

Interest on Cash Credit

_____

15.

Public Distribution System License Fee

275/-

16.

Printing and Stationery (for PDS operation – bill Vouchers / Register at Shop and also related Registers at Head Office)

3450/-

17.

Transport charges for Rice, Sugar, Wheat and SPL, PDS Items and other related charges.

17160/-

18.

Transport charges for kerosene

_____

19.

Depreciation on furniture

750/-

20.

Depreciation on Barrels

_____

21.

Depreciation on Billing ___- 1/3rd of purchase cost, if out of own funds

______

22.

Stock and Information Board

400/-

23.

T.A. to Salesman

____

24.

Insurance Premium

303/-

25.

Telephone

_____

26.

Stamping Charges

525/-

27.

Purchase of Standard Weights Depreciation on Electronic Machine 1/3rd of purchase cost if purchased out of own funds

_____

28.

Building Repair Charges – White Washing and any repairs

1200/-

29.

Miscellaneous (Specify)

2,00,508/-

1.

Income Items

 

Margin on Sale of

f) Rice

 

94500/-

 

g) Sugar

 

4669/-

 

h) Wheat

 

6000/-

 

i) Kerosene

 

_______

 

Special PDS Items – Spl PDS

5800/-

2.

Sale of Empties

e) Rice – Gunnies

 

40800/-

 

f) Sugar- Gunnies

 

11253/-

 

g) Wheat – Gunnies

 

2400/-

 

h) Kerosene Barrels Dhall

538/-

 

Total

1,65,900/-

 

Net Loss

34,548,00/-

 

4.6  CASH CREDIT SYSTEM:

 

4.6.1 Both Lead Societies and Link Societies are advanced credit facilities by the District Central Cooperative Bank. The link societies and lead societies are running the fair price shops.  On the basis of number of cards attached to their respective shops they submit proposals for the sanction of cash credit to District Central Cooperative Bank.  As per the norms, Rs.230/- is allowed per card as the cash credit limit by District Central Cooperative Bank.  The District Central Cooperative Bank at Cuddalore has sanctioned Rs.842.70 Lakhs as Public Distribution System Cash Credit limit for 2010.  The rate of interest for the Public Distribution System Cash Credit is 12%.

 

4.7     PAYMENT FOR FOODGRAIN TO TNCSC

 

On the basis of family cards attached to the respective Fair Price Shops, the Link Societies submit proposals for sanction to the District Central Cooperative Bank.  On the basis of the fund sanctioned to the Central Cooperative Bank as public distribution cash credit limit, and on the basis of the supply caused on behalf of a particular fair price shop belonging to the link society, the concerned lead society to which the link society is affiliated out of its cash credit account makes payment to the Tamil Nadu Civil Supplies Corporation. The lead society and the link society are having cash credit accounts in the District Central Cooperative Bank. Lead Societies issue cheques to the TNCSC for effecting movement from the TNCSC godown. The commodities when supplied at the door step of the FPS is acknowledged by the Salesman and based on this acknowledgement Secretary/Manager of the Society issue Advice Slip. Lead Societies produce these advice slips to the District Central Cooperative Bank which adjusts the amount from Link Society to Lead Society Account.  The payment is made by the District Central Cooperative Bank to the lead society from the society’s account at once. The lead society bears all the expenses for transport of commodities from  Tamil Nadu Civil Supplies Corporation go-downs to the fair price shops and it shares the margin with link societies for all commodities except Kerosene in the ratio of 40:60.

 

4.8     ALLOCATION AND LIFTING SCHEDULE OF FOODGRAIN

 

4.8.1  Advance movement of essential commodities: In the State  a procedure called advance movement of essential commodities is being followed. 60% of the allotment of all commodities are issued and moved as Advance movement from 25th of the previous month to 5th of the current month without waiting for allotment orders. Balance due as per current month allotment issued and moved from 5th to 20th of the current month. This system ensures distribution of essential commodities to the card holders from the first day of the month without waiting for supply against the current month allotment. The balance 40% is moved to each fair price shop before 20th of each month on receipt of allotment orders after taking into account, the closing stock in the shops.  Wherever shortfall in lifting is noticed by the Department, the regional Joint registrars are called to explain the reasons thereof and  are instructed to take necessary action to complete the liftment. If the delay is on the part of TNCSC, the collector of the concerned district is informed to instruct the Regional Managers of TNCSC to do the needful in this regard.

 

4.9     MONITORING DISTRIBUTION OF FOODGRAIN AT THREE STAGES

4.9.1  Checks to ensure  that full quantity of food grain lifted from FCI godowns reaches  the state godowns:

 

1.                 Coordination meetings at the level of Government and Commissioner of Civil Supplies are periodically conducted to ensure the full liftment of essential commodities allotted by the GOI, from FCI godown by TNCSC. Daily liftments are monitored by TNCSC head office.

 

2.                 Movement watch register is maintained for recording the loading and receipts    of each lorry loads in each region.

 

3.                 TNCSC has piloted GPS based monitoring of lorries in 2 districts. Also it has completed installation of an online godown monitoring system which enables tracking of receipts of issue in each godown. This system is likely to be completed by April 2010.

 

 

 

 

4.9.2  Checks to ensure that full quantity reaches the FPS

 

1.                   The officials from the level of Collectors to Special Revenue Inspector are  responsible to monitor the movement of essential commodities from godowns to fair price shops on a daily basis. They are further responsible to carry out periodical checks  on the vehicles moving from godown to fair price shops enroute to ensure whether the standardized bags that are being supplied to the fair price shops are in correct weight.

2.                   Daily MIS reports on stocks issues etc are reviewed by Principal Secretary / Co-operation Food and Consumer Protection, Commissioner, Civil Supplies and Consumer Protection Department Managing Director, Tamil Nadu Civil Supplies Corporations, Registrar of CO-operative Societies, Collectors, etc.

3.                   Further, a Fair Price Shops stock monitoring system enables the department to monitor and issue stocks of commodities to Stock-out shops on a daily basis.

4.                   Further weekly review at State and District level ensures that the full quantity reaches Fair Price Shops every month. A State Consumer helpline (004-28592828) and an online grievance registration and follow up system at www.consumer.tn.gov.in enables effective public grievance redressal.

4.9.3  System of monitoring of Fair Price Shops. The State Government has fixed target for inspection of fair price shops by various officials who are monitoring PDS. The targets fixed, officer wise is in Civil Supplies Department. Co-operatives and TNCSC are also arranging inspection through State teams. Apart from this, intensive inspections are arranged by top state officials including Principal Secretary and Minister using specially selected officers who normally cover 10% of their staff in each district on single day by way of  surprise checks followed by review meetings. During a month at least 2-3 districts are covered in this way. Further, based on grievances / complaints received, by way of special raids 100% audit is taken up for such fair price shops by teams organized by Collectors and action taken against erring sales men.

 

4.9.4     Daily stock position of fair price shops through SMS: All sales personnel are given instructions to send daily stock position of shops through SMS .The SMS sent by sales personnel are stored in server. The same is available in the Web Site www.remotedatacentre.com. Daily stock position of fair price shops is being reviewed by lead societies, DRs (PDS), Regional Joint Registrars etc. and action  taken where insufficient stock/stock out  occurres to replenish the stock. Wherever the stock is not adequate in Civil Supplies godowns, the M.D., TNCSC requests Registrar of Cooperative Societies to arrange for maintaining sufficient stock in godowns.

 

4.10   OBSERVATIONS:

 

The Committee observations are as follows:-

1.     The role of Tamil Nadu State Civil Supplies Corporation is very limited so far as Public Distribution System is concerned. The role of TNCSC should be enlarged to include both wholesale and retail distribution of food grains.  The FPS should be run by corporation rather than cooperative societies and women self-help groups in order to check diversion and malpractices. The Committee found that most of the shops run by cooperative societies are incurring losses and subsidy from the government provides life line to such shops.

 

2.     Till recommendation of the Committee that FPS operations should be handled by  the TNCSC  is implemented, it is necessary that salary of salesman employed by cooperative Societies or WSHG should be at par with that of the Salesman employed by TNCSC. TNCSC should deliver at door step of FPS on its own so as to reduce the intermediary levels  handling transportation (presently Lead Society) to check the Diversion of PDS foodgrain. The State is in the process of computerisation and specially in Chennai the allocation of foodgrain to FPS is made online.

 

3.     There should be a system by which the grain allocated to the State can be equated with the grain distributed to the beneficiaries. Since the scale of distribution and the number of beneficiaries is very large this cannot be achieved manually. Complete automation and computerisation is the need of hour.    At About 20 shops in Chennai the Webcam’s are installed and anyone can access and view the functioning of it online.  Daily closing Stock of FPS is also available online. Similar steps be taken in other cities of the State. The Committee has already submitted a report on Computerisation of PDS and its findings in this regard stated in its separate and detailed report on computerisation, are reiterated herein.

 

4.     Introduction of Global Positioning System (GPS) technology is recommended for keeping a track on the movement of trucks carrying food grains from the FCI up to the Fair Price Shops. This will also enable the authority to fix responsibility on the transporter, if the stock does not reach the FPS at the scheduled time. Though state is experimenting the same in two Districts i.e Thiruvallur and Krishnagiri.

 

5.     The system of joint sampling for supply of sealed sample packets by FCI to the wholesale godowns and thereafter to the FPS should be rigorously followed to ensure that the same quality of food grain, as issued by FCI/ TN CS godowns are being distributed by the TNCSC / FPS dealers. Sealed samples should be ensured up to FPS level to check malpractices on the part of intermediaries and guard against tinkering with the quality of food grains released through PDS outlets.

 

6.     The practice being adopted for standardization of bag in TNCSC godowns  be discontinued forthwith as it is not serving any useful purpose and is unnecessarily creating a financial burden and increase chances of Diversion or exchange of  good quality of foodgrain with inferior quality. Instead Proper weighment system be installed at TNCSC godowns and FPSs. The Committee is also of the view that the current practice of standardization of bags casts financial burden and serves no useful purpose. Proper weighment of food grains on electronic weigh bridges is a better option.

 

7.     Every point should have an electronic weighing bridge /system connected and integrated with the automated system. This would ensure the integrity of the weight and content of the bags and reduce the possibility of tempering with the bags received from the FCI godowns. There must be an electronic weighment system connected to the online computerized system at every whole sale point, i.e., at the FCI and at the  point. At the retail point, the same may be integrated to the Point Of Sale device, as suggested in the separate report on computerization through a smart card. Only computer generated Weight Check Memos and Truck Chits should be issued. The FCI should ensure that all weight check memos are printed from the automated system giving exact quantity and number of bags.

 

 

 

 

 

 

 

 

 

 

CHAPTER 5

 

FUNCTIONING OF FAIR PRICE SHOPS

 

5.1            PDS CONTROL ORDER, 2001 :

PDS Control Order, 2001, provides for the functioning of FPS shop in proper and transparent manner.

5(i) of Annexure to PDS control order 2001 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.

Para 5(ii) of the Annexure to PDS control order 2001  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 Antodaya 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.

 

5.2       METHODS INTRODUCED BY STATE TO STREAMLINE THE FUNCTIONING OF FAIR PRICE SHOPS

(a)              Introduction of Hand Held Billing Machine (HHBM): To speed up the billing process, minimize the accounting work, to monitor stock position through online, in the first phase HHBMs are introduced in all fair price shops functioning in Chennai City and its suburbs and all kerosene bunks in the state. NetPCs are also being tried as an alternative to HHBMs in shops where transaction is heavy. The hand held Billing Machines can generate the whole stock position at any particular time.

 

(b)              Installation of IP Video Camera: As a trial run, surveillance cameras were installed initially in 4 fair price shops and  presently in 20 FPS to continuously monitor the activities through webcam. Any one can open the website and by clicking the shop number can see whether the shop is functioning or closed. One camera installation costs Rs 14000, camera costs Rs 5000 per year, broadband costs and other servicing costs which are approximated Rs3000 thus totaling to 22 thousand Rupees in one year. System is good but costly. It was informed that  it is functioning in Chennai city and has yielded the following good results:

(a)              Reduction of outsiders menance

(b)              Improved cleanliness in shops

(c)               Improved behaviour both on the part of Salesman and public.

 

It is proposed to install IP Video Camera in more No. of fair price Shops and kerosene bunks. 

 

c)       Electronic  Weighing Machine

 

In order to avert  the problem of underweighment of essential commodities, Electronic Modern Weighing Machines are being installed in the fair price shops. Electronic Weighing machines and handheld billing stops working when power failure is there. Hence in such case FPS Salesmen do not distribute foodgrain.

 

As on 28.02.2008, 21644 full time fair price shops are functioning in the state under the control of cooperative department and Government have sanctioned subsidy to all the Fair Price Shops to purchase Electronic weighing machines as follows:

 

Year                    Amount(Rs. In lakhs)                  (No. of fair price shops)

 

2004-2005           Rs. 72.52.                                 879

2005-2006           Rs. 100.00                                 2395 

2007-2008           Rs. 1150.00                               23600 

 

(d)     Building for FPS

Out of 28695 full time and part time fair price shops as on 31.12.2009. 3991 are accommodated in own buildings, 11125 in buildings constructed under various Government schemes, 3886 in rent-free buildings and 9693 in rented buildings.

 

(e)      Registers  required to be maintained by the FPS Owner.

                                i.            The following registers are maintained in the fair price shops.

                              ii.            ‘A’ register indicating the details of the family cards attached to the fair price shops

                            iii.            Bill Books

                            iv.            Daily sales chitta register indicating the family card to which commodities are issued and the quantity of commodities issued with the sale amount.

                              v.            Drawal Register indicating the quantity of essential commodities supplied to each family card with date of supply

                            vi.            Stock register

                          vii.            Attendance Register

                        viii.            Empty gunny account register

 

 

(f)      Opening time/ Schedule of FPS.

 

Working hours of fair price shops has been fixed by the Government and weekly Holiday has also been announced. The details of working hours of fair price shops is as follows:

 

Rural Shops                                               Urban  Shops

 

Morning

From 9.00 A.M. to 1.00 P.M.              From 8.30 A.M. to 12.30 P.M.

Evening

From 2.00 P.M. to 6.00 P.M.              From 3.00 P.M. to 7.00 P.M.

Lunch Break

From 1.00 P.M. to 2.00 P.M.              From 12.30 P.M. to 3.00 P.M.

 

Sunday has been declared as weekly Holiday for fair price shops in the State. However in respect of Nilgiris district and Valparai Taluk in Coimbatore district, which are hilly areas, Friday is being observed as weekly Holiday.

 

          5.3     FACTS OBSERVED DURING VISIT TO FAIR PRICE SHOPS

1.       The Committee visited approx 30 FPS in the State run and managed by either TNCSC or cooperative societies.

 

5.3.1  FPS IN CHENNAI

Chinthamani Park Town Cooperative societies

At Chennai Committee found that FPS no. DBO27 and DBO37 were located adjacent.  Both the  shops are run by Chintamani society previously known as Park town cooperative society. This society is having 223 FPS all over Chennai. In case of non-viability Government is paying subsidy. 80% of the shops are rented. The rent range from Rs.3000 – Rs.6000/- month.

Commodity                          Commission

Rice   -                                      -  45ps/kg

Wheat                                   -  50ps/kg

Sugar                                    -  12ps/kg

kerosene                                -  44ps/litre

 

Per card Distribution of

Special PDS Toordal             - 1kg /Rs.40

Urad Dal                             -  1kg/Rs.40

Palmolien Oil                       -  1kg/Rs.30

Atta                                    -  2kg. Rs.11/kg

Masala Packets                    -  Rs.50/card

 

There are 443 employees in the FPS owned by the Society. One salesman is appointed for shops upto 800 cards. For shops having 800 and above one packer also will be there.

1.                 At Chinthamani Park Town Cooperative Wholesale Store at Shop No.D-27, managed by a Packer, drawing a salary of  Rs.6,400/- per month.  He is stated to be working in the Cooperative Store for 25 years. Neither the complaint box nor telephone number was displayed at the shop.  The stock register on verification reflected discrepancies in the  allotment made to the shop. He expressed grievance about low salary paid to him as compared to a packer working in fair price shops established by the Civil Supplies Corporation who draws a salary of about Rs.12,000/- and the salary of the Salesman of the Chinthamani Park Town Cooperative Wholesale Store is Rs.8,000/- in comparison to the Salesman of the fair price shop established by Civil Supplies Corporation which is roughly about Rs.14,000/-

 

2        Chinthamani Park Town Cooperative Wholesale Store at Shop No.D-37: Eighty AAY families are attached to the shop no. 37. The stock and sales position regarding AAY beneficiaries as observed from records is as follows:

 

Date

Opening balance

 Stock received

 No. of AAY beneficiaries  who lifted foodgrian

1st November 09

1540 kg

1260 kg (i.e stock for 80 cards)

21 AAY lifted

1.12.09

2065 ( stock of 59 cards)

 Not lifted any foodgrain in December

27 AAY lifted

1.1.10

1120

945 kg

27 AAY lifted

1.2.10

1120

945

 26 AAY lifted

1.3.10

1155

910 kg on 12 march

 13 AAY lifted till 15th March 10

 

On perusal of records it was observed   that out of 80 AAY families 26 AAY families lifted their entitlement in the month of February. 27 AAY families lifted in the month of January 2010 and 27 AAY families purchased PDS foodgrain in the month of December 2009. It was also observed in the same shop that  735 kg of Boiled rice was received on 16.12 09 and same is shown as opening balance every month. The shop salesman informed that none of the AAY beneficiary wants to lift the Boiled rice. They purchased only raw rice.  Regarding green card holders also it was observed that usually the permit given by authorities to lift foodgrain is only for 80% of the total requirement.  On perusal of records and interaction with salesman it was observed that only 50-65 % beneficiaries lift the stock every month. The beneficiaries who lift foodgrain from FPS do not necessarily lift the full entitled quantity. FPS gets their allocation only after showing closing balance and closing balance figures were available in the official records pertaining to allocation for FPS with the department also. Space of the Shops was small. 250 sq feet is required but it was found that in urban areas it is very difficult to get that much space and rent is also high. In rural areas it is better.

 

3.       D.B.23 shop inspected

Shop was owned by Park Town Co-operative wholesale shop.[Chinthamani] Electronic weighing Machine is seen installed in the shop. Employee of the Chintamani Store is Managing the Shop. One Uttamaselvi was present. She told that Sivalingam the salesman was on leave and hence she was managing the shop for a few days.

 

4.      D.B.024, Annanagar

Salesman is V.V.Kumar. He gets Rs.6,500/- as salary. The shop is owned by the Park Town Society. Allotment orders for each shop are released each month from AC’s office. All the details are available online to any citizen through internet. Sales report is also available on line. Special PDS items are also sold in this shop.

 

Details of Documents collected from the shop

1.       Sales Report [Online ]

2.       Stock Report[online]

3.       Inspection Report[online]

4.       Details of Allotment[online]

 

 

Beneficiaries interviewed in the shop

1.                 Saidali Fatima [Card No.01/G/00 78446  Rice card. 3 units.

  Rice    -  20kg/month.

  Sugar  -  2kg/month.

2.                 Paneer Selvam.  Card No.1/W/0049138. (Sugar card)

gets maximum Sugar upto 5 kg. Not opting for Rice since  he gets rice from his own field/Sugar will be reduced if he opts for rice.

 

5.       Kilpauk Women Primary Cooperative Society No. DG008:

The fair price shop established by the Kilpauk Women Primary Cooperative Society No. DG008 was also inspected. It was stated that the society own’s nine shops in the city and that particular shop which was inspected, was administered by the saleswoman by name Mrs. Saroja who stated to be working as the Saleswoman of the fair price shop established by the society for the last 22 years and was currently drawing a salary of Rs.3,000/-. She stated that staff were frequently inter-transferred amongst the nine shops owned by the society. Shop had 1156 Green cards. 26 AAY cards. And 730 old age pension (OAP) cards. OAP beneficiaries get 4 kg of rice free of cost.   The stock and sales position regarding AAY beneficiaries as observed from records is as follows:

 

Date

Opening balance

 Stock received

sold

1st November 09

 245 kg

665 kg

20 AAY lifted

1.12.09

210 kg

700 kg

20 AAY lifted

1.1.10

210 kg

700 kg

20 AAY lifted

1.2.10

210kg

700 kg

 21 AAYlifted

1.3.10

175 kg

 

No reipt till 15th March

 4 AAY lifted

 

The shop had 1156 green cards.  On perusing the allocation and issuance details regarding the stock for Green card holders committee observed that 40- 50 % green card holders were lifting the foodgrain. For instance following details support the above inference.

Date

Opening balance

 Stock received ( raw rice)

Sold in the Month of February 10

1.2.10

 2644 kg

 3rd feb – 250 kg

 

 

 

10th feb _ 500kg

 

 

 

11th feb- 500 kg

 

 

 

13th feb-  500 kg

 

 

 

Total 1750 kg

2798 kg

 

Boiled rice at the shop

Month

Opening balance

Stock received ( Bolied rice)

Stock

sold

February’ 10

1842 kg

5000 kg

5054

 

Thus, total stock sold is 2798 kg plus 5054 kg i.e 7852 kg  means  approx 523 cardholders lifted the grain.(  when calculated  taking 15 kg as average lifting per card holder). Thus,  the lifting from FPS is only by 50% beneficiaries.

 

5.3.2  FPS IN CUDDALORE

There are four lead societies functioning in the district. 

1)                 Cuddalore District Saravanabhava Consumer Wholesale Store

2)                 Panruti Cooperative Marketing Society

3)                 Chidambaram Cooperative Marketing Society

4)                 Vridhachalam Cooperative Marketing Society.

 

Fair price shops established in the Cuddalore District are as follows:

 

Details

Cooperatives

Self Help Group

Total

Full Time shops

1117

4

1121

Part Time shops

193

6

199

Total

1310

10

1320

 

The Committee visited Puduchathiram Primary Agricultural Cooperative Credit Society, which is Link Society at Puduchathiram Village, Chidambaram Taluk. Elem Selvi, Deputy Registrar, Co-operative Department accompanied the Committee. The society consists of 2401 farmers. The Society also advances loans to its members that consist of Big Farmers, small farmers, Women Self Help Group, Men Self Help Groups, Handicapped groups etc. The Society has 6 shops under it. Joint Registrar, Co-operative Department appoints the salesmen in the FPS. Total number of cards attached to these shops is 3982. For the years 2007 - 2008, 2008 - 2009, and for the period from 1.4.2009 to 30.9.2009 the Society had availed of cash credit facility in respect of PDS items apart from other loans from the District Central Co-operative Bank as follows:

 

PDS Cash Credit A/c

Year

 

 

Amount [lacs] Received

Remitted [lacs]

Balance

 

2007-08

26.19

26.19

..

 

2008-09

39.41

39,44

..

April

2009 to

16.91

 

16.89

 

 

.02

Sept.

2009

 

 

Records maintained in the Society revealed that the Society was running on a profit basis due to other activities from 98-99 onwards. But all the FP shops are running at a loss. The loss is   reimbursed by way of subsidy by the Government.

 

Committee visited the office and FPS run by Pudur PACS, Shop no. 2, BJ003 , a Self lifting society. The shop had 717 total cards and 18 AAY cards. Lorry is taken for transportation of foodgrain . Usually transportation is done by the contractors with whom the society enters into contract for transportation for one year. Margin of Rs. 45 / Q is there. They are getting entire Rs. 45 /Q otherwise  40%  goes to Lead society and 60% to the link society.

 

5.3.3  FPS IN MADURAI

I.                        WRONG ENTRIES IN THE REGISTERS/ RECORDS: The Committee observed some erroneous / wrong entries in the registers at   FPS. For incstance the  TNCSC FPS no. B4004, K.K Nagar , Madurai having       1350  total cards, 6 AAY cards ( included in 1350 cards). On perusal of the           allocation and lifting details  for AAY  stock of the shop which is mentioned below the committee found that  as per stock register 5 beneficiaries lifted the stock in the month of February 2010, however when the drawal register and bill book were checked it was found that only 3 AAY beneficiaries purchased  the Stock.

Date

Opening Balance for AAY stock

AAY stock Received

Sold to AAY

1st December 2009

 105 kg

105kg

105kg

1st January 2010

105kg

105 kg

70 kg

1st February 2010

140 kg

70 kg

175 kg

 

          At the shop  no. 026 in Niethallur village, Thirukkappatti gram Committee          observed that the entries in the drawal register and the cards of the       beneficiaries were not tallying in many cases.

 

                   At FPS No. FP094 , Nellikuppam cuddalore some wrong entries were also seen    in the ration cards of the beneficiaries.

 

          II.      NO DAILY SALES REGISTER IS MAINTAINED HAVING SIGNATURE OF BENEFICIARIES

          Committee also visited BA002 at K. K Nagar and AD001 at Vandiyur, Madurai. It was found that shops do not maintain daily sales register and only maintain drawl registers. The drawl register does not contain the daily sales data and in most of the shops the drawl Register was found not containing the signature of the beneficiaries.  It was observed by the Committee at various shops in Karur District, Thrichy, Madurai that when the beneficiary comes to purchase foodgrain the salesman makes an entry in the Drawl Register. No signature is taken when the beneficiaries purchase the foodgrain. Signature was taken on first day of the year when beneficiary comes first time and rest of the entries were made by Salesperson with no counter-signature of beneficiary. It was further observed that in the State none of the shops keep the daily sales Register.  Entries in drawl register are made by salesman and manipulations can be done easily as blank columns are never struck off.

       III.      FAKE ENTRIES AND IRREGULAR TIMINGS OF OPENING SHOPS

          At shop run by Self Lifting Society Pudur PACS, A2942, complaints were made    by beneficiaries that salesman makes fake enteries in their ration cards for     those months when they don’t lift foodgrain. The Shop has 1350 cards in total           and 6 AAYcards.  Cardholder ( card no. 24/G/059775) said as the days have         been fixed by the salesman for distributing foodgrains to beneficiaries area           wise, she complained that when she came on fixed day, shop was found   closed and many a times salesman says that stock is not available.

 

        IV.      DISSATISFACTION AMONG SALESMAN REGARDING SALARY: The Salary of salesman vary in each cooperative society. For instance in Madurai At selflifting women cooperative Store no. BS001, Race course colony , Madurai women packer was administering the Shop and was getting Rs. 4200/- .At another shop adjacent to above mentioned shop run by link Society Salesman was getting Rs. 6400/-. At shop no. BZ0007, Bibikulan Saleswomen was getting Rs. 3500 per month and Shop A-2905, Bibikulam Ms Madurai janta Cooperative Society Salesman was getting 4200/-. It was stated that Salesman appointed  has to be  on probation for five years.  During probation he gets Rs.3000/-.  After probation is complete he gets around Rs.7000/-.  Educational  qualification for the salesman is  10+2. Helper gets Rs.2000/- per month.  Helper can be promoted to the rank of salesman,  when vacancy arises.  Salesman can be promoted to  the rank of Accountant.87 Salesmen, who are graduate and computer knowing, were recently  recruited.

 

           V.      GENERAL NORMS OF PUNISHMENT PRACTICED :Conscious decision was taken about 1 ½  year back that if the irregularity is of more than Rs.10,000/- it should be treated serious  and dealt  with the punishment of dismissal.  If it is a case of less than Rs.10,000/-  punishment like reversion to the lower rank is given.  This applies to all FPSs in Civil Supplies Department. No departmental proceeding pending    against any salesman.

 

        VI.      NON-PDS COMMODITY : The Committee also  asked the Secretary whether the FPS can sell non-PDS items, the Secretary says   as per the Govt. instructions non-PDS controlled commodities should not be compelled on the public.  The TNCSC shops and  FPS run by  the cooperative Societies also sell non-PDS commodities. However, they should not compel the public to buy those commodities, but there are large number of Corporation outlets only with PDS commodities.  As such Govt. has not given any instructions whether PDS outlets should sell non-PDS commodities/items in all outlets.  It is upto the agency which runs the PDS outlets. In Madurai Public Hearing many beneficiaries complained that FPS salesman compel them to buy other items also.

 

     VII.      PUBLIC GRIEVANCE: During the public hearing in Madurai one participant  showed his grievance by saying “Why is that the rice supplied by the Government is of poor quality, when both the Government and private traders are buying rice from farmers of the same region,” he questioned. Nawab John, an aged Gandhian, in a dramatic narration said that the ration shops are opened and closed at the whims and fancies causing much inconvenience to the poor and the aged. He wondered when liquor shops were opened from morning to night, why cannot it be so with the ration shops too. While some wanted the Government to fix days for supplying each foodgrain, many wanted that all goods should be supplied on all days. A lawyer, Seetharaman, said that the PDS was under the influence of rowdy elements. Many complained the entire system was corrupt; many attributed the malpractices in ration shops to the appointment of sales personnel from local villages.

 

  VIII.      The committee also visited village area and interacted with the beneficiaries  attached to the Fair Price Shop bearing No. A1235, Madurai Taluk Agricultural Cooperative Society at Rangarajapuram.  The salesman, one Danasekaran, S/o. Natarajan had caused lots of  inconvenience to the 185 beneficiary families  of the village and at the time of inspection, the visiting team was engulfed with complaints by the entire villagers. Their complaints are indicated below:-

 

i)                   The consumers  complained that the Fair Price Shop, though  was a part time shop to be kept open only on Wednesdays and Saturdays  on the date of inspection, being a Saturday, the salesman had not turned up to open the shop.

 

ii)                 The shop is open only for two or three days in a month on the whole.

 

(iii)            The food articles to be at the ration shop are never distributed to the complete requirements.  For example, a consumer said that the salesman will not distribute the Dal every month and he would inform that the same could be given only in rotation at an average of 50 cards per month even though he would make the entry in the ration card as if the consumer had availed the item.

 

(iv)            The weighment is not made in public view as he would restrict the display on the electronic weighing machine being viewed by the public which certainly results in under weighment of the materials distributed.

 

(v)              There was demand for money from the salesman for distribution of the quantity of materials under the ration card from irregular consumers.   The Deputy/ Joint Registrar, who accompanied the team for inspection called upon the hierarchy of the inspecting officials of the region and informed that he would immediately take steps to initiate action against the salesman of the area.

         

5.3.4  FPS IN KARUR DISTRICT

1.                 Nangavaram village, Karur district (Hint- Shop 2 shops at one place)

(a)              Primary Agricultural Cooperative Society Shop No. CB008. Following are the  observations  of this Committee:

i.                        Shop had 935 green card holders and 143 AAY card holders.  It was observed that inspection of shop has been done almost every month either by Taluk supply officer or Cooperative sub registrar (PDS) or by Dy Registrar PDS. On 29. 12 09 when Tehsildar inspected the shop deficit stock was found and same was noted in the inspection book. Shop had detailed Inspection register which provided all details of Inspections done, findings by Authorities conducting Inspection etc. Similar inspection books were not found in other districts. 

      ii.            Stock and lifting details for 143  AAY families attached to the shop

Date

Opening balance

 Stock received

Total stock

Stock

sold

1.11.09

 2470 kg

4970

7440

4975

1.12.09

2065

4975

7040

4890

1.1.10

2150

4890

7040

4730

1.2.10

3310

4555

7865

4420

1.3.10

2445

-

 

-

 

If shop had 143 AAY then the monthly requirement is 143 X 35 kg= 5005 kg , However total allocation which shop was getting between 7040 kg to 7865 kg far exceeds the actual requirement. Why so much extra foodgrain is allocated to the shop was not explained to the committee.

 

When stock comes at shop same is not weighed . Shop was also selling non- PDS commodities like shop , candles, oil etc. It was informed by the Sales man and other staff of the Cooperative society that  the  sales price of empty sugar bags  is Rs. 35 and empty foodgrain bags (50 kg)  is 16per kg

 

The details of  green card holders  is mentioned below

40 cardholders were entitled to lift 12 kg

7 cardholders were entitled to lift 14 kg

113 cardholders were entitled to lift 16 kg

522 cardholders were entitled to lift 20 kg

 

Similar observations were made regarding PACS Nangavaram Shop No. CB011 which was located adjacent to the above mentioned shop.

 

Fair price shop  GP026 run by Therukkuppatti PAC society, Naithallur colony

 

No. of Cards attached               -        666

AAY                                       -        84

OAP                                       -        60                       

 

Register kept in the shop was seen inspected by Co-operative Sub Registrar [Mathivanan] on 10.3.2010. The sales man has counter signed the Register.  Stock was checked. But complaint Box in the shop is not used. The Society has 3 shops at Seppalappally, [having 750 cards]. Naidalur colony [having 666 cards] and Therukkuppatty [with 550 cards]. The subsidy format made available to the Committee reveals that all the 3 shops were running at a loss.

 

Seppalapally Shop [1]

Naidalur Colony[2]

Therukupatti Shop [3]

Expenditure

Income

Expenditure

Income

Expenditure

Income

1,27,853

99,833

91,223

91,021

90,663

71,173

 

Loss Claimed for the year 2008-2009

1.  Rs.28,020/-

2.  Rs.     202/-

3.  Rs.19,490/-

 

The income statement was drawn consisting both the income from commodities and sale of gunny bags. However, no transportation charges are borne since the Society is a Link Society. But to meet the transportation charges the Lead Society Kalithadam Marketing Society is being given part of the Commission allowed by the State.

 

The building in which the shop is run is owned by the Government. The shop is built by the Panchayat. Hence no rent is payable. Salesman Ranga Rajan gets salary of Rs.5800/- He told that the total commission available for a month from the FPS is Rs.8082/- when transportation is made. Lead Society raises invoices which are acknowledged by the Salesman. Remittance   is made on daily basis by the Salesman to the Society.

OBSERVATIONS:

 

  1. More than 50% of the people in higher category do not take their food grains from the FPS and as such allocation for this category gets diverted to the black market. This emphasizes the need to target the PDS only to the poor and needy.
  2. Introduction of coupon system was also advocated during public hearings but the Committee is not in a position to fall in line with this view since its efficacy in helping the poor is yet to be established.

 

  1. Double boiled rice supplied through FPS is not liked by consumers. But having regard to its nutritive value, there is a need to educate people in this regard in order to improve their acceptance to this type of rice.

 

  1. Mobile FPS should be pressed into operation in areas which are isolated and number of cards is not sufficient to justify opening of FPS.

 

  1. The Committee was also apprised of the activities of anti-social elements who target fair price shops. There is a general perception that such elements enjoy political patronage. Installation of closed circuit TV’s at sensitive locations in the shop may provide the answer.

 

  1. In few shops Committee found the expired products. Both the FPS salesman and the beneficiaries be made aware and be sensitized about the not purchasing and selling the expired products.  

 

  1. Committee also found that records were not properly maintained at many shops and it was due to reasons like no-standard and updated format of registers. The registers were not having columns for every commodities hence salesman were not making entries of issuing all commodities. In some shops it was found that entries in the records of FPS and in ration cards of beneficiaries were not tallying. It is suggested that there should be standardized and formatted system of record keeping. 

 

  1. Another interesting observation was about the sales register. None of the FPS maintains the daily sales register. Though they keep record of sales, the so called sales register doesn’t contain the signature of the beneficiaries. At some places it was found that FPS dealer takes signature of the beneficiary once in the beginning of the year on the sheet on which he makes entries about issuance to that particular beneficiary. Even after considering the practical difficulties of record keeping it is suggested that beneficiaries signature must be taken whenever he purchase the commodity

 

 


 

CHAPTER 6

 

ALLOTMENT OF FAIR PRICE SHOPS

 

 

6.1     Government of Tamil Nadu decided to allot part time fair price shops vide G.O. Ms. No. 63, dated:11.03.1997. Following various GO’s were issued regarding opening of FPS by Co-operation, Food and Consumer Protection Department:

 

1.       G.O.Ms. No. 828 dated 19.10.1989.

2.       G.O.Ms. No. 962, , dated 26.12.1989.

3.       G.O.2 (D) No. 3, dated 22.01.1991.

4.       Government letter No. f6694/F1/93-3, dated 04.10.1993.

5.       GO.Ms. No. 802, dated 29.08.1994.

6.       G.O.Ms. No. 237, dated 20.07.1995.

 

6.2     The G.O 63, dated 11 march 1997  provides  that the Public Distribution System in the State has an extensive network of 23,125 Fair Price Shops.  It was stated that  there is atleast one retail outlet in every Revenue Village. A Fair Price Shop should have atleast 800 family cards attached to it to run as a viable shop with the existing margins. However, in the interest of reaching the cardholders in remote and far-flung areas more than 15,000 shops are run with less than 800 cards each. The resultant loss is shared by the Government and the concerned Co. operatives etc.

 

6.3     Apart from the above shops, in G.O.Ms. No. 828, Co. operation, Food and Consumer Protection dated 19.10.1989 first read above, orders have been issued permitting the District Collectors and the Deputy Commissioners of Civil Supplies (City) in the city of Chennai to open part time shops wherever the distance between two fair price shops is 3 kilo-metres and above subject to the condition that the building for running such a fair price shop is offered free of rent. The Government also directed that the salesman of the regular existing fair price shops  should look after the affairs of these part-time shops atleast for 3 days in a week and hence no subsidy will be sanctioned by the Government either for opening of these shops or for establishment charges. In the G.O. third read above, the Government imposed certain restrictions for opening of part-time shops. It was ordered that opening of part-time shops should be restricted to the minimum and they should be opened only under extraordinary circumstances and that too with atleast 200 cards attached to it  after obtaining the concurrence of Registrar of Co. operative Societies.

 

6.4     To serve the public in far-flung hilly and inaccessable  areas, 30 mobile shops have also been put  into service in Tirunelveli Kattabomman, erstwhile Dindigul Anna, North Arcot Ambedkar erst while Tiruchirappalli, Salem, Nilgiris, Dharmaprui, Coimbatore, Tiruvannamalai, Sambuvarayar, and villupuram Ramasamy Padayachiyar Districts.

 

6.5     Vide  G.O  237 dated 20.7.1995  the Government introduced a Voluntary Distribution Scheme according to which retail outlets for distribution of essential commodities are opened by the Women’s Groups functioning under the Tamil Nadu Corporation, for Development of Women or by Women Groups coming under the schemes for Development of Women and Children in Rural Areas (SWCRA).

 

6.6     Inspite of opening of full time fair price shops, part-time fair price shops, Mobile shops and sub-retail outlets run by Women Groups as mentioned in paras 1-4 above, representations are being received from various corners of the state requesting for the opening of more and more new fair price shops. The Public demand more fair price shops or part-time fair price shops to cater to their needs for the reasons that the existing shops are either too crowded or they had to walk two to four kilo metres to reach the allotted shops in many rural areas. In certain cases, they have to make one or two trips to ascertain the availability before they make purchases sacrificing their productive time. Proposals have also been received pleading for fair price shops in each Municipal Ward.

 

6.7     Appreciating all the difficulties experienced by the general public in getting essential commodities at the fair price shops and also to facilitate easy accessibility of foodgrains at the door-steps of the consumers, the Food and Public Distribution System Minister announced on the floor of the Assembly on 02.08.1996 that the fair price shops having more than 100 cards would be bifurcated and a new shop opened wherever necessary for the excess 200 cards. It was also assured that if there are three or four hamlets in a Panchayat and  more than 500 cards, then a new shop would be opened and if there are 100 cards then a sub-retail outlet run by women would be started. Based on the assurance, as a first step, before laying fresh set of guidelines on opening of fair price shops in Chennai City fair price shops which were having more than 1500 cards have been bifurcated and 53 new shops opened on 25.09.1996.

 

6.8     The Government have examined the whole issue of opening of fair price shops with reference to the position obtaining in other southern states, the recommendations made by the High Level Committee to streamline the state Public Distribution System and also with reference to the representations received for opening more shops. The Government consider that the existing norms for opening fair price shops may be refixed in supersession of all earlier orders.

 

6.9     Accordingly the existing guidelines and the subject relating to opening of fair price shops were consolidated updated and re-issued  in GO. 63 dated 11 March 1997 as follows:-

(i)      No existing shop should be closed

(ii)      In the Municipal Corporations and Municipalities the existing fair price shops may be reorganized in such a way that no shop will have more than 1000 cards or less than 800 cards subject to (i) above. It may be ensured that there is atleast one shop in every ward.

(iii)     In rural areas shops having more than 800 cards may be reorganized in such away that no shop will have less than 500 cards and more than 800 cards subject to (i) above.

(iv)     While reorganized the shop in the above manner it should be ensured that no card holder is required to travel more than 2 kilo metres to reach the fair price shop.

(v)      The District Collectors will be empowered to open new shop based on the above guidelines. The number of new shop opened should be intimated to the Commissioner of Civil Supplies and Consumer Protection every month.

(vi)     In case the above guidelines are not satisfied and the opening of new shops becomes absolutely necessary the District Collectors should approach the Registrar of Co-operative Societies and Commissioner of Civil Supplies and Consumer Protection as the case may be and get their prior concurrence before opening the new shops.

(vi)            In tribal areas and in communally sensitive areas where law and order situation warrants opening of new fair price shops the District Collector may do so depending on exigencies using his discretion.

 

6.10   As regard opening of retail outlets by Women’s groups functioning under the Tamil Nadu Corporation for Development of Women or under the scheme for Development of Women and children in Rural Areas (DWCRA) the existing instructions issued in the G.O.  237 dated 20.7.1995 is continuing.

 

6.10   In the State of Tamil Nadu, FPS are run predominantly by Cooperative Societies and a few by TNCSC. Private persons/individuals are not allowed to run the shops. However, with a view to encourage women enterprise, Women Self Help Group are permitted to run the shops. The number of FP Shops run by women Self Help Group in the State is 617 [as on 28.2.2010]. Village Panchayats are also permitted to run the shops under the guidelines issued by the Rural Development and Panchayat Raj Department. But presently no fair price shop is run by any Panchayat. The Policy of the State Government is to open shops at strategic points so that no card holder walks more than 1.5km to get his due. Minimum number of cards attached to a shop is 500 in rural areas and 800 in Urban areas.

 

6.11   Part time shops are opened if there are 150 or more family cards and the distance from the Parentshop is more than 1.5kms. New shops are opened with a view to bifurcate shops having more than 2000 cards. 346 shops have been bifurcated and new shops established so far.

 

1

Number of fair price shops run by TNCSC   throughout  the State

1159

 

Part time shops

92

 

Total shops run by TNCSC

1251

 

 

 

2

Number of FPS run by Cooperatives  Full Time

22,127

 

 Part Time

6,625

 

 Total

28,752

 

 

 

3

Number of FPS run by others

 Full Time

 

125

 

Part Time

13

 

Total

138

 

 

 

4

Number of shops run by Women Self Help Groups (WSHG)

Full Time

 

 

553

 

Part Time

77

 

Total

630

 

 

 

5

Mobile Shops

10

 

Total FPS    Full Time

23,974

 

                 Part Time

6,807

 

Total

30,781

 

 

OBSERVATION:-

1.     The Committee during the visit to the State observed that in some areas the part time Fair Price Shops are not functioning properly. There are number of   complaints by the beneficiaries. In such areas which are isolated and the number of cards are not sufficient and justified for opening a shop the TNCSC may undertake the supply through the mobile vans in those areas to ensure that PDS commodity are available  to the people of those areas on time.

 

2.     It was informed that there are 3 posts of Joint Registrar Cooperative  in Madurai. Regional JR is incharge of all the FPS in Madurai. JR in Madurai Central is incharge of Central Bank and its Branches. Joint Registrar , Pandian wholesale store is incharge for all the 112 FPS , 6 kerosene bunks and 2 supermarkets and one LPG store run by Pandian wholesale Store.

 

3.     Seventeen (17) new FPS were created in Last year for Madurai Pandian Store.  Totally 41 FPS were created in Madurai Last year.  The number of Cards varies from 500- 1800 per FPS. If there are  more than 2000 cards, salesman is  unable to  manage the rush. Therefore, the Government has given order that  if there are above 2000 cards shop be bifurcated. Cooperative Sub-registrar give report which   area’s can be bifurcated . Based upon his report the regional Joint Registrar recommend to DSO. DSO in turn recommends to the Collector and if Collector is satisfied he bifurcates the shop.

 

4.     Committee also observed that usually 2-5 FPS are opened at same  premises or same shop  by the Cooperative societies. On asking the reason it was informed by the officials of Cooperative department and members of cooperative society that it is done due to the paucity of space and it is very difficult mostly in urban areas to get premises.  Though by 2-5 FPS are opening at same premises is helpful for different salesman to handle crowd and maintain record but it is doubtful that the distance of beneficiaries residence and fair price shop is within accessible limits as prescribed by the abovementioned rule.

 

 

 

 

 

 

 

 

 

 

 

CHAPTER 7

 

VIGILANCE , ENFORCEMENT AND COMPLAINT MECHANISM

 

 

6.1     The State Government has formed State Level PDS Advisory Committee, District Level and Divisional Level PDS Advisory Committees. Members from NGO, people’s representative and officials are members of these committees and any irregularities in the functioning of PDS can be brought to the notice of these committees for appropriate remedial action.

 

6.2     In Tamil Nadu, there is no vigilance committee at fair price shop level.  There had been a system of vigilance committees earlier and it was the experience of the State that these vigilance committees were not effective and they rather turned into a parasite on the system and therefore the State discontinued the Vigilance Committee for monitoring.   The vigilance System in the State is as follows

 

1.                 The Panchayat Presidents and local representatives are authorized to inspect the shops at any time. Public representatives including Village Panchayat representatives are empowered to inspect the PDS outlets and report any problems to TSOs/DSOs.

 

2.                 There are advisory committees at divisional level and district level to hear the grievances.  

 

3.                 The stock position of the PDS outlets can be accessed by the public through SMS at any time. 

 

4.                 At the district level, there are inspecting teams and also at the State level, special teams are formed by pooling the officers of integrity and intensive inspection are carried out frequently. 

 

5.                 Further, the State is also contemplating on the annual social audit in each PDS shop similar to NREGS for which the Commissioner is preparing the detailed guidelines. 

 

6.                 The Cooperatives and Civil Supplies Corporation are having their own vigilance mechanism. The Civil Supplies Department, which is the administrative department of PDS, is having its own state level inspection teams and at district legal flying squads and other enforcement machineries are in place. At State level Assistant Commissioner (Inspection) and Flying Squad Superintendents are assisting Commissioner of Civil Supplies and Consumer Protection in the enforcement operations. There are vigilance squads formed by the Registrar of Co-operative Societies. At the district level, District Collectors co-ordinate Public Distribution System enforcement work. Flying Squads have been constituted in all the districts and Chennai City are closely monitoring the functioning of Public Distribution System and prevent smuggling of Public Distribution System commodities. Further, special teams are constituted on a monthly basis for surprise raids to select districts by the Principal Secretary or CCS & CPD.

 

7.                 Apart from this, the State is also having a separate Civil Supplies CID wing which keeps close vigilance on the PDS administration to prevent any illicit movement. Enforcement of Public Distribution System, specially anti-smuggling operations, are carried out by  Civil Supplies C.I.D. and Civil Supplies and Consumer Protection Department Officials.

 

8.                 Monitoring  by cooperative department:-

i.        Two Joint Registrars, 10 Deputy Registrars and 40 Cooperative Sub Registrars for Chennai city.

ii.      In the remaining 31 districts 1 Deputy Registrar and 18 Cooperative Sub Registrars for each district.

iii.    State level flying squads organized for surprise inspections.

 

6.3     A Cooperative Sub Registrar has to conduct regular inspection of 20 shops and cursory inspection of 40 shops on an average in a month. Likewise the Deputy Registrar (PDS) has to conduct regular inspection of 50 shops on an average in a month. In addition intensive verification is also organized.

 

8.1             State is of opinion that multi level grievances redressal system and transparency is a better system than the village level vigilance committee. Schedule of Inspections to be conducted by Various officials is mentioned below

Sl. No.

Designation of the Official

Target per Month

(no. of FPS to be inspected)

1

District Collector

10

2

Additional Collector / District Revenue Officer

20

3

Deputy Commissioner (City) North/South

20

4

District Supply and Consumer Protection Officer

30

 

5

Sub Collector / Revenue Divisional Officer

20

6

Taluk Supply Officer / Assistant Commissioner /Superintendent / Checking Inspector

30

7

Special Revenue Inspector

40

8

Joint Registrar (PDS)

45

9

Regional Joint Registrar

10

10

Special Officer / Managing Director / Lead Societies (Joint Registrar)

10

11

Deputy Registrar (PDS) Chennai

60

12

Deputy Registrar (PDS) Intensive Verification – Chennai

10

13

Deputy Registrar (PDS) Districts

50

14

Circle Deputy Registrar

10

15

Co-Operative Sub-Registrar (PDS) Regular Inspection

Cursory Inspection

 

45

25

16

Co-Operative Sub-Registrar (PDS), Senior Inspector- Chennai (PDS) District

25

 

 

6.5     FPS Audit: - Every month a certain set of Fair Price Shops are identified based on complaints / offtake etc for 100 % sales verification with reference to ration cards / Fair price shops registers by Collectors. Team sent to these shops to carry out the Audit and action is taken based on results. Further, every agency running fair price shops carry out month end stock verification and cash audit for every Fair price shop under their control.

 

 

6.6     Monitoring of the vehicles movement from the Tamil Nadu Civil Supplies Corporation go-down to the fair price shops through the link or lead societies.

 

 1.      The number of vehicles engaged are listed out at the TNCSC on the basis of the allotment to each society and no variance of the vehicles engaged in the movement is allowed.  The movement register is a periodic register as per the printed format maintained by the corporation.  Any variance to the entries with reference to the vehicle number made in the said register would require counter signature of the officials as indicated in the printed format itself. 

 

2.       The inspection register maintained by the fair price shop in triplicate also reflects the systematic verification which is caused by the officials concerned in terms of the counter signature required in the said register.

 

6.7     Monitoring the PDS at Fair Price Shop Level:

 

1.       Officials from Department of Revenue, Civil Supplies, Co-operatives, TNCSC & Civil Supplies CID carryout periodical checks in the  FPS as well as consider the complaints of the card holders by interacting with  them. Action is taken against FPS salesmen who fail to honour the entitlements. MLAs, Panchayaths and District Collectors keep constant vigil over the working of the FPSs State Team as well as District level teams conduct surprise checks  in the FPSs followed by review meetings. Orders are issued every year by the Government specifying the target.

 

2.       State Government has formed State Level PDS Advisory Committee, District Level and Divisional Level PDS Advisory Committees. These Committees consist of NGOs, elected representatives, and officials. They meet at least once in a month.    A State Level consumer helpline [044-28592828] and district level control room are in place. Weekly grievance day is also observed at District Head Quarters. Monthly PDS Grievance Day camp are held by T.S.Os., T.Co-op. and Sub Registrars, Public Mobile contact Phones are in vogue.       FPS displays help line numbers as well as phone numbers of Vigilance officials for public to lodge complaints. Ration Cards also carry phone numbers for redressal. People’s representatives also vested with powers to inspect FPS and report the problems to TSOs/DSOs.       FPS Audit done for selected shops on a regular basis by the District collector. Month end stock verification with respect to the cash audit is also done by the respective agencies who control the FPSs.

 

3.       Measures taken to check the Quality of Food grains

It was stated that fair average quantity norms set up by Govt. of India are followed by the TNCSC in controlling the quality of Food grains. Quality control staff are deployed at FCI godowns and other procurement points to draw sample of grains and avoid lifting of substandard commodities. Quality is checked before standardizing of the bags is undertaken in the TNCSC godowns. Periodical checking is carried out by TNCSC and Cooperative and Civil Supplies officials in the PDS outlets. However as sampling procedure is not followed it is always difficult to cross check what quality was actually supplied by FCI to TNCSC and again by TNCSC to FPS. Standardisation of bags was criticized by general public in public hearings conducted by Committee. In absence of proper methods to cross check quality supplied by FCI and because of standardization system adopted by State, it was found that the doubt of people about quality change could not be cross checked.

 

4.       Weight and measure checking mechanism at FP shops

Electronic weighing machines have been supplied to all FPS in the State of Tamil Nadu. Labour Inspectors of legal Metrology is under duty to inspect the shops and take action if malpractices are checked. Inspection teams of Civil Supplies Department, Co-operative Department and TNCSC officials  are bound to carryout surprise inspection and take action in case of malpractices. 

 

5.       Malpractices Detected

 

        i.            As per the Report submitted before the CVC by the officials for the period January 2009 to November 2009. 20,223 Fair Price Shops were inspected against the target of 27,677 fixed in various districts for the month of January 2009. 1013 under weighment detected, 7042 Bogus billing, excess stock detected in 1700 and shortage in 15,392 shops. Similar figures are given for the rest of the period. During the month of November 2009, 28,307 shops were targeted while 18,649 were inspected.  Under weighment detected in 1355 shops, Bogus billing in 7395, excess stockage in 1451 and shortage in 13,254 shops. What actions were taken against the erring salesman or cooperative society was not made clear to the Committee.

 

      ii.            On 17th February Cuddalore, the Committee visited FPS no AP 092 at Varakkalpattu. There were total 901 green cards out of which 111 belonged to AAY category, 28 white cards, 2 police cards and 6 no commodity cards were there. The shop was run by cooperative society Varakkalpattu PACCS and no complaint register or complaint box were maintained by the FPS dealer. The beneficiaries, residents of Vanniyar street told the Committee that they satisfied about their PDS entitlement as there getting ration on time and they  are not bothered with the entries made in the ration card and at the same time are not bothered about the complaint mechanism. It was also seen that the inspection and monitoring of the FPS was not proper and the entries made in the inspection register were apparent to be made in a single stroke.

 

    iii.            The Committee visited FPS No. FP094 at Nellikuppam. More or less the position was the same as above mentioned and inspection was not proper more so over some wrong entries were also seen in the ration cards of the beneficiaries.

 

    iv.             On, 20th February in Madurai, the Committee visited one FPS at Madurai shop no. BS001 at Race Course Colony run by Women Consumer Co-operative Store. There was no complaint register or complaint box maintained by the FPS dealer however complaint number was painted there at the display wall adjoining the FPS. When the Committee inspected the inspection register it was seen that on 28th January 2010 Mr. S.Saravan visited the shop and found that there was a deficit of stock and a fine of Rs. 370 was imposed which was paid. One daily remittance register was alone maintained and it was also told that the FPS is remitting money to Cooperative Society on daily basis.

 

      v.            Another FPS number BZ007 was visited at Bibikulam run by Primary Cooperative Store. No complaint register or box was there however complaint number was painted. Inspection register was not proper.

 

    vi.            One more FPS number BZ004 run by Janatha Cooperative Store at Bibikulam was visited. It was noticed that some old stock was lying there. The fact came to the notice when it was seen that bags with a different colored thread were lying. The present month allocation was with different color thread and on asking no satisfactory reply was given by the salesman.

 

  vii.             The Committee visited one part time FPS which was supposed to be opened twice in a week i.e. on Wednesdays and Saturdays. But even on Saturday when the Committee visited the FPS it was closed. When the Committee interacted with the beneficiaries all of them gathered and started raising hue and cry that the FPS salesman do not behave properly and it was also seen that though entries were made in the ration cards the beneficiaries were not given the allocation as per the entries made therein. No display board or wall was there, thus complaint number or details were not displayed. It was also told by the beneficiaries that repeated complaints have been made and few days back they went for agitation against the FPS by blocking road but all their efforts went in vein and nothing has been done in this regard.

 

6.       Many Consumers feel that many of the problems could be effectively controlled if the commodities are distributed in sealed packets. However the Government represents that the cost of packing all the commodities would be prohibitively high.

 

7.       PDS Monitoring

FPS level vigilance committees were formed vide GO[MS]248, Food & Consumer Protection dt.15.4.83. But these vigilance committees were non-functional and became ineffective, hence not re-constituted. Presently there is no system of vigilance committees monitoring the functioning of PDS in Tamil Nadu. However, State Government has formed State Level PDS Advisory Committee, District Level and Divisional Level PDS Advisory Committees. Members from NGOs, elected people’s representatives and officials are members of this Committee and irregularities brought before such committees are taken care of for remedial action.

That apart following monitoring activities are undertaken with the help of modern technology.

1.                 A State Level Consumer Helpline [044-28592828] and District Level Control Room, register and follow up of PDS related grievances are addressed.

2.                 Weekly grievance day held at District Head Quarters by the District Collector.

3.                 Monthly PDS Grievance day camps held at selected villages in each Taluk jointly by T.S.O. and Taluk Co-operative Sub Registrar.

4.                 Publicized Mobile Phones given to officials upto TSO/AC for access to public.

5.                 All the FPS are bound to exhibit the contact number of vigilance and top officials in case of complaint.

6.                 Ration Cards also carry phone numbers of redressal authorities.

7.                 Elected representatives at Village Panchayat level onwards are empowered to inspect PDS outlets and report any problems to TSOs/DSOs. FPS Audit  is done on selected shops at the D.C.Level.

 

Vigilance Committees are replaced by  multi level grievance redressal steps and transparency.

                   

6.8     Enforcement Mechanism

6.8.1  The TDPS is governed by the provisions of Essential Commodities Act 1955, the PDS Control Order 2001 and the control orders passed by the states under section 3 of the essential commodities act, 1955.No system can be implemented properly unless there is a proper system of enforcement of the rules and regulations. An effective system of enforcement of the punitive and penal procedures of the Essential Commodities Act and the control orders has to be set up by each state to ensure compliance with their provisions.Section 7 of the Essential Commodities Act provides penalties for the person contravening any order made under section 3.

 

6.8.2  The PDS (Control) Order,2001 provides that if any person contravenes any  of this Order under clauses 3, 4, 6 and 7, he shall be liable to punishment under Section 7 of the Essential Commodities Act.

 

6.8.3  There are conditions imposed on a FPS licencee and their enforcement has to be ensured by the state. A very elaborate system to monitor and enforce effective PDS has been put in place. In spite of this there are cases of commodities being smuggled and stolen. The enforcement through Courts does not appear to be a sufficient deterrent. Provisions have been made for canceling the license of the drivers driving vehicles in which these commodities are smuggled as well as cancelling the registration of these vehicles. However, this is not implemented effectively. It is the view of the Committee that if these measures are implemented effectively, it would be a strong deterrent against such mal-practices.

 

6.8.4  Vide G.O.[ms]101 Food Dept Order dt.16.5.1977 the term Vigilance Cell [Food] was changed as C.S.C.I.D. and a DIG of Police was empowered to supervise  the functioning of Civil Supplies with three Superintendent of Police at Madras, Madurai and Coimbatore. In 1991, it was re-organized with each District having a Unit of CSCID.

6.8.5  CSCID have to enforce the Prevention of Black marketing and Maintenance of supplies of E.C.Act 1980 and take steps under E.C.Act 1955.

6.8.6  Apart from registration of cases under E.C. Act 1955, steps under Section 6A of the Act are undertaken by the Investigating Officer for confiscation of the essential commodities and vehicles etc. In each district a Judicial Magistrate Court is designated for the purpose of trial and conviction under E.C.Act 1955 [vide G.O.(MS) 873 Home (Court II) Department dt.30.7.2008].

 

6.8.7  The Data provided by Civil Supply CID in respect of cases registered under the Act is pointer to the fact that large scale diversion and malpractices are in place in the whole State of Tamil Nadu. The following particulars are a pointer towards the same.

Sl

No.

Particulars

2009

1

Total cases detected

9771

2

Commodities seized

Cases regd.

Qty

 

a. PDS Rice[qntl]

6,664

40,265.93[qntl]

 

b. PDS Kerosene[ltrs]

1,854

1,62,117

 

c. LPG Cylinder [Nos]

937

2,489

 

d. Others [value]

316

48,53,867

3

No. of persons arrested

4,795

4

No. of vehicles seized

1,369

5

No. of persons detained

116

6

Commodities total

 Rs. 6,30,71,738/-

 

 

 

 

6.8.8  During the current year [2010] already 1,897 cases have been registered. 1,384 relate to PDS Rice and 31,354 qntls of rice have already been seized. This quantity relates to a period of just two months for the year 2010. But the trial and conviction data gives a very dismal figure. Conviction in  numbers provided by the cell is

2004    -  No conviction

2005    -  1 conviction

2006    -  18

2007    -  12

2008    -  22

2009    -  7 convictions

6.8.9  Most of the persons detained under the B.M.Act have been released. Details of conviction point to a fact that whatever may be the quantity of Rice seized by the officials, a routine fine ranging from Rs.1,000/- to Rs.5,000/- is seen extracted from the offenders. [Eg. case relating to Chennai 1683/.08, JMI, Thiruvolliyur, the accused Murugan from whom 40 qtls of rice was seized was fined an amount of Rs.3,000/- while in the case Chennai 1065/08 JM of the same court [Thiruttoyur], the accused Mahalingom from whom 33 qtls of rice was seized was fined Rs.4,000/-]

 

6.8.10   In Thiruvallur – 7 case. Case 326/06, JM I, Thiruvallur fined the accused [3 in number] from whom 10 Tonnes of Rice was seized to an amount of Rs.5000/. While in a similar case namely, Coimbatore – 257/09, JM IV, Coimbatore subjected the accused Karim [Rice owner] from whom 10 qtls of rice was seized, to 6 months Rigorous imprisonment]. Similarly, in Erode, Case No.201/09, JM III, Erode only fined the accused an amount of Rs.3000/- towards seizure of 26 qtls. of rice. The above data reveals that when it comes to trial and conviction stage, the accused who indulge in large sale diversion, black marketing, and smuggling go scot free. The authorities under the enforcement mechanism look upon these activities as routine ones and due to their indulgence the malpractices are increasing and also due to lack of deterrent steps.

 

6.8.11   If the Value of the foodgrain alleged to be diverted is below Rs 5000/-  amount is recovered from the employee @Rs 12 per kg. If its value is more than Rs. 5000/- criminal action is initiated.  In Cuddulore it was informed that 12 persons were charged in such criminal case

 

6.8.12 Diversion cases:

 

1.                 A case was shown of one Gunasekhar alias  Sekhar, rice owner.  He was arrested u/s 6(4) of the TNCSC, RDCS Order 1982 read with Sec.7(1)(a)(ii) of the Essential Commodities Act 1955. 1100 bags (2 Qtls.) PDS rice was seized from the truck (AP 26Y0036).  Venkatesan  was the owner of the truck.  Mosis was  the truck driver. Two were arrested,  it is stated that rice  owner Mr. Gunasekhar  was detained under B.M.  Act  but  has since been released  by the High Court  on 4.8.2009.   Venkatesan got anticipatory bail from the High Court and is yet to be arrested.  Driver Mosis has remanded to judicial custody.  It is stated that the case is still under investigation and charge sheet will be filed after certificate to this effect is received from the Collector that the rice is PDS rice.

 

2.                 It is stated that on 14.3.2010 two lorries were chased by Inspector Raju of Police Department from  Krishangari of Karnataka border. The vehicle nos. were TN31A 8847 and TN35 M 0895.  Inspector chased  the vehicles and went even beyond Karnataka border.   Karnataka Police caught  the lorries on the border, detained the vehicles and the Inspector  brought back  the vehicles while the drivers escaped.  The case is pending.

 

3.                 Kartik Rajan – Case is for hoarding of PDS rice at the rice mill Chennai.  Owner of the mill is Subramaniam.  Subramaniam and Kartik Rajan are brothers.  They purchase PDS rice and after polishing it sent it to Andhra Pradesh.  237.25 Qlts. rice  was seized on 18.9.2009.  Kartik  Rajan was detained  on 28,9,2009 and is still under detention.  Mr. V. Srinivasan was also one of the accused.

 

4.                 226 bogus ration cards were prepared by four accused officers of Civil Supplies Department.  Case was registered on 14.9.08 and transferred to Civil Supplies CID.  Case relates to 2007-2008.  All the four accused got anticipatory bail.  Rice costing to Rs.27,23,117/-.  Investigation  is over and the accused are likely to be charge-sheeted.  All the cards seized.  Out of them 24 cards were genuine.

 

5.                 One instance will show the extent of diversion of PDS food grain in the State.  This incident  is respecting charge sheet filed by CBI on 29.5.2009 arising out of FIR dated 31.12.2007.  17 accused have been charged with conspiracy to procure illegally PDS rice, storing it and transporting it to various places.  Investigation revealed that 12,100 MT of PDS rice was illegally procured in Tuticorin and stored in warehouse at Pondicherry (Puducherry)  This pertained to PDS  rice for  2006-07.  PDS rice illegally procured and was brought to Puducherry in  two quantities  5924.57 MT and 6165.60 MT totalling 12090.17 MT.  Out of this  7352 MT was exported to in Bangladesh  and other places as under:

      Date              Destination                                Quantity in MTs

          13.9.2007     Gededarshana (Bangladesh)                  2340

          22.09.2007   Jorhat Town                                       1247

          22.09.2007   New Guwahati                                     1241

          07.10.2007   New Guwahati                                     2524

                                                                                    _______

7352 Mt

 

The balance quantity  of  4764.75 of PDS rice was  seized from the Railway wagons  and godowns in Puducherry.  Since no one came forward to claim the rice it was confiscated.  Charge sheet records that during the course of investigation the involvement of public servant engaged in diversion of PDS food grain was probed but however no evidence could be collected to link  any public servant in this case.  This remark in the charge sheet filed by C BI  is rather  unfortunate.  Such huge quantity of  illegally procured  PDS rice  without the connivance of    public servants is not possible.  It is unfortunate  that such PDS officials have been let out.

 

6.                 During the course of  the visit of the Committee news item appeared on March 15,2010 showing that on March 18,2001 Custom authorities at Tuticorin port seized 290 Mt. of rice worth Rs. six lakhs.  The rice was brought to be exported to UAE.  The declaration  for the purpose of export wrongly showed that  the consignment is of maize.  Investigation is on to find the source of rice so seized.

 

7.                 Another instance that occurred at Madras Port would show the slackness of the system and attempt to bail-out the guilty  including  public servant. On information that the Public Distribution System rice is being smuggled to Foreign countries through the Madras Port Trust, the Civil Supplies C.I.D. conducted surprise checks in Tondiarpet and Royapuram area on 8.6.2007, searched the lorry bearing No. TN 57 K 8930 and found 225 bags of rice packed in the lorry were of Public Distribution System rice.  Civil Supplies C.I.D arrested the lorry driver Ganesan and on his confession raided Central Ware Housing Corporation godown at Royapuram on 12.6.07 and found 4 containers packed for rice for being exported to foreign countries through the Madras Port and waiting for customs clearance. Samples from the bags loaded in the lorry, as well as the containers drawn were analyzed by Tamil Nadu Civil Supplies Corporation and found that the stocks were Public Distribution System rice.  The 4 containers were packed with 1785 bags of Boiled rice and 115 bags of Raw rice and the lorry was having 225 bags of Public Distribution System rice. All the above stocks, totally 2125 bags weighing 98,871.25 Kgs., the 4 containers and the lorry bearing No.TN57 K 8930 were seized by Civil Supplies C.I.D, registered a case under Cr.No.208/2007 and the case was referred to Deputy Commissioner ( C) North for enquiry under of the Essential Commodities Act, 1955.The Lorry owner was imposed a fine of Rs.57,000/- as the lorry was used for smuggling Public Distribution System rice in Proc. No.N3/2926/07 dated 15.11.2007 of the Deputy Commissioner (City ) North. The Deputy Commissioner (C) North after conducting enquiry and after perusing the Quality Certificates issued by the Tamil Nadu Civil Supplies Corporation held that the smuggled rice was Public Distribution System rice and confiscated the entire quantity of 98,871.25 Kg. of Public Distribution System rice in Proc. No.N3/2926/07 dated 30.11.2007.  The Deputy Commissioner (City) North has also imposed a fine of Rs.5,03,000 on the 4 containers from which 1900 bags of Public Distribution System  rice were seized. The Tamil Nadu Civil Supplies Corporation has remitted a sum of Rs.1,50,047 into Government account after disposing the entire seized stocks of rice through Public Distribution System.

 

The instance shows the lack of seriousness of the department to enforce the law regarding PDS.  The Committee has been advocating zero tolerance in the system.  Here the guilty has been  let off  with  mere fines which is against  the principles  of law   particularly that relating to Essential Commodities Act.

 

8.                 A news item  was published in “Hindu   Dateline” 12.2.2010 Dundigul  in Tamil Nadu.  The report said that salesmen of FPS had gone on strike because some shops run by the Cooperative Department were sealed by the Department.  The Committee called for the report.  It was stated that on 10.2.2010 at about 7.30 P.M. an anonymous call was received regarding smuggling of PDS rice in Shop Nos, 14,16,21,22 and 23 in Dundigul.  These five shops were locked by the Cooperative Sub-Registrar (PDS) by   putting a new lock in all these five shops in order to verify the closing stock of rice next day.  It is stated that these shops had already been closed by the concerned salesmen.  Information was also sent to Food Cell Police Sub Inspector at about 9.00 P.M. on that day i.e. 10.2.2010 Sub-Inspector informed the Cooperative Sub-Registrar that the seized rice weighed 950 Kgs. and was not smuggled from the ration shops but that the mill from where the rice was seized, stated that it was purchased at higher price from the card-holders. A news report also mentioned that the Food Cell Police in a surprise raid seized 19 bags of ration rice from a private mill and following which Supply officials had sealed  Fair Price Shops around this area for investigation.  Sub Inspector also  informed that the rice was  not connected to the ration shops. It would, therefore, appear that the story has been built up now.   Ration card holders would sell only PDS rice.  The agitation by the salesmen came to an end when the locks were removed on 11.2.2010.  To the Committee it would appear to be a made-up story that it was not the PDS rice smuggled from the five shops.  This shows smuggling of rice by the salesmen of shops run by Cooperative Department in a large scale is quite rampant. 

 

The report also said that that there was a regular gang  indulging smuggling of PDS goods from the Fair price Shops and this is happening for a long time. Conscious decision was taken about 1 ½  year back that if the irregularity is for more than Rs.10,000/- it should be treated serious  and dealt  with the punishment of dismissal.  If it is a case of less than Rs.10,000/-  punishment like reversion to the lower rank is given.  This applies to all FPSs in Civil Supplies Department. No departmental proceeding pending    against any salesman.

 

9.                 A Random inspection of files relating to cases registered and action taken in respect of diversion and black marketing of PDS items was done on 19.3.2010 in Madurai.

 

a)     File 33395/09

The file revealed that on 21.4.09 at 3.00 a.m. Lorry No.TN- 02/B 6878 was interrupted at Melekkal Village by the Police based on secret information. The Lorry contained 240 bags of PDS rice [240x50][12000kg]. Statement given by the Lorry driver [Murukan] revealed that the bags were collected from various Fair Price shops by a broker who sold the rice to the Rice owner. Salesmen are supplying these bags from the excess stock available with them. The Sales man gets Rs.5/- kg. Rice broker gets Rs.2-3/kg. Owner of the rice spends Rs.6/kg. The bags collected from various shops are stacked in a secret open yard or thatched shed. Agents in Pollachi buy this rice and transport to Kerala where they get Rs.16/kg for boiled rice. In open market this rice fetches at least Rs.20-24/kg. Lorry transporters get more charges than usual for transporting this contraband. Loading in Lorry is done by small pick up vans. The lorry passes through various check posts. Pollachi is a major point where such operations are taking place.

 

b)     File relating to Crime No.10/2010

Crime was registered under 6[4] of T.N.Sch.Com. Order and Section 7 of E.C.Act. On 9.1.2010, one Lorry bearing No.TN-41/P 1564 was stopped for checking Vellinipattivilakku.at 22.40hrs. 280 bags containing 140  Qtls PDC rice was seized along with the lorry. The sacks were changed to white polythene sacks. The lorry Driver Sekhar was arrested. He gave statement that  one Karuvan, native of Melur Taluk was transporting the rice to Pollachi. The broker in Pollachi was  Meenakshi Sundar, who had hired the lorry from Pollachi. The owner of the lorry was Jayalakshmi of Pollachi. The occurrence report was filed before the Magistrate on 10.1.2010. Magistrate released the Accused on bail on 18.1.2010. The owner filed a petition before the High Court WP[MD] No.1208/2010 to release the Lorry. The High Court directed release of the lorry on a bond of Rs.10,000/- before the authority.

 

c)      File relating to case No.6/2010

In this case seizure of 2 vehicles was made on 6.1.2010 at 18.45 hrs in Elamannoor, Pudur Village. 168 bags [84 quintals] of PDS rice was loaded in a Lorry bearing No.TN-30/M 4079 and a Truck bearing No.TN-59/J 0172. The accused arrayed in the case are Anandan of Pollachi, Sekhar, Rice broker, Kannan owner of the vehicles and two others. Rice was filled in Polythene sacks. Statement of the driver reveals that the rice bags were collected from Ration shops in Iyer Bangla, M.G.Nagar, Karuppuyurani areas.

The Police officials who are investigating the cases revealed that such operations are going on in large scale in Tamil Nadu. This is due to the availability of quality rice at Re.1/kg. The diversion take place from TNCSC godowns enroute FPS shops. Since transportation is done by Contractors who are private players, they indulge in diversion to make quick buck. In collusion with the salesmen, required off take alone is delivered at the doorstep of the salesmen. usually off take from a FP Shop is very low. If the quality is low, off take will be only 20% of the usual allotment. Route Clerk in the transport vehicles are also party to this diversion.

         

d)     Action Taken on Erring Sales personnel:

During period from 1.4.2009 to 28.2.2010 serious irregularities to the tune of Rs. 56.76 lakhs were detected in 491 fair price shops. In respect of irregularities detected to the tune of more than Rs. 5,000/- criminal complaints are being filed with Civil Supplies C.I.D. So far in the current year 98 criminal complaints have been filed with Civil Supplies C.I.D. Stern action is taken against erring salesmen. So far 498 sales personnel have been placed under suspension and 148 have been dismissed from service in this financial year.

 

10.             In District Madurai the Field inspection reflected uniform opinion of the public, who  expressed satisfaction of the quality and correct operating of the P.D.S. Food Material, but for isolated complaints which is being prosecuted by the administration, resulting in severe disciplinary action which would act as a deterrent, for such irregularity being committed in future.n Inspection of records was done at Madurai District by the Committee

 

I.       The Stock Deficit Registers and the recovery of the value of the stock registers were examined and it was found that severe action has been taken by the department in so far as Uslampatty Taluk was concerned and the Committee was apprised of the various dismissals that were effected against the erring officials.

 

II.      The monitoring mechanism of the department has thoroughly analyzed the manner in which the pilferage is done at the Fair Price Shops and has worked out modalities to prevent it.  The Field Officer’s report, who is the Co-operative Sub Registrar, is obtained from the bi-monthly inspection done by them as a monthly report.  The report of the field officers is examined in comparison to the complaints which are received by various sources in which a consumer is allowed to register a complaint and the Joint Registrar of the region examines the complaint, calls for information from the relevant society, i.e. Link Society or Lead Society which administers the particular Fair Price Shop against which complaint has arisen, and sufficient opportunity is given to rectify the mistakes. On an average, six month’s time is granted.  If there is no effective rectification of the lapses, the license granted to the Link or Lead Society is liable to be cancelled.  Once such a licence is cancelled by due orders of the District Collector, the Fair Price Shop under the particular society was terminated and the administration of the fair price shop is handed over to another link or lead society.  The administrative control of the particular link or lead society over its fair price shops would be on the basis of the bye-laws framed for administration of the society (both Link or Lead Society) which has determined the territorial limits for their functioning. 

 

 

 

OMBUDSMAN/ REGULATOR

1.                 The Ration Card Holders have been given certain entitlements under Public Distribution System.  It is the responsibility of the state apparatus to ensure that these beneficiaries enjoy access to these entitlements smoothly, without let or hindrance. Public satisfaction in this field would strengthen the democratic system and reinforce public confidence. Widespread discontent will naturally provoke disruption and affect social stability adversely. Hence, it is imperative to take urgent action for suitably strengthening the vigilance and monitoring system in the existing Public Distribution System framework. This can be done by the appointment of an independent Ombudsman/Regulator.

2.                 While the Central Vigilance Committee is of the  view that an independent monitoring mechanism for addressing consumer complaints along with a host of other related issues needs to be set up on priority. Such grievance redressal machinery would be in addition to the already existing legal remedies that may be available to an aggrieved person under Clause 11 of the Public Distribution System (Control) Order, 2001. This alternative mechanism may be in the form of “Ombudsman/ Regulator” that may be created under Para 6(1) of the Annexe to Clause 8 of the Public Distribution System (Control) Order, 2001. Para 6(1) of the Annexe to Clause 8 of the Public Distribution System (Control) Order, 2001 casts an obligation upon the State Government to provide a proper system of monitoring FPS. This clause provides the statutory basis for setting up an independent monitoring mechanism such as an “Ombudsman/ Regulator”.

3.                 The objective of Ombudsman/ Regulator would be that he/she would act as ‘Watch Dog’ to ensure effective compliance of the PDS Control Order, 2001’. The Ombudsman/ Regulator will also provide free, fair, independent mechanism for speedy resolution of complaints with reference to the benchmark set out in the governing statute, order and circulars by the authorities. Ombudsman/ Regulator should focus on investigating and resolving individual complaints and also address systemic issues. The Ombudsman/ Regulator provides consumers an easily accessible system, which would be just and speedy in redressal of their complaints and grievances. This should not become a procedure bound system or be driven by dilatory reports. Investigation will be resorted to wherever considered necessary by the Ombudsman/ Regulator. The Ombudsman/Regulator shall oversee the functioning of the Enforcement Branch including the Anti Hoarding Cell.   

4.                 Ombudsman/ Regulator should be appointed by the Governor of State  in concurrence with the Chief Justice of The High Court. He or she will not be eligible for re-appointment.

5.       Eligibility conditions

A.      The Ombudsman/Regulator should be a sitting/retired member of the Higher Judicial Services who is or has been in the super time scale.

B.       If the Ombudsman/Regulator is a retired member of the Higher Judicial Services, he/she will remain in office for a term of three years or upon reaching the age of Sixty five, whichever is earlier. 

5.                 Terms and conditions of service

The salary and allowances payable to the Ombudsman/ Regulator shall be the same as payable to a member of the  Higher Judicial Service in the super time scale.

 

 

 

6.                 Removal and Resignation from office

Whereas a sitting member of the  Higher Judicial Services will be governed by the service rules applicable to him. In the case of a retired member of the Higher Judicial Services being appointed, the following will apply: -

The Ombudsman/ Regulator may be removed from office by the Government any time after appointment if Ombudsman/ Regulator has:

          (i).     Been adjudged an insolvent; or

(ii).     Been convicted of an offence involving moral turpitude; or

(iii).   Become physically or mentally incapable of acting as Ombudsman/ Regulator; or

(iv).    Acquired such interest as is likely to prejudicially affect his functions as Ombudsman/ Regulator; or

(v).     So abused his position as to render his or her continuance in office prejudicial to the public interest.

However, the removal on the grounds specified in clauses (iv) and (v) can be done only in concurrence with the Chief Justice of the High Court, after following the principles of natural justice.

   8. Functions and Responsibilities of Ombudsman/ Regulator

A.      Ombudsman/ Regulator would be that he/she would act as ‘Watch Dog’ to ensure effective compliance of the PDS Control Order, 2001. The Ombudsman/Regulator will constantly monitor each facet of the distribution process detailed in the governing control orders and circulars to ensure inter alia that the correct quantities of Essential Commodities reach the intended beneficiaries.

B.       In addition the Ombudsman/ Regulator will deal with Consumers’ complaints and grievances which may broadly be classified into two groups:

Ø            Basic

Ø            Complex. 

C.       Basic complaints would mainly relate to non-provision of Public Distribution System items benchmarked to quality/quantity, delays, harassment etc. Complex complaints would relate to matters involving laws, enforcement deficiencies and widespread discontent. Basic complaints may require summary disposal without undertaking any detailed investigation. Complex complaints may involve proper investigation.

Having regard to the class of complaints, whether basic or complex, the functions and responsibilities of the Ombudsman/ Regulator will be as follows:

(i).     To act as the repository of complaints/grievances received upon the Helpline. Ombudsman/ Regulator shall also monitor the functioning of GPS technology that may be used in the Transportation of Food grains and deal with all matters relating to consumer complaints arising from deficiencies in various stages of Public Distribution System operation;

(ii).     To act as the monitoring authority in respect of functioning of the Vigilance Committees and follow up action taken by the Department on the reports/recommendations of the Vigilance Committees.

 (iii).    To investigate, where necessary in the judgment of the Ombudsman/ Regulator, complaints on case-by-case basis after seeking the perspectives of parties involved and making an independent assessment of complaints;

(iv).    To seek resolution of complaints through application of extant law, rules and orders in complex cases based on his or her personal assessment of what is reasonable and fair;

(iv).    The Ombudsman/ Regulator will have jurisdiction to address and investigate, where necessary, complaints about, inter-alia, the following matters:

·     non-observance of the PDS Control Order by  FPS  owner.

·     short supply of Food grains/sugar/kerosene oil below entitlement;

·     supply of poor quality Food grains not matching the sample on display; and

·     diversion of Food grains to shops other than FPS.

·     the manner in which complaints received from the consumers/complainants including those on the toll free Helpline, have been dealt with by the concerned officials of the Department.

·        Action taken by officials of the Department on reports of Vigilance Committees.

(v)     It will be the responsibility of Ombudsman/ Regulator to devise and implement communication strategy to educate consumers as well as FPS owners about their rights and entitlements as well as various dos and don’ts of  Public Distribution System.

(vi)   It is made clear that the remedy to approach the Ombudsman/ Regulator would be in addition to and not in derogation of other remedies available in law.

 

9.                  Powers of Ombudsman/ Regulator

          The powers of the Ombudsman/ Regulator, inter-alia, would include:

A.                Public functionaries in the Department/Tamil Nadu State Civil Supplies Corporation Limited/Food Corporation of India, in charge of, or dealing with  Public Distribution System, must function with “due diligence”; that is, they must ensure that within the framework of the system, the consumers’ entitlements of Food grains etc., are made available to them on time through the distribution network.  Any deficiency or shortcoming on their part, with reference to the benchmarks, will render the functionary personally liable to action. The Ombudsman/Regulator will have the power to recommend and monitor departmental action in respect of errant officers keeping in mind the governing disciplinary rules.   In cases of violation of any laws in the matter of Public Distribution System, the Ombudsman/ Regulator can direct the concerned authorities to take action against the person/party. There cannot be any corruption in Public Distribution System unless there is complicity between FPSs, Department Officials and the Transporter. While the FPS owner and the Transporter can be prosecuted under Section 7 of the Essential Commodities Act, 1955 for violation of the provisions of law including the Public Distribution System (Control) Order, 2001, it is incongruous that the Department officials who are fully involved in the crime should be proceeded against only departmentally in the absence of sanction under Section 15A of the Essential Commodities Act, 1955. The Committee therefore recommends that Section 15A be suitably amended by deleting clause (b), which deals with public servants belonging to the State Governments. The Committee also recommends that till the legislature makes such an amendment as proposed, the State Government shall delegate the power of sanction for prosecution to the Ombudsman/Regulator. 

B.                 The Ombudsman/ Regulator can recommend payment of compensation to a complainant upto a maximum amount of Rs. 5,000/-, and/or supply of goods and services as required for resolving the complaint or/and issue cease and desist order. In case of complaints of a frivolous nature, the complainant will also be liable for similar action.   The amount mentioned above would be paid by the Department to the beneficiary at the first instance and would be recovered from the concerned officer.

C.                 The complaints received by the Ombudsman/ Regulator may be referred by him for a report from the District Vigilance Committee or FPS Vigilance Committee, as the case may be. It is clarified that this power of the Ombudsman/ Regulator to make a reference shall be in addition to and not in derogation of the powers of the Ombudsman/ Regulator to conduct an independent enquiry into complaints. While, the reports so received, will assist the Ombudsman/ Regulator in providing solution, these reports will not be binding upon the Ombudsman/ Regulator.

D.                The Ombudsman/ Regulator also may not entertain a complaint if the complaint is more than  90 days old which can, however, be relaxed by Ombudsman/ Regulator in his discretion in deserving cases and final  resolution of complaints will need to be prescribed for ensuring speedy and efficacious handling of complaints.

E.                 Time limits for addressing complaints, various stages involved in completion of investigation and final resolution of complaints will need to be prescribed by the Ombudsman/ Regulator for ensuring speedy and efficacious handling of complaints.

F.                  The Ombudsman/ Regulator will ensure that all codes/orders/regulations etc., are put on the website for the convenience of the consumers.

G.                The Ombudsman/ Regulator will have authority to suggest/recommend changes in operational matters to smoothen and simplify the operation of the system.

 

 

10.             Structure

The Ombudsman/ Regulator would need to be given a nucleus of staff to examine issues from both reactive and pro-active approaches.

11.             Funding

It will be the responsibility of the Government to provide funds for implementation of the foregoing recommendations including meeting administrative and operational expenses of the office of Ombudsman/ Regulator including the staff thereof. In this context it is relevant to point out that the Planning Commission provides funds under its plan programmes for monitoring and improvement in the management of supplies.

COMPLAINT MECHANISM

 

1.                 Public Grievance Day

                    i.                        Once in every week  the DM  conducts  Public grievance day  to hear public on all Government schemes

                  ii.                        Every month in each taluk Public Grievance meeting is being conducted to explain to card holders and general public about PDS procedures and also to enable them to give their complaints about the functioning of PDS and requests regarding ration cards. Their request and complaints are being attended immediately in this Public Grievance Day. In 2009-10, 1704 Taluk PDS GDP camps were conducted, 72,014 petitions received and 65581 disposed off.

 

2.                 Online Grievance registration and redressal system at www.consumer.tn.gov.in since inception in 2008, 3464 complaints have been received and 2747 disposed off.

3.                 A State Consumer Helpline (TNSCH) was launched in 1.11.2009. Since inception, in the last 4 months, 13437 calls were recorded, 8156 were IVRS automated calls, 5181 calls attended, 3786 were PDS complaints, out of which 2446 have been disposed off.

 

4.                 The complaint and inspection mechanism maintained by the Madurai District revealed the following procedure adopted by it.

 

5.                 On receipt of the complaint which is either made telephonically by a consumer from the fair price shop level or by a field officer, immediate intimation is given to the society (either the link or the lead society) which is administering the said fair price shop.  The verification officer at the level of Cooperative Sub Registrar (CSR) is constituted for each block.  Under him, a Senior Inspector as well as an Inspector is available for field inspection.  On the report submitted by the Cooperative Sub Registrar (PDS), the District Registrar takes action and reports the same to the Joint Registrar.  The hierarchy of the officials investigation on the complaints is as follows:

 

Joint Registrar

 

 


 

District Registrar

 

Cooperative Sub Registrar (PDS) for each block

 

Senior Inspector

 

Inspector

As stated above, communication is given to the society for involving it as an employer, in the process of identifying the mischief monger at the fair price shop level and to cause necessary check thereof.

 

The Civil Supplies Department for its part has put into operation an  entire inspection wing headed by the Collector

 

              i.      Collector

            ii.      District Revenue Officer

          iii.      District Supply Officer (DSO) equivalent to RDO

          iv.      Rural Development Officer

            v.      Taluk Supply Officer

          vi.      Special Revenue Inspector

        vii.      Flying Squad

 

The records submitted by the District Administration put forth the manner in which the Complaint Redressal Mechanism is put to operation.  Completeness of the mechanism is thwarted to a certain extent as there is no disclosure of the complainant, in which case the department is also constrained to get the investigation, even on a bogus complaint.  In any event, the system in vogue is satisfactory as hierarchy of officials who conducted such inspection, monitor the process till its logical end.  The records relating to the Civil Supplies Department’s inspection was also examined which comprises of not only individual inspecting officials but also a team comprising of the District Supply Officer, the DRO from the Civil Supplies Department as well as Co-operative Department which conducted joint inspection. 

 

 

 

 

OBSERVATION :

 

1.                 Despite putting in place an effective monitoring system, diversion/smuggling of PDS food grains has not stopped which is evident from the various iincidents of diversion like:

    1. Smuggling to Foreign countries through the Madras Port Trust,
    2. PDS rice illegally procured in Tuticorin and stored in warehouse at Pondicherry
    3. Diversion also happens with the connivance of Salesman which is evident from the incident such as salesman going on strike when few shops were locked by authorities on receiving information of Diversion

 

The Committee suggests Zero Tolerance Approach in the matter of enforcement of various provisions concerning Public Distribution System. FPS dealers found indulged in malpractices should be summarily dealt with, including cancellation of licence. Similarly, contracts of transporters involved in diversion of food grains should be cancelled forthwith and such transporters and/or their agents should be permanently debarred from obtaining contracts for transportation of food grain items. The Committee is of the view that more effective steps like canceling of registration of the vehicles or licence of the drivers need to be taken to act as a deterrent against persons indulging in such malpractices. One option suggested during the public hearing was to distribute commodities in a sealed packet. The State authorities, however, felt that the cost of packing all the commodities would be prohibitively high.

 

2.                 Fast Track Courts dealing with economic offences should be set up to try the cases under Essential Commodities Act and Indian Penal Code. 

 

3.                 The Food Advisory Committees (FACs) must meet at a fixed venue at the specified days, for example, the District Level FAC should meet in the office of the District Collector on the days specified by the government. The date, time and venue of the meetings should be notified for information of general public. The minutes of meeting of the committee should be prepared and a copy of the same along with the action taken report should be sent to the department.  The ration card holders of the area may submit their complaints to the Vigilance Committee which should report to higher officers about the nature of action taken on the complaints received. The State government should fix the responsibility of the officials of the administrative machinery to convene the meetings and ensure the presence of the members. Rules may provide that any member who does not attend two consecutive meetings would be replaced.

 

4.                 Vigilance Committees should be constituted in terms of PDS Control Order. In various States visited by committee though there is provision for constitution of Vigilance committee either these have not been constituted or wherever done these are non-effective. According to State Govt. view Vigilance Committee’s at FPS level were parasites.

 

5.                 A public hearing for PDS on the lines of the Lok Adalat       (electricity/telephone/water) must be convened at a designated time and day every 2/3 months where the general public can seek to resolve outstanding issues pertaining to the PDS. These may include those relating to their category/entitlements, non-issuance of the cards, bifurcation of cards, wrong inclusion of APL, complaints regarding under-weighment etc. PDS Lok Adalat so constituted should be presided over by District Judge or a Judicial Officer nominated by him not less than the rank of Additional Judge and should include Joint Collector of the District in-charge of PDS operations.  A system of accountability must be put in place to ensure the implementation of decisions taken during these hearings.

 

6.                 There should be dedicated special squads in every district for enforcement of penal provisions of the Essential Commodities Act 1955. squads be setup by the State consisting of persons from the administration and the police and should be placed directly under the District Magistrate. These squads should be made responsible for initiating criminal prosecution and also for recommending departmental action, suspension etc. for persons found guilty of contravening provisions pertaining to smooth functioning of PDS.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CHAPTER 8

SUPPLY OF  FORTIFIED ATTA

 

 

8.1             In the Tamil PDS shops are distributing Rice, Wheat, Sugar and Kerosene. Apart from the above, as a price control measure the Government of Tamil Nadu is distributing toor daal, urad dal, palmolein oil, fortified atta and spices packet containing 10 items at concessional rates. The Officials  informed the Committee that atta scheme is not target driven scheme and people have option to buy it or not .  For the supply of fortified atta 2500 M.Ts. of wheat is utilized from out of PDS allocation with Government of India permission and another 2500 M.Ts. is used from stock purchased by the state under open market scheme.  Presently the total Quantity of foodgrain given to card holders is not 35 Kg as fixed by the Government of India. The rice cardholders get 12 kg to maximum of 20 kg rice  depending upon the number of units in the family apart from this they can get 5 kg of wheat@ Rs 7.50 and 2 kg of atta @ Rs 11 per kg.  Beneficiaries of ‘sugar card’ are entitled  to get 3 kg of sugar @ Rs.13.50 instead of rice. State should ensure that 35 kg  foodgrains be given to the beneficiaries of PDS. The state charges Rs. 11 for atta to PDS beneficiaries which is on the higher side seeing the rates fixed for  issue of wheat  to beneficiaries by the Government of India. The cost of atta be made rational.

 

8.2             In Cuddulore during public hearing it was informed to the Committee that only 50% of wheat is distributed and the wheat is mixed by some persons in cattle fodder. The Committee is of the view that in TN instead of wheat, card holders be supplied with fortified atta. Necessary steps are to be taken for proper publicity about the shelf-life of the atta to be supplied. State should encourage and give publicity for consumption of more atta in the State as it came to the knowledge of the Committee that wheat is diverted and used as cattle feed.

 

8.3             Committee visited TNCSC godown, Ramnathpuram, Madurai.  The Bags of atta were of United India Roller Mills Chennai and packets were of 1 Kg. atta.   Committee Inspected few packets on which the date of manufacture was 12.3.10 and the date of  receipt at the godown was 15.3.10.  As per the stock  register the position was as under:

 

4.2.10          -- 1100 bags received.  There was no balance.

19.2.10        -- 800 bags received; date of manufacture was 13.2.10.            On this   day 100 bags were in balance. 

15.3.10        -- 700 bags received.  Date of manufacture was 12.3.10.  All are in stock.

 

It was told  that no one accompanies the truck of TNCSC carrying foodgrain.  Only driver is present.  It is submitted that the chances of pilferage during transportation is high.

 

8.3     Following is the Comparative analysis in brief about the atta distribution:

 

1.                 Categories which are entitled for Fortified Atta:

 

(a)        Tamil Nadu     : all PDS beneficiaries.

(b)        Gujarat           : Antyodaya Anna Yojana (AAY)

It is also proposed by the Government of state of Gujrat to supply fortified Atta to beneficiaries of Below Poverty Line (BPL).

 

 

 

2.                 Grinding Rate:

 

Tamil Nadu: Rs. 2552 per MT at ex-mill delivery basis or Rs. 2.55 per kg. (inclusive of transport and handling charges for lifting of wheat from Tamil Nadu Civil Supply Corporation Ltd. Godowns / FCI godowns to the mill, milling charges, packing charges, printing and pre-mix of micro nutrients and supply in 1 kg. pockets).

Gujarat:

(i)                Re. 1.00 per kg.

(ii)              Packaging, printing and fortification of atta at Re. 0.40 per kg.

 

Rajasthan: Wheat is supplied to APL category at the rate of Rs. 6.80 per kg. Miller grinds the wheat and supplies to Upbhokta Bhandar Saras Dairy Booths in polythene bags of 10 kgs. @ Rs. 87/- per bag or Rs. 8.70 per kg. Thus, Rs. 1.90 per kg. (8.70-6.80=1.90)  are grinding / packaging charges, etc.

 

3.                 Wastage / Shortage

 

Tamil Nadu:  50 gm. / per kg. (950 kg for 1 MT of wheat)

Gujarat:        30 gm. / per kg. or 3% per kg.

Rajasthan:    5% or 50 gm. / per kg.

 

4.                 Lifting of Wheat:

 

Tamil Nadu:  Millers lift the wheat from godowns.

Gujarat:        Civil Supply Corporation shall deliver the wheat to miller

Rajasthan:    Miller lift the wheat grain from FCI godowns.

 

5.                 Transportation from the Mill:

 

Tamil Nadu:  Miller would charge Rs. 140/- per MT for transportation from the mill to all the 33 regions, except Vellore region. In Vellore region, the transportation charges are Rs. 125 per MT or Ps. 12.5 per kg.

Gujarat: Millers give it to Gujarat State Civil Supplies Corporation.

Rajasthan:    The millers grind the wheat grain into atta and supply to Upbhokta Bhandar or Saras Dairy Booths.

 

The commission on atta to Dairy Booth Owners is 30 paisa per kg. as against 8 paisa per kg. on wheat to the FPS in Rajasthan.

 

6.                 Pre-mix of Micro Nutrients:

 

Tamil Nadu:  Millers purchase micro nutrients, like Vitamin A, Folic Acid and Iron from the identified suppliers and pre-mix the same for fortified atta at their cost.

Gujarat: The charges for fortification of atta are included in the charges for packaging, etc.at the rate of 40 paisa per kg. as stated above.

 

8.4             The Government of India decided vide letter dated  17.01.2008 to adopt a policy of encouraging distribution of wheat flour to ration card holders of AAY, BPL and APL categories under the TPDS.  It provides that the State Governments should take up distribution of wheat flour through the network of fair price shops to AAY, BPL and APL categories of card holders under the TPDS.  subject to the following terms and conditions:-

 

(a)              Distribution of wheat products other than wheat flour such as suji, maida, rawa etc. will not be permissible from the allocations of wheat made by the Deptt. of Food and Public Distribution, Govt. of India under the TPDS.

 

(b)              The wheat flour to be distributed to ration card holders shall conform to all quality standards/ specifications of whole wheat atta prescribed under the Prevention of Food Adulteration Rules, 1955. The State/UT Governments shall put in place adequate safeguards to ensure that the quality of wheat flour issued to card holders is as per the standards/specifications prescribed under PFA Rules, 1955.

 

(c)               From commencement of this policy and thereafter, in the beginning of every financial year, State/UT Govts. should assess the requirement of wheat flour in their State/UT based on options, if any, to be exercised by the ration card holders under the TPDS. However, this requirement of wheat and wheat flour would be limited to the monthly allocation of wheat to the concerned State/UT under the TPDS.

 

(d)              The State/ UT Governments should distribute wheat flour in quantities equal to about half of the monthly allocations of wheat to ration card holders under the TPDS from March, 2008 onwards. This should be done particularly in those areas where evaluation studies have shown high levels of diversion/leakages of foodgrains under the TPDS and where it would be more convenient for the ration card holder families to get delivery of the wheat flour.

 

(e)              The wheat flour should be properly packed in suitable quantities.

 

(f)                The ratio of whole wheat flour to whole wheat should be fixed by the State/ UT Govts. appropriately in such a way as maximum quantity of wheat flour is obtained from the whole wheat to be issued to flour mills for this purpose.

 

(g)              Expenses on milling/ grinding of whole wheat, packaging and transportation of whole wheat to mills and of wheat flour from the mills to distribution centres, etc. should be borne by the State/UT Govts. or they should be adjusted suitably in the quantity/ issue price of wheat flour in such a manner as no additional burden in passed over to the targeted AAY, BPL and APL ration card holder families.

 

(h)              The State/ UT Govts. should ensure that no unreasonable monetary advantage is allowed to flour mills in the process.

 

(i)                For distribution of wheat flour instead of whole wheat to eligible ration card holders under the TPDS, it will not be necessary for State/UT Govts. to obtain  specific permission or prior concurrence of the Govt. of India for this purpose. However, the quantum of wheat flour distributed under the TPDS will be reported every month to GOI.

 

(j)                The quantity of unlifted wheat flour/ atta from fair price shops, if any, during a month may not be disposed of in the open market but carried forward to the next month for distribution subject to it retaining the required quality and the wheat allocation to RFMs/Chakki mills for conversion into wheat flour for the next month will be proportionately reduced by the State/UT Govt. authorities.

 

(k)              The State/UT Governments or their Agencies will not make any profit in implementation of the scheme.

 

(l)                The distribution of wheat flour / atta through PDS outlets will be made as per provisions of the PDS (Control) Order, 2001 and any violation of the Order will result in imposition of penalties under the EC Act, 1955.

 

(m)           Based on assessment of the State/ UT Governments, distribution of fortified wheat flour may also be taken up in selected areas or for selected categories of ration card holders or for all categories of the ration card holders, for improving nutritional standard of the families covered.

 

(n)              Distribution of wheat flour to the targeted families under the TPDS as per the terms and conditions specified above shall be sole responsibility of the concerned State/UT Governments. The State/ UT Governments shall ensure proper implementation and regular monitoring of the scheme. It shall be ensured that there is no diversion of TPDS wheat flour to the open market.

 

8.5     Since shelf life of wheat flour (Atta) is only 45 days it has to be ensured that the product is distributed and consumed within the stipulated period of shelf life so as to avoid product deterioration.The    Committee suggests  the following  safeguards for distribution of ‘Atta’:

 

1.                 There should be a dedicated flour mill for grinding PDS wheat. In case that is not immediately possible, it should be ensured that the day on which the PDS wheat is ground no other wheat will be ground in that flour mill.

 

2.                 Quality of the flour manufactured has to be strictly monitored. Grinding should be perfect and flour should be of fine consistency;

 

3.                 There should be strict vigilance to ensure that no other wheat is mixed up with PDS wheat;

 

4.                 Grinding of PDS wheat should be in a flour mill where there is no human intervention except at the time of pouring the wheat grain in the machine and at the time of sealing the atta, in right quantity in the bags as it comes out. The process may include fortification of wheat with proper folic acid, iron and other nutrients.

 

5.                 There should be strict adherence to the time schedule to ensure that atta is consumed within the prescribed period and its quality is maintained. It is necessary that the atta reaches the FPS within 5 days of its grinding. A period of 30 days must be given to the beneficiary for consumption of atta from the date he lifts the atta from the FPS as he is given ration for one month. Thus, atta must be distributed by the FPS to all the beneficiaries within 15 days of grinding. In case, some bags are left undelivered in the FPS after 30 days of grinding, steps should be taken to remove the undistributed bags from the FPS.

 

6.                 The date of grinding of the wheat and the date on the HDPE bag should be same and the bags should also contain all other relevant particulars like the expiry date, batch no., name of the mill, etc.

 

 

 

 

 

 

 

 

 

 

CHAPTER 9

 

COMPUTERISATION

 

9.1   The following measures to automate PDS transaction have been taken as all taluk office (except new ones) are linked to TNSWAN.

 

                          i.                  Allotments to fair price shops are made through a web based software by every taluk / zonal offices for each fair price shop.

                        ii.                  Daily closing stock of each FPS is sent by SMS by each FPS salesmen to a common server which is accessible to public.

                      iii.                  TNCSC godown transactions are completely automated by an on-line software.

                      iv.                  Grievance registration is made possible through a automated State Consumer Help Line.

                        v.                  On an experimental basis, on-line electronic billing machine have been installed in 1350 FPS in Chennai city and kerosene bunks and this system has enabled on-line tracking of FPS sales and stocks

                      vi.                  To further consolidate the present system, it is proposed to introduce Total e-governance Solution to capture bio-metrics of all cardholders and their family members, de-duplicate bio-metric and install a work flow PDS management system, issue commodity to smart family cards to eligible families leading to full elimination of bogus cards. Also all FPS godowns, agencies running FPS, TNCSC Head Office. TSO and DSOs offices, DCs Offices, Office of the Joint Registrars, Registrar of Coop. Societies and Commissioner of Civil Supplies office should be linked through an online Total Solution software so that all transactions relating to family cards, FPS will be carried out through an on-line system enabling effective and fraud-free implementation of PDS.

9.2     Initiatives taken up by the State for streamlining and reforming the PDS administration in recent times.

                         (i)               Digitised family card data is being maintained.  Taluk data centre is connected with district and State through TNSWAN.

                       (ii)               Electronic scales have been put to use in the PDS outlets and godowns  to ensure accuracy in weighment.

                     (iii)               Intensive drive has been organized with 100% verification of cards through door to door enumeration to eliminate bogus card.  This has resulted in the elimination of substantial number of bogus cards.

                     (iv)               SMS stock monitoring system has been introduced throughout the State wherein the daily stock position in PDS outlets is being monitored at district and State level.

                       (v)               Billing machine has been introduced in Chennai city on a pilot basis which is proposed for upscaling while taking up total e-governance programme..

                     (vi)               GPS tracking has been introduced on a trial basis in two districts viz., Tiruvallur and Krishnagiri to monitor the movement of essential commodities.

                   (vii)               Operations in the godowns are computerized and also at the taluk level for card management, allocations etc.

 

9.3             Further proposals:

All these measures have improved the delivery of service considerably.  But the issues like bogus card, bogus billing, risk of diversion, delay in service to the public on issuing new cards, mutations etc. continue to pose a serious challenge.  It is felt these problems could be solved only through system interventions with technological solution.  Thus the State is planning for end to end computerisation with work flow software and continues the reform process.  Components of the project include:

                      (i)                  To eliminate the bogus card, the State is proposing for biometric capturing of data and iris for deduplication and issue the new card.

                    (ii)                  To eliminate the bogus billing, the State is proposing to introduce smart card embedded family card and also billing machine in the PDS outlets with smart card reader.

                  (iii)                  To ensure the intended stock reaches the destination without any leakage, the State is proposing for CCTV monitoring in the godowns and also GPS tracking for tracking the commodity movement.

                  (iv)                  The workflow software will be put in operation to improve the service level at taluk office and PDS outlets for a new card issue, mutations and also streamlining the allotment and monitoring of distribution. 

 

9.4     All these initiatives are proposed as part of the total solution provider under end to end computerization.  State is also discussing with Census Department for combined bio-metric capturing after completing population register and will coordinate with UIDAI.   We are hopeful that this new system will be able to settle many of the unresolved problem which remains for the past many years.

 

9.5      Hand held Billing Machines

         Hand held Billing Machines are installed in all kerosene bunks in the State and all FPS in Chennai. Card holder gets a small printed receipt which is reflected in the accounts. Account statements are streamlined. Hence the task of inspecting officers has been simplified. Data collection and generation of MIS reports apart from online monitoring can be done instantly.

 

9.6      Viedeo surveillance of FPS

         Video surveillance of FPS functioning installed as a pilot project in 4 FPS in Chennai city has yielded memorable results.

 

 

9.6      Grievance Redressal

         A State Consumer Helpline was launched on 1.11.2009. Since inception, 13437 calls were recorded, 8156 were IVRS automated calls, 5181 calls attended, 3786 were PDS complaints out of which 2446 have been disposed of. State Consumer Helpline also attends to complaints regarding open market products and services.

9.7     Online Grievance Registration and redressal system is available at www.consumer.tn.gov.in since its inception in 2008, 3464 complaints have been received and 2746 disposed of.

 

9.8     Daily Online monitoring of receipt of foodgrain  enables daily review of stock in shops.

 

9.9      Review and Monitoring System

·                      Automated system to track movement of SKO

·                      Automated e-mail from Oil Companies on billing

·                      Tracking on receipt through SMS

·                      Daily SMS alerts regarding stock to State and District Officers are in force.

 

9.10   Online Billing System as on 13.3.2010 was retrieved from the internet. The page showed shop code, shop name, Phone No., status No. of bills for the day, No. of bills for the month, Bills cancelled for the month.

e.g. 01 DB024 [shop code] showed Annanagar Main 3 as the shop name, 26632871 as the telephone No., online as the station, 31 Bills issued for the day, 1059 Bills issued for the month and 9 bills cancelled for the month.

Similarly Billing Report sample of DB024 on 13.3.2010, gave the details of Attendance Report, Status Report, Purchase Report, Sales and Stock, Drawal and Chitta Inspection Report.

e.g. In the Billing Report dt.13.3.2010, at 9:44:49 A.M. Bill No.1048 was shown, card type showed as General, Card No. was shown as 01W0046466Drawal and Chitta Register as 242, Bill amount Rs.147-50.

 

9.11   Online viewing of the activities of the shops through CCTV/Webcam.in the internet.

When the Committee visited Shop No.DB024 at Annanagar 3, Chennai, Ms. Vanitha, Deputy Registrar [PDS] showed online activities happening in 20 shops where CCTV has been installed as a pilot project. These can be accessed by any person through the  website www.remotedatacentre.com  by clicking  the name of the shop on Home Page and logging in with the user ID and password available on the page itself.

 

9.12   Renewal of Ration Cards using Modern Technology

The process of renewal of ration cards is in the offing in the State of Tamil Nadu. To ensure elimination of bogus cards/persons, Government has proposed to capture the biometrics of all persons residing in every area of Tamil Nadu as per UIDAI standards irrespective of whether they have a ration card or not. Vide D.O.Letter No.3679/F2/2010-1 dt.8.3.2010, The Principal Secretary to Government of Tamil Nadu Coop: Food and Consumer Protection Department has sought concurrence of the Registrar General and Census Commissioner, New Delhi for combining biometric capture for ration cards with the NPR exercise. This is to avoid duplication and to prevent citizens being called to enumerate themselves repeatedly by different agencies at different points of time for the very same purpose. Since TNPDS is universal, the target group of NPR, PDS and UID would be almost the same. Hence it was proposed to conduct a combined exercise for data collection from citizens at the time of biometrics enumeration for NPR, UID and PDS which will save time, effort and expenditure besides reducing hassles for the citizens.  The following proposal was put forward before the Government of India.

1.       Based on data requirements of NPR, UIDAI and TNPDS, data entry format at biometric enumeration camps [BEC] will be designed so that the captured data can be inter operable.

2.       Biometrics will be captured for all residents of every area irrespective of whether they have ration cards or nationality in each BECS as per UIDAI/NPR norms.

3.       All biometric/biographic data captured at BECs will be compliant with UIDAI standards.

4.       Collectors will be put in charge of the joint exercise as they are already in charge of NPR & PDS.

5.       The entire project for biometric capture will be  undertaken by Government of Tamil Nadu and data made available to RGI/UIDAI as and when ready/required. The proposal is to commence the project by August 2010 and complete by December 2010. A State Level Committee comprising DCOTN, DDG-UIDAI and relevant State officials if formed can steer the course of the project and provide operational guidelines to the meet the needs of all agencies concerned.

 

9.13        Unique Identification Authority of India (UIDAI):

 

  1. Central Government have recently constituted the Unique Identification Authority of India (UIDAI). The mandate of the UIDAI is to issue unique ID numbers to every resident of the country. The assurance of uniqueness being promised by UIDAI will ensure that there are no duplicates and no fakes in the databases of UIDAI. If the PDS authorities, in their domain, make the UID numbers of the ration card holders and their family members as mandatory, they can clear up their databases of bogus ration cards. Secondly, the UIDAI is also going to provide authentication facilities which will be available on ubiquitous devices such as mobile phones. This could also be helpful in ensuring that the ration meant for the consumers is actually distributed to them.
  2. While the UIDAI will provide enrolment and authentication infrastructure, it is for the Consumer Affairs Department of the States to align their systems and processes to leverage the advantage which the UIDAI offers.

 

  1. We would recommend that all the State Governments should start working and actively participate with the UIDAI so as to clean up their databases and improve their delivery systems.

 

  1. From the draft approach of the UIDAI, we find that UIDAI is going to build its database through a number of agencies, both at the State and the Central level, described as “Registrars”. These Registrars are agencies which deal with public in their normal course of activities and they are considered as the most appropriate agencies to enroll their “clients/customers” into UID system. The Departments of Food and Supply at the State level should, therefore, become Registrars of the UIDAI so as to enroll the existing cardholders into UID system.

 

  1. The specifications of the Smart Transaction Terminals for retail ration shops (STT) need to be standardized and all the State Units may follow the uniform specifications so that the state terminals are compatible with each other and can be booked up to a national network, for monitoring the smart card based PDS at national level.

 

  1. Procurement of equipment and other infrastructure for providing such network shall be the reasonability of the state concerned. The funding mechanism between centre and States need to be decided suitably.

 

  1. In case of regional and interstate transfers of the subscribers, new smart card can be issued as per eligibility after verification by previous unit. The old card may have to be surrendered for issue of new one or else the date in the same card may have to be updated. The delay in present system of issuing new paper ration cards can as well as be avoided. If this is done their regional and interstate transfers can be taken care of.

 

  1. Mr. R.S. Sharma, IAS, Director General & Mission Director, Unique Identification Authority of India (UIDAI) has forwarded two documents--(i) Creating a Unique ID Number for every resident in India and (ii) Working paper which deals with possible linkages UIDs can have with the PDS with a view to clean up the system. This second document is attached to this report  as Annexure C.

 

  1. The Committee would suggest that a meeting of NIC and UIDAI be ordered so as to arrive at the specifications of the STT which need to be standardized by all. State Units must follow to uniform specifications so that State Tribunals are compatible with each other and can be hooked to a national network, for operating Smart Card based PDS at national level.

 

  1. For transaction in PDS modern technology in the shape of smart card is required to be used. Central Govt. has already financed the programme of issue of Smart Card in the State of Haryana and Chandigarh Union territory.

 

9.14         It is hoped that computerization as envisaged in the State of Tamil Nadu will go a long way in making the system corruption free, easy and transparent. It is a people friendly project that can be implemented  by any Government of a State with respect to PDS. Easy access to entire details relating to FPSs, godowns even with respect to transportation of vehicles will go a long way in preventing diversion, substitution, black marketing and indulgence in malpractices.

 

***

CHAPTER 10

 

RECOMMENDATIONS

 

1.                 The State of Tamil does not follow the Central PDS Control Order hence,  it is not possible to do comparisons between State of  Tamil Nadu  and  other states. The State of Tamil Nadu follows the Universal PDS unlike the other States which follow the Targeted public Distribution System as initiated by the GOI in year 1997. Tamilnadu  has adopted universal PDS which entails a recurring annual cost of Rs. 4000 crores to the state government. It is not known whether any detailed study has been done regarding its financial feasibility in the long term. The Committee came to know during its visit to Pondicherry that since 19 January 2010 UT of Pondicherry is distributing free ration to AAY and BPL beneficiaries and to APL beneficiaries at the rate of Re 1/- per kg. It is necessary to work out its financial feasibility lest other states also follow suit. TPDS should be put in place if universal PDS is not found financially viable.

 

2.                 Despite putting in place an effective monitoring system, diversion/smuggling of PDS food grains has not stopped which is evident from the various incidents of diversion like:

a.                  Smuggling to Foreign countries through the Madras Port Trust,

b.                 PDS rice illegally procured in Tuticorin and stored in warehouse at Pondicherry

c.                  Diversion also happens with the connivance of Salesman which is evident from the incident such as salesman going on strike when few shops were locked by authorities on receiving information of Diversion

3.                 The Committee suggests Zero Tolerance Approach in the matter of enforcement of various provisions concerning Public Distribution System. FPS dealers found indulged in malpractices should be summarily dealt with, including cancellation of licence. Similarly, contracts of transporters involved in diversion of food grains should be cancelled forthwith and such transporters and/or their agents should be permanently debarred from obtaining contracts for transportation of food grain items. The Committee is of the view that more effective steps like canceling of registration of the vehicles or licence of the drivers need to be taken to act as a deterrent against persons indulging in such malpractices. One option suggested during the public hearing was to distribute commodities in a sealed packet. The State authorities, however, felt that the cost of packing all the commodities would be prohibitively high.

 

4.                 The role of Tamil Nadu State Civil Supplies Corporation is very limited so far as Public Distribution System is concerned. The role of TNCSC should be enlarged to include both wholesale and retail distribution of food grains.  The FPS should be run by corporation rather than cooperative societies and women self-help groups in order to check diversion and malpractices. The Committee found that most of the shops run by cooperative societies are incurring losses and subsidy from the government provides life line to such shops.

 

5.                 Till recommendation of the Committee that FPS operations should be handled by the TNCSC is implemented, it is necessary that salary of salesman employed by cooperative Societies or WSHG should be at par with that of the Salesman employed by TNCSC.

 

6.                 TNCSC should deliver at door step of FPS on its own so as to reduce the intermediary levels handling transportation (presently Lead Society) to check the Diversion of PDS foodgrain.

 

7.                 There are more ration cards in circulation than the population of the State. Despite a massive exercise by the state government to weed out bogus ration cards, a sizeable number of such cards is still in circulation Mere withdrawing a bogus ration card, is not enough. Strict penal actions should be taken against the officials responsible for issuing bogus ration cards or against fair price shop dealers who deliberately do not disclose about bogus cards or have issued ration against such cards or take undue advantages from such cards.  State should introduce an amnesty scheme providing option for surrender of bogus ration cards within a period of two months without any penalty. Stringent action, however, should be taken against those still  found to be in possession of such cards, during door to door survey on expiry of the amnesty period.  The Committee would request the  Hon’ble Court may consider passing appropriate order.

 

8.                 The Committee is of the View that in TN instead of wheat, card holders be supplied with Fortified atta. Necessary steps are to be taken for proper publicity about the shelf-life of the atta to be supplied. State should encourage and give publicity for consumption of more atta in the State as it came to the knowledge of the Committee that wheat is diverted and used as cattle feed.

 

9.                 Presently the total quantity of foodgrain given to card holders is not 35 Kg as fixed by the Government of India. The rice cardholders get 12 kg to maximum of 20 kg rice  depending upon the number of units in the family Apart from this they can get 5 kg of wheat@ Rs 7.50 and 2 kg of atta @ Rs 11 per kg.  Beneficiaries  of Sugar card are entitled get 3 kg of sugar @ Rs.13.50 instead of rice. State should ensure that 35 kg foodgrains be given to the beneficiaries of PDS.

 

10.             Atta is distributed at the rate of Rs. 11 per kg where as  issue price fixed by Government of India for wheat is low. It appears no proper study has been made by State considering value of foodgrain , cost of grinding and wastage. The issue price of atta for beneficiaries be made rational.

 

11.             Time schedule of 60 days as fixed  by the Department within which new ration card be issued should be strictly followed and in case of delay the applicant be informed about delay along with the reason for the delay.

 

12.             The State is in the process of computerisation and specially in Chennai the allocation of foodgrain to FPS is made online. There should be a system by which the grain allocated to the State can be equated with the grain distributed to the beneficiaries. Since the scale of distribution and the number of beneficiaries is very large, this cannot be achieved manually. Complete automation and computerisation is the need of hour.    At About 20 shops in Chennai the Webcam’s are installed and anyone can access and view the functioning of it online.  Daily closing Stock of FPS is also available online. Similar steps be taken in other cities of the State. The Committee has already submitted a report on Computerisation of PDS and its findings in this regard stated in its separate and detailed report on computerisation, are reiterated herein.

 

13.             The introduction of Global Positioning System (GPS) technology is recommended for keeping a track on the movement of trucks carrying food grains from the FCI up to the Fair Price Shops. This will also enable the authority to fix responsibility on the transporter, if the stock does not reach the FPS at the scheduled time. The state is experimenting the same in two Districts i.e Thiruvallur and Krishnagiri.

 

14.             Fast Track Courts dealing with economic offences should be set up to try the cases under Essential Commodities Act and Indian Penal Code. 

 

15.             More than 50% of the people in higher category do not take their food grains from the FPS and as such allocation for this category gets diverted to the black market. This emphasizes the need to target the PDS only to the poor and needy.

 

16.             Introduction of coupon system was also advocated during public hearings but the Committee is not in a position to fall in line with this view since its efficacy in helping the poor is yet to be established.

 

17.             Double boiled rice supplied through FPS is not liked by consumers. But having regard to its nutritive value, there is a need to educate people in this regard in order to improve their acceptance to this type of rice.

 

18.             Mobile FPS should be pressed into operation in areas which are isolated and number of cards is not sufficient to justify opening of FPS.

 

19.             A post of ombudsman/regulator should be created for the purpose of ensuring the transparent functioning of the PDS. Details of these recommendations have been made by this Committee in the report on Delhi which may be referred to.

 

20.             The Food Advisory Committees (FACs) must meet at a fixed venue at the specified days, for example, the District Level FAC should meet in the office of the District Collector on the days specified by the government. The date, time and venue of the meetings should be notified for information of general public. The minutes of meeting of the committee should be prepared and a copy of the same along with the action taken report should be sent to the department.  The ration card holders of the area may submit their complaints to the Vigilance Committee which should report to higher officers about the nature of action taken on the complaints received. The State government should fix the responsibility of the officials of the administrative machinery to convene the meetings and ensure the presence of the members. Rules may provide that any member who does not attend two consecutive meetings would be replaced.

 

21.             Vigilance Committees should be constituted in terms of PDS Control Order. In various States visited by committee though there  is provision for constitution of Vigilance committee either these have not been constituted or wherever constituted these are non-effective. According to State Govt. view Vigilance Committee’s at FPS level were parasites.

22.             Every point should have an electronic weighing bridge /system connected and integrated with the automated system. This would ensure the integrity of the weight and content of the bags and reduce the possibility of tampering with the bags received from the FCI godowns. There must be an electronic weighment system connected to the online computerized system at every whole sale point. At the retail point, the same may be integrated to the Point Of Sale device, as suggested in the separate report on computerization through a smart card. Only computer generated Weight Check Memos and Truck Chits should be issued. The FCI should ensure that all weight check memos are printed from the automated system giving exact quantity and number of bags.

 

23.             The system of joint sampling for supply of sealed sample packets by FCI to the wholesale godowns and thereafter to the FPS should be rigorously followed to ensure that the same quality of food grain, as issued by FCI/ TNCSC godowns are being distributed by the TNCSC/ FPS dealers. Sealed samples should be ensured up to FPS level to check malpractices on the part of intermediaries and guard against tinkering with the quality of food grains released through PDS outlets.

 

24.             The practice being adopted for standardization of bag at TNCSC godown be discontinued forthwith as it is not serving any useful purpose and is unnecessarily creating a financial burden and increase chances of diversion or exchange of  good quality of foodgrain with inferior quality. Instead Proper weighment system be installed at TNCSC godowns and FPSs. The Committee is also of the view that the current practice of standardization of bags casts financial burden and serves no useful purpose. Proper weighment of food grains on electronic weigh bridges is a better option.

 

25.             A public hearing for PDS on the lines of the Lok Adalat       (electricity/telephone/water) must be convened at a designated time and day every 2/3 months where the general public can seek to resolve outstanding issues pertaining to the PDS. These may include those relating to their category/entitlements, non-issuance of the cards, bifurcation of cards, wrong inclusion of APL, complaints regarding under-weighment etc. PDS Lok Adalat so constituted should be presided over by District Judge or a Judicial Officer nominated by him not less than the rank of Additional Judge and should include Joint Collector of the District in-charge of PDS operations.  A system of accountability must be put in place to ensure the implementation of decisions taken during these hearings.

 

26.             There should be dedicated special squads in every district for enforcement of penal provisions of the Essential Commodities Act 1955. squads be setup by the State consisting of persons from the administration and the police and should be placed directly under the District Magistrate. These squads should be made responsible for initiating criminal prosecution and also for recommending departmental action, suspension etc. against persons found guilty of contravening provisions pertaining to smooth functioning of PDS.

 

27.             The Committee was also apprised of the activities of anti-social elements who target fair price shops. There is a general perception that such elements enjoy political patronage. Installation of closed circuit TV’s at sensitive locations in the shop may provide the answer.

 

28.             In few shops Committee found the expired products. Both the FPS salesman and the beneficiaries be made aware and be sensitized about the not sell and purchase the expired products.  

 

29.             Committee also found that records were not  properly maintained at many shops and it was due to reasons like  no-standard and updated format of registers. The registers were not having columns for every commodities hence salesman were not making entries of issuing all commodities. In some shops it was found that entries in the records of FPS and in ration cards of beneficiaries do not tally.    It is suggested that  there should be standardised  and formatted system of record keeping. 

 

30.             Another interesting observation was about the Sales register. None of the FPS maintains the Daily Sales Register and though they keep record of sales, the so called sales register doesn’t contain the signature of the beneficiaries. At some places it was found that FPS dealer takes signature of the beneficiary once in the beginning of the year on the sheet on which he makes entries about issuance to that particular beneficiary. Even after considering the practical difficulties of record keeping it is suggested that beneficiary’s signature must be taken whenever he purchase the commodity.

 

31.             Central Government have recently constituted a Unique Identification Authority of India (UIDAI).  The mandate of UIDAI is to issue unique ID number to every resident of the country.  It is stated that if  PDS authorities, in their domain make ration cards on the basis of UID number of the ration card holders and their family members as mandatory, they can clear up their data base of bogus ration cards.  If a State decides to have UID in all its  ration cards, then somebody who has a ration card with the UID  cannot come again on another ration card with another UID. Duplication and bogus ration cards  would be eliminated.

 

32.             Committee would recommend that all the State Governments should start working and actively participate with the UIDAI so as to clean up their databases and improve their delivery systems.

 

33.             From the draft approach of the UIDAI, we find that UIDAI is going to build its database through a number of agencies, both at the State and the Central level, described as “Registrars”. These Registrars are agencies which deal with public in their normal course of activities and they are considered as the most appropriate agencies to enroll their “clients/customers” into UID system. The Departments of Food and Supply at the State level should, therefore, become Registrars of the UIDAI so as to enroll the existing cardholders into UID system.

 

34.             The specifications of the Smart Transaction Terminals for retail ration shops (STT) need to be standardized and all the State Units may follow the uniform specifications so that the state terminals are compatible with each other and can be booked up to a national network, for monitoring the smart card based PDS at national level.

 

35.             The Committee would suggest that a meeting of NIC and UIDAI be ordered so as to arrive at the specifications of the STT which need to be standardized by all. State Units must follow to uniform specifications so that State Tribunals are compatible with each other and can be hooked to a national network, for operating Smart Card based PDS at national level.

 

Annexure- A

 

ISSUES RAISED IN PUBLIC HEARINGS

 

Chennai : Representations at Public Hearing

 

1)                There were quite a few complaints about the quality of rice – People demanded raw rice or polished rice as against the double boiled rice that was being supplied.

2)                Many people do not know the existence of A Register in which the names of all the card holders are registered.

3)                Irregular timings kept by Fair Price Shops.

4)                Some speakers suggested the introduction of coupon system.

5)                All commodities not available at the same time.    Consumers have to make several trips to get the commodities.

6)                Many suggested that the commodities may be supplied in packaged form.

7)                In respect of FPS run by Co-operative Societies, there is only one employee to handle the entire load. This is found to be totally inadequate.

8)                If a shop has more than a 1000 cards, then it is not able to function efficiently.

9)                Each Corporation Division should have a shop.

10)           Disparity in pay between employees working in shops run by the Tamil Nadu Civil Supplies Corporation and those run by Co-operative Societies.

11)           Rice  not supplied through out the month but usually at month end to  beneficiaries of Old Age Pension, Antodaya Anna Yojana, Annapurna  scheme.

 

 

 

 

 

District Tiruchirapalli: Representations at Public Hearing

 

1.       Consumers are forced to purchase soaps, powders, etc., along with essential commodities.   If the consumers say no to buy these soaps, etc., the FPS keepers refuse to give the essential commodities.

2.       Goods supplied are always under weight .

3.       Delay in issue of new ration cards.

4.       Essential commodities are sold in black market.

5.       Irregular timing of ration shops.

6.       Notice boards are not kept about stock position.

7.       Full supplies are not made to the card holders.

8.       Poor quality of essential commodities.

9.       Bogus ration cards exist.

10.     Political interference.

11.     Diversion of PDS commodities to Open Market.

12.     Insufficient number of shops.

 

 

 


 

 

District Madurai : Representations at Public Hearing

 

 

1.       Misappropriation of Andiyodhaya Anna Yojana Rice Scheme and Annapoorna Free Rice Scheme and also in Rice and Sugar sales.

2.       Goods supplied to fair price shops by the TNCSC is always under weight of 5 kg or more per bag.

3.       Many departments inspect the Fair Price Shops  which causes hurdles to the routine functioning of shops.

4.       Workers in Fair Price Shops run by Co-operative societies get lesser wages than TNCSC staff.

5.       Politicians and anti-social elements interfere in effective functioning of PDS.

6.       Delay in issue of new/ renewal of ration cards.

7.       Corruption prevails at every opportunity.

8.       Diversion of PDS commodities to Open Market.

9.       Flying squad and vigilance action on PDS is not effective.

10.     Bogus ration cards exist.

11.     Sales Personnel of FPS are threatened by local rowdies and anti-social elements.

12.     Majority of Fair Price Shops do not have enough space.

13.     Irregular timing of FPS.

14.     Commodities are not supplied as per the necessity or needs of the consumers

 

 

 

 

 

 

Annexure B

 

Lok Sabha

 

HIGHER ALLOCATION OF FOODGRAINS THROUGH TPDS

 

          At present, Central Government makes available wheat, rice coarse grains and kerosene under TPDS to the State /UT Governments for distribution through FPS.  Pulses are distributed to the State Governments under the PDS @ Rs.10 per kg subsidy scheme.  In view of the rise in prices of essential commodities witnessed during the recent past, Government has also allocated imported edible oils to State/ UT Governments.  States are free to distribute the oil through whatever outlets they decide on.

 

          The following measures have been taken by the Central Government to enhance allocation of food grains under TPDS to States /UTs:

 

1.       Allocation of foodgrains under TPDS:-

 

I.       BPL /AAY allocation norms

 

 

II.      APL allocation

          Allocations under APL category are made depending upon the availability of stocks of food grains in Central Pool and past off take.  Due to declining stock position of food grains in the Central Pool, allocations of wheat and rice to States /UTs under APL category were rationalized on the basis of past off take and availability food grains in the Central Pool. Presently, these allocations range between 10 kg and 35 kg per family per month in different States / UTs.

 

v     During 2009-10, a quantity of 190.20 lakh tones of food grains have been allocated to States /UTs under APL Category as against 112 lakh tones during 2008-09.  This includes the following additional allocations made to augment availability of food grains in the States /UTs with a view to keep prices under control.

 

(i)    A total quantity of 2.65 lakh tones of wheat at MSP based price and 1.70 lakh tons of rice at MSP derived issue price allocated from April 2009 to September 2009 to various States / UTs as adhoc / additional /festival allocations.

 

(ii)  Allocations for drought relief: 

          A total quantity of 7.63 lakh tones including 1.45 lakh tones or rice have been issued at MSP based / derived price as drought relief for APL families in 12 drought affected States from September to December 2009.

 

          Over and above the TPDS allocations of 190.20 lakh tones mentioned above, the following allocations of food grains have also been made during the year.

 

Allocations for flood relief :

v     Additional allocations of 63000 tons of rice and 20000 tonnes of wheat have been made for flood relief to Andhra Pradesh, Assam, Karnataka and UP during the current year so far.

 

Additional allocations on requests of State Governments :

v     Over and above TPDS allocations, 8000 tons of wheat and 4.41 lakh tones of rice have been allocated to the States / UTs at economic cost based on the request received from these States / UT Governments.

 

Besides the above, the Government has released 10 lakh tons of wheat and 5 lakh tones of rice for distribution to retail consumers and 5 lakh tones of wheat for bulk consumers under OMSS during October to December, 2009 to check inflationary trends in food economy.

 

2.       Measures taken for strengthening of TPDS:

          A number of measures have been initiated by Department of Food & Public Distribution to strengthen TPDS which include improved monitoring and vigilance, increased transparency in functioning of TPDS, use of information and communication technology tools and efficient operations of FPS.  These measures include :-

 

A.   Measures to strengthen monitoring and vigilance:

(i)  Implementation of the Nine Point Action Plan

(ii)  Review to detect and eliminate bogus ration cards and action     

      against   those with Bogus Ration Cards.

(iii) Greater involvement of Panchayati Raj Institutions (PRIs)

 

B.   Increased transparency in functioning of TPDS:

(i)  Adoption and implementation of revised Model Citizens’

     Charter to facilitate use of Right to Information Act.

         (ii)  Introduction of monthly certification of delivery of food grains

      at fair price shops and their distribution to ration cards

      holders.

(iii)  Publicity –cum-awareness Campaign on TPDS.

(iv)  Display of allocation of food grains –district and FPS wise on

       websites for public scrutiny.

 

C.   Use of ICT tools

(i)  Pilot Scheme on Computerization of TPDS Operations in 

     four States.

(ii)  Pilot Scheme on Smart Card based Operations in Haryana 

       and Chandigarh

(iii) Piloting of new technologies for tracking movement of

                 vehicles Transporting TPDS Commodities.

 

D.   Improve the efficiency of FPS operations

(i)  Doorstep delivery of food grains to FPS.

(ii)  Timely availability of food grains at FPS

(iii) Distribution of wheat flour / fortified wheat flour under TPDS.

(iv)  Allotment of Fair Price Shops to Institutions and Groups

(v)  Sale of non-PDS items by FPS.

(vi) Revision of Commission paid by State Government to

      FPS licensees.

 

3.       To improve functioning of TPDS, especially during the period of drought, State /UT Governments have been directed to take up a special campaign during October-December, 2009 to verify BPL and AAY ration cardholders to detect and eliminate bogus / ineligible ration cards.

 

          This information was given by Prof. K.V. Thomas, Minister of State for Agriculture, Consumer Affairs, Food & Public Distribution, in written reply to a question in the Lok Sabha today.

 

 


 

[1] Annual Report 2007-2008, pg 29 , Department of Food and Public Distribution (Government of India)

 

 

UID & PDS System ANNEXURE-C (Click here to view)