By K.R. Balasubramanyam
Risaldar Street is a little known Bangalore locality situated about a kilometre from the city's main railway station. It has only one fair-price shop. More than a third of its 3,000-odd ration card holders belong to families living below the poverty line (BPL). But the fair-price shop now has one claim to fame - it is one of a handful of shops through which the Karnataka government has taken its first steps towards reforming its leaky public distribution system (PDS).
Consider the scene at the shop one evening in the last week of August. As usual, a group of people had gathered to buy their rationed monthly quota of foodgrains, sugar and kerosene. Among them was Sujatha, a helper at a hotel, in her mid-30s. When she handed over her ration card to the shopkeeper, he did not, as he used to once, scribble on it and return it to her. Instead he punched the card number into a biometric machine installed at the shop three months ago. The woman was then asked to put her left thumb on the machine, which promptly recognised her thumb impression as that of a genuine beneficiary. As each item Sujatha sought was placed on the weighing platform, the machine not only displayed the list of purchases along with their weight and price, but also announced these verbally in Kannada. Finally, the transaction complete, it printed a bill.
The process does not end there. After each transaction, the machine electronically relays its details to a National Informatics Centre (NIC) server, which uploads the data on a newly created portal of Karnataka's PDS data centre. "Not just the officials, anyone from anywhere can access the information," says B.A. Harish Gowda, Karnataka's Food, Civil Supplies and Consumer Affairs Secretary, who has been driving the change. "We can achieve results only by increasing transparency."
Karnataka's move is the latest in a series of efforts by states and the Centre to fix the inefficient system of distributing essential items at subsidised rates to the poor. The PDS is run through more than 500,000 fair-price shops across the country.
The Centre spends a huge amount on food subsidies - it has budgeted Rs 75,000 crore for 2012/13 - but many poor people do not get their allocated quota of grains as the system is notoriously leaky. Some estimates suggest more than half the subsidised grain meant for BPL families is siphoned off.
"Transparency puts pressure on people to perform," says Sudhir Kumar, Union Food and Public Distribution Secretary. "We support all such positive moves, and are in the process of preparing a scheme that will encourage states to take up PDS reforms."
Gowda says the state has installed biometric machines in 103 shops in Bangalore and Tumkur districts since July. He is satisfied with their performance. "We will now start installing them in all the 20,459 fair-price shops in the state," he adds. Karnataka hopes the Centre will help fund the Rs 100-crore programme.
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Gowda estimates there could be around 1.5 million ineligible ration cards in the state, which will go out of circulation once the machines are installed all over. He expects the move to save the state around Rs 150 crore a year.
In the first phase, the Bangalorebased Essae Teraoka is supplying 1,000 machines at Rs 46,011 apiece. "We had feared shop licensees would resist the new system, but things have gone smoothly till now," says its Managing Director S.A. Prabhu Chandran. He is trying to persuade other states such as Tamil Nadu to follow Karnataka's example.
To ensure only genuine beneficiaries buy from the fair-price shops, the state food department has collected fingerprints and photographs of all cardholders and fed the data into a server that links all the machines. To further eliminate fake ration cards, the government has also linked the cards to electricity meter numbers in urban areas and property tax numbers in rural.
Wherever more than one family has claimed the same electricity meter or property tax number, officials have visited the houses and allowed only the ones genuine.
The linking had another tangential effect - it cleaned up land records. "When we shared data relating to property details with village panchayats, it did not match in many cases with what the panchayats had. The panchayats were able to identify more than 200,000 new properties that had not paid taxes," says P.V. Bhat, Senior Technical Director, NIC, Bangalore.
Karnataka is also using its information technology network to ensure fair-price shops lift their allocated stock from warehouses in time. Earlier, many shops would lift the stock only in the last week of each month - since lifting early meant locking up their working capital for a longer period. Today most shops are taking their quotas well in time and state officials keep tabs on the stock position. "A few warehouses had a month's extra stock because many shops postponed lifting by one week every month," says D.N. Jeevaraj, Karnataka's Food and Civil Supplies Minister. "I have instructed that stocks should be lifted by the 10th of every month."
How the new system works
Reproduced From Business Today. © 2012. LMIL. All rights reserved.