EFFICIENCY EFFECT OF

DEVELOPMENT PROGRAMME
DOES NOT SATISFY THE
REDISTRIBUTING EFFECT
EQUALLY

Group: Aditya a. Pungavkar.Basudutta Sarkar.

Murali T.V.Amol S. Holey.

SEMINAR II
EFFICIENCY EFFECT OF DEVELOPMENT PROGRAMME DOES NOT SATISFY THE REDISTRIBUTING EFFECT EQUALLY

Topic: EFFICIENCY EFFECT OF DEVELOPMENT PROGRAMME DOES NOT SATISFY THE REDISTRIBUTING
EFFECT EQUALLY .

Group: Aditya a. Pungavkar.

Basudutta Sarkar.
Muraly T.V.
Amol S. Holey.

Efficiency:

Efficiency is ‘doing the thing right’ – it defines whether the developments are completed using
the least resources, in the shortest time possible and for benefit of the people.

Effectiveness means conducting the right activities and applying the best strategies for
competitive advantage.

Efficiency vs. equity:

 Efficiency means that society is getting the most it can from its scarce resources. A more
efficient society can produce more with the same amount of resources. Equity means
that the resources are distributed fairly among the individuals.
 When government designs its policies, society is making use of its resources and also
the outcome is well distributed among the citizens.
 It is seen in Indian context that in some cases the beurocrats of the society are enjoying
the benefits and the benefits are not coming to the common people in the same way.

Basics of Indian economic models after independence

 The basic Indian economy was low input agrarian economy
 Not capable of yielding much of surplus
 Way we choose for development was intensification of agriculture, irrigation,
industrialisation of large resources like petroleum, coal, hydro-electric power, steel,
cement mostly to promote manufacturing sector.

Soviet model: The basic soviet model involves the mocking up the rural or country side areas
and setting up the large industries. The model involves the direct intervention of state or nation
but the system involved various flaws Mr Jawaharlal Nehru could realise those and while
following the model in India he allowed the participation of private sector. This decision didn’t
worked out because the private sector has basic priciles like more profit in less investment.

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Examples :

1. Land reform

 Lack of consistent track record to support land reform outcome, especially when carried out
under corruption or resulting in collective or socialized ownership (rather than smallholder
title); for example, in Zimbabwe, an "aggressive" "land reform" plan[2] has led to a collapse
of the economy and 45 percent malnutrition.

 Equity issues of displacing persons who have sometimes worked hard in previous farming
of the land.

 In UP, as in many other parts of the country, former feudal lords still own hundreds of acres
of land either by exploiting legal loopholes or through illegal strategems.

 Official data would have you believe that most of the large land-holdings have disappeared
in the past half-century, that there is greater equity and there is no room left for any
meaningful redistribution of land. But the reality is just the opposite. The absolute landless
and the near landless (those with less than half an acre of land) make up 43 per cent of
rural households in India.

 Poverty and much of the violence and extremism in the country are even today highly
correlated with lack of access to land.

 An extreme case in point is the state of Bihar. Rich in natural resources, this state in eastern
India is one of the poorest and grabs headlines every time there is”caste carnage". The lack
of development in Bihar is due to the almost total failure to implement land reforms and
the lack of any real mass movement against the existing land holding system.

Examples:

Saltlake land distribution

 It was a marshy land
 Investments done to drain out the water
 Land sold on the political influence on 10% of the market rates(to the Bureaucrats)
 Whereas common people bought land in a very high price.

Operation barga In west Bengal (land reform schemes)

 Operation Barga was a Land Reforms movement throughout rural West Bengal for
recording the names of sharecroppers (bargadars)
 Avoiding the time-consuming method of recording through the settlement machinery.
 Small scope and inability to solve all the major problems.
 policies not accounting for the high landmass-population ratio in Bengal

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 The small and highly segregated land holding patterns and failure of the Government to develop
agri-industrial markets for farm produce
 These failures, have distributed poverty rather than creating prosperity
 The unsatisfactory performance of these bargadars was due to their poor resource base and lack
of access to modern technology and to capital market with the resultant inability to acquire
material resources.
 Operation Barga was also criticized for being anti-landowner, and providing some draconian
measures that could be misused.

Narmada valley:
 Indira sagar dam constructed in Narmada valley
 Conflicts between NHDC and local people
 Issues: acquisition of land, valuation of property, unsettlement of compensation
 Diplaced residences are often exploited harassed
 700 year old town Harsud destroyed fully in 2004
 Displaced people were without infrastructures, schools, electricity, hospitals
 No means of earning livelihood
 No schemes for compensation
As against this it can be said that:
 The Narmada dam's benefits include provision drinking water, power generation and
irrigation facilities. However, the campaign led by the NBA activists has held up the
project's completion.
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 NBA supporters have indulged in physical attacks on local people who accepted
compensation for moving.
 Narmada Dam protesters are little more than environmental extremists who
use pseudoscientific agitprop to scuttle the development of the region.
 The dam will provide agricultural benefits to millions of poor in India.
Rehabilitation and Resettlement
Construction of dams does not always create problems. There are examples of successful
rehabilitation projects. One such is the Tehri dam Project:
 The rehabilitation of Tehri town - The New Tehri town is probably the most well planned
and properly designed hill station since independent India.
 About 5,300 families are rehabilitated and resettled with modern urban facilities.
 Many technical teams including the Three Georges Project of China have visited the
resettlement and rehabilitation site of THDC.
 Some families are also rehabilitated and resettled at Rishikesh and Dehradun, as per
their option apart from compensation for their existing shops and other structures at
the old Tehri town.
 The rural displaced are compensated through allotment of agriculture land of 2 acres or
cash in lieu thereof and resettled in large blocks so that the fabric of their social life
remains intact.
 The displaced or their representatives were involved to the extent possible in selecting
the rehabilitation centres and the preference was given to the displaced for settlements
at a particular location.
 Furthermore, the community facilities are provided at each of the rural rehabilitation
centres for about 9,240 families if these did not exist at their earlier settlements.
 House construction assistance to the old Tehri town land owners, provisions of
constructed flat at lower rates, goodwill grant to the shop keepers of old Tehri town,
cash grant for advocates of old Tehri town, and grant to rural farmers for the purchase
of seeds and fertilizers are additional facilities provided by the project to the affected
people during their rehabilitation and resettlements.

2. Food security

 “Food security refers to a situation that exists when all people at all times have
physical, social and economic access to sufficient, safe and nutritious food that
meets their dietary needs and food preferences for an active and healthy life,” says
an FAO report ‘State of Food Insecurity in the World, 2001’

 The National Food Security Act has failed to reform the discriminatory public
distribution system leaving many high and dry.
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 A concept note on the proposed National Food Security Act circulated to all states
continues to push for a targeted public distribution system instead of a universal one,
and proposes to reduce the issue of foodgrains to 25 kg per BPL household,
completely ignoring the contentious issue of who is poor and what an adequate and
nutritious diet consists of.
 At a public hearing on the public distribution system (PDS), held before the Justice
Wadhwa Committee in Bangalore in December 2008, Sarojamma, a single parent
with four children (one of whom is mentally disabled) pleaded for a below the
poverty line (BPL) ration card. She had been given an above the poverty line (APL)
ration card as she is a garment worker earning Rs 3,500 per month. The APL ration
card fetches her only kerosene and no foodgrain in Karnataka.
 "Almost 50% of its children are malnourished and 75% of its women suffer from
anaemia; and per capita food availability has actually decreased"
 While it sports a high growth in GDP, it ranks 66th in a list of 88 countries on the
World Hunger Index.
 While civil society is clamouring that the PDS be universalised, without any
distinctions between BPL and APL, so that the poor get self-selected as it was earlier
when the country was growing at the Hindu rate of growth of about 3%, the concept
note seeks to make the targeted PDS statutory.
 "If universalisation of the PDS is not accepted, those earning less than the minimum
wage need to be considered poor"
 The targeted PDS is costly and gives rise to a lot of corruption in the process of trying
to decide who is and who is not poor. This results in the genuinely poor being left out
whilst the ineligible get several cards.
 The concept note does not mention the word ‘malnutrition’ at all; it completely
ignores the contentious issue of defining who is poor and how much and what
constitutes ‘adequate and nutritious food’
 Reduction in BPL numbers
 While civil society demands that BPL cards be updated every year in order to capture
those who have slide back into poverty due to various exigencies like debt, drought,
displacement, etc, the Centre is talking about annual updation only to seek out those
who have risen above the poverty line, with the aim of taking away their BPL cards.
 Mid day meals at schools: poor quality food, sometimes no food, sometimes
children are getting sick after having it. With this, the government seemingly wishes
to wash its hands of any accountability ensuring the right to food to all its citizens"

3. MDG – sarba shiksha abhiyan

 Only 120 million children of total 203 million are going to primary school.
 Children from disadvantaged families are at the bottom of heap where the girl
children from such families are uniquely disadvantaged position.
 Literacy rate increased from 43.57% in 1981 to 52.2% in 1991 to 65.4% in 2001 but
absolute number of illiterates rose from 424.2 million in 1981 to 479.2 million in
1991.

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 Educational status for SC and ST disproportionately low.

 In the case of SC and ST children the rate of drop outs is 50% at primary stage and
70% at upper primary stage whereas in case of general students it is 30% at primary
stage and 50% at upper primary stage.
 A national study shows that young visually impaired students fare extremely poorly in
government schools under Sarva Shiksha Abhiyan.

Reason: Inexperienced teachers and shortage of appropriate equipment. Over 35%

students did not even have Braille slates, a basic instrument for elementary
education for the blind.

As against this the Sarba Shiksha Abhiyan has shown positive results in a number of cases like:

 Bhonga Shala -bringing the schools to the children.

Bhonga shala is an innovation to provide education to children from brick kilns in
Thane district of Maharashtra.
 Vidhayak Sansad, a local NGO started five Bhonga Shalas in 1995 in two blocks of the
district. Today, with support from SSA Maharashtra, there are as many as 250 such
centres in 7 blocks of Thane district.
 These are catering to the educational needs of more than 5000 children from the
brick kilns. Bhonga shalas ensure that education continues, and is not hampered due
to migration. For the entire brick kiln season (December to May) primary level
(standard I-IV) education is provided at the brick kiln site through these centres.

4. Farmer’s suicide:

 Over 1,500 farmers in an Indian state committed suicide after being driven to debt by
crop failure
 The crop failures, which took place in the agricultural state of Chattisgarh, were
prompted by falling water levels.
 Nearby forest depletion and poorly planned government dam projects contributed to
the falling water level
 Combined with the vicious money-lending schemes that are prevalent in the region,
many farmers felt that death was the only option in the face of insurmountable debt.

Government’s response and bigger reasons behind the suicides:

 Prime Minister Manmohan Singh visited Vidarbha and promised a package of Rs.110
billion to be spent by the government in Vidarbha. The families of farmers who had

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committed suicide were also offered an ex gratia grant to the tune of Rs.100, 000 by
the government.
 One of the reasons behind the suicides was the falling Minimum Support Price for
cotton. The problem is complex and root causes include lopsided policies of the
World Trade Organisation and developed nations' subsidies to their cotton farmers
which make Vidarbha's cotton uncompetitive in world markets.

5. The incessant floods, manipulation of prices by traders, supply of spurious pesticides

and seeds, decline in prices of agricultural produce, increase in the cost of agricultural
inputs, successive drought in recent years, and of course, the neglect of farmers by the
previous state government.

6. Unemployment

To generate employment among the rural poor, the Government has introduced certain
schemes such as:

 Integrated Rural Development Program (IRDP)

 Training Rural Youth For Self Employment (TRYSEM)
 Swarnajayanti Gram Swarojgar Yojana (SGSY)
 National Rural Employment Guarantee Scheme (NREGS)

Rural poverty in M.P.

 One of the least developed states

 Second most populated state
 Has lowest HDI at Jhadua which is 0.371
 Unemployment rate 11%-13% in spite of government employment generation
scheme.
 86% are in paid employment in agriculture with Rs. 5046 per annum.

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As against this scenario, these schemes have shown certain positive results as:

 Since 1980, upto 1998- 535 Lakh families benefitted through IRDP.
 SGSY was a holistic package covering all aspects of employment. A number of projects
were undertaken to generate employment. Some of these projects from Himchal
Pradesh are:
o Installation of Hydrams- 268 hydrams has been procured out of which 208
hydrams have been installed.
o Marketing of rural goods- upto 2008 10 Gramin Bhandars were completed, 8
near completion and 12 were under progress.
o Milch Livestock Improvement- in Solan district 9595 cattle have been treated in
95 field level camps, 12,273 breeders have been trained and 6715 Qt fodder
seed have been distributed to farmers.
 Through NREGS 100 day’s employment has been guaranteed to the rural poor. A
number of development works were undertaken under this scheme to generate
employment:
o Construction of roads, ponds, protection walls against floods, bunds etc.

7. Effects of mechanised fishery industries

Until independence coastal waters of India were fished by local fishermans. Fish was
relatively inexpensive and also was used as manure for coconuts orchards.

 Due to over fishing- Decline of fish catching

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 Fishermans facing poverty

 Fish became more expensive

 Less consumption by poor people

 Use as manure stopped

8. Koyana Dam : Koyana dam constructed in western ghats of maharashatra. The western
ghats known for its scenic beauty. The dam displaced many local habitants also the
hydroelectric power from dam mainly diverted to metro cities like Mumbai and rest
areas are deprived. Also many earthquakes happened in surrounding areas due to the
dam, the local people have to bear the damage and the rest class enjoying the benefits.

But the dam has provided irrigation to many agricultural regions. The electricity
generated is used in development works. The theory of the dam being the reason
behind is quite questionable and many prominent scientists have spoken against this
theory.

9. Housing

 According to the 1991 Census, housing shortage in India was 137 lakh and according
to 2001 Census it was 149 lakh. 10 lakh shelter less are added each year. To meet
these demands the Government has introduced certain schemes like Indira Awas
Yojana (IAY)

 Indira Awas Yojana (IAY) was introduced in 1985- 86 for BPL SC, ST and freed bonded
labourers. In 1993 it was extended to cover even non SC, ST upto 40%.

 Under this scheme construction assistance of Rs 35,000 per unit in plain areas and Rs
38,500 per unit in hilly areas is provided.

 Sanitary latrine, smokeless chulla and proper drainage are provided for each unit.

 Beneficiaries are to build their houses themselves- eliminating possibilities of

corruption and increasing the sentimental values of the house.

 The choice of design, technology and materials are left to the discretion of the
beneficiaries.

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 The households are allotted in the name of the female members- providing social
security to women.

 Some portion of the budget is allotted exclusively for North Eastern States, physically
and mentally challenged and for natural calamities. Rs 400 Crore were sanctioned for
flood affected districts of Bihar in 2004- 05 and Rs 200 Crore for Tsunami affected
areas.

 Performance under IAY- 131 lakh houses were constructed upto 31st Dec 2004.

YEAR FUNDS UTILISED TARGETS HOUSES CONSTRUCTED/

UPGRADED
(CRORES) (LAKHS)
(LAKHS)

2002- 03 2795 13.14 15.48

2003- 04 2580 14.84 13.61

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9 Ecological imbalances: Chambal valley development project

 Chambal valley development project has three dams namely- Gandhi Sagar, Rana
Pratap Sagar, Jawahar Sagar
 The water is distributed in Madhya Pradesh and Rajasthan
 Surface water harvesting was banned in any catchment area near Gandhi sagar,
which resulted in unbalanced development of irrigation facilities.
 Farmers left with only one source i.e. ground water to meet their increasing needs of
irrigation.
 Ground water table fill sharply and now most of the blocks of malwa are becoming
either dark or grey.

Reasons.

Creation of schemes without knowledge of ground reality.

Lack of education and awareness amongst the people.

Social factors are never considered.

Involvement of people.

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Murali TV and Amol

A concern for equity has long been an important aspect of economic analysis. Adam Smith
quotes,

“No society can surely be flourishing and happy, of which the greater part of the members are
poor and miserable. It is but equity, besides, that they, who feed, clothe and lodge the whole
body of the people, should have such a share of the produce of their own labour as to be
themselves tolerably well fed, clothed and lodged”.

Right to Equality (Article 14, 15, 16, 17 and 18 of Indian Constitution)

It is the principle foundation of all the other rights and liberties. It is one of the six fundamental
rights that have been granted to us in the Indian constitution

 Equality before law

 Social Equality
 Equality in public employment
 Abolition of Untouchability

These fundamental rights for Indians are aimed at overturning the inequities of past social
practices. They have been used in successfully abolishing prohibit discrimination on the grounds
of Religion, Race, Sex and also the forced labour.

It also states that State shall not discriminate against any citizen

 Special provision for women and children

 Nothing shall prevent the state from making any special provision for the advancement
of any socially and educationally backward classes of citizens or for SC and ST.
 Equal opportunities for all citizens in matters relating to Employment, Education and
Socially.

Government of India and also State governments are coming up with various policy measures
to minimise the disparity between poor and the rich by implementing those policies and socio-

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economic schemes to ensure the redistribution equally among all the strata of the society is
effectively achieved. Some of them are discussed in this paper.

1. Land Reforms (Agrarian reform)

Land reforms may consist of a government-initiated or government-backed real estate property

redistribution, generally of agricultural land. Land reforms are an attempt by the Government
to achieve social equality and optimum utilization of land by redistributing the land holdings.
These reforms are intended to eliminate exploitation and social injustice within the agrarian
system, to provide security for the tiller of the soil and to remove obstacles arising from the
agrarian structure that has been inherited from the past.

Concern over the value of Land Reform is based upon the following:

 Lack of consistent track record to support land reform outcome, especially when carried
out under corrupt auspices or resulting in collective or socialized ownership (rather than
smallholder title);

 Question of experience and competence of those receiving land to use it productively

 Equity issues of displacing persons who have sometimes worked hard in previous
farming of the land

 Question of competence of governmental entities to make decisions regarding

agricultural productivity

 Question of miring a country in vast legal disputes from arbitrary property distribution

 De-motivation of any property owners to invest in land that ultimately can be seized

Consequently, land reform most often refers to transfer from ownership by a relatively small
number of wealthy noble owners with extensive land holdings (e.g. plantations, large ranches,
or agribusiness plots) to individual ownership by those who work the land.

Land Reform has encompassed the transfer of land from ownership even peasant ownership in
smallholdings to government-owned collective farms.

Land reform was especially popular as part of decolonisation. It was an important step in
achieving economic development in many third world countries. It gives a sense of ownership
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to the peasants which lead to more production of land. The production has approximately
raised by 20 %. Land Reform policies are generally advocated as an effort to eradicate food
insecurity and rural poverty.

the cumulative position of implementation of the ceiling laws as regards to area declared
surplus, area taken possession, area distributed and number of beneficiaries during the last two
decades is indicated below to have a comparison with the latest figure as may be seen in Table

Table (Lakh Acres)

Pre-revised revised As on As on As on As on As on
ceiling laws 31.3.80 31.3.85 31.3.90 31.3.95 30.9.98

Area declared surplus 69.13 72.07 72.25 74.10 73.74

Area taken possession 48.50 56.98 62.12 65.42 65.11

Area distributed 35.53 42.64 46.47 51.46 53.05

No of beneficiaries 24.75 32.90 43.60 49.94 55.37

Distribution of Government Wasteland and Bhoodan Land

In addition to the distribution of 53.05 lakh acres of ceiling surplus land, figures collected from
the States/ UTs show that an area of 147.44 lakh acres of Government Wastelands has also
been distributed amongst landless rural poor. However, the quantum of land reported by the
States as distributed during 1998-99 till December 1998 is 2.48 lakh acres.

Prevention of Alienation and Restoration of Alienated Tribal Land

Article 46 of the Constitution enjoins an obligation upon the States to promote the interests of
the Scheduled Castes and Scheduled Tribes and to protect them from social injustice and all
forms of exploitation. The State Governments have accepted the policy of prohibiting the
transfer of land from tribals to nontribals and for the restoration of the alienated land to the
tribals. The States with large tribal population have enacted laws prohibiting alienation of tribal

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land and for restoration of alienated land. The legal provisions are however, generally
applicable to the tribals living within the Scheduled and notified areas. As per reports from 11
States on the aforesaid subject 4.65 lakh cases of tribal land alienation have been registered so
far covering 9.18 lakh acres of land, of which 2.02 lakh cases have been disposed of in favour of
the tribals covering a total area of 5.31 lakh acres of alienated land.

Consolidation of Land Holding Programme

Consolidation of Agricultural Holdings forms an integral part of land reforms policy and Five
Year Plans have accordingly been laying stress on the importance of its implementation. This
operation is considered necessary for planed development of villages and achieving efficiency
and economy in agriculture. In pursuance of this strategy, a number of States have enacted
legislation of carrying out consolidation of holdings. In the State of Uttar Pradesh, where
annually about 900 to 1000 villages are being covered under the programme. So far an area of
1583.45 lakh acres or 640.81 lakh hectares have been consolidated in the country.

Agriculture production

Due to the redistribution of agricultural land to the needy and the poor which imparts them
social security and also food security to the family at the micro level. Then all people will have
both physical and economical access to sufficient food to meet their dietary needs for a
productive and healthy life.

Increase in agricultural productivity has manifold advantages which help in improving the rural
economy by influencing activities like

 Milk dairy products

 Live stock and Animal husbandry
 Consumption of Fertilisers and Pesticides
 Poultry
 Cold storages
 Savings

By encouraging such economy generation activities Rural economy is catapulted to new heights
and directly contributes to development of market infrastructure in the cities.

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2. JNNURM

There are two types of Reforms prescribed in the Guidelines of JNNURM

1. Mandatory reforms
Provision of basic services to urban poor including security of tenure at the affordable
prices improved Housing, Water supply, Sanitation and ensuing delivery of other
services for Education, Health and Social security.
2. Optional reforms
Earmarking at least 20-25% of developed land in all housing projects (both Public and
Private Agencies) for EWS/LIG category with a system of cross subsidization.

3. Gender and Land rights

Karnataka, Tamilnadu and Andhra Pradesh has amended Hindu succession act, 1956 which has
formalised women’s right to property including land. Government of Karnataka has off late
issued guidelines to all Plot/House allotting agencies in the state especially in the case of EWS
and LIG schemes, the property should be either registered in the name of women head of the
family or both Husband and Wife.

4. Taxation

Taxation has four a main purpose or effects: Revenue, Redistribution, Repricing, and
Representation.

 The main purpose is revenue: taxes raise money to spend on roads, schools and
hospitals, and on more indirect government functions like market regulation or legal
systems. This is the most widely known function and also a indirect way of redistribution
function.
 A second is Redistribution. Normally, this means transferring wealth from the richer
sections of society to poorer sections.
 A third purpose of taxation is repricing.
 A fourth, consequential effect of taxation in its historical setting has been
representation.

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Governments use different kinds of taxes and vary the tax rates. This is done to distribute the
tax burden among individuals or classes of the population involved in taxable activities, such as
business, or to redistribute resources between individuals or classes in the population. Modern
social security systems are intended to support the poor, the disabled, or the retired by taxes
on those who are still working. Governments also use taxes to fund welfare and public services.
These services can include education systems, health care systems, pensions for the elderly,
unemployment benefits, and public transportation. Energy, water and waste management
systems are also common public utilities which is also part and parcel of redistribution process.

A progressive tax is a tax by which the tax rate increases as the taxable base amount increases.
"Progressive" describes a distribution effect on income or expenditure. The term is frequently
applied in reference to personal income taxes, where people with more disposable income pay
a higher percentage of that income in tax than do those with less income. It can also apply to
adjustment of the tax base by using tax exemptions, tax credits, or selective taxation that would
create progressive distributional effects.

A progressive tax reduces income inequality, which has been reported to have a number of
societal benefits, at all income levels.

5. Public Distribution System (PDS)

India’s Public Distribution System (PDS) with a network of 4.78 Lakh Fair Price Shops (FPS) is
perhaps the largest retail system of its type in the world. Since 1951 public distribution of food
grains has been retained as deliberate social policy by India with the objectives of:

(i) Providing food grains and other essential items to vulnerable sections of the society at
reasonable (subsidized) prices

(ii) To put an indirect check on the open market prices of various items and

(iii) To attempt socialization in the matter of distribution of essential commodities

PDS is an important constituent of the strategy for poverty eradication and is intended to serve
as a safety net for the poor whose number is more than 33 Crores and are nutritionally at risk.
PDS is operated under the joint responsibility of the Central and the State Governments. The

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EFFICIENCY EFFECT OF DEVELOPMENT PROGRAMME DOES NOT SATISFY THE REDISTRIBUTING EFFECT EQUALLY

Central Government has taken the responsibility for procurement, storage, transportation and
bulk allocation of food grains, etc.

Food Subsidy

Food Subsidy is provided in the budget of the Department of Food and Public Distribution to
meet the difference between the economic cost of food grains and their sales realization at
Central Issue Prices for TPDS (Targeted PDS) and other welfare schemes. In addition, the Central
Government also procures food grains for meeting the requirements of buffer stock. Hence,
part of the food subsidy also goes towards meeting the carrying cost of buffer stock. The
subsidy is provided to FCI under TPDS and other welfare schemes and for maintaining the
buffer stock of food grains as measure of food security. The quantum of food subsidy depends
on the level of procurement of food grains and off take under TPDS and other welfare schemes.
The budgetary estimate for food subsidy during 2008-09 was about Rs. 37,000 Crores.

PDS System Today

The TPDS system today supports over 40 Crore Indians below the poverty line with monthly
supply of subsidized food grains. The system also provides gainful employment for 4.78 Lakh
Fair Price Shops Owners, their employees and hired labour who work at the FCI and state
warehousing godowns. PDS also has become a cornerstone of government development policy
and is tied to implementation of most rural development programs. PDS is also a key driver of
public sentiment and is an important and very visible metric of government performance.

Conclusions
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EFFICIENCY EFFECT OF DEVELOPMENT PROGRAMME DOES NOT SATISFY THE REDISTRIBUTING EFFECT EQUALLY

It is the fund crunch, delay in flow of funds, lack of capacity, non availability of skilled
manpower, Intra / Inter organisational problems that hampers the redistribution process.

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