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  • Jul 12, 2014
  • Updated: 5:02pm
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INDIA

Cheating the hungry: corruption in India’s food scheme

PUBLISHED : Wednesday, 28 August, 2013, 4:22pm
UPDATED : Wednesday, 28 August, 2013, 4:24pm

The Indian government’s new US$19-billion food scheme to feed two thirds of the population, as well as the ruling party’s political fortunes, depend in large part on hundreds of thousands of shopkeepers such as Brij Kishore.

The 52-year-old has been running his Fair Price Shop, a government food dispensary, for more than 30 years from a one-storey warehouse in the northern district of Jahangirpuri in New Delhi.

Rough-hewn sacks of wheat, rice and sugar, which are sold for as little as two rupees (HK$0.23) per kilo, are piled ceiling high, bearing the markings of government warehouses in neighbouring Haryana state.

Several bags are emptied out on the floor by Kishore’s assistant, who in between serving customers with a large scoop, kicks back the tide of grain with his dirty sandals.

We have been getting 20 kilos of wheat and five kilos of rice and the wheat is full of dirt

Under new legislation passed in the lower house of the national parliament on Monday, about 800 million people will be entitled to five kilograms per month of subsidised grains from shops like these.

But the current distribution system is dogged by complaints from customers that they are routinely shortchanged on their rations by shopkeepers, who then sell the extra grain on the black market to help compensate for their own thin earnings.

“We are working on a non-profit basis,” complains Kishore, estimating his monthly income at about 8,000-10,000 rupees (HK$900-1,100). “But it’s forced on us because we don’t have a choice.”

As a result, corruption “happens everywhere ... In some places, it’s worse than others,” he says.

The scheme – which will add 230 billion rupees to India’s annual food subsidy costs – is designed to tackle deep-rooted malnutrition that still afflicts an estimated 42 per cent of Indian children.

Deaths caused by starvation are rare but still a reality in contemporary India and images of stunted and malnourished children have become a source of shame for the government of an aspiring superpower.

But as Kishore’s customers leave his shop, often carrying one large sack by hand and balancing another on their heads, they are eager to share their frustrations with the public distribution system.

Santosh, a 35-year-old mother who feeds four children and an unemployed husband at home, says she is routinely deprived of 10 kilograms of grains that she says are then sold on the black market.

“We have been getting 20 kilos of wheat and five kilos of rice and the wheat is full of dirt,” she spits.

Her complaints are echoed by others, who say that their grievances go unacknowledged by local administrators.

Kishore admits that he sells the “surplus” rations left behind each month, which he says is a necessary addition to his meagre income.

He cuts a dejected figure as he explains how the commission he receives for selling 35 kilos of produce to a client is about 12 rupees and it hasn’t budged in years.

The shopkeeper is part of the world’s biggest food distribution system for the poor, which already covers 100 million “below poverty line” families and another 140 million “above poverty line” families, official data shows.

Any Indian family can apply for a ration card at present and receive 35 kilos of subsidised grain, an official in the food ministry explained, adding that the new legislation will cover 67 per cent of the total population.

“So the coverage will be more targeted,” he said.

As well as changing the criteria for the entitlements – hand-outs will be mostly per capita instead of per family – the prices at Fair Price Shops will be reduced to as little as one rupee per kilogram.

Indian consumers have been reeling from rocketing food prices for most of the government’s term and voters have told pollsters that the cost of basic goods is foremost among their concerns ahead of elections next year.

We have been getting 20 kilos of wheat and five kilos of rice and the wheat is full of dirt
Ashok Gulati, CACP

But the popularity of the programme, which was temporarily activated as an executive order by the president in July, will depend on the inefficient national network of public granaries, transporters and 500,000 ration shops.

One widely quoted study published in 2005 by the Planning Commission, a government advisory body, found that 58 per cent of grains in the Public Distribution System (PDS) failed to reach their intended destinations.

Ashok Gulati, chairman of government’s Commission for Agriculture Cost and Prices (CACP), describes the PDS as like “carrying a bucket full of water that is 40 per cent broken.”

“The biggest challenge is not restructuring, the biggest challenge is plugging the leakages,” he said.

An additional five million tonnes of publicly procured food grains will be pumped into the PDS to meet the new demand in the current year.

Arvind Subramanian, an economist, wrote recently that “it’s as if an emaciated, old man struggling to carry a load of stones is asked to carry another load because that will strengthen his muscles.”

Other recent surveys have found improvements in the system, however, with the central state of Chhattisgarh emerging as an example for the rest of the country on how to make changes.

A large study in nine states in 2011 found that 97 per cent of eligible respondents received their quota there, compared with just 18 per cent in impoverished northern Bihar.

Economist Jean Dreze, who advised the government on the legislation in the early stages, agrees it could have forced more reforms of the PDS. The fact the system it is not computerised he says is a “scandal.”

But he says people will be more aware of their entitlements and the system will make better use of the millions of tonnes of food grains which the government is already committed to buying from farmers.

“The state governments are coming under a lot of pressure. I think there’s a chance that it will lead to huge improvements in the effectiveness of the PDS,” he said.

“It addresses a huge thing that is holding back the country economically and in terms of human welfare,” he added.

 

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