K.NAGENDRAN (Reg.No:P3620)

A STUDY ON THE PERFORMANCE OF PUBLIC DISTRIBUTION SYSTEM WITH SPECIAL REFERENCE TO MADURAI DISTRICT

Thesis Submitted to Madurai Kamaraj University for the Award of the Degree of

DOCTOR OF PHILOSOPHY IN ECONOMICS

Submitted by K.NAGENDRAN (Reg.No:P3620)

Under the Guidance of Dr.C.RAJKUMAR, M.A., M.Phil., Ph.D., Assistant Professor, Department of Economics, N.M.S.S.Vellaichamy.Nadar. College, Madurai-19.

MADURAI KAMARAJ UNIVERSITY (University with Potential for Excellence) MADURAI–625021. TAMIL NADU, INDIA.

APRIL 2018 2

SYNOPSIS

A STUDY ON THE PERFORMANCE OF PUBLIC DISTRIBUTION SYSTEM WITH SPECIAL REFERENCE TO MADURAI DISTRICT

India is the home to the largest number of the World’s hungry Sixty-nine years after independence, and nearly four decades after the launch of the Public

Distribution System, (PDS) it is one of the most crucial elements in food policy and food security system in our country. Public Distribution System is considered as a principal instrument in the hands of government for providing safety net to the poor and the downtrodden.1

The system serves the triple objectives namely protecting the poor, enhancing the nutritional status and generates a moderate influence on market prices. The focus and coverage of PDS have changed widely over the years.

Initially, during World War civilian consumption was restricted so as to divert food items to meet the food requirement of defence forces. Subsequently frequent occurrence of drought throughout the country made the planners to think on food shortages. In order to overcome this shortage, ration system came into existence.

1. Sadasivam.K and Senthamarai. C, “Fair Price Shops in Tamil Nadu with Special Reference to Usilampatti Municipality”, Southern Economist, June 1 2012, Vol. 51, No. 3, pp. 39 - 43.

DEFINITION OF PUBLIC DISTRIBUTION SYSTEM

Public Distribution System is the whole or a part of the distribution system, in principle owned and controlled by the public authorities on behalf of the public and run by them for the good of the general public or of a specific group thereof.

Generally speaking, Public Distribution System operates as a complementary system to the private trade which exists side by side.2

IMPORTANCE OF PUBLIC DISTRIBUTION SYSTEM

At the World Food Summit in 1996, 186 countries including India signed a declaration making a commitment to ensure food security for all. Food security was defined as “physical and economic access, at all times, to sufficient, safe and nutritious food (for people) to meet their dietary needs and food preferences for an active and healthy life”. The Summit set a concrete goal of reducing the number of hungry and malnourished persons in the world by one-half by 2015.

Locally these are known as “ration shop” and chiefly sell wheat, rice, kerosene and sugar at a price lower than the market price. However, other essential commodities may also be sold. These are also called Fair Price Shops.

For buying items from this shop one must have a ration card. These Shops are operated throughout the country by joint assistance of central and state

2. Gupta Arvind, “Public Distribution of Food grains in India”, Centre for Management in Agriculture, Indian Institute of Management, Ahmadabad Monograph, 1977, No. 69.

government. No doubt the items from these shops are much cheaper but are of poor quality. Ration shops are now present in most localities, villages towns and cities. India has 478,000 shops constituting the largest distribution network in the world.

STATEMENT OF THE PROBLEM

The Public Distributions System (PDS) is one of the most important and costly welfare programmes in India. The main objective of planning had been removal of inequalities and provision of social justice. Besides this the inflationary situation and the natural calamities faced by the economy also calls for taking up steps to provide necessaries of life through PDS. Thus, the Government had taken up a heavy programme of provision of essential goods through fair price shops especially for the benefit of the weaker sections of the society. The withholding of food grains would increase the open market price, which would hurt the poor more and the very poor the most, since not all poor are covered by the PDS.

The planning commission report says that with a network of more than

4,00,000 FPS, the PDS in India are perhaps the largest distribution machinery of its type in the world. PDS is said to distribute each year commodities RS, 15,000 crores to about 16 crore families. The huge network can play a more meaningful role if only the system is able to translate into micro level and macro level self- sufficiency by ensuring availability of food grains for the poor households. There

is a criticism that the present PDS mostly caters to the needs of the urban people but fails to meet the needs of the rural population. This is true to some extent because of the low purchasing power of the rural population and the seasonal nature of rural employment.

The researcher has analysed with the help of various earlier studies to conclude the unexplained problems of the PDS System the Study area. In Tamil

Nadu Madurai district has number of Population over the years and their living in rural areas so researcher as chosen the sample area in Madurai District.

OBJECTIVES OF THE STUDY

The present study has been undertaken to meet the following objectives

1. To study the Production, Procurement and stock of food grains through Public Distribution System India and Tamil Nadu. 2. To analyse the supply of food grains and number of beneficiaries in the study area. 3. To assess the changes in the level of employment and income, expenditure, saving pattern and indebtedness of the PDS beneficiaries. 4. To assess the issues of Public Distribution System under food safety programme of Madurai District. 5. To suggest the remedial measures for the problem of food supply system in the study area.

HYPOTHESES OF THE STUDY

The Hypotheses of the Study are as follows.

1. Is there any significant between the variable family size and income of the

sample respondents.

2. Is there any significant relationship between the variable savings and

income of the sample respondents.

3. Is there any significant relationship between the variable expenditure and

income of the sample respondents.

4. Is there any significant influence between variable family size on the

preference of PDS commodities.

METHODOLOGY

The present study is based on both Primary and Secondary data.

SELECTION OF THE STUDY AREA

Tamil Nadu is the only state in India practicing the universal system of public distribution in order to ensure food security. Apart from the food grains and essential commodities, in Tamil Nadu the system was extended as special Public

Distribution System. So, it is a special case when compared to the other states. So the researcher has chosen Tamil Nadu for the present study. In Tamil Nadu,

Madurai district was selected for the empirical study because Madurai is the

second largest city of Tamil Nadu. An in-depth study of this type cannot be undertaken in a very large area.

Therefore a district has been chosen for this study which is an administrative unit covering all aspects of the economy and also the district has a blend of various social groups like educated and uneducated, weaker section and non-weaker section, and the like. Hence the researcher analysed the performance of public distribution system in Madurai District. By studying the performance of the public distribution system in the district, it is possible to assess the effectiveness of the public distribution system and the problems indulged in the management of the public distribution system in the study area.

DATA COLLECTION

An Interview schedule was prepared in the light of comments, suggestions and additional information put forth by the Researcher’s guide. Then the interview schedule was pre-tested with ten households to judge the arrangement of questions, format and the like. The interview schedule was again modified to incorporate all the pertinent issues in the schedule for the purpose of bringing it in the present form. For the primary data collection, field work was carried out by the researcher herself.

The secondary data on allotment and off-take of rationed commodities, number of family cards and fair price shops were collected from the District

Supply Office and the Office of the Joint Registrar of the Cooperative Societies,

Madurai District.

SECONDARY DATA

Secondary data, which are not originally collected but are rather obtained form already published or from other unpublished sources. The secondary data required for the study was collected from various sources such, RBI Hand Book of

Statistics on Indian Economy, Economic Survey, various issues of the Journal of

Economic Political Weekly, The Government Records, Assistant Director of

Statistics, Collectorate of Chennai, concerned Panchayat block offices, Tamil

Nadu Journal of Cooperation, Kissanworld, Southern Economist, Kurukshetra, other related books, journals and periodicals.

PRIMARY DATA

The study is mainly based on primary data sources. The primary data has been collected through personal interview schedule method among the selected sample respondents with will structured questionnaire.

SAMPLE DESIGN

In order to study the attitude of consumers towards the supply of essential commodities supplied by the Public Distribution System, a survey was conducted among 300 sample respondents by using a structured interview schedule.

Madurai District comprises 7 Taluks. For the purposes of collecting primary data, Taluk-wise lists of fair price shops were obtained from the District

Supply Office in Madurai. 300 sample respondents were selected by using purposive Random Sampling technique from ten Region in Madurai District.

Out of 7 Taluks, the researcher has selected Two Taluks which is highest and lowest cardholders. i.e., Madurai South Taluk and Peraiyur Taluk. The total sample respondents are 300. Of 300 sample respondents, 150 respondents from

Madurai South Taluk and 150 respondents from Peraiyur Taluk. In Peraiyur

Taluk, 75 sample respondents from T.Kalluppatti shop 1 and 75 respondents from

Peraiyur shop 1. In Madurai South Taluk, 75 sample respondents from Meenashi

Mill (Vasanthannagar) and 75 sample respondents from Madakulam.

PERIOD OF THE STUDY

The field survey was carried out from July 2015 to June 2016 for primary data collection.

SCOPE OF THE STUDY

The study covers the Public Distribution System in Madurai District. It does not cover the PDS in the other Districts of Tamil Nadu.

LIMITATIONS OF THE STUDY

Firstly the study is based on a limited number of samples. Secondly the sample respondents did not cooperate perfectly in providing reliable information.

Moreover it covers only certain aspects of PDS in Madurai District.

CHAPTERISATION The present study related to economic utilization of the PDS in the study area. This Thesis is presented in Six Chapters along with Bibliography and

Questionnaire.

The First chapter deals with the introduction, Objectives of PDS, Growth and performance of PDS at the national level. This chapter also includes the details of the PDS in India and achievements during the different plan periods. It incorporates the Statement of the Research Problem, Objectives, Hypotheses,

Scope of the study, Methodology and the Limitations of the study. Tools of

Analysis.

The Second Chapter deals with earlier studies that have been made and are related to the Public Distribution System and Basic Concepts.

The Third Chapter presents the Profile of The Study Area. It includes

Geographical area, Population, Agriculture, Industry, Infrastructure, Transport,

Communication, Name of Taluks etc.

The Fourth Chapter traces the Origin and Growth of the Public Distribution

System in India and Tamil Nadu.

The Fifth Chapter deals with the analysis and discussion of the data with the functioning of Public Distribution System in Madurai District.

The Sixth Chapter presents a summary and findings along with suggestions and conclusions based on the study.

REVIEW OF LITERATURE

The present chapter reviews the earlier studies on the Public Distribution

System in India in order to identify the gaps in research. The question of food insecurity at the national and state levels in India has received considerable attention ever since the Government of India embarked upon the economic reform programme in 1991. Some of the important issues addressed include: Concept, definition and trends, where the focus has largely been at the macro level. Fiscal dimensions of food subsidy, its magnitude and composition such as consumer subsidy, costs due to operational inefficiency of the state agencies, and so on. We present here the resume of various studies in the area undertaken by several researchers from time to time in India and abroad.

Reetika Khera (2011)3 analyses the functioning of Public distribution in

India. The study estimates the proportion of grain diverted from public distribution system to the open market in the past decade by matching official off take figures with household purchase reported by the National Sample Survey. At the All-India level, diversion of PDS grains remain a serious issue; however, there are

3. Reetika Khera, “Trends in Diversion of Grain from the public distribution system”, Economic and Political Weekly, May 21 2011, Vol. XLVI, No . 21, pp. 106-113.

interesting contrasts at state level. Based on trends in monthly per capita purchase of PDS grain and estimated diversion, states are categorized into three groups-

“functioning”, “reviving” and “languishing” states. This paper also discussed the probable reason for the improvement in the PDS in the reviving states and questions the assessment of the PDS as uniformly and irreversibly dysfunctional.

Peter Svedberg (2012) 4 that pointed out that the targeted public distribution system, indented to provide subsidized food to poor households, is the largest welfare programme in India, with a budget corresponding to about 1percent of the net national product. Several studies have found the system to be inefficient and costly in assisting poor. This paper analyses the case for, and against, replacing a reformed version of this system with a targeted and differentiated cash transfer scheme. Such a scheme could cover about two thirds of households and make far larger transfers to the poorest to the actual subsidy embedded in the current system, eliminating the risk of large exclusion errors. Further, the overall budget can be held at the present outlay level. It is argued that most of the objections to such a transfer scheme can be circumvented at the design stage.

4. Peter Svedberg, “Reforming or Replacing the Public Distribution System with Cash Transfers?”, Economic and Political Weekly, February 18, 2012, Vol. XLVII, No. 7, pp. 53- 61.

Sekhar (2015)5the authors concluded as there is a board- based trend of improvement in most of the state’s due to initiatives to make the system work- expansion of PDS Coverage, reduction in PDS Price. Computerisation, doorstep delivery of grain, de-privatisation of ration shops, and community management of

FPS, setting up proper channels for grievance red ressal and raising FPS commissions. An important part of the revival is the new political will to make the

PDS work and strengthen the demand side by increasing the coverage and raising the stake of beneficiaries in a well-functioning PDS system.

TOOLS OF ANALYSIS

The primary data collected from the study were analysed with the help of both descriptive and inferential statistical tools. The percentage analysis and ratio analysis have been used to a large extent though out the study. Trend line was fitted for the time series data like allotment and off-take of food grains, supply of essential commodities, prices commodities distributed under the Public

Distribution System, Family Cards in circulation and Fair Price Shops.

Compound Growth Rate was also calculated for the time series data.

Analysis of Variance was also used to test the difference in the perception about the six critical elements of Public Distribution System among different income

5 . Sekhar.C.S.C, “The Political Economy of Public Distribution System in India”, Yojana, August 2015, pp.54-57.

groups. Simple ranking was also used in the present study and Mean Scores and

Standard deviation of mean scores were also calculated. Spearman’s Rank

Correlation technique was used to assess judgment made by the village people about the Complaints in the public distribution system. Family size, Saving amount, Income and Expenditure to test the hypotheses framed.

i. COMPOUND GROWTH RATE

ii. TREND ANALYSIS iii. MULTIPLE LINEAR REGRESSION MODEL iv. SPEARMAN’S RANK CORRELATION TECHNIQUE

v. ANOVA

The impact of PDS on the incidence and severity of poverty is also estimated. Based on the studies own experience and the study consider various policy options for reforms.

PROFILE OF THE STUDY AREA

A brief description of the agro-economic and socio-economic characteristics of the study area would help us not only to understand the problem that is being studied, but also would help us in drawing meaningful conclusions from the results obtained by the study.

MADURAI DISTRICT

Madurai is the second most important district in the state of Tamil Nadu, the first being the Chennai District. Of the 33 districts in the state, Madurai

District is the 17th largest District in terms of its area. The Madurai District is bound by the Sivaganga District in the East, the Theni district in the West, the

Dindigul District in the north and the Virudhunagar District in the South. Madurai

District has an area of 3471.73 sq.km, accounting for 2.9 per cent of the geographical area of the Tamil Nadu state and having a predominantly parched terrain.

MADURAI SOUTH TALUK

Madurai South Taluk, with population of about 13.9 lakh is Madurai district's the most populous sub district, located in Madurai district of the state Tamil Nadu in India. There are 46 villages in the sub district, among them Perungudi is the most populous village with population of 9081 and Moothankulam is the least populous village with population of 131. Nallur is the biggest village in the sub district with an area of 13 km2 and Kallambal is the smallest with 1 km2.

There are 16 cities in the sub district which comes under the sub district administration, those are Madurai Municipal Corporation; Avaniapuram and

Thiruparankundram Municipalities; Thiruparankundram Municipality and Out

Growth; Chinna Anuppanadi, Nagamalaipukottai, Nilaiyur (I Bit),

Thanakkankulam and Vilacheri Census Towns (limited to 5most populous)

Thirunagar and Harvey Patti Town Panchayats.

PERAIYUR TALUK

Peraiyur Taluk, with population of about 2 lakh is Madurai district's the 2nd least populous sub district, located in Madurai district of the state Tamil

Nadu in India.

There are 70 villages in the sub district, among them Malappuram is the most populous village with population of 8409 and Iswaraberi is the least populous village with population of 120. Saptur is the biggest village in the sub district with an area of 209 km2 and Manibamettupatti is the smallest with 0 km2.

There are 3 cities in the sub district which comes under the sub district

Administration; those are Elumalai, T. Kallupatti and Peraiyur Town Panchayats.

The foregone chapter has briefly presented a brief profile of Madurai

District, Block, and towns were very useful in analysing the performance and functioning of Public Distribution System during the liberalisation period.

PUBLIC DISTRIBUTION SYSTEM IN INDIA AND TAMIL NADU

This chapter has been presented in two sections. The first section deals with the Public Distribution System in India. The second section analyses the performance of Public Distribution System at central level and state level namely

Tamil Nadu. The growth performance analysis deals with Production,

Procurement, Off-take, Stock, Distribution, Subsidy and Prices etc.

PUBLIC DISTRIBUTION SYSTEM IN INDIA: ORIGIN AND GROWTH Public Distribution System (PDS), is a national food security system, established by the Government of India under Ministry of Consumer Affairs, Food and Public Distribution and managed jointly with state government in India. It distributes subsidized food and non-food items to India’s poor. Major commodities distributed to consumers include staple food grains such as wheat, rice, sugar, and kerosene through a network of Fair Price Shops (FPS) established in several states across the country. Food Corporation of India, a PSU, distributes food grains to FPS throughout the country, which are managed by state government. As of date there are about 4.99 lakhs Fair Price Shops (FPS) across.

Both the Central and State Governments shared the responsibility of regulating the PDS. While the Central Government is responsible for procurement, storage, transportation and bulk allocation of food grains, State Governments hold

the responsible for operational responsibilities including allocation and identification of families below poverty line, issue of ration cards, supervision and monitoring the functioning of FPDs.

OBJECTIVES OF PUBLIC DISTRIBUTION SYSTEM IN INDIA The following are the objectives of the Public Distribution System.

1. To maintain price stability,

2. To ensure the availability of food grains at reasonable prices especially to

the vulnerable sections of the society.

3. To protect the real purchasing power of the consumers by making steady

availability of essential commodities at affordable price.

4. To supplement the poverty alleviation programme of Government of India.

5. To avoid the imbalance between demand and supply of consumer goods.

6. To ensure social justice in the distribution and supply of consumer goods.

7. To raise the welfare of the poverty providing access to basic foods at

reasonable prices.

8. To ration the scare commodities during short supply and to keep a check on

private trade market price.6

6. www.gov.in, “The Targeted Public Distribution System; Problems and Scope for Reforms”, Appendix IV, 4.1.

FOOD SECURITY

Food security is defined as including both physical and economic access to food that meets people’s dietary needs as well their food preferences. Today, India is ranked second worldwide in farm output. Agriculture and allied sectors accounted for 16.6% of the GDP and employed about 52% of the total workforce.

However, a steady decline of its share in the GDP is highlighted in recent economic studies. There are about 1210.2 million people (17.5) of the World population) living in India alone:

According to the World Bank report 2011, the decadal in Indian population is 17.64% according to 2011 population survey. India has more undernourished people than the whole of Africa, with more than 20% of the population undernourished. Lack of political will, political instability, climate change, trade liberalization, poor infrastructure, lack of appropriate policy framework, low level of regional integration and severe bilateral conflicts have greatly impeded the efforts to achieve food security in India.

CHANNELS OF PUBLIC DISTRIBUTION SYSTEM

Chart 4.1 presents the channels for PDS in India.

CHART- 4.1

CHANNELS FOR PUBLIC DISTRIBUTION SYSTEM IN INDIA

Government of India

State Governments and Union

Territories

District Head Quarters

Fair Price Shops

Consumers

Ration Card Holders

Source: Administrative Report 2015, Government of Tamil Nadu.

It is seen from Chart 4.1 that the channel for public distribution system in

India starts from Government of India supplying the essential commodities. The food grains procured by the Government of India are passed on to the State

Governments and Union Territories. The State Governments and Union Territories in turn send the essential commodities to the district headquarters. The authorities at the district level after procuring the same from the State Government send them to the fair price shops for onward supplies to consumers. The consumers who are having ration cards draw their entitlements from the fair price shops to which they are registered.

The trend value for the food subsidy to be provided by the Government of

India for the year 2026 would be Rs.1, 19,088.58 crores. But however, the number of family size may be decreased which compare the study period. The above said amount may be changed over the concern years.

PUBLIC DISTRIBUTION SYSTEM IN TAMILNADU:

The unique feature of public distribution system in Tamil Nadu is that no private trader has been given license to run fair price shops. As on 31st March

2010, there were 29720 fair price shops engaged in the distribution of essential commodities in Tamil Nadu.

The Government announced that “free rice would be distributed on all the working days. Cardholders can call the State Consumers Helpline to express their grievances or complaints. Besides, special consumer cells were formed at

Collector’s office with a separate telephone number”. A flying squad was formed in all the districts to monitor the execution of free rice scheme and they were asked to carry out surprise checks.

With a view to ensure availability of essential commodities to the public at fair prices and to prevent hoarding, black marketing and profiteering in essential commodities and to avoid exploitation by the traders, the Tamil Nadu Government had issued the following control orders:

1. The Tamil Nadu Kerosene (Regulation of Trade) Order, 1973.

2. The Pulses (Storage Control) Order, 1977.

3. The Tamil Nadu Essential Commodities (Display of Stocks, Prices

and Maintenance of Accounts) Order, 1977.

4. The Tamil Nadu Sugar (Regulation of Trade) Order, 1981.

5. The Tamil Nadu Paddy (Restriction on Movement) Order, 1982.

6. The Tamil Nadu Scheduled Commodities (Regulation of

Distribution by Card System) Order, 1982.

7. The Tamil Nadu Paddy and Rice Procurement (Levy) Order, 1984.

8. The Tamil Nadu Essential Trade Articles (Regulation of Trade)

Order, 1984.

ORGANISATIONAL STRUCTURE OF PDS IN TAMIL NADU

The organisational structure of the public distribution system in Tamil

Nadu is presented in Chart 4.2.

CHART- 4.2

ORGANISATIONAL STRUCTURE FOR PDS IN TAMIL NADU

Commissioner of Civil Supplies and Consumer Protection of Tamil Nadu

District Collector

District Supply Officer (DSO)

Taluk Supply Officer (TSO) Special Tashildar

Assistant and Special Revenue Inspectors (Civil Supplies)

Office Assistant

Source: Administrative Report 2015, Government of Tamil Nadu.

At the district level the District Collector is the supreme authority for implementation of the PDS and holds full responsibility for its efficient administration in the district. The Commissioner of Civil Supplies and Consumer

Protection of Tamil Nadu is the immediate superior at the state level.

The trend value for the food subsidy to be provided by the Government of

Tamil Nadu for the year 2026 would be Rs.11, 013.24 crores. But however, the number of family size may be decreased which compare the study period. The above said amount may be changed over the concern years.

This chapter is undertaken by the researcher to highlight the picture of the

Public Distribution System at the National level, State level and in Madurai

District, like type of family cards, management of Fair Price Shops at the state and district level, allotment and off-take of food grains, issue prices of essential commodities under Public Distribution System.

Based on the analysis of performance of PDS in India and Tamil Nadu as discussed in the present chapter, a micro level analysis has been made in the study

District- Madurai District of Tamil Nadu and the results are interpreted in the forthcoming chapter.

PERFORMANCE OF PUBLIC DISTRIBUTION SYSTEM IN

MADURAI DISTRICT

The present chapter analyses the data both secondary and primary which were collected from Madurai District. It includes the organization structure of PDS in Madurai District, physical and financial performance of PDS and its effects on poor people through PDS etc. The Secondary data related to Allotment, Supply,

Prices, Off-Take, Distribution of Essential Commodities through fair price shops and number of Ration Cards, card holders etc.

Data collected from The District Supplies Office, Tamil Nadu Civil

Supplies Corporation (TNCSC), Taluk Supply Office (TSO), Co-operative Office and District Collectorate are analysed and presented in the first part of this chapter.

Primary data regarding socio-economic status of the beneficiaries detail about awareness and use of PDS by the poor people and practical difficulties faced by the PDS beneficiaries are also analysed in detail in the second section of this chapter. A few suitable and appropriate statistical analysis in this chapter.

PUBLIC DISTRIBUTION SYSTEM IN MADURAI DISTRICT

Co-operative plays a predominant role in the distribution of Essential

Commodities to 9.43 lakhs cardholders in Madurai District. Essential

Commodities of mass consumption like Rice, Sugar, Wheat and Wheat products

like Rava and Maida, edible Oil and Kerosene are distributed through 1394 Fair

Price Shop (FPS). One of the unique features of PDS in Tamil Nadu is that no private traders are given license to run the FPS. At least one FPS is provided to each revenue village even if the card strength is very low. The conveniences of the cardholders are given the highest priority. Even though every revenue village has

FPS, there may be still certain areas, which are far away from the existing shop, and it may not be easily accessible to these villages. Because of the limited number of cards in remote areas there is necessary to open part time FPS. The

District Collectors are empowered to permit the same after obtaining the concurrence of the Registrar of Cooperative Societies.

The District Collector is coordinating the PDS activities at the District level by holding meeting with Civil Supplies Officials, Regional Managers if the Tamil

Nadu Civil Supplies Corporation. Regional Joint Registrars, Deputy Registrar

(PDS) and special officers of the lead societies, Secretary to Government also commissioner of Civil Supplies, Chairman-cum-Managing Director of the Tamil

Nadu Civil Supplies Corporation, Registrar of Cooperative Societies and the

Inspector General of Police Civil Supplies. The organizational structure of PDS in

Madurai District is exhibited in Chart 5.1.

CHART- 5.1 ORGANISATIONAL STRUCTURE FOR PUBLIC DISTRIBUTION SYSTEM IN MADURAI DISTRICT

District Collector

Distribution Allotment Distribution Channel (Co- Channel Channel operatives)

Deputy Registrar District Tamil Nadu State Level Civil (PDS) Supplying Supplying Corporation Officer (TNSCSC)

Co-Operatives Taluk Supplying Lead Societies

Sup – Registrar (Officer) (PDS) Union

Wise) Revenue Inspector Link Societies

Fair Price Shops

Card Holders Source : Tamil Nadu Civil Supplies Corporation, Madurai.2016.

DETAILS OF RATION CARDS IN MADURAI DISTRICT

The government is trying to computerize the PDS system so as to weed out the bogus cards. Out of the total 1.50 crore cards, 20 lakhs cards were bogus hence causing a great loss to the government ex-checker. The new ration cards would be distributed to the public in three phases. In the first phases, the new cards would be distributed in Chennai and the other Corporation areas, while Municipalities and the District headquarters would be taken up in the second phase, all the remaining areas-town and village panchayats would be covered in the third phase.

The essential commodities are distributed to the beneficiaries who have family cards in their names and are registered with the fair price shops concerned are given below. Table 5.3 shows the details of Taluk-wise number of ration cards in

Madurai District.

In Madurai District, 7, 17,550 there are cards in 2000-01 and they increased to 9, 43,668 cards in 2015-16. Of the total ration cards, Madurai North Taluk and

Melur Taluk is having 1, 42,837 cards. Similarly, Melur 90,491 Taluks are dominating in the cards distribution in Madurai District. Regarding the year wise growth performance of ration cards in Madurai District, a meager growth in the total number of cards are 7, 71,550 in 2000-01and 9,43,668 cards in 2015-16 respectively. Nearly 2, 26,118 new cards were supplied to the Public within 15 years in Madurai District.

ESSENTIAL COOMODITIES DISTRIBUTED AND RETAIL PRICES IN MADURAI DISTRICT

This section attempts to analyze the quantity supplied of essential commodities by the District Supply Office of Madurai during the study period.

Ration cardholders are given the option to decide the type of commodity they want. Separate ration cards are issued on the basis of the commodities. Green cards are issued to those families opting for rice. White cards are issued to those who do not want rice at same time is eligible to get their sugar or kerosene.

SOCIO-ECONOMIC BACKGROUND OF SAMPLE RESPONDENTS UNDER PUBLIC DISTRIBUTION SYSTEM IN MADURAI DISTRICT

In this chapter, an attempt has been made to analyse the socio-economic background of sample respondents and their opinion about their service rendered by the fair price shops in Madurai district.

Explains the area wise classification of the sample respondent. Out of 7

Taluks, the researcher has selected Two Taluks which is highest and lowest cardholders. i.e., Madurai South Taluk and Peraiyur Taluk. The total sample respondents are 300. Of the 300 sample respondents, 150 respondents from

Madurai South Taluk and 150 respondents from Peraiyur Taluk. In Peraiyur

Taluk, 75 sample respondents from T. Kalluppatti shop 1 and 75 respondents from

Peraiyur shop 1. In Madurai South Taluk, 75 sample respondents from

Meenaskshi Mill (Vasanthannagar) and 75 sample respondents from Madakulam.

From the above chapter focused that the performance of Public Distribution

System in Madurai District and socio-economic condition of the sample respondents in the sample area. In Madurai District the supply of PDS commodities are increasing year to year, the number of cardholders also increasing, the number of ration cards are also increasing then the Government is extended the fair price shops equal the increasing number of cards. It analysised with percentage, comparison trend, The Spearman Correlation analysis, Simple

Linear Regression analysis, Multiple Linear Regression analysis and F-Test for the problems faced by the sample respondents.

SUMMARY OF FINDINGS, SUGGESTIONS AND CONCLUSION

Tamil Nadu Government is implementing Public Distribution System since

1964.The scheme village Shop programme was introduced by the state with the intention to have one shop village in order to feed essential articles to rural public.

Subsequently the scheme was converted into public distribution system with the intention of providing essential commodities to the public both in rural and urban areas. Since the introduction of targeted public distribution system from June

1997, the universal public distribution system is in operation in Tamil Nadu with the inclusion of Antyodaya Anna Yojana Scheme.

The study aims to trace the origin and growth of Public Distribution System in India and Tamil Nadu, Socio-Economic background of the sample respondents and their opinion about service provided by Fair Price Shops, functioning of

Public Distribution System, consumer attitudes towards fair price shops and what are the problems faced by PDS customer.

FINDINGS:

The Main Findings of The Study are Summarised Below:

 The production of Rice has increased from 84.98 Million Tonnes to 104.32

Million Tonnes during the period from 2000-01 to 2015-16. Due to the

increasing number of Card Holders in India.

 The production of Wheat has increased from 69.68 Million Tonnes to

93.50 Million Tonnes during the period from 2000-01 to 2015-16.

 The procurement of Rice has increased from 21.28 Million Tonnes to

34.14 Million Tonnes during the period from 2000-01 to 2015-16.

 The procurement of Wheat has increased from 16.36 Million Tonnes to

22.93 Million Tonnes during the period from 2000-01 to 2015-16 due to

the strength of Number of card holders and New card holders.

 The Allotment of Rice has increased from 21.62 Million Tonnes to 34.33

Million Tonnes during the year from 2000-01 to 2015-16. Whereas it got

doubled to 37.68 Million Tonnes in 2015-16 due to the increase of demand

by the people. It is noted that the years 2000-01, 2007-08 and 2001-02

registered the minimum allotment of Wheat in India.

 That Off-Take of Rice has increased from 10.42 Million Tonnes to 31.82

Million Tonnes during the periods from 2000-01 to 2015-16. As it is 32.64

Miilion Tonnes in peak level at the year of 2012-13.

 Off-Take of Wheat has increased from 7.79 Million Tonnes to 31.84

Miilion Tonnes during the periods from 2000-01 to 2015-16. As it is 33.21

Million Tonnes in Peak level at the year of 2012-13, after implementation

of the New Economic Policy.

 The stock of Rice has increased from 23.20 Million Tonnes to 28.81

Million Tonnes during the year from 2000-01 to 2015-16. The stock of

Wheat has decreased from 21.50 Million Tonnes to 14.54 Million Tonnes

from the year 2000-01 to 2015-16. Due to the more supply of Wheat to the

Card Holders.

 The production of Rice has increased from 73.66 Metric Tonnes to 78.82

Metric Tonnes during the period from 2000-01 to 2015-16. Due to Climate

condition the production of Rice is high. The Allotment of Rice has

increased from 26.15 Metric Tonnes to 37.23 Metric Tonnes in the year

2000-01 to 2015-16 due to increase the supply of Ration Cards.

 Off-Take of Rice had increased from 21.53 Metric Tonnes to 22.21

Metric Tonnes during the year 2000-01 to 2001-02. The Allotment of

Wheat was the highest in 2009-10 followed by the years 2012-13, 2013-14

and 2015-16 which account for 210.29, 202.69 Metric Tonnes respectively.

 Off-Take of Wheat over the years is the highest to 202.68 Metric Tonnes

in 2015-16 and is the lowest in 2001-02 16.25 Metric Tonnes in Tamil

Nadu.

 Off-Take of Sugar has increased from 26.03 Metric Tonnes to 43.12

Metric Tonnes during the periods from 2000-01 to 2015-16. As it is 42.87

Metric Tonnes in peak level all the year of 2013-14.

 The Kerosene allotment to Tamil Nadu, which stood at 8, 14,512 Kiloliters

in 2000-01 and it has decreased to 3, 41,724 Kiloliters in 2015-16. The

kerosene Off-Take to Tamil Nadu, which stood at 6, 33,880 Kiloliters in

2000-01 has decreased to 3, 41,724 kiloliters in 2015-16 due to the usage

of LPG gas cylinder by the consumer.

 The total number of Fair Price Shops in Tamil Nadu in 2000-01 was 27,886

but it was increased to 34,577 in 2015-16 due to emerging population

growth and their needs. The difference in number of Family Cards was the

highest in 2006-07 which account for 6, 98,113 and was the minimum in

2013-14 and it was 14,000 cards.

 It is seen that the number of ration shops had increased from 1070 to 1394

during the period from 2000-01 to 2015-2016 in Madurai District. Out of

1394 fair price shops maximum 1116 fair price shops are functioning as a

full-time basis and rest of 278 fair price shops are functioning as a part-time

basis.

 It is clear that the circulation of ration cards had been increased during the

study period in Madurai district. In 2000-01 the circulations of ration cards

were 7, 17,550 and it was increased to 9, 43,668 ration cards in the year

2015-16. The result shows that increasing trend in the supply of ration

cards under public distribution system in Madurai District. A meager

growth in the total number of cards in 2000-01 and 7, 71,550 in 2015-16

respectively. Nearly 2, 26,118 new cards were supplied to the Public within

15 years in Madurai District.

 2000-01 Supply of Rice had increased from 78,921.000 Metric Tonnes to 1,

54,110.000 Metric Tonnes in Madurai District during the period from the

2000-01 to 2015-16.

 The supply of Wheat had increased from 538.000 in Metric Tonnes to

5740.000 Metric Tonnes during the year from 2000-01 to 2015-16.

 The Supply of Sugar by the Government of Tamil Nadu which stood at

12835.000 Metric Tonnes in the year 2000-01 which had steadily increased

to 17680.000 Metric Tonnes in the year 2015-16.due to the high price

allotted for sugar in the open market.

 It is due to the increase in the supply of LPG connections in the households,

the Supply of Kerosene to Madurai District, which stood at 57063.000

Kiloliters in 2000-01 and it had decreased to 19764.000 Kiloliters in

2015-16.

 The Spearman correlation analysis explains the relationship between the

variables Family size, Savings, Expenditure and Income of the sample

respondents.

 The Simple Linear Regression model summary adjusted R square explains

that the dependent / outcome variable preference of PDS commodities (15

percentage) is explained by the predictor Family size significantly.

 The Simple Linear Regression model summary adjusted R square explains

that the dependent / outcome variable preference of PDS commodities (.06

percentage) is explained by the predictor Savings Amount significantly.

 The Simple Linear Regression model summary adjusted R square explains

that the dependent / outcome variable preference of PDS commodities (.04

percentage) is explained by the predictor Income of the sample respondents

significantly.

 The Simple Linear Regression model summary adjusted R square explains

that the dependent / outcome variable preference of PDS commodities (.002

percentage) is explained by the predictor Expenditure of the sample

respondents significantly.

 The Multiple Linear Regression model summary adjusted R square

explains that the dependent / outcome variable preference of PDS

commodities (.184 percentage) is explained by the predictor Family Size,

Savings Amount, Income and Expenditure of the sample respondents

significantly.

SUGGESTIONS

 The suggestion for effective functioning of fair price shop.19.33 per cent of

the sample respondent’s suggestions is functioning regularly, 29.00 per cent

of the sample respondents suggestion is Supply Entitled Quota of ration,

14.00 per cent of the sample respondents suggestion is Display the

availability of ration every day and 37.67 per cent of the sample

respondents suggestion is Weighment must be ensured. It is inferred that

supply of PDS commodities at correct weight would pave the way for

effective functioning of PDS in Madurai District of Tamil Nadu.

 Good quality food grains should be supplied in the Public Distribution

System at the Central Issue Price itself. The difference between state

incurred subsidy and the Central Issue Price can be used for the measures

taken for the operational efficiency of Fair Price Shops.

 Surveillance Camera would be installed in the shops in order to curtail the

mal practices in the Fair Price Shops. Toll-free phone numbers have to be

popularized among the people to make the complaints regarding the Public

Distribution System.

CONCLUSION

The Public Distribution System is a universal system for the cause of eradicating poverty and improving the standard of living of the people living below poverty line. Often it is pointed out that a lasting solution for poverty is to provide increased employment and opportunities for the poor. Government through Public Distribution System perform better service for the people by supplying essential commodities at subsidized price to removes poverty by introducing different schemes. Through these schemes Government improves the standard of living of the poor and poorest sections in the society.

However, further improvements are needed to reach poor eat effectively under the TPDS. India’s own experience offers substantive guidance to approaches for reform. Some of the approaches to reform and their implications for the institutions involved are outlined in this study. Different approaches should be tried in different regions / states and the experience gained be used for further restructuring.

SCOPE OF THE FURTHER RESEARCH

In India and Tamil Nadu, the Smart Card System was not included under the above research due to the researcher studied only before the smart card procedure Act. Further the researcher has wanted to conduct the elaborate survey about that effect of the new card system on removing the poverty.