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. 3 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. 4 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 5 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. 6 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 7 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. 8 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. 9 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.