MANAGEMENT INFORMATION SYSTEM

CASE STUDY ON PUBLIC DISTRIBUTION SYSTEM

SUBMITTED TO; DR P.MOHAN Professor DCMS

SUBMITTED BY
SAJITHA A.K GEESHMA.K.R SHUHAIB.C.V VARUN.K UMAR SAJID AKHILA.K.R PRIYANKA

DEPARTMENT OF COMMERCE AND MANAGEMENT STUDIES UNIVERSITY OF CALICUT

MANAGEMENT INFORMATION SYSTEM

CONTENTS

INTRODUCTION PUBLIC DISTRIBUTION SYSTEM ANALYSIS AND DISCUSSION MIS DESIGN FOR MONITORING AND CONTROL OF PDS CONCLUSION

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INTRODUCTION
PDS is primarily a social welfare and antipoverty program of the Government of India. Essential commodities like rice, wheat, sugar, kerosene and the like are supplied to the people under the PDS at subsidized prices. It has been one of the most important elements in Indias safety net system for almost 50-years and also the most far reaching in terms of coverage as well as public expenditure on subsidies. PDS provides rationed amounts of basic food items (rice, wheat, sugar, edible oils) and other non-food products (kerosene, coal, standard cloth) at below market prices to consumers through a network of fair price shops disseminated over the country. The scale of the program is evident from the fact that it handles 15 percent of the total availability of rice and wheat. With a network of more than 400,000 Fair Price Shops (FPS), the Public Distribution System (PDS) in India is perhaps the largest distribution machinery of its type in the world. The PDS is said to distribute commodities worth more than Rs 15,000crore to about 16crore families each year. The success of this huge network is dependent on its ability to translate a macro level self-sufficiency to a micro level, by ensuring availability of food grains for poor households. The Public Distribution System is considered as the principal instrument in the hands of government for providing a safety net to the poor and the downtrodden. On the surface, though it might seem that the shift to the Targeted System was to blame for this complete change in the Kerala Model; it becomes pretty apparent that the blame for the decline in the utilization of the PDS cannot be blamed on the shift alone. Firstly, the use of the number of ration cards issued was the measure of the effective coverage of the population. However prior to 1997, the ration card was the primary identity card for the population and holding one was necessary for getting things like gas connections. However today there is a voter ID card and bankcards can also be used as ID cards. Hence the need for holding a ration card is no longer pressing. Most people dont bother renewing their cards at all. It is only now, when inflation is spiraling high that some APL families are coming back to the ration shops according to FPS owners.

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PUBLIC DISTRIBUTION SYSTEM

Public Distribution System (PDS) is an Indian food security system. Established by the Government of India under Ministry of Consumer Affairs, Food, and Public Distribution and managed jointly with state governments in India, it distributes subsidized food and non-food items to India's poor. The focus and coverage of PDS have changed widely over the years. Initially during the World War civilian consumption was restricted so as to divert food items to meet the food requirement of defense forces. Subsequently frequent occurrence of drought throughout the country made the planners think about food shortages. In order to overcome these shortages, the ration system came into existence. Fair Price Shops were opened to distribute the items of mass consumption in urban areas. Thereafter, it was extended to rural areas. From the year 1992, the Revamped PDS was introduced in those areas where Drought Prone Area Program and Dessert Development Program were in operation. Under this system people were allowed to purchase essential items from the FPS at relatively lower subsidized rates. After, the Chief Ministers Conference held in July 1996, a revised scheme known as the Targeted PDS was introduced countrywide with a network of 4.74lakh FPS. Under the TPDS a two-tier subsidized pricing system is followed. Cardholders are classified as Above Poverty Line (APL) and Below Poverty Line (BPL). The BPL families are entitled to receive the essential commodities at a price, which is very close to the economic cost. BPL families are identified based on the methodology given by Lakdawala Expert Group on estimates of poverty. The TPDS was further extended in December 2000 to include the Anthodia Anna Scheme. It consists of the identification of 10 million of the poorest families out of the total BPL population of 65.2 million- the Poorest of the Poor, and provides them with 35 kg of food grains per family per month at the price of Rs 2 per kg of wheat and Rs 2 per kg of rice

PUBLIC DISTRIBUTION SHOP

A public distribution shop also known as Fair Price Shop (FPS), part of India's Public Distribution System established by Government of India, is a kind of shop in India which is used to distribute rations at a subsidized price to the poor. As of date there are about 4.99 lakh Fair Price Shops (FPS) across India. 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
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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 government. No doubt the item from these shops is much cheaper but is 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. The introduction of rationing in India dates back to the 1940s Bengal famine. This rationing system was revived in the wake of acute food shortage during the early 1960s, prior to the Green Revolution.

OBJECTVES OF THE PUBLIC DISTRIBUTION SYSTEM

Indias public distributions system (PDS) with a net work of 4.99 lakh Fair price shops (FPS) is perhaps the largest retail system of its type in the worlds. Since 1951 public distribution of food grains has been retained as deliberate social policy by India with the objectives of: Providing food grains and other essential items to vulnerable sections of the society at reasonable prices. To attempt socializations in the matter of distribution of essential commodities. To put an indirect check on the open market prices of various items and commodities. Keeping a check on private trade, and Rationing during situation of scarcity.

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ANALYSIS AND DISCUSSIONS

DATA COLLECTION
ARD NO: 2 PLACE: vellamunda TALUK: mananthavady DISTRICT: wayanad LICENCE OWNED BY: shameer.K SHOP OPERATED BY: shameer.K TOTAL NO.OF CARDHOLDERS: 920 BPL: 150 APL: 630 AAY: 140

Details of items and quantity distributed are given below:

Rice
AAY: Andhyodhya scheme provide 35 kg @rS.1 Per Kg BPL: 25 Kg @rs. 1 per kg APL: 9Kg @rs.8 per kg A scheme annapoorna giving 10 kg free irrespective of BPL and APL

WHEAT
BPL: 5Kg @ rs.6.70ps per kg APL: 2Kg @rs.21 per kg

SUGAR
For each member in a family provide 400g Sugar is now provided only for BPL families @Rs.13.50 per

Kerosene
For electrified house-up to 1ltr @16.50 For not electrified house-4ltr 16.50rs
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Atta powder
No definite quantity is to be provided @ RS.12rs

Books and journals are prepared by shop keeper

Ledger Sale register: for the purpose of recording sale Stock register: for the purpose of recording stock Card register: used for recording of ration cards Monthly indent: this should be submitted to the thaluk supply officer. According to the monthly indent the stock are supplied Bill book: bills are provided while sales take place. Receipt is given to consumers and the counter foil is kept in shop Visit book

INTERPRETATION
From our field visit we observed that the PDS currently suffers from a number of issues that make it difficult for it to meet its objectives, following challenges are faced by FPS in our locality.
There has been a decline in off take of rationed articles among APL, but now, when inflation is spiraling high that some APL families are coming to the ration shops according to FPS owners. There seems to be leakages at some levels in the chain of distribution. Local people are of the opinion that often the food grains released from FCI go down do not reach the target group in same quality and quantity. Neither the department nor the government has a mechanism to oversee this. Earlier, ration scales were at fixed quantities per person or unit whereas now irrespective of size and need, a family is entitled to a uniform quantity of 25kg rice per month per household. This has opened avenues for malpractices and
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corruption. During the field visit it was observed that for BPL households with small family size, 25kg was more than their requirement. A large number of families living below the poverty line have not been enrolled and therefore do not have access to ration cards In many cases AAY cardholders are not even aware of their entitlement or price. A number of bogus ration cards which do not correspond to real families, exist in t he BPL & AAY categories. Food drawn on the basis of these bogus cards is a significant leakage from the system, as it does not reach the intended beneficiaries. Additionally, these extra cards inflate the number of BPL and AAY cards in circulation and further reduce the amount of food available to every rightful beneficiary family Errors in categorization of families that lead to BPL families getting APL cards and vice versa. A number of instances where benefit s are being availed in the names of right fully entitled families without their knowledge. This shadow ownership is possible due to inefficiencies in ration card issuance and distribution

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MIS DESIGN FOR MONITORING AND CONTROL OF PDS OPERATIONS

PROFOMA FOR REPORTING THE FUNCTIONING OF FPS Month year a) Name of state: State code: b) Name of district: district code: c) Name of block: block code: d) Name of FPS: FPS code: e) No. of ration cards attached to FPS: AAY BPL APL Others Total commo dity Rice AAY BPL APL Wheat AAY BPL APL Openin g stock Allocation Qty for the received month by FPS Total qty Qty Closing distributed stock

sugar kerose ne Atta

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Repots Format (To be submitted by the vendor along with payment claims) MIS Monthly report showing allocation to FPS Report for the month of

Date of report generation dd/mm/yr FPS NumberBlock Quantity Allocated to FPS Wheat (Kg) Rice (Kg) Sugar (Kg) Kerosene (Liter)

MIS monthly report showing balance quantity of FPS Report for the month of

Date of report generation dd/mm/yy FPS NumberBlock Balance quantity of FPS Wheat (Kg) Rice (Kg) Sugar (Kg) Kerosene (Liter)

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Details of FPS Report for the month of

Date of report generation dd/mm/yy FPS Number Block District Name of Date of owner Granting Authority To FPS Date of Any adverse

renewal of remark/vigilance authority report against FPS(Yes/ No)

REPORTS TO BE SUBMITTED BY WAREHOUSES Report on no. of FPS handled: It shall include details regarding no. of FPS served by warehouse. Report on stock level: It shall include details of stock at the go down and the volume of commodities issued, minimum level of stock required during a month etc, Report on storage facility: It shall include details of volume of space required to store commodities, existing safety measures etc,
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Report on quality control measures: It shall include details of existing quality control measures undertaken to ensure quality and safety of commodities in the warehouse. Inspection: Inspection will be conducted monthly or surprise visit may be there in the ration shop. It is headed by district supply officer (DSO) or Taluk supply officer (TSO) or any other person appointed by DSO or TSO. By checking the actual stock with the quantity in the stock book and other books, if there is any differences it is to be recorded in a book called visit book and it should be submitted to the TSOs office and also pay fine for it.

DISTRIBUTION PROCESS OF PDS

a) Identification of Beneficiaries b) Allotment of Food Grains c) Lifting d) Distribution e) Transactions f) Authorization to FPS g) MIS Reports & Alerts

a) Identification of Beneficiaries The beneficiary information will be captured by the vendor in electronic format and would constitute beneficiary database. A onetime state wide exercise will be performed to create online database of all existing ration cards. The application will have feature of linking /delinking of ration card with FPS, tehsi and district. This will help linking the ration card to new FPS when the beneficiary migrates from one place to other. The list of all the beneficiaries recorded would be category wise (APL, BPL, AAY) and FPS wise. Biometric database of all ration card holders will be maintained to ensure uniqueness and authentication of end beneficiaries
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b) Allotment of Food Grains The system will maintain record of food grains allocated to each beneficiary and FPS. The system should record FPS wise allocation based on the number of ration cards linked to the FPS. Based on the submission of coupons by the FPS salesman, the allotment for the next plus one month will be calculated and displayed in the application. The system will have provision of capturing amount of food grains actually reaching the FPS against the allotted food grains. The system will maintain historical data in this regard.

c) Lifting To automate the process of logistics and warehousing, it is proposed to develop a Module capturing lifting information of food grains from the Go downs or accept data from other system. The module developed will maintain details of issuance and dispatch of allocated food grains to each FPS and storage centers. The lifting information from the Go downs will include date and time of lifting, destination, details of the vehicle, expected time and date of arrival at FPS shop and the distance from lifting point to the destination. The amount of food grains reaching FPS will be recorded in the system. The FPS salesman will either call or SMS department officials about the amount of food grains reaching FPS. The system will also maintain a log of inventory at different go downs. The data entry for the proposed module will be done by the staff of MP Warehouse and Logistics Corporation (MP WLC). The information available by deploying this module will help in monitoring lifting details of food grains thus improving efficiency. Measures like Just in Time (JIT) and shortest possible route could be used with the captured information.

d) Distribution The amount of ration disbursed to the beneficiary will be captured in distribution module after collection of coupons from the FPS salesman by the vendor and
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updated at regular interval (two times in a month). This will help in recording the amount of food grains actually disbursed to each beneficiary in the system. Thus timely information of disbursement to end beneficiaries will be available to the department. The tracking of distribution of food grains from FPS to end beneficiary will be done using coupons disbursed to beneficiaries. These coupons will be verified and the amount of food grains disbursed to the beneficiaries will be recorded. FPS wise closing balance against the allotted amount will be available and reports will be generated at District level on the basis of data at FPS level.

e) Transactions The details of the payment made by the FPS salesman will be captured in this module. The mode of payment (Cash/DD/Cheque etc) and date of deposit will also be recorded in the system.

f) Authorization to FPS This module will be used to record the details of FPS. The information captured will include Authority number, date of expiry of the Authority, name of FPS salesman, location of the FPS, beneficiaries served by the FPS etc. g) MIS Reports and Alerts This module will be used to generate MIS reports including FPS wise allotment of food grains FPS wise inventory status Actual amount of food grains disbursed against the allotted food grains Monthly lifting information from each go down Beneficiary wise / FPS wise / block wise / district wise lifting details Active/Inactive FPS New authorization to FPS report Number of FPS suspended/cancelled Number of Active/Inactive FPS

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SUMMARY AND SUGGESTIONS

. The Public Distribution System (PDS) in the country facilitates the supply of food grains to the poor at a subsidized price. However, doubts have been raised about the efficacy and cost-effectiveness of the PDS, especially in the light of the growing food subsidy and food stocks. The PDS needs to be restructured and there is a need to explore the possibility of introducing innovative ideas such as smart cards, food credit/debit cards, food stamps and decentralized procurement, to eliminate hunger and make food available to the poor wherever they may be in cost-effective manner. Some of the things that can be done to improve public distribution system: Computerize the entire ration distribution system and introduce new technology in order to stop pilferage in the system, so that the subsidized item reaches the needy. Biometric finger prints can be used for the identification of cardholders and to avoid duplication of cards. GPS instruments can be fitted in the vehicles carrying food grains from govt food warehouses to state warehouses and they can be tracked from the data centre till the fair price shop, so that pilferage can be stopped. A citizens charter should be published and exhibited since, in many cases AAY cardholders are not even aware of their entitlement or price. Publication of the charter will help to create awareness among the public about their rights and will make the staff and FPS dealers more efficient there by weeding out corruption. The food stamp system can address the problem of ration being diverted into other sources and the poor not being able to avail of the rations. An idea is that food stamps will be allocates to each family- perhaps a finger print system based biometric smart card could be given instead of a ration card, so the familys details could be included in the card, along with the amount of food stamps each member would be eligible for. It should be made mandatory that every shopkeeper should submit his records including daily sales register, cards register, stock register etc to the prescribed authority.

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CONCLUSION
The sustainability of PDS is now a matter of concern. As per the High Level Committee report the introduction of targeting has not reduced the expenditure on the food subsidy while it has at the same time weakened the impact of price stabilization and weakened the overall system. However many aspects indicated in the guidelines issued by the Central Government are not yet operationalized. Overall what is needed is the immediate implementation of guidelines issued by Central Government rather than the formulation of new policy directions or guidelines. Constitution of Vigilance committees at various levels, publicizing citizens charter, effective supervision at all levels, sensitizing the targeted poor on their entitlements and price of commodities and revision of APL/BPL list need to be taken up by the Government on a priority basis, if the desired objectives of PDS are to be achieved.

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