A recent paper in World Development investigates the effect of the digitalization of the Kerala Public Distribution System (PDS) on food security in Kerala. The paper highlights some of the potential achievements from the specific system of digitalization that Kerala is pursuing. However certain problems, generally related due to the design of the digitalization process, remain. From this, the paper draws useful lessons for the digitalization of the PDS for other states across India.
The PDS, jointly run by the Indian Government and State Governments, distributes essential food and non-food items to India’s poor. Set up in 1965, the PDS was universal in the sense that all beneficiaries were entitled to equal subsidies. In 1997 amid criticisms of inefficiency, increasing costs and corruption the Central Government decided to reorient the PDS towards one based on the poverty estimates of households Since then, it has been called Targeted Public Distribution System (TPDS).
The general lessons from this reform in Kerala are that the reformed PDS has contributed to food security and also makes a positive impact on nutrition in India. However, the majority of scholars argue that TPDS has failed to meet its objectives. This is generally attributed to two main factors: problems in measuring poverty rates (generally underestimated) and corruption all along the supply chain. Corruption occurs when subsidized food grains are sold in the private market for personal gain which is generally labelled as the “rice mafia.” In 2009 the Unique Identification Authority of India Planning Commission (UIDAI) estimated that 57% of TPDS commodities across India did not reach intended beneficiaries.This is a general picture across India and the context in Kerala is more nuanced. Prior to 1997, Kerala was considered as running one of the most efficient PDS programs; due to widespread poverty coupled with strong social programs, the population of Kerala was heavily dependent on the PDS. However, the 1997 reforms practically destroyed the system as only 25% of the population was categorized as Below the Poverty Line (BPL) and entitled to the TPDS; this figure was generally considered as underestimating Kerala poverty rates. Similarly, the allocation of food grains to the state was less than 10% of the previous supply. In response the state-government intervened and provided a subsidy to 42% of the population from the state budget.
It was in this context that the state government of Kerala began digitalizing its TPDS operations starting in 2001 with the creation of a database for all users linked to physical ration cards. This was later complemented by the design and implementation of a variety of software for the TPDS. Split into four modules the software includes the following: a ‘ration card management system’ based on fingerprints that ensures the targeted households are the ones receiving the subsidy; an application called Allocation 2.0 that allows the regional supply officers to calculate the theoretical amount needed for each local supply officer/dealer to help optimize allocation; an ‘inspection monitoring system’ that records the inspections in each administrative area, and any irregularities and actions taken to correct them; and an internet-based platform that allows TPDS beneficiaries to apply for ration cards and lodge complaints on the internet. In practice however, awareness of the existence of the entire process of digitalization and its adoption has so far been partial and its coverage restricted.
The study collected data on the effectiveness of digitalization in Kerala through collaborations with the London School of Economics and the Centre of Development Studies Trivandrum. The lessons drawn from the study are based around interviews with citizens, recipients and ration dealers. The primary finding of the paper is that in the case of Kerala, the process of digitalization (specifically the development of the modules) targets a specific area of the supply chain, namely the point of sale. This is based around a perception that corruption and inefficiency are based in this sector. The paper argues that this helps create accountability and improves the supply chain but remains problematic because it is likely that there are problems of accountability across the entire supply chain. In effect, the digitalization technology attempts to create accountability in one area rather than instill and promote accountability across the supply chain. Additionally, this process does not address a crucial question: ‘what is the root cause of this corruption?’ For instance, it could be that the low pay of the employees along the supply chain contributes to the high level of corruption.
In parallel to this finding, the paper highlights that the central government encourages state governments to adopt digitalization and has started digitalization of PDS on a national level. The program at the core of this is the digitalization based on Aadhar. Aadhar was launched in 2012 and provides a unique 12 digit identification number to all Indian citizens, biometrically identifying customers when they make purchases at the subsidized shops. The general rationale behind this process is that there is a proliferation of fake ration cards that are used to divert goods from the PDS for personal profit. Similarly to the case of Kerala, this technology is also designed to tackle problems at the point of sale. The paper suggests that this is an essential step but that efforts in digitalization need to be further developed to create accountability across the supply chain.
In conclusion, these implications allow the paper to draw a number of lessons for other states seeking to bring e-governance into the TPDS. Technology can act as a reform mechanism that redesigns existing social safety nets and contribute to food security, when done well it can create accountability and improve efficiency across the supply chain. A few other states that have developed digitalized systems across the supply chain, such as Chhattisgarh and Karnataka, have seen strong improvements in the effectiveness of the TPDS. In the case of Kerala, it is less clear that digitalization has led to significant improvements to the TPDS. This suggests that for technology to have a meaningful impact it needs to be designed in a ‘holistic’ manner. There has been much discourse across India on how the adoption and use of information and communication technologies can improve governance. This paper highlights that the adoption of technologies are not a panacea in itself but have the potential to improve governance and food security.
This paper appeared in the journal World Development, Volume 67 in March 2015 and can be found online here: http://www.sciencedirect.com/science/article/pii/S0305750X14003258
It should be noted that in August 2015 the World Food Programme announced that it was partnering with the Kerala State Government on running a pilot project that tests biometric identification of beneficiaries. Additionally, it was announced that in tandem to this additional software is being developed that will improve the functioning of the PDS across the entire supply chain in Kerala. This article can be found on the WFP India website: http://www.wfp.org/news/news-release/kerala-government-partners-wfp-improve-food-delivery
By: Bas Paris, IFPRI