developement and equal distribution among people

8/8/2019 Developement and Equal Distribution among people

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EFFICIENCY EFFECT OF

DEVELOPMENT PROGRAMME

DOES NOT SATISFY THE

REDISTRIBUTING EFFECTEQUALLY

Group: Aditya a. Pungavkar.Basudutta Sarkar.

Murali T.V.Amol S. Holey.

SEMINAR II


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EFFICIENCY EFFECT OF DEVELOPMENT PROGRAMME DOES NOT SATISFY THE REDISTRIBUTING EFFECT EQUALLY

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Topic: EFFICIENCY EFFECT OF DEVELOPMENT PROGRAMME DOES NOT SATISFY THE REDISTRIBUTING

EFFECT EQUALLY .

Group: Aditya a. Pungavkar.

Basudutta Sarkar.

Muraly T.V.

Amol S. Holey.

Efficiency:

Efficiency is doing the thing right it defines whether the developments are completed using

the least resources, in the shortest time possible and for benefit of the people.

Effectiveness means conducting the right activities and applying the best strategies for

competitive advantage.

Efficiency vs. equity:

Efficiency means that society is getting the most it can from its scarce resources. A moreefficient society can produce more with the same amount of resources. Equity means

that the resources are distributed fairly among the individuals.

When government designs its policies, society is making use of its resources and alsothe outcome is well distributed among the citizens.

It is seen in Indian context that in some cases the beurocrats of the society are enjoyingthe benefits and the benefits are not coming to the common people in the same way.

Basics of Indian economic models after independence

The basic Indian economy was low input agrarian economy Not capable of yielding much of surplus Way we choose for development was intensification of agriculture, irrigation,

industrialisation of large resources like petroleum, coal, hydro-electric power, steel,

cement mostly to promote manufacturing sector.

Soviet model: The basic soviet model involves the mocking up the rural or country side areas

and setting up the large industries. The model involves the direct intervention of state or nation

but the system involved various flaws Mr Jawaharlal Nehru could realise those and while

following the model in India he allowed the participation of private sector. This decision didnt

worked out because the private sector has basic priciles like more profit in less investment.


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Examples :

1. Land reform Lack of consistent track record to support land reform outcome, especially when carried out

under corruption or resulting in collective or socialized ownership (rather than smallholder

title); for example, in Zimbabwe, an "aggressive" "land reform" plan[2]has led to a collapse

of the economy and 45 percent malnutrition.

Equity issues of displacing persons who have sometimes worked hard in previous farmingof the land.

In UP, as in many other parts of the country, former feudal lords still own hundreds of acresof land either by exploiting legal loopholes or through illegal strategems.

Official data would have you believe that most of the large land-holdings have disappearedin the past half-century, that there is greater equity and there is no room left for any

meaningful redistribution of land. But the reality is just the opposite. The absolute landless

and the near landless (those with less than half an acre of land) make up 43 per cent of

rural households in India.

Poverty and much of the violence and extremism in the country are even today highlycorrelated with lack of access to land.

An extreme case in point is the state of Bihar. Rich in natural resources, this state in easternIndia is one of the poorest and grabs headlines every time there iscaste carnage". The lack

of development in Bihar is due to the almost total failure to implement land reform s and

the lack of any real mass movement against the existing land holding system.

Examples:

Saltlake land distribution

It was a marshy land Investments done to drain out the water Land sold on the political influence on 10% of the market rates(to the Bureaucrats) Whereas common people bought land in a very high price.

Operation barga In west Bengal (land reform schemes)

Operation Barga was a Land Reforms movement throughout rural West Bengal forrecording the names ofsharecroppers(bargadars)

Avoiding the time-consuming method of recording through the settlement machinery. Small scope and inability to solve all the major problems. policies not accounting for the high landmass-population ratio in Bengal
http://en.wikipedia.org/wiki/Land_reform#cite_note-1http://en.wikipedia.org/wiki/Land_reform#cite_note-1http://en.wikipedia.org/wiki/West_Bengalhttp://en.wikipedia.org/wiki/West_Bengalhttp://en.wikipedia.org/wiki/Sharecropperhttp://en.wikipedia.org/wiki/Sharecropperhttp://en.wikipedia.org/wiki/Sharecropperhttp://en.wikipedia.org/wiki/Sharecropperhttp://en.wikipedia.org/wiki/West_Bengalhttp://en.wikipedia.org/wiki/Land_reform#cite_note-1


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The small and highly segregated land holding patterns and failure of the Government to developagri-industrial markets for farm produce

These failures, have distributed poverty rather than creating prosperity The unsatisfactory performance of these bargadars was due to their poor resource base and lack

of access to modern technology and to capital market with the resultant inability to acquire

material resources. Operation Barga was also criticized for being anti-landowner, and providing some draconian

measures that could be misused.

Narmada valley:

Indira sagar dam constructed in Narmada valley Conflicts between NHDC and local people Issues: acquisition of land, valuation of property, unsettlement of compensation Diplaced residences are often exploited harassed 700 year old town Harsud destroyed fully in 2004 Displaced people were without infrastructures, schools, electricity, hospitals No means of earning livelihood No schemes for compensation

As against this it can be said that:

The Narmada dam's benefits include provision drinking water, power generation andirrigation facilities. However, the campaign led by the NBA activists has held up the

project's completion.


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NBA supporters have indulged in physical attacks on local people who acceptedcompensation for moving.

Narmada Dam protesters are little more than environmental extremists whouse pseudoscientific agitprop to scuttle the development of the region.

The dam will provide agricultural benefits to millions of poor in India.Rehabilitation and Resettlement

Construction of dams does not always create problems. There are examples of successful

rehabilitation projects. One such is the Tehri dam Project:

The rehabilitation of Tehri town - The New Tehri town is probably the most well plannedand properly designed hill station since independent India.

About 5,300 families are rehabilitated and resettled with modern urban facilities. Many technical teams including the Three Georges Project of China have visited the

resettlement and rehabilitation site of THDC.

Some families are also rehabilitated and resettled at Rishikesh and Dehradun, as pertheir option apart from compensation for their existing shops and other structures at

the old Tehri town.

The rural displaced are compensated through allotment of agriculture land of 2 acres orcash in lieu thereof and resettled in large blocks so that the fabric of their social life

remains intact.

The displaced or their representatives were involved to the extent possible in selectingthe rehabilitation centres and the preference was given to the displaced for settlements

at a particular location.

Furthermore, the community facilities are provided at each of the rural rehabilitationcentres for about 9,240 families if these did not exist at their earlier settlements.

House construction assistance to the old Tehri town land owners, provisions ofconstructed flat at lower rates, goodwill grant to the shop keepers of old Tehri town,

cash grant for advocates of old Tehri town, and grant to rural farmers for the purchase

of seeds and fertilizers are additional facilities provided by the project to the affected

people during their rehabilitation and resettlements.

2. Food security Food security refers to a situation that exists when all people at all times have

physical, social and economic access to sufficient, safe and nutritious food that

meets their dietary needs and food preferences for an active and healthy life, says

an FAO report State of Food Insecurity in the World, 2001

The National Food Security Act has failed to reform the discriminatory publicdistribution system leaving many high and dry.


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A concept note on the proposed National Food Security Act circulated to all statescontinues to push for a targeted public distribution system instead of a universal one,

and proposes to reduce the issue of foodgrains to 25 kg per BPL household,

completely ignoring the contentious issue ofwho is poor and what an adequate and

nutritious diet consists of.

At a public hearing on the public distribution system (PDS), held before the JusticeWadhwa Committee in Bangalore in December 2008, Sarojamma, a single parent

with four children (one of whom is mentally disabled) pleaded for a below the

poverty line (BPL) ration card. She had been given an above the poverty line (APL)

ration card as she is a garment worker earning Rs 3,500 per month. The APL ration

card fetches her only kerosene and no foodgrain in Karnataka.

"Almost 50% of its children are malnourished and 75% of its women suffer fromanaemia; and per capita food availability has actually decreased"

While it sports a high growth in GDP, it ranks 66th in a list of 88 countries on theWorld Hunger Index.

While civil society is clamouring that the PDS be universalised, without anydistinctions between BPL and APL, so that the poor get self-selected as it was earlierwhen the country was growing at the Hindu rate of growth of about 3%, the concept

note seeks to make the targeted PDS statutory.

"If universalisation of the PDS is not accepted, those earning less than the minimumwage need to be considered poor"

The targeted PDS is costly and gives rise to a lot of corruption in the process of tryingto decide who is and who is not poor. This results in the genuinely poor being left out

whilst the ineligible get several cards.

The concept note does not mention the word malnutrition at all; it completelyignores the contentious issue of defining who is poor and how much and what

constitutes adequate and nutritious food Reduction in BPL numbers While civil society demands that BPL cards be updated every year in order to capture

those who have slide back into poverty due to various exigencies like debt, drought,

displacement, etc, the Centre is talking about annual updation only to seek out those

who have risen above the poverty line, with the aim of taking away their BPL cards.

Mid day meals at schools: poor quality food, sometimes no food, sometimeschildren are getting sick after having it.With this, the government seemingly wishesto wash its hands of any accountability ensuring the right to food to all its citizens"

3.

MDG sarba shiksha abhiyan

Only 120 million children of total 203 million are going to primary school. Children from disadvantaged families are at the bottom of heap where the girl

children from such families are uniquely disadvantaged position.

Literacy rate increased from 43.57% in 1981 to 52.2% in 1991 to 65.4% in 2001 butabsolute number of illiterates rose from 424.2 million in 1981 to 479.2 million in

1991.


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Educational status for SC and ST disproportionately low. In the case of SC and ST children the rate of drop outs is 50% at primary stage and

70% at upper primary stage whereas in case of general students it is 30% at primary

stage and 50% at upper primary stage.

A national study shows that young visually impaired students fare extremely poorly ingovernment schools under Sarva Shiksha Abhiyan.

Reason:Inexperienced teachers and shortage of appropriate equipment. Over 35%

students did not even have Braille slates, a basic instrument for elementary

education for the blind.

As against this the Sarba Shiksha Abhiyan has shown positive results in a number of cases like:

Bhonga Shala -bringing the schools to the children.Bhonga shala is an innovation to provide education to children from brick kilns in

Thane district of Maharashtra.

Vidhayak Sansad, a local NGO started five Bhonga Shalas in 1995 in two blocks of thedistrict. Today, with support from SSA Maharashtra, there are as many as 250 such

centres in 7 blocks of Thane district.

These are catering to the educational needs of more than 5000 children from thebrick kilns. Bhonga shalas ensure that education continues, and is not hampered due

to migration. For the entire brick kiln season (December to May) primary level

(standard I-IV) education is provided at the brick kiln site through these centres.

4. Farmers suicide: Over 1,500 farmers in an Indian state committed suicide after being driven to debt by

crop failure

The crop failures, which took place in the agricultural state of Chattisgarh, wereprompted by falling water levels.

Nearby forest depletion and poorly planned government dam projects contributed tothe falling water level

Combined with the vicious money-lending schemes that are prevalent in the region,many farmers felt that death was the only option in the face of insurmountable debt.

Governments response and bigger reasons behind the suicides:

Prime Minister Manmohan Singh visited Vidarbha and promised a package of Rs.110billion to be spent by the government in Vidarbha. The families of farmers who had


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committed suicide were also offered an ex gratia grant to the tune of Rs.100, 000 by

the government.

One of the reasons behind the suicides was the falling Minimum Support Price forcotton. The problem is complex and root causes include lopsided policies of the

World Trade Organisation and developed nations' subsidies to their cotton farmers

which make Vidarbha's cotton uncompetitive in world markets.

5. The incessant floods, manipulation of prices by traders, supply of spurious pesticidesand seeds, decline in prices of agricultural produce, increase in the cost of agricultural

inputs, successive drought in recent years, and of course, the neglect of farmers by the

previous state government.

6. UnemploymentTo generate employment among the rural poor, the Government has introduced certainschemes such as:

Integrated Rural Development Program (IRDP) Training Rural Youth For Self Employment (TRYSEM) Swarnajayanti Gram Swarojgar Yojana (SGSY) National Rural Employment Guarantee Scheme (NREGS)Rural poverty in M.P.

One of the least developed states Second most populated state Has lowest HDI at Jhadua which is 0.371 Unemployment rate 11%-13% in spite of government employment generation

scheme.

86% are in paid employment in agriculture with Rs. 5046 per annum.


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As against this scenario, these schemes have shown certain positive results as:

Since 1980, upto 1998- 535 Lakh families benefitted through IRDP. SGSY was a holistic package covering all aspects of employment. A number of projects

were undertaken to generate employment. Some of these projects from Himchal

Pradesh are:

o Installation of Hydrams- 268 hydrams has been procured out of which 208hydrams have been installed.

o Marketing of rural goods- upto 2008 10 Gramin Bhandars were completed, 8near completion and 12 were under progress.

o Milch Livestock Improvement- in Solan district 9595 cattle have been treated in95 field level camps, 12,273 breeders have been trained and 6715 Qt fodder

seed have been distributed to farmers.

Through NREGS 100 days employment has been guaranteed to the rural poor. Anumber of development works were undertaken under this scheme to generate

employment:

o Construction of roads, ponds, protection walls against floods, bunds etc.

7. Effects of mechanised fishery industriesUntil independence coastal waters of India were fished by local fishermans. Fish was

relatively inexpensive and also was used as manure for coconuts orchards.

Due to over fishing- Decline of fish catching


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Fishermans facing poverty Fish became more expensive Less consumption by poor people Use as manure stopped

8. Koyana Dam : Koyana dam constructed in western ghats of maharashatra. The westernghats known for its scenic beauty. The dam displaced many local habitants also the

hydroelectric power from dam mainly diverted to metro cities like Mumbai and rest

areas are deprived. Also many earthquakes happened in surrounding areas due to the

dam, the local people have to bear the damage and the rest class enjoying the benefits.

But the dam has provided irrigation to many agricultural regions. The electricitygenerated is used in development works. The theory of the dam being the reason

behind is quite questionable and many prominent scientists have spoken against this

theory.

9. Housing According to the 1991 Census, housing shortage in India was 137 lakh and according

to 2001 Census it was 149 lakh. 10 lakh shelter less are added each year. To meet

these demands the Government has introduced certain schemes like Indira Awas

Yojana (IAY)

Indira Awas Yojana (IAY) was introduced in 1985- 86 for BPL SC, ST and freed bondedlabourers. In 1993 it was extended to cover even non SC, ST upto 40%.

Under this scheme construction assistance of Rs 35,000 per unit in plain areas and Rs38,500 per unit in hilly areas is provided.

Sanitary latrine, smokeless chulla and proper drainage are provided for each unit. Beneficiaries are to build their houses themselves- eliminating possibilities of

corruption and increasing the sentimental values of the house.

The choice of design, technology and materials are left to the discretion of thebeneficiaries.


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The households are allotted in the name of the female members- providing socialsecurity to women.

Some portion of the budget is allotted exclusively for North Eastern States, physicallyand mentally challenged and for natural calamities. Rs 400 Crore were sanctioned for

flood affected districts of Bihar in 2004- 05 and Rs 200 Crore for Tsunami affectedareas.

Performance under IAY- 131 lakh houses were constructed upto 31st Dec 2004.YEAR FUNDS UTILISED

(CRORES)

TARGETS

(LAKHS)

HOUSES CONSTRUCTED/

UPGRADED

(LAKHS)

2002- 03 2795 13.14 15.48

2003- 04 2580 14.84 13.61


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9 Ecological imbalances: Chambal valley development project

Chambal valley development project has three dams namely- Gandhi Sagar, RanaPratap Sagar, Jawahar Sagar

The water is distributed in Madhya Pradesh and Rajasthan Surface water harvesting was banned in any catchment area near Gandhi sagar,

which resulted in unbalanced development of irrigation facilities.

Farmers left with only one source i.e. ground water to meet their increasing needs ofirrigation.

Ground water table fill sharply and now most of the blocks of malwa are becomingeither dark or grey.

Reasons.

Creation of schemes without knowledge of ground reality.

Lack of education and awareness amongst the people.

Social factors are never considered.

Involvement of people.


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Murali TV and Amol

A concern for equity has long been an important aspect of economic analysis. Adam Smith

quotes,

No society can surely be flourishing and happy, of which the greater part of the members are

poor and miserable. It is but equity, besides, that they, who feed, clothe and lodge the whole

body of the people, should have such a share of the produce of their own labour as to be

themselves tolerably well fed, clothed and lodged.

Right to Equality (Article 14, 15, 16, 17 and 18 of Indian Constitution)

It is the principle foundation of all the other rights and liberties. It is one of the six fundamental

rights that have been granted to us in the Indian constitution

Equality before law Social Equality Equality in public employment Abolition of Untouchability

These fundamental rights for Indians are aimed at overturning the inequities of past social

practices. They have been used in successfully abolishing prohibit discrimination on the grounds

of Religion, Race, Sex and also the forced labour.

It also states that State shall not discriminate against any citizen

Special provision for women and children Nothing shall prevent the state from making any special provision for the advancement

of any socially and educationally backward classes of citizens or for SC and ST.

Equal opportunities for all citizens in matters relating to Employment, Education andSocially.

Government of India and also State governments are coming up with various policy measures

to minimise the disparity between poor and the rich by implementing those policies and socio-


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economic schemes to ensure the redistribution equally among all the strata of the society is

effectively achieved. Some of them are discussed in this paper.

1. Land Reforms (Agrarian reform)Land reforms may consist of a government-initiated or government-backed real estate property

redistribution, generally ofagricultural land. Land reforms are an attempt by the Government

to achieve social equality and optimum utilization of land by redistributing the land holdings.

These reforms are intended to eliminate exploitation and social injustice within the agrarian

system, to provide security for the tiller of the soil and to remove obstacles arising from the

agrarian structure that has been inherited from the past.

Concern over the value of Land Reform is based upon the following:

Lack of consistent track record to support land reform outcome, especially when carriedout under corrupt auspices or resulting in collective or socialized ownership (rather than

smallholder title);

Question of experience and competence of those receiving land to use it productively Equity issues of displacing persons who have sometimes worked hard in previous

farming of the land

Question of competence of governmental entities to make decisions regardingagricultural productivity

Question of miring a country in vast legal disputes from arbitrary property distribution De-motivation of any property owners to invest in land that ultimately can be seized

Consequently, land reform most often refers to transfer from ownership by a relatively small

number of wealthy noble owners with extensive land holdings (e.g. plantations, large ranches,

or agribusiness plots) to individual ownership by those who work the land.

Land Reform has encompassed the transfer of land from ownership even peasant ownership in

smallholdings to government-owned collective farms.

Land reform was especially popular as part of decolonisation. It was an important step in

achieving economic development in many third world countries. It gives a sense of ownership
http://en.wikipedia.org/wiki/Agrarian_reformhttp://en.wikipedia.org/wiki/Real_estatehttp://en.wikipedia.org/wiki/Property_redistributionhttp://en.wikipedia.org/wiki/Property_redistributionhttp://en.wikipedia.org/wiki/Agriculturehttp://en.wikipedia.org/wiki/Plantationhttp://en.wikipedia.org/wiki/Ranchhttp://en.wikipedia.org/wiki/Agribusinesshttp://en.wikipedia.org/wiki/Peasanthttp://en.wikipedia.org/wiki/Smallholdinghttp://en.wikipedia.org/wiki/Smallholdinghttp://en.wikipedia.org/wiki/Peasanthttp://en.wikipedia.org/wiki/Agribusinesshttp://en.wikipedia.org/wiki/Ranchhttp://en.wikipedia.org/wiki/Plantationhttp://en.wikipedia.org/wiki/Agriculturehttp://en.wikipedia.org/wiki/Property_redistributionhttp://en.wikipedia.org/wiki/Property_redistributionhttp://en.wikipedia.org/wiki/Real_estatehttp://en.wikipedia.org/wiki/Agrarian_reform


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to the peasants which lead to more production of land. The production has approximately

raised by 20 %. Land Reform policies are generally advocated as an effort to eradicate food

insecurity and rural poverty.

the cumulative position of implementation of the ceiling laws as regards to area declared

surplus, area taken possession, area distributed and number of beneficiaries during the last two

decades is indicated below to have a comparison with the latest figure as may be seen in Table

Table (Lakh Acres)

Distribution of Government Wasteland and Bhoodan Land

In addition to the distribution of 53.05 lakh acres of ceiling surplus land, figures collected from

the States/ UTs show that an area of 147.44 lakh acres of Government Wastelands has also

been distributed amongst landless rural poor. However, the quantum of land reported by the

States as distributed during 1998-99 till December 1998 is 2.48 lakh acres.

Prevention of Alienation and Restoration of Alienated Tribal Land

Article 46 of the Constitution enjoins an obligation upon the States to promote the interests of

the Scheduled Castes and Scheduled Tribes and to protect them from social injustice and all

forms of exploitation. The State Governments have accepted the policy of prohibiting the

transfer of land from tribals to nontribals and for the restoration of the alienated land to the

tribals. The States with large tribal population have enacted laws prohibiting alienation of tribal

Pre-revised revised

ceiling laws

As on

31.3.80

As on

31.3.85

As on

31.3.90

As on

31.3.95

As on

30.9.98

Area declared surplus 69.13 72.07 72.25 74.10 73.74

Area taken possession 48.50 56.98 62.12 65.42 65.11

Area distributed 35.53 42.64 46.47 51.46 53.05

No of beneficiaries 24.75 32.90 43.60 49.94 55.37
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land and for restoration of alienated land. The legal provisions are however, generally

applicable to the tribals living within the Scheduled and notified areas. As per reports from 11

States on the aforesaid subject 4.65 lakh cases of tribal land alienation have been registered so

far covering 9.18 lakh acres of land, of which 2.02 lakh cases have been disposed of in favour of

the tribals covering a total area of 5.31 lakh acres of alienated land.

Consolidation of Land Holding Programme

Consolidation of Agricultural Holdings forms an integral part of land reforms policy and Five

Year Plans have accordingly been laying stress on the importance of its implementation. This

operation is considered necessary for planed development of villages and achieving efficiency

and economy in agriculture. In pursuance of this strategy, a number of States have enacted

legislation of carrying out consolidation of holdings. In the State of Uttar Pradesh, where

annually about 900 to 1000 villages are being covered under the programme. So far an area of

1583.45 lakh acres or 640.81 lakh hectares have been consolidated in the country.

Agriculture production

Due to the redistribution of agricultural land to the needy and the poor which imparts them

social security and also food security to the family at the micro level. Then all people will have

both physical and economical access to sufficient food to meet their dietary needs for a

productive and healthy life.

Increase in agricultural productivity has manifold advantages which help in improving the rural

economy by influencing activities like

Milk dairy products Live stock and Animal husbandry Consumption of Fertilisers and Pesticides Poultry Cold storages Savings

By encouraging such economy generation activities Rural economy is catapulted to new heights

and directly contributes to development of market infrastructure in the cities.


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2. JNNURM

There are two types of Reforms prescribed in the Guidelines of JNNURM

1. Mandatory reformsProvision of basic services to urban poor including security of tenure at the affordable

prices improved Housing, Water supply, Sanitation and ensuing delivery of other

services for Education, Health and Social security.

2. Optional reformsEarmarking at least 20-25% of developed land in all housing projects (both Public and

Private Agencies) for EWS/LIG category with a system of cross subsidization.

3. Gender and Land rights

Karnataka, Tamilnadu and Andhra Pradesh has amended Hindu succession act, 1956 which has

formalised womens right to property including land. Government of Karnataka has off late

issued guidelines to all Plot/House allotting agencies in the state especially in the case of EWS

and LIG schemes, the property should be either registered in the name of women head of the

family or both Husband and Wife.

4. Taxation

Taxation has four a main purpose or effects: Revenue, Redistribution, Repricing, and

Representation.

The main purpose is revenue: taxes raise money to spend on roads, schools andhospitals, and on more indirect government functions like market regulation or legal

systems. This is the most widely known function and also a indirect way of redistribution

function.

A second isRedistribution. Normally, this means transferring wealth from the richersections of society to poorer sections.

A third purpose of taxation is repricing. A fourth, consequential effect of taxation in its historical setting has been

representation.
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Governments use different kinds of taxes and vary the tax rates. This is done to distribute the

tax burden among individuals or classes of the population involved in taxable activities, such as

business, or to redistribute resources between individuals or classes in the population. Modern

social security systems are intended to support the poor, the disabled, or the retired by taxes

on those who are still working. Governments also use taxes to fund welfare and public services.

These services can include education systems, health care systems, pensions for the elderly,

unemployment benefits, and public transportation. Energy, water and waste management

systems are also common public utilitieswhich is also part and parcel of redistribution process.

A progressive tax is a tax by which the tax rate increases as the taxable base amount increases.

"Progressive" describes a distribution effect on income or expenditure. The term is frequently

applied in reference to personal income taxes, where people with more disposable income pay

a higher percentage of that income in tax than do those with less income. It can also apply to

adjustment of the tax base by using tax exemptions, tax credits, or selective taxation that would

create progressive distributional effects.

A progressive tax reduces income inequality, which has been reported to have a number of

societal benefits, at all income levels.

5. Public Distribution System (PDS)

Indias Public Distribution System (PDS) with a network of 4.78 Lakh Fair Price Shops (FPS) is

perhaps the largest retail system of its type in the world. Since 1951 public distribution of food

grains has been retained as deliberate social policy by India with the objectives of:

(i) Providing food grains and other essential items to vulnerable sections of the society at

reasonable (subsidized) prices

(ii) To put an indirect check on the open market prices of various items and

(iii) To attempt socialization in the matter of distribution of essential commodities

PDS is an important constituent of the strategy for poverty eradication and is intended to serve

as a safety net for the poor whose number is more than 33 Crores and are nutritionally at risk.

PDS is operated under the joint responsibility of the Central and the State Governments. The
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Central Government has taken the responsibility for procurement, storage, transportation and

bulk allocation of food grains, etc.

Food Subsidy

Food Subsidy is provided in the budget of the Department of Food and Public Distribution to

meet the difference between the economic cost of food grains and their sales realization at

Central Issue Prices for TPDS (Targeted PDS) and other welfare schemes. In addition, the Central

Government also procures food grains for meeting the requirements of buffer stock. Hence,

part of the food subsidy also goes towards meeting the carrying cost of buffer stock. The

subsidy is provided to FCI under TPDS and other welfare schemes and for maintaining the

buffer stock of food grains as measure of food security. The quantum of food subsidy depends

on the level of procurement of food grains and off take under TPDS and other welfare schemes.

The budgetary estimate for food subsidy during 2008-09 was about Rs. 37,000 Crores.

PDS System Today

The TPDS system today supports over 40 Crore Indians below the poverty line with monthly

supply of subsidized food grains. The system also provides gainful employment for 4.78 Lakh

Fair Price Shops Owners, their employees and hired labour who work at the FCI and state

warehousing godowns. PDS also has become a cornerstone of government development policy

and is tied to implementation of most rural development programs. PDS is also a key driver of

public sentiment and is an important and very visible metric of government performance.

Conclusions


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It is the fund crunch, delay in flow of funds, lack of capacity, non availability of skilled

manpower, Intra / Inter organisational problems that hampers the redistribution process.

developement and equal distribution among people

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