A study on the efficacy of the Public Distribution System in India with special emphasis to the functioning of agricultural warehousing agencies

Abstract

The study analyses the effectiveness of the public distribution system in India with special emphasis to the functioning of public sector agricultural warehousing agencies such as Food Corporation of India (FCI) and Central Warehousing Corporation (CWC), engaged in the procurement, transportation, storage and distribution of food grains. The data for the period of 2007-08 to 2011-12 has been collected from secondary sources and has been interpreted. The study shows that the current procurement trends of food grains would not sufficient to meet the allocation and the future requirements in the twelfth plan period. The per capita net availability of rice and wheat declined marginally, while the total availability of cereals and other pulses increased significantly. The total cost of food subsidies contributed about 5 % of agricultural GDP during the last 5 years. The main reason for increase in economic cost of food grains is the higher procurement prices which also lead to rising food subsidies. Instead of open-ended procurement policy in India, a need-based procurement system has to be implemented.