Whats wrong with our BPL cards in Andhra Pradesh

1.1    RATION CARDS

            The ration card in my opinion is the most important part of a persons life in the village.  It is misleading to call it a ration card because it is fundamentally a family card.  The main purposes for which a ration card is used in a village is three fold.  Firstly it establishes the identity of the individual and the family, secondly it is used as the starting point for delivery of all the Government services to the individual and finally to deliver subsidized ration.  The current ration card database is very slow in catching up with real time day to day changes in the families with the result that we are always confronted with an outdated database disconnected from reality.

1.1.1           PDS

            Let us first discuss the last part the Public Distribution System(PDS) as it is the reason for existence of the ration card.  PDS was introduced as a part of India’s overall strategy of poverty alleviation and income redistribution.  The primary objective of PDS is to deliver food grains at affordable prices to the poor households of the country, and to provide food security for the country.  The implementation of PDS saw many problems the most important of which was improper targeting of the poor.  In order to address this problem Government of India (GOI) introduced the Targeted Public Distribution System (TPDS) from 1997.  The problems at national level with the PDS are understood to be urban bias, low coverage in poorer regions, inefficient delivery system with high delivery costs and targeting errors.  However when we look at the problems in Andhra Pradesh(AP) we are confronted with a different set. 

Let us first see some statistics: AP has a monthly allocation of 2.73 lakh MT of PDS rice and an offtake of 2.99 lakh MT of rice; the normal production of rice in AP is 120 lakh MT; 44500 Fair Price (FP) shops exist in the state; there are 2.25 cr cards for 2 cr Below Poverty Line(BPL) families in the state; Rs2/kg subsidized rice was introduced in AP from 2008-09; AP spends 10.2% of countries PDS subsidy for 4.2% BPL house holds in India; as per GOI there exist 16 % BPL families whereas GoAP classifies 60% as BPL; and the income limit for a BPL family was enhanced to Rs.60000 in rural areas and Rs.75000 in urban areas.  These facts indicate certain problems with our PDS system. 

Table 1:Some factors which affect the BPL list

Factor	Influence
1.  Reducing levels of poverty	Reduce the list
2.  Elections	Increase the list
3.  Marriages and nuclear families	Increase the list
4.  Births	No impact(inclusion of units)
5.  Divorce	Increase the list
6.  Deaths	Reduce the list(deletion of units/cards)
7.  Migrations	Tendency to increase
8.  Introduction of new welfare schemes linked to BPL card status	Increase the list
9.  Poor regulatory framework	Increase the list
10.  Introduction of fail safe systems using information technology	Decrease the list
11.  Magnitude of difference between GoAP issue price and market price(switchover effect)	Increase the list
12.  Changes in income limits for BPL family	Increase the list
13  Improper deletions	Increase the list(temporary decrease in list Occurs)
14. Rising prices of essential commodities	Increase the list

It is accepted that the success of any PDS is directly dependent on the targeting efficiency.  The efficacy of PDS system depends on the geographic penetration of PDS with a strong network of FP shops; good incentive structure for dealers; and a strong fail safe system capable of arresting open market diversions, bogus/duplicate/ineligible/non resident cards, under weighing and sale at higher prices. 

An examination of AP from the standpoint of traditional success indicators of a PDS system is given in table 2. 

Table 2.  Performance of AP on the PDS parameters.

Indicator	Performance(V.Good/Good/Poor/V.Poor)
1.  Targeting efficiency	Very poor
2.  Network penetration in poorer areas	Very good
3.  Incentive structure for dealers	Poor
4.  Delivery system efficiency	Poor
5.  Urban bias(lack of)	Very good
6.  Utilisation of central allocation	Very good

Though AP does not suffer from usual problems of other states such as poor network penetration or urban bias, one of the major concerns of AP is poor targeting efficiency.  Improper targeting in AP occurred due to two reasons, the first being almost universal coverage and the other due to inclusion errors.

The concern of almost universal coverage of families in AP under PDS is a result of a liberal definition of income limits for BPL family when compared to GOI norms.  The result is that almost 60% of AP population is classified BPL whereas GOI classifies 16%.  Therefore this universal coverage appears populist on the face of it.  We will reexamine this problem of almost universal coverage from a different perspective.  The BPL list of AP is bloated when viewed from the standard static parameters of GOI.  Every year sees a substantial increase of white rations cards disproportionate to the increases in BPL house holds.  There are rapid yearly increases in BPL list coupled with ever pending applications for new cards.  Table 1 indicates that there are factors not related to the PDS which put pressure on the BPL list  GoAP has linked up many of its welfare schemes to the BPL card.  Schemes such as housing, educational fee waiver, Arogya sri, etc. can only be accessed with a white card today.  Privatisation of education has led to setting up of a large number of private institutions with exhorbitant fees beyond the reach of common man.  Government as a welfare measure has provided all BPL families fee reimbursement.  The average middle class, not so poor family can neither afford the private education nor has a BPL card.  Under normal circumstances a middle class family which would not have been under pressure to obtain a BPL card is now forced to obtain one by hook or crook.  The increasing prices of building materials have pushed house construction out of reach from the ordinary not so poor family in the village.  This has resulted in a large number of people who are not so poor dependent on a BPL card in order access Government housing subsidy.  Similarly all the not so poor households of a village during the last few years of drought or flood suffered from the ever increasing prices of essential commodities such as vegetables etc.  The rising prices in the economy and loss of agricultural production due to natural calamities compelled the average family to obtain a BPL card.  The current BPL definition of AP we can say has responded dynamically to the current concerns of the common man who is suffering from the distortions of the economy, government policies and natural calamities.  In the absence of proper regulation of prices or virtuous educational/health policies a liberal BPL list is the least that any democratically elected government could have done.  It would be unfair to deny the people in a democracy the temporary advantage of having a BPL card to over come their temporary poverty during harsh times.  

The inclusion errors are due to a weak system of identification, election year pressures, defects in computerization of the database etc.  The aftermath of any attempt to weed out bogus or ineligible ration cards by Government will be a flood of applications for fresh white cards.  The net result of any such weeding out exercise will be further addition to already bloated BPL card list.  The aforementioned factors also exert some pressure on the not so poor people to sneak into the list.

Another concern of AP is the heavy subsidy budget which has increased abruptly from 720 cr in 07-08 to 3000 cr in the current year due to the Rs2 kg rice.  Heavy drawls of food grains from the central pool and inadequate reforms are also considered problems in AP.

Some suggestions given by experts to overcome the problems of AP have been decentralized procurement; diversification of food grain supplies (by including ragi, jowar etc. apart from rice); introduction of either food stamps or food coupons as is being proposed by GOI; redesigning of identification, targeting and delivery; and use of IT tools to put in place a fail safe system.  The pressing problem for AP currently is to reduce its subsidy burden. 

1.1.2           FAMILY IDENTITY CARD

One of the functions of a ration card as said earlier is for use as a family identity card.  It establishes the identity of a person as a resident of AP.  Any data relating to such family cards is gathered and stored either manually or electronically.  This database should reflect the family details truly at any given time.  The composition of a family is subject to continuous changes due to births, marriages, migrations, divorces and deaths.  There exists a lag between the time of occurrence of the family changes and the time of incorporation in the database.  This database is therefore dynamic and keeps adapting to real time changes.  The mechanism/system overseeing the database should ensure three things.  The changes should be made reliably and truly, easily and quickly.  Our challenge is to see that the change which occurs in a family in the remotest corner of the state is easily and correctly captured in the quickest possible time.

The family details reflected in a card are names of head of the family and other members, date of birth, age, fathers/spouses name, address, and income.  We have to first see if any changes are needed in the details currently being captured and then examine how to capture those details.  The capture of the card number of father will help in cross referencing and reliability of data.  A large number of rural families migrate during lean season from their villages.  There is a need to capture both the temporary address as well as permanent address for every family.  This will also help in removal of cards for the same family at two places.  The capture of age should be done away with and capture of date of birth in its place alone should be allowed.  Age capture creates confusion at the field level at a later date when the card is used for other purposes.  An incorporation of date of birth alone should be made and not the age in the database.  When we look at the old aged people not receiving pensions today we come across a large number of very old people with an under reporting of age in the ration cards.  All these people now are kept away from enjoying the benefits of old age pensions.  The date of births of a majority of the 0-45 age group people can be easily captured from birth certificates or SSC certificates.  Those of the older people can be ascertained with the help of rationally designed questionnaires at the village level.  Similarly because of improper deletions of death cases from the ration card a number of widows have lost the opportunity to access widow pensions.  The income assessment is another area where a proper procedure should be adopted.

The changes in the database can happen through three ways viz., intimation by the card member, gathered from databases of other departments such as medical & health, education etc., or gathered by group of dedicated functionaries like revenue/civil supplies machinery.  Most of the applications from members are for correction of errors, addition of new members, change of address, creation of new family units, or removal of members.  There is a need to create a fail safe and universally understood mechanism for this purpose.  Such a system should withstand the dumbest and the most mischievous of our employees and citizens.

1.1.3           ACCESS KEY TO ALL GOVERNMENT BENEFITS

The third main function of a ration card is that of a key which unlocks a host of other Governmental benefits.  All the services of Government revolve around the family unit of which any individual is an integral part.  Today the ration card is being used for identification of beneficiaries for many schemes such as housing, pensions, fee waiver etc.  Each of the benefit needs one type of information from the card database.  Housing requires the income data, old age pension require the date of birth, widow pensions require death data, and some other scheme could need the present address.  Therefore all the basic data provided in the card is equally important.  There is a tendency of the civil supplies department to maintain the family details and income alone with no importance given to correct capture of remaining data like date of birth.  When old age pensioners were limited very few people were concerned about right date of birth.  There was a tendency to give younger age in order to appear young in the village.  With pensions being given to all eligible this item became of paramount importance.  Such incorrect data will affect the quality of other departmental services as well.

For this to happen properly all the departments of the Government must have easy and quick access to the real time ration card database.