Can free PDS boost tepid pick of inter-state ONORC? Experts don't think so

One Nation One Ration Card ensures that National Food Security Act beneficiaries can lift their entitled foodgrain from any Fair Price Shop, anywhere in India using existing ration card

The government after the announcement to make the public distribution system (PDS) free under the National Food Security Act (NFSA) and discontinuation of the extra food grains distributed under Pradhan Mantri Gareeb Kalyan Ann Yojana (PMGKAY) said the measure will ensure uniformity in NFSA and its better administration. It also pinned it's hope

Under NFSA, the Centre has been allocating 5 kilograms of grains to almost 814 million beneficiaries at the highly subsidised rates of Rs 3 per kg for rice, Rs 2 per kg for wheat and Rs 1 per kg for coarse cereals.

It has been doing this since 2013, ever since the Act came into force in the last stages of the Congress-led UPA government.

The sale price, also called Central Issue Price (CIP) was for three years and was due for revision every three years after that.

But such has been political compulsion that almost a decade after the Act came into force, the government of the day has taken off the CIP altogether for one year starting from January 2023, instead of revising it.

Attempts to make NFSA uniform have been scuttled by several states in the past who add on their share of subsidy on the already low CIP, thereby making the grains absolutely free for the beneficiaries or selling them at an even cheaper price of Rs 1 per kg for wheat and rice.

So, can the free PDS programme give a push to the One Nation One Ration Card (ONORC) scheme, which has been rolled out in all 36 states and union territories?

ONORC ensures that all NFSA beneficiaries are allowed to lift their entitled foodgrain from any Fair Price Shop (FPS) of their choice, anywhere in the country, by using their existing ration card with biometric authentication on an electronic Point of Sale (ePoS) device.

It is particularly beneficial for those NFSA beneficiaries who frequently change their place of dwelling in search of temporary employment or for other reasons and miss out on their food security benefits due to migration — such as numerous workers and labourers, daily-wagers, urban poor like rag-pickers, street-dwellers, temporary workers in both organised and un-organized sectors, domestic workers, etc.

According to official records, between August 2019 to 30 November 2022, a total of 933.1 million portability transactions were recorded under ONORC.

But the problem here is that an overwhelming number of the same are intra-state transactions that are happening within the geographical confines of a state. Of the total 933.1 million ONORC transactions between August 2019 and November 2022, around 922 million (almost 99 per cent) are intra-state transactions and a very minuscule number is inter-state transactions.

But, the fact that a good number of migrations happen among the states, particularly from poorer states like UP, Bihar, Madhya Pradesh, Rajasthan, and Chhattisgarh to relatively well industrialised states like Maharashtra, Gujarat, Tamil Nadu, and Karnataka.

So can free PDS give a fillip to such transactions now that the price differential between grains states is a thing of the past?

Dr Akhil Alha, Assistant Professor of the Council for Social Development (CSD) said that it won’t have any impact on ONORC as the reasons for low off-take of ONORC in inter-state transactions is for entirely different reasons.

“There is basically three reasons for ONORC has so far not very successful when it comes to inter-state migrants and the reasons are poor coordination between Centre and states, low connectivity of ePoS machines in several players and most importantly mindset problem with FPS owners who will also want to meet the demand for grains from the people in his vicinity before attending to those who have come from outside,” Alha told Business Standard.

He said the ONORC another reason is that while Aadhar seeding with ration cards is progressing at a very fast pace and more than 97 per cent of ration cards have been seeded with Aadhar but it is largely at the household level and not with individual beneficiaries.

CSD, in a recent study conducted jointly with German Development Bank, KFW found that a greater proportion of intra-state migrant families are exercising portability (42 per cent) compared to only 16.9 per cent and 5.3 per cent among inter-state and both inter and intra-state migrant households respectively.

“Portability is low among inter-state migrants due as fear of losing identity is large among them,” Dr Nitya Nanda, Director of CSD had said while releasing the report a few weeks back.

The study was conducted between March 2019 and April 2022 both through secondary sources and direct field surveys.

Field surveys were conducted of around 3,488 beneficiaries of at least one of the six identified social schemes spread across Rajasthan and Madhya Pradesh, which are key migrant source states and Uttar Pradesh (parts adjoining Delhi) and Kerala, which are key destinations for migrant workers and constitute a large proportion of urban poor.