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Photo: Shailendra pandey 
The Other Scam You Forgot About From Tehelka Magazine, Volume 8, Issue 32, Dated 13 Aug 2011
The Karnataka Lokayukta's report on the PDS mess is as damning as the mining scam revelations, says Rohini Mohan
Photo: Shailendra pandey
DESPITE WHAT our reel-life heroes have shown us, perhaps it's only possible to fight one villain at a time. Still, in his last few days on the job, Karnataka Lokayukta Santosh Hegde tried to battle two evils, with two reports that presented damning evidence of corruption in the BJP government. The first report, on illegal mining, had enough firepower to systematically dig holes in the state government. The second report, unfortunately, has been overshadowed by the sheer political drama of getting the otherwise immovable CM BS Yeddyurappa to resign.
Submitted to the chief secretary a day before the mining report (i.e. on Tuesday, July 26, 2011), a probe into the public distribution system (PDS) in the state shows massive corruption and inefficiency in the distribution of foodgrain. While the state lost about Rs 1,800 crore per year through illegal iron ore trading, it also lost about Rs 1,738 crore a year through the PDS.
Public Distribution System (PDS) probe shows massive corruption and inefficiency in the distribution of foodgrain
In September 2010, Hegde appointed Mysore-based anti-corruption activist and founder of Swami Vivekananda Youth Movement (SVYM) Dr. R. Balasubramaniam to probe the alleged irregularities in the PDS. By collecting secondary data and doing field investigations in all 30 districts, Balasubramaniam found that a little above 49 percent of those receiving subsidised rice and wheat under the below poverty line (BPL) quota, were ineligible. Every month, an average of Rs 54.4 crore subsidy was spent on families that no longer existed, foodgrain amounting to Rs 56.6 crore was lost in leakages and Rs 24.5 crore was spent on people who weren't poor at all.
This staggering diversion of funds cannot be explained simply by inefficiency and systemic corruption. The devil lies in the dirty policy. In December 2008, the government announced a short-term programme: anyone producing a self-declared affidavit of poverty by March 2009 would be given BPL cards. If a person stood in line at the district Nemmadi Kendras (relief centres) and said he was poor, he would receive a BPL card. Without proof of income, possessions or calorie intake. The BJP government had simply bypassed every single method of determining poverty.
Nemmadi Kendras are set up by the eGovernance department for providing 43 kinds of services including widow pension, birth and death certificates, domicile certificates, etc. The 136-page PDS irregularities report explains that these centres gave out 1.6 crore cards (APL + BPL), while the state's population is only 1.2 crore families. This means subsidies were drawn and foodgrain accounted against 40 lakh ghost cards for families that do not exist.
Balasubramaniam points out that the BPL cards were given out just a few months before the 2009 Lok Sabha election. "The whole process of identifying the poor was reduced to political gimmickry," he says.
Grain down the drain
Rs 1,800 cr lost per year / annum through illegal iron ore trading
Rs 1,738 cr lost per year / annum through irregularities in the PDS
It gets worse. Even the number of poor families is an overestimation, thanks to the randomness of a self-declaration. The probe calculates that the number of BPL families according to Karnataka's official poverty assessment criteria is 44 lakh. This is far below the 96 lakh BPL cards the state has given out. The inclusion error was thus 49 percent - every second person who received subsidised foodgrain shouldn't have.
THE CENTRAL government, on the other hand, according to methods stipulated by the Planning Commission, estimates that there are 31.29 lakh BPL families in Karnataka. Central funds and foodgrain from the Food Corporation of India are allotted accordingly to the state. As the state claims it has 65 lakh more BPL families (it calls it Extra BPL), it must dip into its own funds to meet the excess food security it wants to extend. So when the Centre gives rice at Rs 5.40 per kg to the state, Karnataka further subsidises this by Rs 2.40, so that it can sell rice to the BPL cardholders at Rs 3 per kg. The Centre also gives rice at Rs 8.30 a kg to Above Poverty Line families, but since Karnataka has slotted most of the APL families also as BPL, it is bound to give them rice at Rs 3 a kg too. It does this by spending another Rs 5.30 a kg for APL families. In other words, Karnataka subsidises the rich far more than it does its really poor.
In the shade Hegde submitted the PDS scam report a day before the one on mining
Photo: SB Satish
The takeaway from the PDS irregularities report is not only that undeserving people are accessing subsidies, but also that the really poor are being shortchanged. In fact, there's an exclusion error of 5 percent. This may seem low but the PDS deprives the poor in another way too.
Since there is only a constant amount of ration (rice, wheat, sugar, kerosene) from the central PDS, the Karnataka government devised a new system to be able to distribute ration to the about 80 percent of its population it had declared BPL. Instead of the per family norm followed in every Indian state, Karnataka introduced a new unit system. One unit is any person who is above 10 years of age. Every unit was entitled to 4 kg of rice, and no family was allowed to claim rice for more than five units, or five family members.
This meant the government never gave more than 20 kg per month to a family, even though the Central law stipulates that every family should get 29 kg rice per month, whether it has five or two members. The Karnataka chapter of the People's Union for Civil Liberties has challenged this in the Karnataka High court. Last year, the court declared the unit system illegal, but the state has shown no sign of reverting to the family system of food security.
Every month, about Rs 54.4 crore subsidy was spent on families that existed only on paper.
The 9 kg extra due to every BPL family does not always fund the extra BPL cardholders in the state either. The PDS report finds that 73 percent of the people surveyed paid bribes to get foodgrain. Fair price shops charged higher rates from the cardholders, and many of them found the shops open only for 5-6 days a month. Even when open, close to 70 percent of the ration shops did not display stock positions on a board outside, as they are supposed to. In a state that considers itself the IT hub of the nation, neither the food distribution nor the inventory is computerised.
Food minister Shobha Karandlaje and Department of Food and Civil Supplies Secretary BA Harish Gowda refused to respond to TEHELKA's queries.
As he steps down after a turbulent last phase, Hegde says that while the illegal mining report indicts politicians and corporates, the PDS graft should be given equal attention. Both scams have caused huge losses to the exchequer, but "the frauds and wrong decisions in the PDS are being further funded by people's taxes," he says.
The graft in Karnataka's PDS is just the sort of callousness in governance that allows a regime to claim that it cares for its poor, when it does nearly the opposite.
Rohini Mohan is a Special Correspondent with Tehelka.
(The above article / news report from Tehelka Magazine ends / concludes here itself.)
· Karnataka Lokayukta's report on the PDS mess / scam is as damning as the mining scam revelations
· Karnataka Lokayukta Santosh Hegde in his last few days on the job tried to battle two evils with two reports that presented damning evidence of corruption in the BJP GoK
· First report, on illegal mining scam, had enough firepower to systematically dig holes in the GoK
· Second report, on PDS scam unfortunately, was overshadowed by the sheer political drama / Kar nataka of getting the otherwise immovable CM BS Yeddyurappa to resign
PDS scam report submitted to the Karnataka chief secretary on Tuesday, July 26, 2011
|
a day before the illegal mining scam report
|
shows massive corruption, inefficiency and incompetency in foodgrain distribution
| | Loss per year / annum to Karnataka |
| Illegal iron ore trading / mining scam | Rs 1,800 crore |
| PDS scam | Rs 1,738 crore |
In September 2010, the Karnataka Lokayukta Santosh Hegde (using his suo moto powers) appointed Mysore-based anti-corruption activist and founder of Swami Vivekananda Youth Movement (SVYM) (http://www.svym.org/) Dr. R. Balasubramaniam (http://rbalu.wordpress.com/) to probe the alleged irregularities in the PDS.
· Secondary data collected and field investigations done in all 30 districts of Karnataka
· More than 49% of those receiving subsidised rice and wheat under the Below Poverty Line (BPL) quota were ineligible
· An average of Rs 54.4 crore subsidy/month spent on non-existent families
· Foodgrain worth Rs 56.6 crore lost in leakages
· Rs 24.5 crore spent on people who weren't poor at all
| Rs 054.4 crore | subsidy/month spent on non-existent families |
| Rs.056.6 crore | worth foodgrain/month lost in leakages |
| Rs.024.5 crore | spent/month on people who weren't poor at all |
| Rs.135.5 crore | Sub-total /month |
· Diversion of funds cannot be explained simply / merely / just by inefficiency, incompetency and systemic corruption
· Devil lies in the utterly, butterly and gutterly dirty pre-Lok Sabha / pre-Parliamentary Election 2009 Policy
· GoK announced a short-term programme in December 2008 to give BPL cards to anyone producing a self-declared affidavit of poverty by March 2009
Pre-Lok Sabha / Pre-Parliamentary Election 2009 Gimmick / Joke / Farce in
|
December 2008
|
GoK announced a short-term programme
|
to give BPL cards to anyone producing a self-declared affidavit of poverty by March 2009
· If a person stood in line at the District Nemmadi Kendras (Relief Centres) and said he was poor even without any proof of income, possessions or calorie intake, he'd receive a BPL card
· BJP GoK had simply bypassed every single method of determining poverty
· Nemmadi Kendras are set up by the eGovernance department for providing 43 kinds of services including widow pension, birth and death certificates, domicile certificates, etc
· District Nemmadi Kendras (Relief Centres) gave out 1.6 crore cards (APL + BPL), while the Karnataka's population is only 1.2 crore families
Karnataka Districts' Nemmadi Kendras (Relief Centres)
|
set up by the eGovernance department for providing 43 kinds of services including widow pension, birth and death certificates, domicile certificates, etc
|
if a person stood in line even without any proof of income, possessions or calorie intake between December 2008 to March 2009 and said s/he was poor, s/he'd get/receive a BPL card
|
gave out 1.6 crore cards (APL + BPL) although Karnataka's population is only 1.2 crore families
| Karnataka's families' population | 1.2 crore | 120 lakhs |
| Karnataka's ghost ration cards for non-existent families | 0.4 crore | 040 lakhs |
| Karnataka's ration cards (APL + BPL) given by Relief Centres | 1.6 crore | 160 lakhs |
· Subsidies drawn and foodgrain accounted against 40 lakh ghost cards for non-existent families
· BPL cards given out/away just a few months before the Parliamentary / Lok Sabha / LS Elections 2009
· Whole process of identifying the poor reduced to political gimmickry / joke / farce
· Number of poor families overestimated due to the randomness of a self-declaration
· 49% inclusion error means every second person who received subsidised foodgrain shouldn't have
· 44 lakh actual BPL families in Lokayukta report based on GoK's own official poverty assessment criteria
· 96 lakh BPL cards given by GoK
· 31.29 lakh BPL families in Karnataka as per GoI / Planning Commission estimates
| BPL families as per Lokayukta report | 44.00 lakh |
| BPL cards given by GoK | 96.00 lakh |
| BPL families as per GoI / Planning Commission | 31.29 lakh |
· GoK's (GoK has) 65 lakh more BPL families (called Extra / Additional BPL) and must dip into its own funds to meet the excess food security it wants to extend
· GoI rice at Rs 5.40/kg to BPL is subsidised by GoK by Rs 2.40/kg to sell it to the BPL cardholders at Rs 3/kg
· GoI rice at Rs 8.30/kg to APL is subsidised by GoK by Rs 5.30/kg to sell it to the most of the APL families that have been slotted / categorised as BPL cardholders at Rs 3/kg
· GoK subsidises the rich far more than it does its really / genuinely / truly poor
| | BPL Families | GoI / Central PDS / Food Corporation of India (FCI) rice/Kg | GoK subsidy/Kg | Karnataka PDS rice sold @ |
| GoI as per Planning Commission | 31.29 lakh | @ Rs.5.40/Kg | Rs.2.40/Kg | Rs.3/Kg |
| GoK (65 lakh extra / addnl) | 65 lakh extra | @ Rs.8.30/Kg | Rs.5.30/Kg | Rs.3/Kg |
| Lokayukta report | 44 lakh | | | |
· Undeserving people accessing subsidies
· Really / Genuinely / Truly poor being shortchanged
· 5% exclusion error deprives the poor
GoI Central PDS
|
gives constant amount of ration (rice, wheat, sugar, kerosene)
|
per family norm must and should be followed in each and every Indian state
|
law stipulates that every family should get 29 kg rice/month whether it has 05 or 02 members
GoK
|
devised a new system to distribute ration to 80% of its population it'd declared as BPL
|
One unit=any person above 10 years of age->entitled to 4 kg of rice
|
no family allowed to claim rice for more than 05 units or family members (5*4=20 Kgs)
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never gave more than 20 kg/month to a family
Unit system of Food Security
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devised by GoK to distribute ration to 80% of its population it'd declared as BPL
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01 unit means any person / individual above 10 years of age gets 4 kg of rice
|
no family allowed to claim rice for more than 05 units or family members (5*4=20 Kgs)
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never gave more than 20 kg/month to a family
|
challenged in the Karnataka High Court (HC) by Karnataka chapter of the People's Union for Civil Liberties (PUCL)
|
declared by HC as illegal in 2010 but the GoK's (GoK has) shown no sign of reverting to the family system of food security
| Family System / Norm of Food Security | GoK's Unit System |
| Legal System / Norm that must and should be followed in each and every Indian state | Declared as illegal by Karnataka High Court in 2010 |
| Law stipulates 29 kg rice/month per family whether it has 05 or 02 members | No family allowed to claim rice for more than 05 units or family members. Not more than 20 kg/month per family |
· Rs 54.4 crore subsidy/month spent on non-existent families
· 73% of people surveyed paid bribes to get foodgrain / ration
Fair Price Shops (FPSs)
|
charged higher rates from the cardholders
|
opened only for 5-6 days a month
|
even when open 70% did not display stock positions on a board outside as they're supposed to
· Neither the food distribution nor the inventory is computerised in Karnataka which considers itself as the IT hub of India
· Frauds and wrong decisions in the PDS scam are being further funded by people's taxes
· Karnataka's PDS scam is just the sort of callousness in governance that allows a regime to claim that it cares for its poor, when it does exactly the opposite
01) Lokayukta indicts BSY over PDS - Ketur Vasuki, Bangalore, The Pioneer, Monday, August 15, 2011 (web page inaccessible / not found / out-of-date)
(web page inaccessible / not found / out-of-date)
Article in The Pioneer: Lokayukta indicts BSY over PDS - PDF File Size = 663 KB
02) The Mess called PDS: How Fair Price Shops have been made Unfair - Dr. R. Balasubramaniam (http://rbalu.wordpress.com/) in Star of Mysore, Eveninger, Thursday, August 04, 2011
The author is the Special Investigation Officer on PDS for Karnataka Lokayukta
03) The mess called PDS: How Fair Price Shops have been made unfair - Friday, August 05, 2011
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