Analysis of The Indian Express Editorial – November 11, 2024

Analysis of The Indian Express Editorial 1 : Fixing a leaky PDS

Introduction

India’s Public Distribution System (PDS) has long been considered a lifeline for millions, providing subsidized food grains to households. However, opinions differ on its sustainability. Some argue that free ration under the current PDS framework is an investment in human resources, benefiting vulnerable households. Others point out the inefficiencies and claim that the system is unsustainable, advocating for a shift towards more targeted and efficient distribution methods.

Challenges with the Current PDS System

1. Overextended Coverage
   • A critical flaw of the PDS is that it currently covers about 57% of the population, well beyond what is necessary.
   • World Bank data from 2022 shows that 12.9% of Indians live in extreme poverty, surviving on less than $2.15 (PPP) a day. This figure is much lower than the number of people benefiting from the PDS.
   • According to a 2024 NITI Aayog report, 248 million Indians were lifted out of poverty over the past nine years. With India’s Multidimensional Poverty Index (MDPI) dropping from 29.17% to 11.28%, there is a clear need to reassess the PDS’s target group.
   • A more sustainable approach would be limiting free ration benefits to the poorest 15% of the population, rather than extending them to over half the country.
   • For those above the poverty line, food grains could be offered at half the minimum support price (MSP). This would free up funds for agricultural research and infrastructure, fostering long-term growth in the sector.
2. PDS Leakage
   • PDS leakage remains a significant concern. According to unit-level data from the Household Consumption Expenditure Survey (HCES) for August 2022 to July 2023, a substantial portion of allocated grains never reaches its intended recipients.
   • The study revealed a shocking 28% leakage of rice and wheat, equivalent to 19.69 million metric tonnes (MMT) of grains. This results in a financial loss of ₹69,108 crore at the current economic cost of these grains to the Food Corporation of India (FCI).
   • This leakage is not a one-time problem. As costs rise, these annual losses will continue to climb unless action is taken.
   • The issue of PDS leakage is not new. A High-Powered Committee led by Shanta Kumar highlighted a 46% leakage in 2015. In response, the government introduced Point-of-Sale (PoS) machines at Fair Price Shops (FPS) in 2016, which brought the leakage rate down to 28%.
   • Still, leakage rates vary widely across states. Arunachal Pradesh, Nagaland, and Gujarat are among the top offenders. Despite nationwide efforts to curtail the problem, PDS inefficiency remains a substantial obstacle to ensuring food security.

State	PDS Leakage Rate (%)
Arunachal Pradesh	36%
Nagaland	34%
Gujarat	32%
All-India Average	28%

3. Nutritional Security Gap
   • While PDS ensures access to basic food grains like rice and wheat, it has failed to address India’s broader nutritional security issues.
   • The HCES data shows a concerning decline in household spending on essential food items such as pulses and vegetables between 2011-12 and 2022-23.
   • More alarmingly, the National Family Health Survey (2019-21) reports that 35.5% of children under the age of five are stunted, 19.3% are wasted, and 32.1% are underweight. These statistics point to a persistent malnutrition crisis that free rice and wheat alone cannot solve.
   • To tackle this problem, India should consider converting some FPS into nutrition hubs, offering a wider variety of nutritious foods like pulses, millets, fruits, and eggs alongside cereals. These hubs could be linked to a digital food coupon system that allows beneficiaries to access a more diverse, healthy range of foods.

Rethinking the PDS: A Sustainable Path Forward

• The current PDS system, while helpful to many, needs a major overhaul to ensure it remains sustainable and effective in tackling poverty and malnutrition. By limiting PDS benefits to the most vulnerable populations and offering partially subsidized grains to those above the poverty line, the government can reduce unnecessary expenditure.
• Savings from this restructuring could be redirected towards agricultural innovation, improving farming infrastructure, and supporting farmers through better research and practices.
• Addressing PDS leakages will require continued efforts to modernize the distribution process. Widespread implementation of digital technologies, such as biometric authentication and blockchain-based tracking systems, could further reduce leakages and ensure that resources reach those in need.
• Finally, to address nutritional deficiencies, the PDS must evolve beyond just providing calories through grains. Nutrition hubs and digital food vouchers can help ensure access to a balanced diet, improving health outcomes for the population and reducing malnutrition rates.

Conclusion

The Public Distribution System (PDS) has been a cornerstone of India’s welfare efforts, but it requires significant reform to meet modern challenges. By targeting benefits more efficiently, curbing leakages, and enhancing nutritional offerings, the PDS can continue to be a crucial tool for poverty alleviation without becoming a financial burden on the state. Ultimately, a reformed PDS will not only provide food security but also promote long-term sustainability and human development.

Introduction

For the next two weeks, all eyes will be on global climate negotiators, especially those representing developed nations. As the world grapples with the ever-increasing threats of climate change, this year’s UN Climate Change Conference (COP 29) holds a pivotal significance. For the first time in 15 years, discussions will revolve around creating a solid framework for climate finance, setting the stage for what many are calling the “Finance CoP.”

CoP 29: A Defining Moment in Climate Finance

• The journey began at the Copenhagen Summit in 2009, where developed nations pledged to mobilize $100 billion annually by 2020 to assist developing countries in tackling climate challenges. However, this promise was only partially fulfilled—and that too, only by 2022.
• Meanwhile, the financial needs of the Global South have escalated far beyond the initial estimates made in 2009.
• As the Baku summit kicks off in Azerbaijan’s capital, the focus will be on setting new financial targets and establishing an updated funding mechanism. It’s for this reason that CoP 29 is being referred to as the “Finance CoP”, even before the negotiations have officially started.

The Optimism Surrounding CoP 29

Despite lingering doubts due to past failures, there is a sense of cautious optimism as the Baku negotiations begin. The outlook is more hopeful than it has been in recent years, largely due to a few key developments:

• At the last two climate conferences, delegates successfully agreed to set up a Loss and Damage Fund, aimed at helping countries mitigate the impact of extreme weather events.
• The financial targets being discussed at CoP 29, 15 years after the Copenhagen summit, are now supported by stronger scientific evidence on the escalating costs of inaction.
• Encouragingly, most developed countries, particularly members of the European Union, have shown willingness to back the creation of mechanisms to raise $1 trillion annually to protect the world’s most vulnerable populations from climate change.
• On the other hand, developing nations have broadly aligned themselves with this ambitious financial goal, recognizing the urgent need for substantial climate financing.

Challenges in Climate Financing

While there is a growing consensus on the overall amount of money needed to combat climate change, significant disagreements remain regarding who should foot the bill and to what extent.

• Earlier this year, India took a bold stance, demanding that developed countries commit to raising $1 trillion annually until 2030 to help address climate challenges globally.
• However, as various pre-Baku climate meetings have shown, the developed nations—primarily in the Global North—have signaled reluctance to shoulder this financial burden alone. They have suggested that emerging economies, such as India and China, should also contribute significantly to the climate funding mechanism.
• CoP 29 is expected to witness tough negotiations around this issue, with India and China likely to face pressure to increase their climate finance contributions.

Potential Political Complications

Adding to the complexity of these negotiations is the political uncertainty surrounding Donald Trump’s possible return to the White House. During his previous tenure as U.S. President, Trump famously withdrew the U.S. from the Paris Agreement, and his “America First” policy often painted India and China as climate villains.

• If Trump were to resume his position as U.S. President, there is little indication that he would take a more cooperative stance toward global climate agreements. This could further complicate efforts to secure a cohesive global financial commitment to climate action at CoP 29.

Conclusion: India’s Role and the Path Forward

As the world prepares for intense discussions at CoP 29, India’s position remains crucial. Historically, India has emphasized the responsibility of developed nations in addressing climate change, and this stance has gained even greater moral authority given India’s positive performance in meeting its Paris Agreement commitments compared to many developed countries.

India must continue to hold firm on its principled stance, ensuring that developed nations fulfill their financial obligations to the developing world. At the same time, global stakeholders must collectively recognize the urgent consequences of climate change. The financing issue, though complex, can be resolved through negotiation and collaborative international effort. If CoP 29 succeeds in setting meaningful financial targets, it could be a game-changer in the fight against climate change, offering hope for a more sustainable and climate-resilient future.