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Functioning of PDS
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This lesson covers: Functioning of PDS.

Roman Saini is teaching live on Unacademy Plus

Roman Saini
Part of a great founding team at Unacademy with Gaurav, Hemesh. Movies, Guitar, Books, Teaching.

U
Unacademy user
Is this Open Market Sale scheme related to Open Market Operations of RBI by any means, Sir?
Salman Hussain
4 months ago
omo is not related with pds by any means. omo is done in the money market
  1. Public Distribution System- objectives, functioning, limitations, revamping, issues of buffer stocks and food security Lesson 2


  2. In this Lesson Functioning of PDS *


  3. The central and state governments share responsibilities in order to ensure food security and provide food grains to the identified beneficiaries The centre procures food grains from farmers at a minimum support price and sells it to states at central issue prices The MSP is the price at which the FCl purchases the crop directly from farmers MSP is higher than the market price and decided by the CCEA It incentivises production and saves them from risk of price fluctuations Union government is also responsible for transporting the grains to godowns in each state . * * . .


  4. States bear the responsibility of transporting food grains from these godowns to each ration shop Many states further subsidise the price of food grains before selling it to beneficiaries Procurement can happen in two ways- Centralised procurement happens when FCI buys crops directly from farmers Decentralised procurement happens when States procure food grains for the central pool at MSP on behalf of FCI . . *


  5. The decentralised procurement scheme was launched to encourage local procurement of food grains and minimise expenditure incurred when transporting grains from surplus to deficit states over long distances These states directly store and distribute the grains to beneficiaries in the state Any surplus must be handed over to FCl But if there is a shortfall, FCl meets the deficit out of the central pool * * . .


  6. The Food Corporation of India (FCI) is the nodal agency at the centre that is responsible for transporting food grains to the state godowns Its functions are: procuring crops at the MSP from farmers maintaining buffer stocks to ensure food security allocating grains to states transporting grains to the states selling the grains to states to be eventually passed on to the beneficiaries . o * . * *


  7. . The centre stores food grains to . meet the minimum buffer stock norms for food security release food grains for Public Distribution systenm * meet emergency situations arising out of unexpected crop failures, natural disasters sell through the Open Market Sale Scheme The central government introduced the Open Market Sale Scheme (OMSS) in 1993 It aimed at selling food grains in the open market to stabilise market prices . . .


  8. FCI is entrusted with responsibility for storage of food grains in the central pool Food grains are stored in covered godowns, silos, and in the open, referred to as Covered and Plinth (CAP) FCI's own storage capacity has been insufficient to accommodate the central pool stock of food grains So, FCI hires space from central and state warehousing corporations and private parties . . . .


  9. CAP storage involves storage on elevated plinths covered in polythene Usually CAP storage is resorted as a last resort, during peak procurement seasons Storage in CAP for long duration exposes food grains to the risk of deterioration in quality * .


  10. The central government allocates food grains to the state governments for distribution to BPL, AAY and APL families through the PDS and various other welfare schemes The targeted beneficiaries are identified and ration cards are allocated to them The centre has the discretion to allocate more grains to states on an ad-hoc basis Ad-hoc allocations are usually provided during floods, droughts etc . . .


  11. The functions of the Fair Price shop owners are- sale of grains to ration card holders at prices fixed by state government maintenance of records and registers display of information such as the list of beneficiaries, list of essential commodities, timings of shops, and opening and closing stocks maintenance of accounts and show it to government officials and the gram panchayat at end of month . * . o