Recently, the Supreme Court did well to set a deadline of July 31 for states to implement the One Nation One Ration Card system. Considering the sheer scale of the migrant crisis that unfolded last year — foodgrains were distributed to a staggering 2.8 crore migrants under the government’s Aatma Nirbhar Bharat scheme — and the still precarious financial position of households, especially of migrant labourers working in the informal economy, the Court has rightly reminded states of the urgency of implementing this scheme. Citizens must not be denied basic welfare benefits simply because they have migrated beyond state boundaries.
[wptelegram-join-channel link=”https://t.me/s/upsctree” text=”Join @upsctree on Telegram”]
The concept of One Nation One Ration Card revolves around the idea that citizens should be able to avail of their entitlements irrespective of where they reside in the country. In this framework, migrant workers can access the subsidised foodgrains under the National Food Security Act from any of the 5.4 lakh fair price shops across the country, and not be bound to the fair price shop near the place where their ration card is registered.
But there are several issues that require careful consideration.
First, shifting to such an architecture will also require continuous and real-time information on migration across the country. But there has been little progress on this front. The Court recently chastised the Centre for the delay in setting up a portal to register migrant and unorganised workers.
Second, foodgrain allocations across states will need to be more flexible in nature, taking into account seasonal fluctuations in migration.Thus the information technology infrastructure needs to be robust to ensure effective inventory and stock management.
Third, as entitlements tend to vary across states, migrants will not be able to access the full benefits available to them in their home states, unless those costs are borne by the states. But this would require integrated, regularly updated, dynamic systems.
Fourth, not all the 5.4 lakh fair price shops have installed ePoS machines. For instance, as reported in this paper, Delhi is yet to start using ePoS in fair price shops.
Fifth, there is also the issue of allowing for the updation of household member details on the ration card, and seeding of ration cards with Aadhaar only in the home state.
To incentivise states to shift to this architecture, last year, the central government had made states’ additional borrowings conditional on the successful implementation of the One Nation One Ration Card system. More such measures may be needed to ensure a quick and effective rollout of this scheme.
The migrant crisis last year threw into sharp relief not only their precarious economic situation, but also the absence of comprehensive safety nets to fall back on. Shifting to this new framework would be a step towards strengthening existing social security nets whose glaring holes have been exposed by the pandemic.
What is the ‘One Nation, One Ration Card’ system?
Under the National Food Security Act, 2013, about 81 crore persons are entitled to buy subsidized foodgrain — rice at Rs 3/kg, wheat at Rs 2/kg, and coarse grains at Re 1/kg — from their designated Fair Price Shops (FPS) of the Targeted Public Distribution System (TPDS). Currently, about 23 crore ration cards have been issued to nearly 80 crore beneficiaries of NFSA in all states and UTs.
In the present system, a ration cardholder can buy foodgrains only from an FPS that has been assigned to her in the locality in which she lives. However, this will change once the ‘One Nation, One Ration Card’ system becomes operational nationally. This is how it will work:
Suppose a beneficiary lives in the district of Basti in Uttar Pradesh and migrates to Mumbai for work. Currently, she is no longer able to purchase subsidised foodgrains from a PDS shop in her new locality in Mumbai. However, under the ‘One Nation, One Ration Card’ system, the beneficiary will be able to buy subsidised foodgrains from any FPS across the country.
The new system, based on a technological solution, will identify a beneficiary through biometric authentication on electronic Point of Sale (ePoS) devices installed at the FPSs, and enable that person to purchase the quantity of foodgrains to which she is entitled under the NFSA.
How will the system of ration card portability work?
Ration card portability is aimed at providing intra-state as well as inter-state portability of ration cards.
While the Integrated Management of Public Distribution System (IM-PDS) portal provides the technological platform for the inter-state portability of ration cards, enabling a migrant worker to buy foodgrains from any FPS across the country, the other portal (annavitran.nic.in) hosts the data of distribution of foodgrains through E-PoS devices within a state.
The Annavitran portal enables a migrant worker or his family to avail the benefits of PDS outside their district but within their state. While a person can buy her share of foodgrains as per her entitlement under the NFSA, wherever she is based, the rest of her family members can purchase subsidised foodgrains from their ration dealer back home.
Receive Daily Updates
Recent Posts
Steve Ovett, the famous British middle-distance athlete, won the 800-metres gold medal at the Moscow Olympics of 1980. Just a few days later, he was about to win a 5,000-metres race at London’s Crystal Palace. Known for his burst of acceleration on the home stretch, he had supreme confidence in his ability to out-sprint rivals. With the final 100 metres remaining,
[wptelegram-join-channel link=”https://t.me/s/upsctree” text=”Join @upsctree on Telegram”]Ovett waved to the crowd and raised a hand in triumph. But he had celebrated a bit too early. At the finishing line, Ireland’s John Treacy edged past Ovett. For those few moments, Ovett had lost his sense of reality and ignored the possibility of a negative event.
This analogy works well for the India story and our policy failures , including during the ongoing covid pandemic. While we have never been as well prepared or had significant successes in terms of growth stability as Ovett did in his illustrious running career, we tend to celebrate too early. Indeed, we have done so many times before.
It is as if we’re convinced that India is destined for greater heights, come what may, and so we never run through the finish line. Do we and our policymakers suffer from a collective optimism bias, which, as the Nobel Prize winner Daniel Kahneman once wrote, “may well be the most significant of the cognitive biases”? The optimism bias arises from mistaken beliefs which form expectations that are better than the reality. It makes us underestimate chances of a negative outcome and ignore warnings repeatedly.
The Indian economy had a dream run for five years from 2003-04 to 2007-08, with an average annual growth rate of around 9%. Many believed that India was on its way to clocking consistent double-digit growth and comparisons with China were rife. It was conveniently overlooked that this output expansion had come mainly came from a few sectors: automobiles, telecom and business services.
Indians were made to believe that we could sprint without high-quality education, healthcare, infrastructure or banking sectors, which form the backbone of any stable economy. The plan was to build them as we went along, but then in the euphoria of short-term success, it got lost.
India’s exports of goods grew from $20 billion in 1990-91 to over $310 billion in 2019-20. Looking at these absolute figures it would seem as if India has arrived on the world stage. However, India’s share of global trade has moved up only marginally. Even now, the country accounts for less than 2% of the world’s goods exports.
More importantly, hidden behind this performance was the role played by one sector that should have never made it to India’s list of exports—refined petroleum. The share of refined petroleum exports in India’s goods exports increased from 1.4% in 1996-97 to over 18% in 2011-12.
An import-intensive sector with low labour intensity, exports of refined petroleum zoomed because of the then policy regime of a retail price ceiling on petroleum products in the domestic market. While we have done well in the export of services, our share is still less than 4% of world exports.
India seemed to emerge from the 2008 global financial crisis relatively unscathed. But, a temporary demand push had played a role in the revival—the incomes of many households, both rural and urban, had shot up. Fiscal stimulus to the rural economy and implementation of the Sixth Pay Commission scales had led to the salaries of around 20% of organized-sector employees jumping up. We celebrated, but once again, neither did we resolve the crisis brewing elsewhere in India’s banking sector, nor did we improve our capacity for healthcare or quality education.
Employment saw little economy-wide growth in our boom years. Manufacturing jobs, if anything, shrank. But we continued to celebrate. Youth flocked to low-productivity service-sector jobs, such as those in hotels and restaurants, security and other services. The dependence on such jobs on one hand and high-skilled services on the other was bound to make Indian society more unequal.
And then, there is agriculture, an elephant in the room. If and when farm-sector reforms get implemented, celebrations would once again be premature. The vast majority of India’s farmers have small plots of land, and though these farms are at least as productive as larger ones, net absolute incomes from small plots can only be meagre.
A further rise in farm productivity and consequent increase in supply, if not matched by a demand rise, especially with access to export markets, would result in downward pressure on market prices for farm produce and a further decline in the net incomes of small farmers.
We should learn from what John Treacy did right. He didn’t give up, and pushed for the finish line like it was his only chance at winning. Treacy had years of long-distance practice. The same goes for our economy. A long grind is required to build up its base before we can win and celebrate. And Ovett did not blame anyone for his loss. We play the blame game. Everyone else, right from China and the US to ‘greedy corporates’, seems to be responsible for our failures.
We have lowered absolute poverty levels and had technology-based successes like Aadhaar and digital access to public services. But there are no short cuts to good quality and adequate healthcare and education services. We must remain optimistic but stay firmly away from the optimism bias.
In the end, it is not about how we start, but how we finish. The disastrous second wave of covid and our inability to manage it is a ghastly reminder of this fact.