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Q.1) The Public Distribution System (PDS) evolved as a system for distribution of food grains at affordable prices and management of emergency situations. What is the significance of the Public distribution system in India? What are the limitations of the distribution system in India? What are the suggested ways to improve the distribution system in India? (GS-2)

  • The Public Distribution System (PDS) evolved as a system for distribution of food grains at affordable prices and management of emergency situations.
  • Public distribution system (PDS) is an Indian food security system.
  • Established by the Government of India under Ministry of Consumer Affairs, Food, and Public Distribution and are managed jointly by state governments in India.
  • It distributes subsidized food and non-food items to India’s poor. This scheme was launched in June 1947.
  • It functions through a network of Fair Price Shops at a subsidized price on a recurring basis.
  • Significance of the Public distribution system in India

The following are the advantages of the public distribution system:

  • It has helped in stabilising food prices and making food available to consumers at affordable prices.
  • It has helped in avoiding hunger and famine by supplying food from surplus regions of the country to deficient regions.
  • The system of minimum support price and procurement has contributed to increase in food grain production.

Limitations of the distribution system in India

The following are the disadvantages of the public distribution system;

  • Instances of hunger occur despite granaries being full.This points to certain lacunae or inefficiency in the system.
  • High level of buffer stocks often leads to wastage of food grains and deterioration in quality.
  • The storage of foodgrains inculcates high carrying costs on the government.
  • The provision of minimum support price has encouraged farmers to divert land from production of coarse grains that are consumed by poor, to rice and wheat.

Steps to improve the distribution system

  • The need of the hour is PDS reforms to ensure that public distribution functions the way it is intended. Technology based reforms are suggested.

Technology Based reforms:

  • End to end computerization would bring in transparency in the whole process. It would help to prevent leakages and diversion of food grains to a great extent.
  • The different type’s reforms undertaken by different states are:

Adhaar Linked and digitized ration cards:

  • This allows online entry and verification of beneficiary data. It also enables online tracking of monthly entitlements and off-take of foodgrains by beneficiaries.

Computerized Fair Price Shops:

  • FPS automated by installing ‘Point of Sale ‘device to swap the ration card. It authenticates the beneficiaries and records the quantity of subsidized grains given to a family.

DBT:

  • Under the Direct Benefit Transfer scheme, cash is transferred to the beneficiaries’ account in lieu of foodgrains subsidy component.
  • They will be free to buy food grains from anywhere in the market.
  • It is estimated that cash transfers alone could save the exchequer Rs.30,000 crore every year.

Use of GPS technology:

  • Use of Global Positioning System (GPS) technology to track the movement of trucks carrying foodgrains from state depots to FPS which can help to prevent diversion.

SMS-based monitoring:

  • Allows monitoring by citizens so they can register their mobile numbers and send/receive SMS alerts during dispatch and arrival of TPDS commodities
  • Use of web-based citizen’s portal
  • Public Grievance Redressal Machineries, such as a toll-free number for call centers to register complaints or suggestions.

Q.2) India recently raised the issue at the ICRG against Pakistan demanding FATF (Financial Action Task Force) a compliance report on terror funding. What is Financial Action Task Force? Discuss the role Financial Action Task Force play in combating money laundering and terrorist financing. Further discuss the significance of FATF in India’s Context? (GS-3)

Financial Action Task Force

  • The Financial Action Task Force (FATF) is an intergovernmental body established in 1989 by the Ministers of its Member jurisdictions.  
  • The objectives of the FATF are to set standards and promote effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and other related threats to the integrity of the international financial system.  
  • The FATF is therefore a “policy-making body” which works to generate the necessary political will to bring about national legislative and regulatory reforms in these areas.

Role played by FATF

  • The Financial Action Task Force creates universally-applicable recommendations that are designed to ensure that all countries participating are treated equally.
  • Because money launderers change techniques over time, the FATF has to update its recommendations every couple of years.

Significance for India

  • Indian has become a full-fledged member of Financial Action Task Force (FATF)
  • FATF membership is very important for India in its quest to become a major player in the International finance.
  • It will help India to build the capacity to fight terrorism and trace terrorist money and to successfully investigate and prosecute money laundering and terrorist financing offences.
  • India will benefit in securing a more transparent and stable financial system by ensuring that financial institutions are not vulnerable to infiltration or abuse by organized crime groups.
  • The FATF process will also help us in co-ordination of AML/CFT efforts at the international level.
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