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CASE STUDY
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ABSTRACT
Introduced in 1954, the Public Distribution System (PDS) is the largest distribution network of its kind in the world operated by the collaborative efforts of Union and State Governments of India. The primary function of the PDS is the distribution of essential commodities at a low price to the people. Till date, the PDS has undergone many transformations including the implementation of the Targeted PDS and yet it has failed to successfully address the pressing issues experienced by the system as a whole. In such a scenario Information Systems have an important role to play by helping to bring about transparency and efficiency in the entire system. This report seeks to identify the various ways in which the above mentioned objective may be achieved with the assistance of Management Information Systems. This case study is prepared by Vrinda, Padmini, Rashmi, Kshithin, Princy and Anupriya.
Kerala State Civil Supplies Corporation popularly known as Supplyco is a wholly Government owned Public Sector Undertaking in Kerala established in 1974 under the Companies Act, 1956. The main object of the Corporation as per the Memorandum of Association is to engage, promote, improve, develop, counsel and finance production, purchase, storage, processing, movement, transport, distribution, and sale of food grains, food stuffs and any other commodities which the Government may consider as essential and to provide services advice and assistance of all kinds including capital, credit, means, resources, technical and managerial for the aforesaid business
INTRODUCTON
The 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 managed jointly with state government in India, it distributes subsidized food and non food items to India’s poor. Major commodities distributed include stable food grains, such as wheat, rice, sugar, and kerosene, through a network of public distribution shops also known as ration shops established in several states across the country. Food Corporation of India, a government owned corporations procures, and maintains the PDS. The PDS was introduced in the year 1954 by the Government to solve the food scarcity problems faced by many regions in the country and to achieve food security. It has been one of the most important elements of India’s safety net systems for almost 55 years now and also most far reaching in terms of coverage as well as public expenditure on subsidies. The use of management information system is helpful in public distribution system.
In plain words this means that there is too much black marketeering and corruption in the system and a developing country like India cannot afford to continue with such inefficient systems in the face of the recent global recession and increasing fiscal deficits. To solve these issues an efficient Information System along with other relevant measures is the need of the hour. If properly implemented it might solve a major chunk of the problems that vexes the entire system. There is a Corporation wholly owned by the Government and designated as PSU known as Kerala State Civil Supplies Corporation popularly called as Supply co. Generally in various States it is seen that where there is a State owned Corporation, the wholesale distribution is done by the Corporation as per the guidelines of the State Government, but in the State of Kerala Supply co has not been entrusted with the wholesale distribution.
ORGANIZATIONAL PROFILE
Supply co is the regulating and controlling organization of various PDS like ration shops, Maveli stores etc. Earlier all the functions of supply co were performed manually. Due to this many complications and work load of the organization increase, there arises a lot of paper works also . Today in the information age due to the advancement of IT in almost in all areas of the world, there arises the implementation of information system in each and every field of organization. Information Technology has become an inevitable amount importance in almost all organization whether it is a private, public etc.
According to the study conducted by us in the supply co office at Perinthalmanna, the management information system is used for various purposes. In supply co, a software named RCMS (Ration card management software) is used for the purpose of preparation of ration cards. Excel is also used for recording the entries on the system and to save the details of customers for further references or to retrieve it as and when it is needed. It helps the organization to reduce its paperwork and the use of large numbers of files. The consumers in public distribution shops may be divided into two categories like APL, BPL on the basis of their income. The commodities which are distributed vary in quantities according to their categories of ration cards whether the particular family belongs to APL or BPL. This condition is applicable in case of rice, and in case of sugar it is depended on the number of customers. In supply co there is online submission of applications for various purposes. The supply co has a centralized control over ration shop, Maveli stores. Management Information Systems (MIS), are information systems, typically computer based, that are used within an organization. Word Net described an information system as a system consisting of the network of all communication channels used within an organization. Components that collect, manipulate, and disseminate data or information communications systems such as telephone lines, and the data itself. The activities include input of data, processing of data into information, storage of data and information, and the production of output such as management reports. Decision Support Systems etc.
Definition: Management Information Systems (MIS) is the term given to the discipline focused on the integration of computer systems with the aims and objectives on an organization.
The development and management of information technology tools assists executives and the general workforce in performing any tasks related to the processing of information. MIS and business systems are especially useful in the collation of business data and the production of reports to be used as tools for decision making.
MIS systems can be used to transform data into information useful for decision making. MIS systems provide a valuable function in that they can collate into coherent reports unmanageable volumes of data that would otherwise be broadly useless to decision makers. By studying these reports decision-makers can identify patterns and trends that would have remained unseen if the raw data were consulted manually.
MIS systems can also use these raw data to run simulations – hypothetical scenarios that answer a range of ‘what if’ questions regarding alterations in strategy. For instance, MIS systems can provide predictions about the effect on sales that an alteration in price would have on a product. These Decision Support Systems (DSS) enable more informed decision making within an enterprise than would be possible without MIS systems.MIS system is also helpful in public distribution system.
The whole sale distribution could be understood by looking at the functioning of the various entities that exist and involved in the System in the State of Kerala:
1. Food Corporation of India (FCI)
2. Department Of Food and Civil Supplies
3. Kerala State Civil Supply Corporation (KSCSC)
4. Authorized wholesale Distributors (AWD)
5. Authorized Retail Distributors (ARD)
. Authorized Wholesale Dealers (AWD)
In accordance with the sanction accorded by Government of Kerala the District Collector invites applications for the appointment of AWDs in a district. Financial capacity , to run the AWD , experience in the field of rationing, adequate godown facility, local residency, educational qualification are the important requirements which are considered for the appointment of the AWD. The notification inviting application is published in the leading newspapers as well as affixed in the notice board of all offices under Civil supplies Department. The interested parties/ firms /Co-operatives apply for the Authorized Wholesale dealership in the prescribed form as prescribed in the Kerala Rationing Order 45(2). After the detailed verification and the personal hearing conducted the District Collector appoints the suitable applicant as AWD. The AWD is appointed for perpetual period. Hence no new appointment of AWD has been done in last 6-7 years. In fact all the Collectors whom Committee met informed that they have not done any appointment in balance stock at the TSO office. The process appears to have been adopted for monitoring the transactions of AWD. The TSO has to furnish the same to the DSO. However, as the TSO does not visit the godown and check the stock himself practically, it is quite possible that if AWD wish he can easily manipulate accounts and more easily with connivance of ARD and submit fake records. During the visit to various AWDs Committee observed that allocation of food grain to AWDs is not calculated after considering the closing balance. The allocation for AWDs is done by TSO as per the food grain allocated for his taluk by the DSO. The Director F&CS decides allocation for every district as per the food grain allocated by the Central Government which keeps varying. The reasons for variation in stock allocation whether it is shortage of stock or as per the payment and requisition by the State Government was not clear.
Findings
The public distribution of India is with a coverage of around forty crores BPL families, a review of the PDS has discovered the following structural shortcomings and disturbances.
• The growing instances of the consumers receiving inferior quality food grains
• Deceitful dealers replace good suppliers received from the F.C.I(Food Corporation of India) with inferior stock and sell FCI stock in the black market.
• Illicit fair price shop owners have been found to create large number of bogus cards to sell food grains in the open market.
• Many fps dealers resort to malpractice, illegal diversions of commodities, hoarding and black marketing due to the minimum salary received by them.
• Numerous malpractices make safe and nutritious food in accessible and unaffordable to many poor those resulting in their food insecurity.
• Identification of household to be denoted BPL status and distribution to granted PDS services has been highly irregular and diverse in various states. The recent development of Adhar UIDAI cards has taken up the challenges of solving the problems of identification and distribution of PDS services along with Direct Cash Transfers.
• Regional allocation and coverage of FPS are unsatisfactory and core objectives of price stabilization of essential commodities had not met.
• MIS is used in PDS, to reduce a lot of paper work associated with every activity.
• Ration Card Management Software is used to prepare and issue ration cards. Before implementing RCMS there were many complications regarding preparation and issue of ration cards. With the help of MIS the supply co can process the issue of ration cards to the customers very quickly.
• Before using MIS there were many delays regarding the delivery of forms and applications in supply co but after implementing MIS in supply co they introduced the system of online application submission for processing the forms and applications.
• The ration card has become a valuable document. It serves as an identity card. It is required for availing benefits under various other schemes of the government. This is in gross violation of the provisions of the Public Distribution System (Control) Order, 2001 issued by the Central Government. Ration card should be de-linked from all other schemes and steps should be taken to ensure that it is not used as an identity card. The Committee suggests that in place of ration card a food entitlement card may be issued which can be used only for food supply under Public Distribution System. The Committee also feels that it is appropriate if the name of TPDS is changed to ‘FOOD FOR POOR SCHEME’
• The Computerization program of the Civil Supplies Department was started from 1995-96. As part of total computerization of Civil Supplies Department the National Informatics Centre, the Total Solution Provider of the Department, is developing exclusive software named TETRAPDS.
Summary and Suggestions
• The PDS has become successful in providing food security to the people of the nation.
• The Government has planned to implement several reforms. Food stamps system is the most easily adoptable new reform.
• The implementation of MIS is helpful for the good management of public distribution system.
• The finger print bio-metric smart card and food debit/credit cards are two other ambitious projects to improve the PDS. In fact the food credit/debit card system plans to do away with all FPS outlets in the country.
• The general awareness of the beneficiaries, high literacy and strong vigilance Committee are the important factors to reduce leakages. Strong Political commitment and careful monitoring by the bureaucracy are the key elements for successful PDS. Leakages happen due to wrong identification, theft and diversion of grain by officials involved in distribution system. It requires strong political commitment and participation of the people in delivery process. The nexus between officials, the mafia and ration shop dealers must be broken in order to reduce leakages. Monitoring and accountability of TPDS can be improved by automation and computerization of the PDS. TPDS needs to be strengthened by means of the effective use of IT including introduction of unique biometric smart cards.
• Central Government have recently constituted a Unique Identification Authority of India (UIDAI). The mandate of UIDAI is to issue unique ID number to every resident of the country. It is stated that if PDS authorities, in their domain make ration cards on the basis of UID number of the ration card holders and their family members as mandatory, they can clear up their data base of bogus ration cards. On 18.8.2009 Kerala Government wrote to Central Govt. for funds for computerization and modernization of ration shops (ARDs)
• The RCMS 4.0 (with Unicode Support) can be rolled out to all the TSO / CROs immediately after the issue of new laminated ration cards. Through successful implementation of this Ration Card Management Software RCMS 4.0, computer generated laminated ration cards with barcode and photo of the owner and Certificates can be issued from Taluk Supply / City Rationing Offices.
• During the course of meetings with the officials of the State Government it was pointed out to the Committee that the State had submitted a project to the Department of Information Technology, Government of India for implementation of e-Governance in Civil Supplies Department under National e-Governance program. This is pending in the Ministry of Information Technology for clearance and both the Ministry of Consumer Affairs and Department of Information Technology have been addressed in this regard. Further, it was stated that a project for modernization of the retail outlets had been submitted to the Government of India and 50% centrally sponsored scheme were approved in the annual plan document of Kerala by the Planning Commission in 2008. It is stated though the State Govt. have gone ahead utilizing its own resources, Government of India is yet to release funds for modernizing ARD outlets. Modernization of ARDs include installation of electronic weighing machines, approving infrastructure of the shops, standardized display board showing stock position and price of the commodities, painting outlets with approved color coating and separate areas for keeping authorized commodities like kerosene oil, sugar, rice etc. Govt. of India is stated to have agreed to consider the proposal during the meeting but orders are yet awaited sanctioning the funds.
• Supply co is allotted wheat for grinding into flour and it is then sold to the consumers through ARD. For the purpose of grinding wheat Supply co enters into agreement with the millers for lifting wheat from the FCI godown, grinding into fortified flour, putting it into 1 Kg. packets and then delivering the same in the large pack containing 50 packets of one Kg flour to Supply co. Miller is allowed 5% wastage i.e. for 100 Kg. of wheat supplied it gives 95 Kg. wheat flour and adds other charges. To this Supply co adds its own administrative charges and delivers it to ARD at the rate of Rs.11.25 per Kg. and ultimately sold to consumers at the rate of Rs.12/- per Kg. The whole process is to be rationalized on the lines it functions in the States of Gujarat and Rajasthan.
• Kerala Rationing Order 1966 provides for 400 cards with every ARD. In practice it is always not so and an ARD is even having as many as 1600 cards. The system of attaching ration cards to an ARD should be rationalized. Similar is the case with AWD. The number of ARDs attached to AWD should also be rationalized. The Committee found that in one district a person was having two AWDs and the other 48 ARDs. DSO could not give rationale about this. Rather in a meeting at Thiruvananthapuram the Committee was informed that in one district there were as many as 5 AWDs with one individual person, out of which two are under suspension.
• The Fair price dealers seldom display rate chart and quantity available in the black- boards in front of the shop. This should be enforced.
• Frequent checks and raids should be conducted to eliminate bogus and duplicate cards, which is again an added expenditure and not fool proof.
• Vigilance squad should be strengthened to detect corruption in PDS.