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The FCI along with the State agencies hold and maintain the reserve ratio buffer stocks of foodgrains in addition to the operational stocks of foodgrains in addition to the operational stocks used for distribution.
But PDS should be made effective so that BPL families get genuine protection.
PDS should be strengthened to safe the poor suffering from food insecurity. The committee recommended that:(i) Quality norms should be strictly adhered to while procuring food grains for PDS distribution.(ii) Payments as statutory levies to state governments by FCI are essentially transfers from the centre to the state governments.
Public distribution system in India represents a direct intervention by the government in the food market.
It involves subsidised distribution of limited quantities of essential goods such as cereals, sugar, edible oils, etc.
The department ensures the adequate availability of foodgrains at reasonable prices in different parts of the country.
The public distribution system in India was started in early 1970s with an objective to make foodgrains and other necessary food items available to the economically weaker sections of the society at reasonable rates.
The State agencies lift the allotted quotas of the central food pool from the godowns and distribute the grains to consumers through a network of fair price shops.
The States are also free to procure additional quantities of foodgrains independently and add to the allotted quotas of food grains for distribution, though very few States do so.
The subsidy incurred on supply of food grains through PDS at below at FCI economic cost constitutes the subsidy of consumer, while produce subsidy is the direct outcome of the price support based on procuring operation of thus government.
The producer subsidy along with cost of maintaining the buffer stock accounts for cost buffer stock operation.