India: Politics of Starvation - Social and Economic Policy - Global Policy Forum
That so many are hungry despite overflowing granaries is a damning indictment of the government’s public distribution system (PDS). The PDS is a network of about 460,000 ration shops across the country through which grains, sugar, cooking oil and so on are sold at subsidized rates.
However, most of India’s poor, such as those who starved to death in Orissa and Rajasthan, cannot afford to buy the grains even at these subsidized rates. Many of them do not possess the Below Poverty Line (BPL) cards that entitle them to purchase at subsidized rates in ration shops. In several cases, the desperately poor have mortgaged their BPL cards to moneylenders or local traders.
Besides, the process of identifying the poor is severely flawed. An article in Outlook magazine points out that in Dharavi, Asia’s largest slum, situated in Mumbai, just 151 families are identified as BPL. Millions of poor across the country are categorized in government records as Above Poverty Line (APL).
Food policy experts say that the pricing of foodgrains for APL and BPL categories is far too high. They have pointed out that the price of grain is sometimes cheaper in mandis (local markets). Consequently, the PDS grains have few takers and state governments have been unwilling to lift the grains they are allocated. This means that foodgrains in government warehouses remain unutilized. Because of poor quality and inadequate storage facilities, millions of tons of foodgrains are eaten up by rats or simply rot.
According to Planning Commission statistics, a third of the surplus food stocks (31 percent of the rice, 36 percent of the wheat and 23 percent of the sugar) in the government warehouses that is meant for the PDS is siphoned away by a nexus of politicians, officials and traders into the black market. One study indicates that 64 percent of rice stocks in Bihar and Assam, and 44 percent and 100 percent of wheat stocks in Bihar and Nagaland respectively "disappear" from the PDS. More at link