Kerala 2005 - of Planning Commission

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The approach of visualising social security measures as
mere costs is flawed. They are also investments, which
protect the productivity and initiative to take risks of the
poor and contribute to human development in the long
run. Nevertheless, they do impose an immediate fiscal
cost on the State budgets in the short run and as argued in
Chapter 1, there appears to be some relationship between
such interventions and high rates of ‘open’ unemployment.
In this section, we review in brief, some of the prominent
socio-economic security measures that seem to have had an
impact on poverty alleviation. This, in turn, has helped in
advancing the basic human development status of the poor.
In other words, the discussion here is focused on certain
aspects of protective security. In particular, the section seeks
to survey the various special welfare schemes initiated by
the State Government, 11 and examine the problems in their
implementation, welfare and fiscal impacts. Perhaps, the most
important protective social security measures in Kerala have
been the food security system with three sub-components:
a) Public distribution system for all the households, b) Free
noon meal scheme for school children, c) Supplementary
nutrition programme for children in the age group of
0-4 years; old age pension for poorer sections; housing
security and welfare funds for unorganised sector workers.
4.1 Public Distribution System
It took almost a quarter of a century to establish a public
distribution system in India as part of the public policy on
food security (see Mooij, 1999). In Kerala, the system was
expanded during 1965 when the State was undergoing an
acute food shortage. This shortage, as suggested earlier, is
structural to the Kerala economy in that a major share of value
added in the agricultural sector is through the production
of cash crops such as coconut, rubber, tea, coffee, spices,
etc, earning or saving considerable foreign exchange to the
national economy. Even at the best of times, Kerala could not
produce more than 50 per cent of its food grain requirements.
This has been recognised by the Central Government, which
agreed to supply food grains (mainly rice and wheat) to meet
the requirements of the PDS. Covering nearly all households
in Kerala, the PDS “contributed to improving a wide range
of human development indicators that are closely related
to access to food and alleviation of poverty." 12 This resulted
in the establishment of a large network of ration shops
throughout the State. At present (2004), there are 14,139
PDS outlets in Kerala, including 694 in the co-operative
sector. The relevant details are given in Table 3.8.
However, the introduction of the new national scheme of
PDS, namely Targeted Public Distribution System (TPDS) in
1997, by which card holders are differentiated between those
above poverty line (APL) and those below poverty line (BPL),
and charged differentially, with the subsidy now going only to
BPL card holders, has detracted much from the scheme as a
universal protective measure in Kerala. Before the introduction
of the TPDS, about 155,000 tonnes of rice and 35,000 tonnes
of wheat were sold on an average per month through ration
shops in Kerala. However, with the TPDS in force, the number
of beneficiaries has come down and the monthly offtake has
declined to almost one-third of that in earlier times (Government
of Kerala 2005: 362; also see Table 3.8). Poor quality of grain
has also been cited as a reason for withdrawal.
In addition to the PDS, the State Government intervenes in
the market through procurement and distribution of essential
commodities with a view to controlling prices. This is done
through the Kerala State Civil Supplies Corporation (KSCSC),
which has a network of 851 ‘Maaveli’ stores, 138 ‘laabham’
markets, 10 supermarkets and 20 mobile ‘Maaveli’ stores, 38
medical stores, 10 petrol bunks, 4 LPG outlets and 1 kerosene
depot (ibid.). The prices in these shops are lower than the
open market prices by a reasonable margin. In addition, by
their strong market intervention to sell essential items during
festival seasons, such as Onam, Christmas and Ramzan, the
State is able to provide a measure of stability to the prices of
essential commodities. Although there is considerable scope
for improving the organisational efficiency of the Corporation
(e.g., over-staffing), intervention in the food market has
helped check prices in the private trading sector.
4.2 Free Noon Meal Scheme
for School Children
The notable feature of this scheme is that food is distributed
free to the targeted groups. This scheme, which has an
earlier history, 13 was reoriented in 1961 (much earlier
11 There are a number of Centrally-sponsored schemes also in operation which we do not discuss here. To name a few, these are 1)
Integrated Child Development Services, 2) National Nutrition Mission, 3) Integrated Rural Development Programme, 4) Swarnajayanti
Grama Swarozgar Yojana (a self-employment scheme through formation of self-help groups, capacity building, planning activity
clusters, infrastructure build up, technology, credit and marketing), 5) Sampoorna Gramin Rozgar Yojana, and 6) Indira Awas Yojana.
There is also a housing scheme Valmiki Ambedkar Awas Yojana (VAMBAY) for Scheduled Castes and Scheduled Tribes. It is to be
noted that a share of expenditure in almost all the Centrally-sponsored schemes is borne by the State Government.
12 Kannan (2000:1).
13 The CDS study traced its origin to the mid-1940s when “the princely states of Travancore and Cochin had established a system
of free mid-day meals for poor children in the lower primary schools.” (CDS-UN 1975: 35).