Model Project 4

“CONSUMER
CONSUMER PREFERENCE ON THE EFFECTIVENESS OF

PUBLIC DISTRIBUTION SYSTEM (PDS) IN ELAPPULLY
PANCHAYATH”
A PROJECT REPORT SUBMITTED TO THE UNIVERSITY OF CALICUT IN PARTIAL

FULFILLMENT OF THE REQUIREMENTS FOR THE AWARD OF THE DEGREE OF MASTER
OF COMMERCE.
SUBMITTED BY,,
MANJUSHA A
(CHAOMCM007
(CHAOMCM007)
UNDER THE SUPERVISION OF AND GUIDANCE OF
SRI. PRADEESH K
ASSISTANT PROFESSOR OF COMMERCE,
POST GRADUATE DEPARTMENT OF COMMERCE

GOVERNMENT COLLEGE, CHITTUR
JULY 2016
DECLARATION
I MANJUSHA A(CHAOMCM007)hereby declare that the project report title

“CONSUMER PREFERENCE ON THE EFFECTIVENESS OF PUBLIC
DISTRIBUTION SYSTEM (PDS) IN ELAPPULLY PANCHAYATH” is a bonafide
work done by me and is submitted to the University of Calicut in partial fulfillment
of the requirements for the award of the degree of Master of Commerce. I also
declare that the report has not been submitted by me for the award of degree,
diploma or other similar title of any other University.
Place:
Date:
Signature of student
2
GOVERNMENT COLLEGE, CHITTUR,PALAKKAD,KERALA
CHITTUR,PALAKKAD,KERALA-
678104
(Affiliated To University Of Calicut)
CERTIFICATE
Certified that is a bonafide work carried out byMANJUSHA

by A(CHAOMCM007
CHAOMCM007)is
submitted to the University of Calicut in partial fulfillment of the requirements for the
award of the degree of Master of Commerce.
C
Place: Signature:
Date: Name and designation of supervising teacher
Countersigned by,
Place:
Date: Signature of the Head of the Department
GOVERNMENT COLLEGE, CHITTUR, PALAKKAD KERALA - 678104
(AFFILIATED TO CALICUT UNIVERSITY)
CERTIFICATE
Certified that MANJUSHA A(CHAOMCM007)4th semester M.COM student

in this department has worked on the project titled “CONSUMER PREFERENCE
ON THE EFFECTIVENESS OF PUBLIC DISTRIBUTION SYSTEM (PDS) IN
ELAPPULLY PANCHAYATH” for a period of 21 daysunder my supervision and
guidance. This has not been previously submitted for the award of any degree,
diploma or other similar title. This project is worth submitting for the Degree of
Master of Commerce.
Place: Signature:
Date: Name and designation of supervising teacher
4
ACKNOWLEDGEMENT
Happiness cannot be expressed by words, and help taken cannot be

left unthankful. I would like to thank all of them who were part of my project
work. I wish to make special mention of the following.
First of all I acknowledge my sincere thanks to my respected guide

SRI. Pradeesh K, Assistant Professor, Department of commerce, for his valuable
guidance and expert advice which enabled me to complete this project. I am
indebted to thank him for giving his valuable suggestions, attention and for
providing delight guidance offered at each step of my study in precise way &
completing the project in time.
I convey my thanks to Mrs. C A Vishalakshi, Head of the Department of

Commerce, Government Collage, Chittur for providing me this opportunity to do
the project report successfully.
I am thankful to all the faculty members of the Department of

Commerce for their encouragement and support.
I would like to thank all respondents who shared valuable information.

And I am also thankful to my parents and my friends.
5
CONTENTS
TOPICS PAGE NO.
CHAPTER 1 01-05
INTRODUCTION
CHAPTER 2 06-11
REVIEW OF LITERATURE
CHAPTER 3 12-21
THEORETICALFRAMEWORK
CHAPTER 4 22-37
DATA ANALYSIS AND INTERPRETATIONS
CHAPTER 5 38-42
FINDINGS ANDSUGGESTIONS
REFERENCE
APPENDIX
6
LIST OF TABLES
TABLE NO. TABLE NAME PAGE NO.
4.1 Sample profile of respondents 24
4.2 Management of FPS 25
4.3.1 Descriptive statistics of awareness towards functioning of PDS 25
4.3.2 ONE WAY ANOVA 26

4.4.1.1 Category wise estimated marginal means 26
4.4.1.2 Occupation wise estimated marginal means 27
4.4.1.3 Two-way ANOVA 27
4.5.1 Mean rank obtained for the mode of getting information 31
4.5.2 Friedman test 31
4.6.1 Mean rank obtained on different items 31
4.6.2 Test statistics 32
4.7.1 Descriptive Statistics 32
4.7.3 Test Statistics 33
4.8.1 Descriptive statistics 33
4.8.2 Mean rank obtained for malpractices based on APL/ BPL 34
4.8.3 Kruskalwallis test 34
4.8.4 Descriptive statistics 35
4.8.5 Mean rank obtained for the malpractices found in PDS 35
4.9.1 Descriptive Statistics 36
4.9.2 Mean Ranks obtained for reasons for not making complaints 36
4.10 Percentage Response regarding the functioning of PDS 37
7
CHAPTER 1
INTRODUCTION
8
PUBLIC DISTRIBUTION SYSTEM OVER VIEW
The Public Distribution System has a great role in our economy. It was established
by Government of India under ministry of consumers’ affairs, food and public distribution. It is managed
jointly by state and government of central India. Public Distribution System is also known as ration
shops. The function of PDS is to distribute subsidized food items and non food items to the poor people.
To buy these items through PDS the people must have a ration card. The items distributed under PDS are
kerosene and food grains such as rice, wheat, sugar etc... Consumers get food grains at reasonable and
fair price i.e. price lower than market price through these ration shops. It is one of the important food
security systems in India.
Public Distribution System is an Indian food security system. This system ensures
food security to all people on a reasonable price. It aims to reduce the poverty among poor people and
also to make a balanced growth in the economy. In our state, Kerala Government is the controller and
regulator of PDS. It is necessary to open more ration shops in rural areas to make food security more
effectively without any malpractice.
SIGNIFICANCE OF THE STUDY
The programme is running under the control of government to eliminate poverty and to ensure food
security and thereof make a balanced economy. But it is not out of Criticisms especially in its
functioning. To the opinion of most, corruption and malpractices ruin the system. This study helps to
examine the problems experienced by the consumers and have thereby an overview on the effectiveness
of PDS. The study is relevant because a large majority heavily depend on the system for their livelihood.
STATEMENT OF THE PROBLEM
The PDS is a rationing mechanism that entitles households to specified of selected commodities at
subsidized prices. Eligible households are given a ration card that entitles then to buy fixed rations
(varying with household size and house compositions) or selected commodities. The six essential
commodities supplies through the PDS nationally, are: rice wheat, sugar, edible oils, kerosene and coal.
Additional commodities like pulses, salt, tea are supplied selectively. The commodities are made
available through a network of fair price shops. In 1994, there were around 0.42 million ration shops in
9
the country. These shops were run by private agents, cooperatives and few are state owned. An important
feature of PDS is that the responsibility for implementation, monitoring and for enforcement of legal
provisions relating to public delivery with the state government.
Nowadays, ordinary people in rural area depend heavily on PDS. To certain extent PDS helps to bridge
the gap between have and have not. Therefore it is an attempt to examine the perception of beneficiaries
on the effectiveness in the functioning of PDS. It is an attempt to study the effectiveness of

functioning of PDS.
OBJECTIVES OF THE STUDY
• To identify the attitude of consumers towards ration shop.

• To examine the perception of beneficiaries on the effectiveness of functioning of PDS.
• To examine the socio-economic conditions of rural population brought under PDS.
SCOPE OF THE STUDY
The population of the study is extended to the consumers of ration shops in Elappully Panchayath,
Palakkad.
METHODOLOGY AND COLLECTION OF DATA
The data collection of this study includes primary source and secondary source. The primary data will
be collected from consumers covered under ration shops in Elappully Panchayath, Palakkad using
questionnaires. The Secondary data will be collected from internet, journals and other publications etc...
PERIOD OF STUDY
The study is conducted for a period of 21 days from first week of April.
10
SAMPLE FRAMEWORK
Elappully
Panchayath
North South East west
Ward 7 Ward 14 Ward 21

Ward 1
3(no of ration 3( no of ration 2(no of ration

4( no of ration
shop) shop) shop)
shop)
400( no of family) 380 ( no of family) 210(no of family)

600(no.Of family)
25 24 26
38
METHOD OF SAMPLING
Multi stage sampling method is used for selecting the sample unit.
TOOLS FOR ANALYSIS

The data will be analyzed using various mathematical and statistical tools. The relationship between the
variables will be analyzed using computer software like SPSS.
The statistical package for social scientists (SPSS-X1)

(SPSS X1) was used to process the data. Relevant statistical
tools and techniques such as Per cents,
s, chi
chi-square
square statistics, one way ANOVA, Two way ANOVA and
Friedman Test were used for analyzing and interpreting
interpretin the collected data.
FRIEDMAN TEST
The Friedman test is a non- parametric test developed by the US Economist Milton Friedman. Similar to
the parametric repeated measures ANOVA, it is used to detect differences in treatments across multiple
test attempts. The procedure involves ranking each row (or block) together, then considering the values
of ranks by columns.
KRUSKAL WALLIS TEST.
Kruskal Wallis one way ANOVA by ranks (named after William Kruskal and W. Allen Wallis) is a non-
parametric method for testing whether the samples originates from the same distribution. It is used for
comparing two or more samples that are independent, and that may have different sample sizes and
extends the Mann-Whitney test or more than two groups. The parametric equivalent of the Kruskal
Wallis test is the one way ANOVA.
ONE-WAY ANOVA
The one way ANOVA is used to determine there are any significant differences among the means of
one independent group. It is a way to test the equality of means at one time by using variances, and it is
used to test the variation in the means score in the consumer preference on the effectiveness of Public
distribution system.
TWO-WAY ANOVA
In statistics, the Two-way Analysis of Variance (Two-way ANOVA) test is an extension of the one-way
ANOVA test that examines the influence of different categorical independent variables on one dependent
variable. While one-way ANOVA measures the significant effect of one independent variable, the two
way ANOVA is used when there are more than one and multiple observations for each.
LIMITATIONS OF THE STUDY
• The study incorporates only the perception of beneficiaries (ration card holders) on the
effectiveness of PDS on selected shops in Elappully Panchayath.
• The study concentrates the perception of consumers on the effectiveness of employees excluding
perception on agents and employees of civil supplies department.
• Consumer’s preference and opinions are supposed to change from time to time.
• The primary data for the study is collected through questionnaires and the results of the study may
suffer from the inherent drawbacks of such instrument.
• The study compares the perceptions and expectations of the customers of the consumers.
Perceptions are subjective in nature and are likely to Change with the changing times and market
conditions.
12
CHAPTER 2
REVIEW OF LITERATURE
13
Review of literature provides a critical summary of research already done on
the relevant topic. It provides readers with a quick overview of the problem addressed, stress the need for
the new study, and the demonstrates how it will contribute to existing evidence. Review of literature is
conducted to generate theoretical and scientific knowledge about a particular phenomenon and results in
a synthesis of what is known and unknown about that phenomenon. The primary purpose of literature is
to gain a broad background available related to problems in conducting research. Thus it facilitates
selecting a problem and its purpose, developing a framework and formulating a lesion plan. In brief,
review of relevant literature is an analysis and synthesis of research source to generate a picture of what
is known about a particular situation and to expose the knowledge gaps that exist in the situation.
In the last 50 years of existence of the PDS, various studies have been made by both
officials and academicians and large volume of literature has grown around the same. Articles have
appeared in a number of journals throughout the period examining and commencing upon the different
facets of the system. Many research projects have been undertaken on PDS in India. Important studies are
presented here.
Agro-Economic Research Centre (AERC-I3 (1957) Madras, has examined the impact of Government's
food control measures on the agrarian economy of the erstwhile-Madras Presidency for the period 1938
to 1953. In general, it perceived the food control measures as "necessary evils" and the rationing of food
as a positive service, especially when food availability remained very low and food prices rules very
high.
Agro-Economic Research Centre, (1965) Madras, has examined the actual working of the Fair Price
Shops in the Southern Region, covering the three States of Tamil Nadu, Kerala and Andhra Pradesh. The
study could not identify the really poor among the consumer households since income statements were
not available. It was found that the open market prices could not be brought down by Fair Price Shops
operations as at the Fair Price Shops supplies of food grains were only limited.
Uma and Leles (1973) in the study pointed out the significance of the relationship between the private
trading activities and the Government's food policies. It confirmed that the grain trade in India operated
efficiently within the technological and policy confines. It concluded that if Government's policies could
be made to facilitate investment in the new storage and transport sectors and could be made to encourage
technological improvement, the traditional market structure will be able to function economically and
14
still more efficiently. This study did not examine the question of how to solve the food problem of the
weaker sections under the free market system, given the real problem of extreme economic inequality in
the society.
Ramamurthy (1974) in his study, he examined the levels of poverty and destitution in Tamil Nadu vis-a-
vis the trends in the production and distribution of wage goods (cereals, pulses, sugar, tea and cotton) for
the period 1960-61 to 1970-71. Ramamurthy emphasized the significant role that the Public Distribution
System could play in the eradication of poverty and destitution in Tamil Nadu after establishing that the
Public Distribution System is superior to all other anti-poverty measures.
Rajapurohit (1978) in his study, he stated the segments of the population who consumed less than the
state average quantity of cereals were treated as the target group. The study suggested the exchange of
superior cereals like Rice and Wheat with coarse cereals like Jowar, Ragi andBajra through open market
operation and distribution of coarse grains through the Public Distribution System.
AmartyaSens (1982) in his study, he concentrated on the three serious conflicts encountered (or battles
persistently waged) by the Economically Vulnerable Sections even during the non-famine situations. Sen
remarked thus "India's so-called self-sufficiency in food goes hand in hand with a quarter-perhaps a third
of the rural population as persistent losers in food battles, suffering from regular hunger and systematic
malnourishment.
Indian Institute of Public Administration (1987) in its study presented a "Status Report" on the Public
Distribution System in India, covering the period upto 1986-87. The papers of BhabatoshDatta, Kamal
NayanKabraand Anil ChandyIttyerah and of Barbara Hams discussed the problems and issues of the
Public Distribution System and offered certain alternative strategies to be adopted for achieving the
maximum effectiveness of the Public Distribution System.
Ittyerah and Kabra (1990) in their study, they analyzed the utilization of and access to the Public
Distribution System in India. They found the utilization index for rice was very low and that for sugar
was very high. According to them about 80 per cent of the sample households were generally satisfied
with the Public Distribution System while 20 per cent were not.
15
Singh (1991) in his study, he analyzed the Public Distribution System in Bihar. He stated a number of
serious deficiencies in the system. He prescribed a package of 27 measures to improve the working of the
system. He emphasized the important contribution of the Public Distribution System towards poverty
alleviation in rural areas.
Government of India (1992 1993) indicated that, the several weaknesses emerged in the public
distribution system which diluted the essence of the system to benefit the vulnerable section. The financial
liabilities of the state government in maintaining this system have increased. Leakage and black marketing
in PDS items have also increased the full impact of PDS in containing inflation. Government of India
(1992 1993) reported that the PDS as a social safety net has to be understood in the sense of this limited
perspective. The perspective as announced by the government of India is that essential commodities such
as rice, wheat, imported edible oils, sugar and kerosene are distributed at prices below the market prices
through a network of fair price shops. The government accepts this as an essential element of
governments’ safety net for the poor.
Geetha, and Suryanarayan, (1993) in their study, they have reviewed the objectives of food policy
pursued in different, five year plans. They examined interstate PDS disparities, and their implications for
the current ongoing PDS reform. Their study confirms the general impression that there have been
significant disparities in the state wise PDS quantities, be it with respect to total population or population
covered by the PDS. This is largely in conformity with the objects of global coverage as enunciated in the
sixth plan. Part of the reason seems to be the lack of proper infrastructure for the PDS in some states and
hence their inability to lift their allotted quota, by the Centre. Thus PDS revamping is not merely a
question of targeting but also involves the creation of the necessary infrastructure.
Government of India in the tenth plan (1995) the document admits that there is overflowing stock of
food grains in the country. This means that the distribution of food grains is not managed properly and
the areas of food shortage are still unable to receive support from the Government overflowing stocks.
Rao (1995) says "the persistent weaknesses observed in FCI operations are a clear symptom of over-
centralization. While efforts to tone up the personnel and working of the corporation need to be
undertaken, the more fundamental task is to reorganize the food security system itself on a decentralized
basis. In the event of such reorganization, FCI with its specialized experience and expertise would be in a
position to play a major supporting role to help the decentralized food security system to become
operational.
16
Indrakanth (2000) using data collected in 1994-95 in five villages in Andhra Pradesh with diverse socio
economic characteristics, shows that in several cases households that were to a ration card did not have
one. Instead, contrary to what seems to happen in other Indian states, in the selected villages complains
about low quality of PDS supplies were not frequent.
ReetikaKhera [2001]in her work entitled “India’s public Distribution system: utilization and Impact”,
studied the effectiveness of India’s public distribution system (PDS) as a food security intervention, using
field survey data collected by the author in Rajasthan, utilization is low, and many households purchase
wheat from the market at higher prices before exhausting PDS quotas.
Jena.A.C. [2002] in the study of “Public Distribution System Impact, status and Future Programmes”.
He argues that PDS is a still an essential requirement in India, given that the 30% of the population is still
living below the poverty line and another 20% needs support so as not to go below the poverty line and
not become food insecure. The PDS is also required at the time of disasters and natural calamities. In
addition to this, while the country has been witnessing huge stocks of food grains on the one hand the
food security has remained a far cry for the large number of people of the country on the other hand
Planning Commission (2005) concluded that the estimated 4.6 million tons of TPDS grains purchased
by poor households – with and without BPL or AAY ration cards corresponds to 15.5% of the total off-
take of TPDS grains (29.65 million tons). This means that for each kg of subsidized grains bought by the
poor, the off-take from the
Central pool was 6.4 kg. This estimate is considerably higher than the 2.4 kg estimate for 2003-04.
Ranjana Singh (2010) in his paper on “Impact of the Public Distribution System on Poverty and Food
Security” opined that there is need to shift from the exiting expensive inefficient and corruption ridden
institutional arrangements to those that will ensure cheap delivery of requisite quality grains in a
transparent manner and are self-targeting.
Chandra Kant Singh and Rakesh Kumar Singh (2010) in the study of “Role of Public Distribution
System in Food Security” observed that there is need to amend law to ban controls and restrictions on
trade between states. There should be free movement of all kinds of commodities including agricultural
produce.
17
RatanLalBasu (2011) in the study of “Public Distribution System in India and Food Security” observed
that the basic causes of food security in India lie not in supply failure but in declining income and
employment intheunorganized sector and failure of the TPDS that excludes a large segment of the poor
because of definitions and methods of implementation. So far as policy of introducing the TPDS is
concerned, it may be said that the policy as such is not unsound but the real problem lies in the way it is
implemented.
Anju Singh, Kalanand Singh and Asha Dubey (2011) in their study on “Management of Public
Distribution System in India – An Arrangement for Food Security” observed that 70 Per cent of people
living in village’s and40 Per cent of landless labourers, beside this 20 crores of the poor people are rural
agricultural labourers. Food problems can be solved by the integration of the PDS with other anti-poverty
programme like Antyodaya and other programmes. The public distribution system is a vital programme
to ensure distributive justice to the weaker sections of the community. Lastly, it maybe quote the line of
Mother Theresa, “if we have no peace, it is because we have forgotten that we belong to each other”.
18
CHAPTER 3
THEORETICAL FRAMEWORK
19
PDS: Concept and Definition
PDS can be distinguished from the private distribution in terms of control exercised
by public authority and the motive predominantly being social welfare in contrast to private gain.
Broadly, the system includes all the agencies that are involved from procurement stage to the final
delivery of goods to the consumer. The agency that is involved in the process of procurement,
transportation, storage and distribution are Food Corporation of India (FCI). At the state level it is the
civil supply departments/corporations and the fair price shops, which are the agencies, involved in the
PDS. The fair price shops are the last link in this process, which are mostly owned by the private
individuals. Hence, the most important aspect that distinguishes PDS is the involvement of government
agencies and government control over the entire distribution system.
1) In the narrow sense, PDS is identified with fair price shops. According to Dholakia and Khurana, PDS
is “a retailing system supervised and guided by the state”.
2) Progress Evaluation Organisation (Government of India 1985) defined as “a setup under which
specified commodities of everyday use are procured and made available to consumers through a network
of FPS in urban as well as in rural areas”.
3) Procurement of cereals is undertaken by FCI on behalf of central government. Some state government
agencies also procure grain for the central pool as well as for their own account. Allocation to definite
state is made by the central government. The state level civil supply organisations undertake the
responsibility of allotment to FPS and supervising the functioning of FPS. FPS is subject to government
control. FPS’s are not allowed to sell other than government supplied essential commodities. Specified
quantities are allotted to each FPS depending upon the number of ration cards attached to the FPS. The
prices of these commodities are fixed by the government. The FPS dealer has to procure a license to
operate ration shop and required to maintain proper records, accounting to the stocks lifted by the dealer.
20
Features of PDS
The essential features of PDS can be summarized as follows:
1. It is the system of distribution of selected essential commodities through the fair price shops
which are operated by private dealers under the government’s control and direction.
2. Rice, wheat, sugar have continued to occupy a predominant position throughout the period. The
other items are kerosene, edible oil etc.
3. The working of PDS did not in any way hinder the functioning of the free market mechanism
except in the limited statutory rationing areas but works along with it.
4. The required amount of food grains and other items are obtained by the government through
imports and a buffer stock is maintained with a view to meet scarcity situations.
5. The aim is to provide at least a basic minimum quantity of essential items at reasonable prices
especially to the weaker sections of population and also stabilize their open market prices or at least to
prevent an undue rise in such prices under conditions of shortage. The prices charged are usually lower
than open market prices and also lower than the procurement and other cost incurred by the government.
6 .It is been primarily an urban oriented system. Its genesis as well as growth has been in those sensitive
areas where a shortage of food grains and other essential commodities could become political liabilities
of government.
Goals of PDS
The goal of PDS does not restrict itself with the distribution of Rationed articles. Making available
adequate quantities of essential articles at all times, in places accessible to all, at prices affordable to all
and protection of the weaker section of the population from the vicious spiral of rising prices is the broad
spectrum of PDS. More specifically, the goals of PDS are:
Make goods available to consumers, especially the disadvantaged /
Vulnerable sections of society at fair prices
Rectify the existing imbalances between the supply and demand for consumer goods; Check and
prevent hoarding and black marketing inessential commodities
Ensure social justice in distribution of basic necessities of life;
21
Even out fluctuations in prices and availability of mass consumption goods
Support poverty-alleviation programmes, particularly, rural employment programmes,
(SGRY/SGSY/IRDP/ mid-day meals, ICDS, DWCRA, SHGs and Food for Work and educational
feeding programmes).
Evolution of Public Distribution System
The PDS, as it is known in India, has evolved over a long time. Famines and droughts
causing acute scarcity conditions and the measures taken by the government to help the victims has been
the typical way in which the food security system began to take shape. Thus, the measures have been in
the nature of the fire-fighting operation “concerned only with putting out the flames and providing a
modest measure of temporary relief to the affected population. An effort of this sort was taken up for the
first time in 1939 under the British regime when the Second World War started. The government thought
of distributing the food grains to the poor of some selected cities, which were facing severe scarcity
conditions, and also situations – where private, failed to provide commodities affordable by the poor.
Later in 1943, after the great Bengal famine, this distribution system was extended to some more cities
and towns. Prolonged periods of economic stress and disruption like wars and famines gave rise to a form
of food security system. Initially it concerned itself primarily with management of scarce food supplies,
and subsequently found it necessary to use a more organized and institutionalized approach including
measures suspending normal activities of market and trade. This form of providing food security existed
in India for long years, in the shape of statutory rationing in selected urban areas and continues to be
present even today in few urban centers. The growth of PDS in India can be grouped into three time
periods.
These are i) from 1939 to 1965 (ii) from 1965 to 1975 and (iii) from 1975 onwards. In the
first period, i.e. up to mid-sixties, the PDS was seen as a mere rationing system to distribute the scarce
commodities and later it was seen as a Fair Price System in comparison with the private trade. Rice and
Wheat occupied a very high share in the food grains distribution. Need for extending the PDS to rural
areas was realized but not implemented. The operation of PDS was irregular and dependent on imports of
PL480 food grains with little internal procurement. In effect, imports constituted major proportion in the
supplies for PDS during this period. Procurement price offered were not remunerative. By the mid 60’s it
was decided to look much beyond management of scarce supplies in critical situations. Stoppage of
PL480 imports forced the government to procure grains internally. In effect, India took a quantum leap in
the direction of providing a more sustainable institutional frame work for providing food security.
22
The setting of FCI and Agricultural Prices Commission (APC) now known as Bureau of
Agricultural Costs and Prices (BACP). Commission in 1965 marked the beginning of this phase. On the
basis of BACP’s recommended prices, the FCI procures the food grains to distribute through the PDS and
a part of the procured quantity is kept as “buffer stock” to meet any unforeseen crisis situation. The key
components of this system were institutionalized arrangements and procedures for procurement, stocking
and distribution of food grains. What is more important to food grains to note is that the food security
system during this period, evolved as an integral part of a developing strategy to bring about a striking
technological change in selected food crops, especially rice and wheat. It provide effective price and
market support for farmers and deployed a wide range of measures to generate employment and income
for the rural poor with a view to improving their level of well- being including better physical and
economic access to food grains. In the third period, there was an increase in the food grains production in
the country. The buffer stock accumulation too increased heavily. With this, initial emphasis on buffer
stock maintenance and price stabilization shift to increase in PDS supplies. In the fourth plan it states that
“in so far as a food grains our concerned the basic objective is to provide the effective PDS. The procured
quantities where in excess compared to the need, PDS meets and minimum reserve was maintained. In
fifth five year plan, programmes such as food for work, Antyodaya etc...” where started with a view to
alleviate poverty as well as to reduce the over stocking of FCI god owns. The imports gradually declined
in this period and during the year 1975; there was a net export of food grains though it was a small
quantity. Imports were continued with relatively very less quantity to maintain level of buffer stocks. The
government strengthened the PDS in this period, so that it remained a “stable and permanent feature of
our strategy to control prices, reduce fluctuations in them and achieve an equitable distribution of
essential consumer goods”
Till late 70’s the PDS was largely confined to urban population and did not guarantee adequate food
to the rural poor in times of crises. During the late 1970’s, and early 80’s some state governments
extended the coverage of PDS to rural areas and also introduced the target grouping approach. The states
are Kerala Gujarat Tamil Nadu and Andhra Pradesh. This was also because there was a marked change in
the food situation particularly in the later years, during 80’s and early 90’s. thus the net availability of
food grains which had increased from 74 million tons in 1968 to 99 million tones in1977, witnessed a
rapid rise in later years reaching 158 million tons in 1991(government of india1994). Thus while the PDS
was started initially to meet the crisis situation, by the sixth five year plan, the PDS was viewed “as an
instrument for efficient management of essential consumer goods” necessary for” maintaining stable
price consideration”.
23
Planning and PDS
The evolution of the PDS in the country also corresponded with the planning for PDS and the changes in
the perspectives of plans over a period of time.
From the beginning of first five tear plan 1951- 56 the need for PDS on a regular basis for the country to
provide help to the poor and to some extend for generating downward pressure on crisis has been
emphasized.
In the fourth five year plan 1969-74 the initial emphasis on buffer stock maintenance and
price stabilization was shifted to increase PDS supplies.
By fifth five year plan 1974-79 a major role for PDS was envisaged in ensuring supplies of
essential goods of mass consumption to people at reasonable particularly to the weaker sections of the
society.
During sixth five year plan 1980-85 PDS was expected to develop such that it remains here
after a stable and permanent feature of the strategy to control price s, reduce fluctuations and achieve
equitable distribution of essential consumer goods.
Seventh plan 1985-90 has specified that the PDS will be a permanent feature of the strategy
to control prices, reduce fluctuations and achieve equitable distribution of essential consumer goods.
During eighth five year plan 1990-95 the supply of food grains through PDS were
increased by extending the coverage to more rural areas and use of food grains for employment
generation programmes, 14 like national rural employment programme (NREP) and rural landless
employment generating programmes (RLEG). Subsequently these programmes were modified and
combined into jawahar rozgar yojana (JRY). The introduction of providing food security through
generation of employment and linking it to programmes of poverty alleviation has added yet another
dimensions to the policies.
Procurement of food grains from farmers

The food grains provided to beneficiaries under TPDS are procured from farmers at MSP. The MSP is
the price at which the FCI purchases the crop directly from farmers; typically the MSP is higher than the
market price. This is intended to provide price support to farmers and incentive production. Currently
procurement is carried out in two ways: (i) centralized procurement, and (ii) decentralized procurement.
Centralized procurement is carried out by the FCI, where FCI buys crops directly from farmers.
Decentralized procurement is a central scheme under which 10 states/Union Territories (UTs) procure
food grains for the central pool at MSP on behalf of FCI. The scheme was launched to encourage local
procurement of food grains and minimize expenditure incurred when transporting grains from surplus to
24
deficit states over long distances. These states directly store and distribute the grains to beneficiaries in
the state. Any surplus stock over the state’s requirement must be handed over to FCI. In case of a
shortfall in procurement against an allocation made by the Centre, FCI meets the deficit out of the central
pool.
The Centre procures and stores food grains to: (i) meet the prescribed minimum buffer stock norms for
food security, (ii) release food grains under TPDS on a monthly basis, (iii) meet emergency situations
arising out of unexpected crop failures, natural disasters, etc., and (iv) sell through the Open Market Sale
Scheme (OMSS).10 The central government introduced the Open Market Sale Scheme (OMSS) in 1993,
to sell food grains in the open market; this was intended to augment the supply of grains to moderate or
stabilize open market prices.
Storage of food grains

Apart from the food grains requirement for immediate distribution under TPDS, the central government
maintains minimum buffer reserves of food stocks for emergencies. The food grains procured for TPDS
and other contingencies are maintained and stored as the central pool stock. FCI is the main government
agency entrusted with the storage of food grains in the central pool. According to the storage guidelines
of the FCI, food grains are normally stored in covered god owns, silos, and in the open, referred to as
Covered and Plinth (CAP).11 However, FCI‟s own storage capacity has been insufficient to
accommodate the central pool stock of food grains. As a result, FCI hires space from various agencies
such as the central and state warehousing corporations, state government agencies and private parties. In
an evaluation of the storage management of food grains by FCI, the Comptroller and Auditor General
(CAG) noted that there is sub-optimum utilisation of the existing storage capacity available with FCI and
states.10 CAP storage involves storage on elevated plinths with polythene covers specially made for this
distribution to BPL, AA.Y and APL families
Allocation of food grains to states
Allocation for BPL and AAY families is done on the basis of the number of identified households. On the
other hand, allocation for APL families is made on the basis of: (i) the availability of food grains stocks
in the central pool, and (ii) the past off take (lifting) of food grains by a state from the central pool. Given
the food grains stocks in FCI, the Centre has the discretion to allocate more grains to states on an ad-hoc
basis. In the past, ad-hoc allocate the central government allocates food grains from the central pool to
the state governments for ones have been provided in the event of floods, droughts, and festivals, etc.
25
Distribution of food grains to beneficiaries
The responsibility of distributing food grains is shared between the Centre and states. The Centre,
specifically FCI, is responsible for the inter-state transport of food grains from procuring to consuming
states, as well as delivering grains to the state god owns. Once FCI transports grains to the state depots,
distribution of food grains to end consumers is the responsibility of state governments. Distribution of
food grains is as complex as the policy of procurement. It involves the following decisions.
1. What quantity of food grains must be allocated to different states,

2. What should be the issue price?
3. What should be the distribution agency at the retail level and the allocation agency at the retail
level and the allocation agency at the different regional levels?
4. What should be the arrangements for transportation, storage, and coordination?
5. What should be the retail price and margins of different agencies?
The fixation of the total quota to be supplied to each states is determined by the Central Government,
keeping in view the production of food grains in the state and the off – take in the previous months,
prices for the consumer are determined by taking into consideration, marketing costs, open market prices
fiscal burden and the paying capacity of the consumer.
Coverage of PDS in India
The PDS is a rationing mechanism that entitles households to specified of selected commodities at
subsidized prices. Eligible households are given a ration card that entitles then to buy fixed rations
(varying with household size and house compositions) or selected commodities. The six essential
commodities supplies through the PDS nationally, are: rice wheat, sugar, edible oils, kerosene and coal.
Additional commodities like pulses, salt, tea are supplied selectively. The commodities are made
available through a network of fair price shops. In 1994, there were around 0.42 million ration shops in
the country. These shops were run by private agents, cooperatives and few are state owned. An important
feature of PDS is that the responsibility for implementation, monitoring and for enforcement of legal
provisions relating to public delivery with the state government.
Since the mid 1980’s the coverage of PDS were extended to rural areas in some states. Thus it
acquired the status of welfare programme. An effort was made to extend subsidized food grains in 1985
in all the tribal blocks covering about 57 million persons. The revamped PDS has been later expanded to
cover 1752 blocks with a high incidence of poverty covering 164 million persons.
26
PDS: An Assessment
According to Tyagi (1990), while deciding the relative success or failure of the PDS, the policy
statements on PDS coverage are essentially based on the assumed role attributed to it. Often the coverage
related roles attributed to PDS include food security, avoiding distress purchases, equity in distribution
with respect to income inequality and regional inequalities. Depending on the specific roles attributed by
the analysts, there have been differing views on the relative success or failure of the PDS. Their
observations relate to the fulfillment of the main objective of providing food security to the poor inherent
urban bias, leakage to non-poor and interstate variations in the coverage of population below the poverty
line. According to V.M Rao, the initial thrust for the later evolution of the food security system provided
by the green revolution in wheat and rice. He further stated that the disconcerting feature of the system
was that, even after three decades, it still remained almost exclusively dependent on these two crops. This
has been the source of many weakness and distortions. The price support policy for rice and wheat, which
nurtured the green revolution and promoted its spread, according to him is now in need of major revision.
The policy has had the effect of prompting the fanner to bring his produce to the public agency almost
immediately after the harvest. As a result, procurement become a significant operation to be rushed
through within a few weeks having little time for essential procedures like grading and checking the
produce for its quality and condition. More importantly, given the anxiety of the government about
adequate quantity of rice and wheat and the increasing reliance of procurement on purchases at minimum
support prices, it was inevitable that pressures cumulate for progressive increase in minimum support
price and as consequence, price policy instead of limiting itself to preventing crash in market prices, may
begin to operate as a factor causing rise in them. At the same time, the commission for Agricultural costs
and prices has been repeatedly pointing out in its reports, instances of price support mechanism
remaining inactive in backward areas which do not contribute much to procurement. The food security
system could also be faulted for pursuing a price policy which goes against the interests of the poor. It
has been pointed out by Dantwala and many others that procurement has effect of raising the market
price of rice/wheat some the level which would have a prevailed in the absence of procurement.
S.Geetha (19SSSSS97) showed how procurement and buffer stocking make food more costly than it
need be and hurt the poor. Moreover, according to Radhakrishnan and Subha Rao the system was
inherent costly as it is based on the surpluses of two superior cereals rice and wheat generated in a few
green revolution pockets; Punjab, Haryana and western Uttar Pradesh. These surpluses have to be
procured, stored and distributed all over the country. The surpluses of these crops and hence, their
procurement is concentrated in a few states and, given the minimum support price which remain fixed for
27
the crop year, the farmers take the first opportunity to deliver their produce when harvesting starts, except
when a substantial rise in the price of grain is expected in the later part of the season. The quantities of
grains thus mobilized have to be allocated to areas all over the country maintaining a steady flow of
monthly installments of food grains supplied at a subsidized price. He further states that this has to be a
command operation as the normal trade channels working for profit may not find the task sufficiently to
undertake.
28
CHAPTER 4
DATA ANALYSIS AND INTERPRETATION
29
CONSUMER PREFERENCE ON THE EFFECTIVENESS OF PUBLIC
DISTRIBUTION SYSTEM
The result of the survey conducted as a part of the research study has been presented and
analyzed in this chapter. Analysis of data is most skilled task in the research process. Analysis of data
means studying the tabulated material in order to determine inherent facts or meanings. In other words
analysis means the computation of certain indices or measure or coefficient alone with searching for
pattern of relationship that exists among data group.
The analysis is presented in:
1. Demographic profile of respondents

2. Awareness towards the functioning of PDS
3. Satisfaction regarding the services provided in infrastructure facility, fair dealings and complaint
redressal mechanism provided by PDS
4. Mode of availing information on the availability of items
5. Reasons for not purchasing items from PDS shops
6. Malpractices found in PDS shops
7. Reasons for not making complaints against unsatisfactory matters
Friedman test, one way –ANOVA, two-way ANOVA and Kruskal Wallis test are used for analysis
30
4.1 Demographic profile of respondents
The profile of respondents explaining the demographic and occupational features are shown below.
Table 4.1 Sample profile of respondents
Category No. Of respondents Percent

Less than 45 35 31.8
46 to 55 46 41.8
56-65 17 15.5
Age Above 66 12 10.9
Male 80 72.7
Gender Female 30 27.3
Literate 26 23.6
Upto 10th 60 54.5
Plus two 15 13.6
Education UG/PG 9 8.2
Pvt. Employee 13 11.8
Govt. employee 11 10.0
Agriculture 12 10.9
Occupation Others 66 60.0
>25000 49 44.5
25001-50000 18 16.4
50001-75000 10 9.1
75001-100000 9 8.2
Annual income Above 100000 24 21.8
APL 64 58.2
Category BPL 46 41.8
Source: Primary Data
Table 4.1 exhibits the profile of the sample respondents selected for the study. As per the table, 73 Per
cent of the respondents were less than 55 years. Gender wise classification shows that majority of the
respondents (72.7 Per cent) was male. Most of the respondents (78.2 Per cent) were literates and none
of them were illiterate.58.2 per cent of the respondents were APL holders
The occupational status shows that 60 Per cent respondents are included in category of others
(coolie).the annual income distribution reveals that most of the respondents are belongs to less than Rs
50000.
31
4.2 Management of FPS
Fair price shop are managed by the private persons or Panchayath authority. The table shows the
frequency and corresponding per cent of respondents regarding the management of FPS.
Table 4.2Management of FPS
Frequency Percent
Pvt. Person 38 34.5
Panchayath 72 65.5
65.5 per cent of the respondents opines that most of the FPS were under the control of Panchayath.
4.3 Level of awareness towards functioning of PDS
Level of awareness towards the functioning of PDS is different from person to person with regard to
their educational qualification. Information about the quantity, availability, price and the matters related
with PDS are different. The variations of the level of awareness with regard to educational qualification
of respondents are analyzed with one-way ANOVA and the output is presented in the following tables.
H0: There is no significant variation in the mean scores obtained for the variable “level of awareness
towards the functioning of PDS “among the education wise classification of respondents.
H1: There is significant variation in the mean scores obtained for the variable “level of awareness
Table 4.3.1 Descriptive statistics

Illiterate Up to 10th Plus two UG/PG Total
N 26 60 15 9 110
Mean 4.46 4.38 4.33 4.56 4.41
FPS in my village SD 0.647 0.715 0.976 0.726 0.733
N 26 60 15 9 110
Mean 4.27 4.35 3.73 4.33 4.25
FPS functioning year SD 0.827 0.82 1.28 0.707 0.9
N 26 60 15 9 110
Mean 3.5 3.43 3.53 3.11 3.44
know availability of ration items SD 0.906 0.909 0.64 1.167 0.894
N 26 60 15 9 110
Get information about availability, Mean 3.27 3.23 2.87 3.22 3.19
quantity &price. SD 1.151 0.998 1.06 1.093 1.045
N 26 60 15 9 110
Mean 2.15 2.3 2.27 2.22 2.25
PDS is discussed in GSM SD 1.008 1.046 1.223 0.833 1.035
32
Table 4.3.2 ONE WAY ANOVA
Sum of squares DF Mean square F Sig.

FPS in my village Between groups .390 3 .130 .237 .870
Within groups 58.200 106 .549
Total 58.591 109
FPS functioning Between groups 4.674 3 1.558 1.973 .122
year Within groups 83.699 106 .790
Total 88.373 109
Know availability Between groups 1.199 3 .400 .493 .688
of ration items Within groups 85.856 106 .810
Total 87.055 109
Get information Between groups 1.853 3 .618 .559 .643
about availability, Within groups 117.138 106 1.105
quantity& price. Total 118.991 109
PDS is discussed in Between groups .399 3 .133 .121 .947
GSM Within groups 116.474 106 1.099
Total 116.873 109
The result of one way Anova for the variable “level of awareness towards the functioning of PDS
“among the education wise classification of respondents give f values .237, 1.973,.493,.559 and .121
which is found to be not significant at 5 Per cent level(p >0.05) hence the null hypothesis is not rejected.
So, there is no significant variation in the mean scores obtained for the variable “level of awareness
4.4 Satisfaction regarding the services provided by PDS

Consumers have different levels of satisfaction regarding the services of public distribution system. The
analysis provides the level of satisfaction regarding the infrastructure facility, fair dealings, complaint
redressal mechanism provided by fair price shop.
4.4.1 Two-way ANOVA on the satisfaction regarding transparency in dealings by category

and occupation.
The variation of level of satisfaction regarding transparency in dealings by category and occupation of
respondents are analyzed with Two-way ANOVA and the output is presented in the following tables.
Table 4.4.1.1 Category wise estimated marginal means
Dependent variable: Transparency In Dealing

95% Confidence Interval
Category Mean Std. Error Lower Bound Upper Bound
APL 3.086 .086 2.916 3.257
BPL 3.257 .093 3.072 3.441

33
Table 4.4.1.2 Occupation wise estimated marginal means
Dependent variable: Transparency In Dealing
95% confidence interval
Occupation status Mean Std. Error Lower Bound Upper Bound
Private employee 3.217 .157 2.907 3.528
Govt. Employee 3.239 .171 2.900 3.577
Business 3.082 .200 2.686 3.479
Agriculture 3.200 .162 2.880 3.520
Others 3.119 .070 2.980 3.257
Table 4.4.1.3 Two-way ANOVA

Tests of Between-Subjects Effects
Dependent variable: Transparency in dealings
Mean
Source Type I Sum of Squares DF Square F Sig.
Category 1081.45 2 540.72 1725.37 <0.01*
Occupational status .273 4 .068 .218 .928
Error 32.59 104 .313
Total 1114.32 110
*significant at 5 Per cent level of significance
It is clear from the table that the occupation wise variations of the mean score are not statistically
significant at 5 Per cent level of significant value of f .218). But the category wise variations of mean
score are significant at 5 Per cent level of significant. Thus BPL category respondents have highest
satisfaction regarding the transparency in dealings.
4.4.2 Two-way ANOVA on the satisfaction regarding Infrastructure facility by category

and occupation.
The infrastructure facilities of PDS shop are different from each other. It may be like adequate space
provided for keeping the items inside the shop, proper weighing machine, storage facility etc... Hence,
the variation of level of satisfaction regarding infrastructure facility by category and occupation of
respondents are analyzed with Two-way ANOVA and the output is presented in the following tables.
Dependent Variable: infrastructure facilities

APL 2.936 .108 2.721 3.151
BPL 3.088 .117 2.855 3.321
34
Dependent variable: Infrastructure facilities
Pvt. Employee 2.937 .198 2.545 3.329
Govt. employee 2.889 .215 2.462 3.316
Business 3.062 .252 2.562 3.562
Agriculture 3.100 .204 2.696 3.504
Others 3.071 .088 2.897 3.246

Dependent Variable: Infrastructure facilities
Source Type I Sum of Squares DF Mean Square F Sig.

Category 1008.854 2 504.427 1010.915 <0.01*
Occupational status .492 4 .123 .247 .911
Error 51.894 104 .499
Total 1061.240 110
The shows that occupation wise variation of the mean score are not statistically significant at 5 Per cent
level of significant (value of .247). But the category wise variation of mean score are significant at 5
Per cent level of significant. BPL category scored highest mean than APL. This means that BPL card
holders have the highest satisfaction regarding the infrastructure facilities provided by PDS shop.
4.4.3: Two-way Anova on the satisfaction regarding Fair dealings by category and
occupation.
Nowadays we can see that there is no fair practice among the PDS shops. This bring me to analyse the
variation of level of satisfaction regarding fair dealings by category and occupation of respondents are
analyzed with Two-way ANOVA and the output is presented in the following tables.
Dependent Variable: Fair dealings

APL 2.944 .094 2.758 3.129
BPL 3.295 .101 3.094 3.496
35
Dependent variable: Fair dealings

Pvt. Employee 3.286 .171 2.947 3.624
Govt. employee 3.201 .186 2.833 3.570
Business 2.891 .218 2.460 3.323
Agriculture 3.028 .176 2.679 3.377
Others 3.191 .076 3.041 3.341

Dependent Variable: Fair dealings
Source Mean
Type I Sum of Squares DF Square F Sig.
Category 1083.572 2 541.786 1457.82 <0.01*
Occupational status 1.027 4 .257 .691 .600
Error 38.651 104 .372
Total 1123.250 110
It is found that occupation wise variations of the mean score are not statistically significant at 5 Per
cent level of significant (value of .691). But the category wise variations of mean score are significant
at 5 Per cent level of significant. BPL category scored highest mean than APL. This means that BPL
card holders have the highest satisfaction regarding the fair dealings of PDS shops.
4.4.4: Two way Anova on the satisfaction regarding Complaint redressal mechanism by
category and occupation.
The variation of level of satisfaction regarding complaint redressal mechanism by category and
occupation of respondents are analyzed with Two-way ANOVA and the output is presented in the
following tables.
Dependent variable: complaint redressal mechanism
APL 2.756 .100 2.559 2.953
BPL 2.657 .108 2.443 2.871
36
Dependent variable: Complaint redressal mechanism

Lower
Occupation status Mean Std. Error bound Upper bound
Pvt. Employee 2.566 .182 2.206 2.926
Govt. employee 2.868 .198 2.476 3.261
Business 2.975 .232 2.516 3.434
Agriculture 2.533 .187 2.162 2.905
Others 2.591 .081 2.431 2.751

Dependent Variable: Complaint redressal mechanism
Type I Sum Mean

Source of Squares DF Square F Sig.
Category 769.99 2 384.99 915.30 <0.01*
Occupational status 1.82 4 .45 1.08 .368
Error 43.74 104 .42
Total 815.56 110
It is found that occupation wise variations of the mean score are not statistically significant at 5 Per
cent level of significant (value of f 1.085). But the category wise variations of mean score are
significant at 5 Per cent level of significant. APL category scored highest mean than BPL.
4.5: Mode of availing information

Various modes of availing information on the availability or supply of items in the shop are
announcement, notice board, friends and relatives etc... Friedman test is used to test the following
hypothesis.
H0: There is no difference in preference of beneficiaries as to mode of getting information related to

the availability of items in the shop.
H1: There is difference in preference of beneficiaries as to mode of getting information related to the
availability of items in the shop.
37
Table 4.5.1 Mean rank obtained for the mode of getting information
Ranks
Modes Mean Rank
Announcement 2.01
Notice board 2.78
Friends & relatives 4.52
Making telephone calls 2.76
Newspaper advt. 2.93
Table 4.5.2 Friedman test
Test Statistics
N 110
Chi-Square 175.220
DF 4
Asymp. Sig. <0.01*
The table shows that the mean rank of friends and relatives are high(4.52).The chi-square static
provides the value of 175.220, which is significant at 5 Per cent level of significance (.000<.05).
Therefore the null hypothesis is rejected. This indicates the variation in the mode of availing
information from PDS.
4.6 Items based on different factors provided by PDS
There are different items provided by PDS shops. They are different in their quantity, quality, price
and availability. The following table shows the items rated on the basis of price, quality, availability
and weights and measures which are provided by PDS. Friedman test is used to test the following
hypothesis.
H0: There is no difference in preference of beneficiaries as to the items provided by PDS based on
selected aspects.
H1: There is difference in preference of beneficiaries as to the items provided by PDS based on
selected aspects.
Table 4.6.1 Mean rank obtained on different items
Price Quality Availability Weight

Rice 2.58 2.22 2.71 2.52
Sugar 2.54 2.51 2.17 2.44
Wheat 2.43 2.44 2.46 2.55
Kerosene 2.45 2.83 2.66 2.49
38
Table 4.6.2 Test statistics
N Chi-Square Df Asymp. Sig.

Price 110 1.088 3 .780
Quality 110 26.909 3 <0.01*
Availability 110 26.303 3 <0.01*
Weight 110 2.879 3 .411
The chi square static provides a value of 26.909 and 26.303, which is significant at 5 Per cent level of
significance (0.000<0.05). In availability, rice (2.71) is more significant than sugar (2.17) and in
quality, kerosene (2.81) is more than rice (2.22).
4.7 Reasons for not purchasing items
We can see that some of the consumers were not purchasing items from PDS shop, may be because
of lack of information on the availability of goods, lack of good quality, lack of income etc...
Friedman test is used to analyse the following hypothesis.
H0: There is no difference in preference of beneficiaries for not purchasing items

H1: There is difference in preference of beneficiaries for not purchasing items
Table 4.7.1 Descriptive Statistics
Reasons Mean SD
Lack of information 3.88 1.098
Lack of good quality 3.10 1.211
Lack of income during the time 2.33 1.235
Irregular supply 3.39 1.362
Under weight 2.47 1.081
Lack of customer relation 2.65 1.216
Mean Ranks
Reasons Mean Rank
Lack of information 4.68
Lack of good quality 3.74
Lack of income during the time 2.59
Irregular supply 4.05
Under weight 2.82
Lack of customer relation 3.11
39
The mean rank shows that, the lower the rank, higher will be the preference. As per table the highest
preference is lack of income during the time (2.59). The following table shows that chi square statistic
provide a value of 110.206, which is significant at 5 Per cent level of significance (0.000<0.05).
Therefore, the null hypothesis of “no difference in the reasons for not purchasing items”.
Table 4.7.3 Test Statistics
N 110
Chi-Square 110.206
DF 5
Asymp. Sig. <0.01*
4.8 Malpractices generally found in PDS shop

Some of the malpractices generally found in the PDS shop are adulteration, reselling, misselling
etc.,, Kruskal Wallis test is used to find the malpractices found in PDS shop and to test the following
hypothesis.
H0: There is no difference in the median responses of the malpractices found in shops among the
categories of respondents
H1: There is difference in the median responses of the malpractices found in shops among the
categories of respondents.
Malpractices Mean SD
Not supplying items as per govt. rules 3.00 1.427
Charging high prices 2.55 1.246
Under weight of goods 2.47 1.123
Adulteration 2.89 1.070
Reselling 2.91 1.267
Black marketing 2.91 1.351
Mis selling 2.90 1.270
Hoarding 2.70 1.296
40
Table 4.8.2 Mean rank obtained for malpractices based on APL/ BPL
Category APL BPL

Not supplying items as per Govt. rules 58.04 51.97
Mis selling 59.85 49.45
Hoarding 57.49 52.73
The mean rank table shows that the malpractices of charging high prices are mostly opined by the
category of APL, adulteration by the category of BPL, and misselling by BPL category.
Table 4.8.3 Kruskal wallis test

Chi-square DF Asymp. Sig.
Not supplying items as per govt. rules 1.016 1 0.313
Charging high prices 1.342 1 0.247
Under weight of goods 0.763 1 0.382
Adulteration 0.052 1 0.82
Reselling 0.078 1 0.78
Black marketing 9.668 1 0.002*
Mis selling 2.989 1 0.084
Hoarding 0.627 1 0.428
Friedman test
Friedman test is also used to test perceptional preferences of beneficiaries on the malpractices found in
PDS shop and to test the following hypothesis.
H0: There is no difference in the median responses of the malpractices found in shops among the
categories of respondents
H1: There is difference in the median responses of the malpractices found in shops among the
categories of respondents.
41
Malpractices Mean SD
Not supplying items as per govt. rules 3.00 1.427
Misselling 2.90 1.270
Hoarding 2.70 1.296
Table 4.8.5 Mean rank obtained for the malpractices found in PDS
Ranks
Malpractices Mean rank
Not supplying items as per govt. rules 4.96
Charging high prices 4.07
Under weight of goods 3.85
Adulteration 4.75
Reselling 4.76
Black marketing 4.66
Misselling 4.66
Hoarding 4.28
Test Statistics
N 110
Chi-Square 22.979
DF 7
Asymp. Sig. .002*
The Kruskal Wallis test is found to be significant at 5 Per cent level of significance with regard to
mispractises of black marketing but the Friedman test is found to be significant at 5 Per cent level of
significance with regard to under weighment of goods.
42
4.9 Reasons for not making complaints
There are some reasons for not making complaints against the unsatisfactory matters happened in
PDS shops, such as illiteracy, lack of interest, tedious procedures, lack of knowledge on proper
authority to file complaint etc… Friedman test is used to test the following hypothesis.
H0: There is no significance difference in the reasons for not making complaints against unsatisfactory
matters.
H1: There is significance difference in the reasons for not making complaints against unsatisfactory
matters.
Table 4.9.1 Descriptive Statistics
Reasons Mean SD
Illiteracy 2.87 1.434
Lack of knowledge on proper authority 3.54 1.002
Lack of interest 3.68 1.066
Tedious procedure in handling complaints 3.92 .858
Simply put up with the problem as fate 3.47 1.290
Table 4.9.2 Mean Ranks obtained for reasons for not making complaints
Mean Ranks
Reasons Mean Rank
Illiteracy 2.39
Lack of knowledge on proper authority 2.95
Lack of interest 3.15
Tedious procedure in handling complaints 3.56
Simply put up with the problem as fate 2.95
Test Statistics
N 110
Chi-Square 37.843
DF 4
Asymp. Sig. <0.01*
43
The Friedman test shows that illiteracy is the main reason for not making complaints against
unsatisfactory matters (mean rank=2.39).The chi-square static provides a value of 37.843, which is
significant at 5 Per cent level of significance (.000<.05). Therefore the null hypothesis is rejected.
This indicates the variation in the reasons for not making complaints.
4.10. Functioning of PDS system based on the need for improvement
Respondents’ attitude towards the functioning of PDS shop may different. Following are the
statements expected by the customers regarding the functioning of PDS that needs further
improvements. (Strongly disagree=SD, disagree=D, neutral=N, Agree=A, strongly agree=SA)
Table 4.10 Percentage Response regarding the functioning of PDS
SD D N A SA
Proper info about the supply of items 2.7 .9 8.2 24.5 63.6
Prompt supply .9 3.6 4.5 35.5 55.5
Need more quality 0.9 .0 3.6 26.4 69.1
Correct weight .9 5.5 12.7 35.5 45.5
Need more quantity 0 6.4 15.5 39.1 39.1
More subsidized price 0 5.5 21.8 45.5 27.3
The table shows that 69.1 per cent of the respondents were strongly agree to the factor that they need
more quality followed by the proper information about the supply of items. And respondents are only
strongly disagreeing to the factors relating to correct weight and need more quantity.
44
CHAPTER 4
FINDINGS AND SUGGESTIONS
45
FINDINGS
1. Demographic profile of respondents

The majority of the respondent belongs to the age group less than 55.
Gender wise classification shows that out of 110 respondents, majorities (72 Per cent) are male. As to
education qualification (78.2 Per cent) were literates and none of them were illiterate.60 Per cent
respondents are included in category of others (coolie).Above 58.2 per cent of the respondents were APL
holders. Most of the respondents opine that most of the FPS is under the control of Panchayath.
2. Level of awareness towards the functioning of PDS

Level of awareness towards the functioning of PDS among the education wise classification of
respondents give f values .237,1.973,.493,.559 and .121 which is found to be not significant at 5 Per cent
level(p >0.05). That is level awareness is same for all.
3. Satisfaction regarding services provided by PDS Shops

The category wise variations of mean score about the variable transparency in dealings are significant at
5 Per cent level of significant. BPL category scored highest mean than APL.The occupation wise
variation of the mean score about infrastructure facility are not statistically significant at 5 Per cent level
of significant (value of f .247).It is found that occupation wise variation of the mean score about fair
dealings are not statistically significant at 5 Per cent level of significant (value of f .691). But the
category wise variations of mean score are significant at 5 Per cent level of significant. BPL category
scored highest mean than APL.The category wise variation of mean score about complaint redressal
mechanism are significant at 5 Per cent level of significant. APL category scored highest mean than BPL.
4. Mode of availing information

The respondents get information on the availability or supply of items in the shop is more through friends
and relatives.
5. Items based on different factors provided by PDS
There are different items provided by PDS shops. They are different in their quantity, quality, price and
availability. Items based on availability, rice (2.71) is more significant than sugar (2.17) and in quality,
and kerosene (2.81) is more than rice (2.22).
46
6. Reason for not purchasing items
Some of the consumers were not purchasing items from PDS shop, may be because of lack of
information on the availability of goods, lack of good quality, lack of income etc... The mean rank shows
that, the highest preference is lack of income during the time (2.59).
7. Malpractices found in PDS shop

Some of the malpractices generally found in the PDS shop are adulteration, reselling, misselling etc. The
mean rank shows that the malpractices of charging high prices are mostly opined by the category of APL,
adulteration by the category of BPL, and misselling by BPL category.
8. Reasons for not making complaints
There are some reasons for not making complaints against the unsatisfactory matters happened in PDS
shops, such as illiteracy, lack of interest, tedious procedures, lack of knowledge on proper authority to
file complaint etc… The chi-square static provides a value of 37.843, which is significant at 5 Per cent
level of significance (.000<.05). Therefore the null hypothesis is rejected. This indicates the variation in
the reasons for not making complaints.
9. Functioning of PDS system based on the need for improvement
Respondents’ attitude towards the functioning of PDS shop may different. 69.1 Per cent of the
respondents were strongly agree to the factor that they need more quality followed by the proper
information about the supply of items. And respondents are only strongly disagreeing to the factors
relating to correct weighment and need more quantity.
47
Suggestions:
The main aim of ration shops in the public distribution system is to ensure food security. The
Effectiveness of this system can be measured through how it reached to the target consumers. The
recommendations are arrived from the opinion of the consumers of ration shops in Elappully
Panchayath.
• Level of awareness towards the functioning of PDS among the education wise classification
of respondents is same. Inorder to increase their awareness it is better to conduct meetings
related with PDS in regular intervals as it is possible.
• Level of satisfaction regarding the services provided by PDS is not same for all. It is better to
increase the infrastructure facility by providing adequate space for keeping inside the shop,
having proper weighing machines, and providing proper storage facility for keeping each
item separately.
• It is better to increase the fair dealings by supplying right quantity of item at right time,
maintain quality of items prescribed by civil supply department, providing correct
clarification about the doubts of customers, etc…
• Some of the malpractices generally found in the PDS shops are adulteration, reselling, mis-
selling etc. It is better to reduce the malpractices in PDS by conducting proper auditing,
supervision and placing proper complaint boxes.
• The respondents get information on the availability or supply of items in the shop is mainly
through friends and relatives. But most of the time it is not practical. So it is better to ensure
information availability by providing newspaper advertisement, placing notice board and
making telephone calls.
• Some of the consumers were not purchasing items from PDS shop, may be because of lack of
information on the availability of goods, lack of good quality, lack of income etc... So it is
better to maintain good quality and availability of food grains.
• There are some reasons for not making complaints against the unsatisfactory matters
happened in PDS shops, such as illiteracy, lack of interest, tedious procedures, lack of
knowledge on proper authority to file complaint etc… by providing proper information about
the aspects related with PDS we can make them how to react with unsatisfactory matters.
• It is better to adopt technologies in PDS shops for the easiness and smooth functioning.
48
CONCLUSION
India is a developing nation and second largest population in the world. To ensure food security in India
is an important function for the development of the country. PDS in India is one of the largest welfare
programmes in the world with the primary aim of improving food and nutrition security of the socially
and economically deprived sections in the country. PDS is considered as principal instrument in the
hands of central and state government to providing safety net to the poor against the spiraling rise of
price of essential commodities. Ration shops are grass root level functioning of the total public
distribution system in India to ensure food security. That’s why the study of effectiveness of ration shop
is important in this scenario.
This study shows that how effectively the ration shops are working in Elappully Panchayath
in Palakkad. The effectiveness can be assessed through the data collected from the municipal area. To
conclude that most of people are depending on ration shops at least for an item. But in present situation
the availability of food items is not adequate for the consumers. There is a need for increase the quantity
of food items given through ration shop and also need to ensure the quality of food grains which supplied
to consumers. The strong intervention from the government to ensure adequate full supply to every poor
in the society helps to eradicate poverty by attaining food security.
49
BIBLIOGRAPHY
BOOKS
Soundarapandian M., “Economic Reforms and Public Distribution System”, Serials Publications,
New Delhi, 2002.
Bapna S.L. “Food security through the PDS: The Indian Experience”, In Tyagi
www.shodhgangainflipnet.nic.in
www.scribd.com
www.wikipedia.com
50
ANNEXURE
51
INTERVIEW SCHEDULE
CONSUMER PREFERENCE ON THE EFFECTIVENESS OF PUBLIC DISTRIBUTION SYSTEM (PDS)
IN
ELAPPULLY PANCHAYAT
PERSONAL INFORMATION
1. Age of the family head : …………years
2. Gender : Male [ ] Female [ ]
3. Education : illiterate [ ] Upto 10th [ ]

Plus two [ ] UG/PG [ ]
4. Category : APL [ ] Antyodaya Anna Yojana [ ]

BPL [ ] Annapoorna [ ]
5. Occupational status : Private sector employee [ ] Govt. employee [ ]

Business [ ] Agriculture [ ]
Others [ ]
6. Average income in the last Financial year : …………………………
RATIONING PROFILE
7. Who is managing the fair price shop in your area?
Co-operatives [ ] Private person [ ] Panchayath Authority [ ] others [ ]
8. Mark your level of awareness towards the functioning of PDS in your residential area. Mark your opinion
on the respective columns
(Very high=VH High=H average=A Low=L Very low=VL)

s/no Statements VH H A L V
L
8.1 Have fair price shop in my village
8.2 Fare price shop in my village are functioning for a number of years
8.3 I know the availability of ration items in the shop at the right time
8.4 I get correct information about the availability, quantity, price of ration items in
the shop
8.5 Matters related with PDS is discussed in gram sabha meetings
9. State the level of satisfaction regarding the service provided/ infrastructure facility/ fair
dealings/complaint redressel mechanism provided by fair price shop. Mark your opinion in the respective
columns
(Strongly agree=SA Agree=A Neutral=N Disagree=D strongly disagree=SD)
52
s/no Statements SA A N D SD
9.1 Transparency in dealings
9.1.1 PDS dealer gives me up-to-date or relevant information
9.1.2 PDS dealer behave fair and friendly to their customers
9.1.3 PDS dealer is impartial to all
9.1.4 The price charged by fair price shops are low compared to other shops in the same
market
9.1.5 PDS dealer has the transparent ration shop with all consumers
9.2 Infrastructure facilities

9.2.1 Adequate space is provided for keeping items inside the shop
9.2.2 Adequate space is provided for queuing customers
9.2.3 PDS dealer having proper weighing machines in shop
9.2.4 Proper storing facility for storing each items separately
9.2.5 There is separate space for receipt of items and payment of money
9.3 Fair dealings
9.3.1 Supplying right quantity of item at the right time
9.3.2 Quality of items maintained in the PDS shop is prescribed by civil supply
department are correct
9.3.3 PDS dealer supplies items as prescribed by government
9.3.4 Providing correct clarification about my doubts from the dealer
9.3.5 Prices of different articles are displayed in the outer side of the shop
9.3.6 disparity between services rendered on APL & BPL
9.4 Complaint redressal mechanism
9.4.1 Malpractices are noticed in PDS shop in dealing with weighing machines
9.4.2 PDS dealer provide items with different price for different customers
9.4.3 I have complaints regarding the performance of PDS dealers
9.4.4 I have no option for redressal of my complaints
9.4.5 I noticed proper complaint box is placed in PDS shop
53
10. Identify the mode of availing information on the availability or supply of items in the shop
(Very high=VH High=H Moderate=M Low=L Very low=VL)
s/no Mode of availing information VH H M L VL
10.1 Announcement
10.2 Notice board
10.3 Friends and relatives
10.4 Making telephone calls
10.5 Newspaper advertisement
11. Rate the following items based on their Price/Quality/Availability/weights and measure which are
provided by PDS Very good=VG Good=G Average=A Bad=B Very bad=VB)
s/no Items VG G A B VB
11.1 Price of food grains
11.1.1 Rice
11.1.2 Sugar
11.1.3 Wheat:
11.1.4 Kerosene
11.2 Quality of food grains
11.2.1 Rice
11.2.2 Sugar
11.2.3 Wheat:
11.2.4 Kerosene
11.3 Availability of items
11.3.1 Rice
11.3.2 Sugar
11.3.3 Wheat:
11.3.4 Kerosene
11.4 Weights and measures
11.4.1 Rice
11.4.2 Sugar
11.4.3 Wheat:
11.4.4 Kerosene
54
12. Following are the some of the reasons for not purchasing items from the PDS shops, please mark your
opinions on the basis of your experience
(Very High = 5 High = 4 Average = 3 Low = 2 Very low = 1)
S/no Reasons for not purchasing items Rank
12.1 Lack of information on the availability of goods
12.2 Lack of good quality
12.3 Lack of income during the time
12.4 Irregular supply
12.5 Under weighment
12.6 Lack of customer relation
13. Following are the some of the malpractices generally found in the PDS shops,please mark your opinions
on the basis of your experience
S/no Malpractices Rank
13.1 Not supplying the items as prescribed by the government
13.2 Charging high prices
13.3 Under weighment of goods
13.4 Adulteration
13.5 Reselling
13.6 Black marketing
13.7 Misselling
13.8 Hoarding
14. Following are some of the reasons for not making complaints against unsatisfactory matters, , Please
mark your opinions on the basis of your experience
S/no Reasons for not making complaints Rank
14.1 Illiteracy
14.2 Lack of knowledge on proper authority to file complaint
14.3 Lack of interest
14.4 Tedious procedure or mechanism in handling complaints
14.5 Simply put up with the problem taking it to be fate
55
15. Evaluate the following factors in relation to functioning of PDS system based on the need for
improvement
(Strongly Agree=SA Agree=A Neutral=N Disagree=D strongly Disagree=SD)
S/no Factors SA A N D SD
15.1 Need more quantity
15.2 Need more quality of goods
15.3 More subsidized price
15.4 Correct weighment
15.5 Prompt supply
15.6 Proper information about the supply of food items
**Thank you for spending time for us**
56

Model Project 4

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Model Project 4

Uploaded by

Copyright:

Available Formats

“CONSUMER

CONSUMER PREFERENCE ON THE EFFECTIVENESS OF

A PROJECT REPORT SUBMITTED TO THE UNIVERSITY OF CALICUT IN PARTIAL

UNDER THE SUPERVISION OF AND GUIDANCE OF

POST GRADUATE DEPARTMENT OF COMMERCE

I MANJUSHA A(CHAOMCM007)hereby declare that the project report title

(Affiliated To University Of Calicut)

Certified that is a bonafide work carried out byMANJUSHA

Date: Name and designation of supervising teacher

(AFFILIATED TO CALICUT UNIVERSITY)

Certified that MANJUSHA A(CHAOMCM007)4th semester M.COM student

Date: Name and designation of supervising teacher

Happiness cannot be expressed by words, and help taken cannot be

First of all I acknowledge my sincere thanks to my respected guide

I convey my thanks to Mrs. C A Vishalakshi, Head of the Department of

I am thankful to all the faculty members of the Department of

I would like to thank all respondents who shared valuable information.

TOPICS PAGE NO.

4.3.2 ONE WAY ANOVA 26

SIGNIFICANCE OF THE STUDY

STATEMENT OF THE PROBLEM

on the effectiveness in the functioning of PDS. It is an attempt to study the effectiveness of

OBJECTIVES OF THE STUDY

• To identify the attitude of consumers towards ration shop.

SCOPE OF THE STUDY

METHODOLOGY AND COLLECTION OF DATA

North South East west

Ward 7 Ward 14 Ward 21

3(no of ration 3( no of ration 2(no of ration

400( no of family) 380 ( no of family) 210(no of family)

TOOLS FOR ANALYSIS

variables will be analyzed using computer software like SPSS.

The statistical package for social scientists (SPSS-X1)

LIMITATIONS OF THE STUDY

Evolution of Public Distribution System

Procurement of food grains from farmers

Storage of food grains

Allocation of food grains to states

1. What quantity of food grains must be allocated to different states,

Coverage of PDS in India

DATA ANALYSIS AND INTERPRETATION

The analysis is presented in:

1. Demographic profile of respondents

Table 4.1 Sample profile of respondents

Category No. Of respondents Percent

Table 4.2Management of FPS

4.3 Level of awareness towards functioning of PDS

Table 4.3.1 Descriptive statistics

Sum of squares DF Mean square F Sig.

4.4 Satisfaction regarding the services provided by PDS

4.4.1 Two-way ANOVA on the satisfaction regarding transparency in dealings by category

Table 4.4.1.1 Category wise estimated marginal means

Dependent variable: Transparency In Dealing

APL 3.086 .086 2.916 3.257

BPL 3.257 .093 3.072 3.441

Table 4.4.1.3 Two-way ANOVA

4.4.2 Two-way ANOVA on the satisfaction regarding Infrastructure facility by category

Table 4.4.2.1 Category wise estimated marginal means

Dependent Variable: infrastructure facilities

Table 4.4.2.3 Two-way ANOVA

Source Type I Sum of Squares DF Mean Square F Sig.

Table 4.4.3.1 Category wise estimated marginal means

Dependent Variable: Fair dealings

Dependent variable: Fair dealings

Thank you for spending time for us