This document proposes solutions to address issues with India's Public Distribution System (PDS). It notes that only 10% of the intended benefits from PDS subsidies reach the poor. It suggests linking ration cards to Aadhaar numbers, basing poverty lines on asset ownership rather than income, and including families with working female heads. Other proposals include independent verification of eligibility, accountability for fair price shop owners, and audits of storage facilities to reduce leakage. However, challenges include additional costs and risks of corruption from strengthened oversight systems.

1. PLUGGING THE LEAKS

2. 
 Nikhil Gokhale
 Arjun Iyer
 Dharmesh Kariya
 Harshit Gupta
 Varsha Venkat
Institution: IIT MADRAS
GROUP DETAILS:

3. 
 Only 10% of poor receive intended benefits on the
subsidies offered by the Public Distribution System (PDS)
in India.
 61% of households are excluded from the Below Poverty
Line (BPL) net and 25% of households become
unintended beneficiaries.
 23% of all Fair Price Shops (FPS) survive solely due to
leakages and diversion.
 PDS Corruption estimate is around Rs. 20747 Crores.
CONCERNS

4. 
Fair Price Shop
Owners made more
accountable to the
government
Commission earned
by the FPS Shop
Owners proportional
to quantity of goods
sold
Awareness
Campaigns
particularly in small
towns and rural areas
Formation of a
committee to keep a
check on FPS and
godowns
SNAPSHOT OF SOLUTION PROPOSED:

5. 
 Linking the ration card with the Aadhar card will decrease exclusion
errors.
 Criteria of poverty line to be based on the possession of certain assets
rather than on the income.
Other assets can also be included.
 Families with working female as only source of income(e.g. – maids,
house servants) should be included under BPL.
PROBLEM OF GHOST CARDS
Assets
making one
ineligible
for BPL
cards:
Television Set
Refrigerator
Fan
Two- or Four-Wheeler
More than Five Acres Land Holding

6. 
 Setting up of NGOs to conduct surveys which reveal family
situations and constraints.
 These NGOs will then submit an independent report on the
people eligible to recieve the benefits of the PDS system.
 In small villages this job can be made easier by obtaining the
required information about families from the gram
panchayat,as it has lesser chances of being manipulated.
 Based on the reports obtained from the independent surveys
conducted,eligible citizens will be given the status of BPL and
will obtain benefits of the PDS system.
 The NGOs should be given financial and legal support by the
government to carry out these surveys.
MEASURES TO TACKLE GHOST CARDS

7. 
 Payment to the FPS shop owner should be done in two stages:
1. Initial Payment: Minimum payment for providing the service
through his shop.
2. Final Payment: This will be based on the percentage of allotted
families that he covers.
 Every FPS shop owner must maintain records containing the following details:
1. Card Holder’s Name.
2. Amount of grains and other items provided.
3. Money received.
4. Sign/Thumbprint of the Customer.
5. Sign of the Shop Owner.
Shopkeeper must produce such a bill to become eligible for final payment.
 Each customer must also receive a signed copy of the bill before leaving the FPS
shop.
THE LEAKAGE PROBLEM

8. 
 Proper accounting of grains to be done at the godowns.
 Timely audits to be done by the district collector to check
the accounts and the conditions at the godowns.
 Margin of profit should be increased for efficient
business.Incentives may be provided to such owners.
 Display of rate chart and quantity available in the block-
boards in front of the shop should be enforced strictly.
 Electronic weighing scales should be made compulsory to
reduce malpractices.
KEEPING A CHECK

9. 
ORGANISATION STRUCTURE
 Responsibility of spreading awareness about rights of the people should be given
to the Panchayats.
 Regulatory Committee will ask for feedback from the people from time to time.
 VIGILANCE SQUAD is responsible for conducting raids and detecting corruption
in the system.
Collector
Auditing
Committee
Grievances
Vigilance
Squad
Regulatory
Committee

10. 
 Considerable manpower and financial aid will be required for
implimenting the surveys as it intended to cover a vast number
of citizens.
 More manpower will also be required in the government
mechanism, as the plan suggests formation of specialised
committes to audit and to keep a vigilant check on the PDS
system.
 The incentives proposed for the FPS owners will also require
additional funding.
 Advanced equipments required for preventing leakeages and
tampering,both in godowns and in FPS will also require
financial funding.
FINANCIAL AND HUMAN
RESOURCES REQUIRED

11. 
IMPACT AND REACH:
 21% of the poor are remaining undernourished currently.
 URBAN AREAS:
There are around 10 million families who depend on
the PDS in urban areas.
 RURAL AREAS:
Over 8 million families living in rural areas depend on
the PDS for getting their essential commodities.
 The Civil Supplies Corporation should open more Fair
Price shops in rural areas since density of shops is less in
such areas.

12. 
There are many challenges to implementing this plan:
 The strengthening of vigilance squads will be an additional burden on the
taxpayers.
 F.C.I. and other agencies don’t really have any incentive to provide good
quality food grains.
 Frequent checks and raids on Fair Price Shops are again an additional burden
on the taxpayers and are not foolproof.
 Fair Price Shop owners might cheat the poor, uneducated villagers by giving
them false bills.e.g.- he might give a bill for 35 kg when only 30 kg rice was
given.
 During surveys people may exhibit only part of their assests, due to which
undeserving people ay obtain benefits.
CHALLENGES AND RISKS

13. 
 planningcommission.gov.in/reports/sereport/ser/PDS_Frep.
pdf
 web.iitd.ac.in/~reetika/PDS%20JDS%202011.pdf
 www.financialexpress.com/news/states-submit-suggestions-to-
improve-pds/645481
 pdscvc.nic.in/Annexure%20C.pdf
 www.indiancag.org/manthan/improving-public-distribution-
system
REFERENCES
http://pdscvc.nic.in/Annexure%20C.pdf