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  1. 1. Plugging the leaks: Improving the reach & efficiency of PDS Report By: Lokireddy Siddhartha Karthik Akunuru BVK Aditya Muthali Ganesh Praveen Kartha
  2. 2. Effective Food security bill need an effective PDS!!! There are many systemic challenges that plague the PDS system today • PDS Leakages: Accessibility Issues, Bogus ration cards, Errors in categorization, Products Diverted to open market. • Scale and Quality of Issue: Many FPS are open only for a few days in a month and beneficiaries who do not visit the FPS on these days are denied their right. • System Transparency and Accountability: The most serious flaw plaguing the system at present is the lack of transparency and accountability in its functioning. • Grievance Redressal Mechanisms: Malpractices abound to the great discomfiture of the common man.
  3. 3. Our Solution: An IT based solution approach to positively confirm and track the individual beneficiary offtake on a monthly basis. Advantages of an IT based solution: • Removal of Bogus and Shadow ration cards: This solution will effectively weed out bogus and shadow ration cards from the system. By putting a mechanism in place to positively confirm and track the individual beneficiary offtake on a monthly basis, the problems relating to PDS leakages, Transparency and Transportation would get resolved, as leakage would become more difficult to hide. • Better Identification - Program will lead to better identification of individuals and families leading to better targeting and increased transparency and therefore better functioning of the system and increased public approval. • Duplicate and Ghost Detection – This provide duplicate detection infrastructure to the PDS program. It can also assist in the development of special tools to assist in the assessment of eligibility of applicants. • Eliminate Malpractice in FPS: The shop keepers are accountable for the quantity of food grains sold. • Support for PDS reform – This system can further be extended to old age pension scheme and other schemes were government fund needs to be transferred to a person’s bank account directly.
  4. 4. UID – Targeting each beneficiary uniquely The Solution Components --The draft food security act implicitly requires a computerization of various elements of the PDS system. The key components of the proposed solution and how they can be implemented in a rapid and cost effective manner is briefly described in this section.  Creation of a Beneficiary Database  Enrollment of identified family members by enrolling them into the UID  The inclusion of all families in the beneficiary database is important for an effective elimination of Shadow and Bogus cards.  Individual Beneficiary Tracking -- Deployment of a Point of Sale (PoS) system that is equipped with a fingerprint reader to positively identify a beneficiary before an issue is made. The PoS system can generate a receipt and automate the bookkeeping reducing the time required for a transaction. The data on eligible beneficiaries for the next month is transferred to the PoS each month with the offtake information for the previous month is collected.
  5. 5. • Information, Communication Technology Infrastructure -- Information Communication Technology (ICT) infrastructure will need to be deployed to connect all the key offices of the Food Department including the Secretariat, Commissioner cell, District Offices, Teshil/Block offices and Whole Sale Points. • This could include the use of handheld devices or the PoS Device for managing inspections and other data collection activity.
  6. 6. UID DATABASE . BIOMETRIC SCAN . ID . FAMILY DETAILS . RATION CARD NO. FPS DATABASE Region 1 . BIOMETRIC SCAN . Product Sold . Inventory . Next Order date FPS DATABASE Region 2 . BIOMETRIC SCAN . Product Sold . Inventory . Next Order date FPS DATABASE Region 3 . BIOMETRIC SCAN . Product Sold . Inventory . Next Order date District NIC
  7. 7. Implementation Mechanism • The PDS Control order stipulates that as part of the monitoring “State Governments shall ensure monitoring of the functioning of the Public Distribution System at the fair price shop level through the computer network of the NIC installed in the District NIC centers. For this purpose computerized codes shall be issued to each FPS in the district.” • The program can be implemented by the State Governments with minimal changes to the clause in the PDS control order referred above.
  8. 8. Enabling effective accountability and monitoring • The PDS today has put in place vigilance groups and monitoring systems to ensure that food subsidies reach the poor. A limitation the program faces however, is a lack of transparency and the clear accountability – the government and the public have no means of verifying whether vigilance checks and inspections were carried out, and who is accountable for delays and leakages. UID authentication would be a tool for the government to implement high levels of accountability across the system: I. Accountability in food grain movement: The use of UID authentication at subsidy exchange points would ensure that the responsibility of each individual – supplier, transporter, FPS owner, inspector – is traceable, and clearly visible across the PDS infrastructure. II. FPS accountability: Requiring UID authentication every time the beneficiary collects the entitlement from the FPS would ensure that the FPS owner must clearly account for the offtake claimed by his store. III. Beneficiary accountability: UID authentication by the beneficiary would ensure that proxy withdrawals of entitlements are no longer possible. Beneficiaries would also not be able to withdraw more subsidies than they are entitled to through duplicate ration cards. IV. Community participation in monitoring: Communities in both rural and urban India have turned to Right to Information, as well as public activism, in order to access FPS records and monitor the functioning of ration shops. However these community monitoring efforts by individuals and civil society organizations have been constrained by the limited access they have to records across the PDS supply chain, before the foodgrain arrives at the FPS.
  9. 9. Incentives for residents i) Ease in identity verification: With UID, residents can easily establish their identity, wherever they are in the country. Identity verification will be simpler while obtaining a ration card. ii) Expanded coverage: Ease in identity verification will allow poor residents who have so far been shut out of food subsidies, to access food entitlements iii) Address exclusion of eligible poor: A centralized, Aadhaar-enabled registration system for PDS applicants would encourage governments to respond more quickly to applications, and limit the exclusion of eligible individuals. iv) Portability and choice in accessing benefits: A universal identification number gives governments the chance to offer portable food entitlements, which beneficiaries can claim wherever they are in the state. v) Improved services through increased transparency: Clear accountability and transparent monitoring would significantly improve access and quality of entitlements to beneficiaries. vi) Better grievance redressal: Transparent, centralized system of grievances would encourage rapid responses from governments on complaints.
  10. 10. Incentives for government I. Lower costs in procurement and storage: Use of an UID-enabled MIS in farmer registration, food grain movement, delivery and payment can ease costs and complexity within the PDS infrastructure. II. Ease in capacity additions: By easing registration of suppliers as well as distributors, an UID-enabled MIS can make capacity additions and changes more convenient for the government to implement. III. Effective monitoring: UID would greatly improve the power of vigilance committees and overall monitoring, as it would enable the government and public to track delays and diversions. IV. Expansion to other schemes: In India, a variety of programs, including the ICDS and the MDMS, offer food entitlements to the poor. These multiple benefits can eventually
  11. 11. Appendix • • • 268a.pdf