Presentation by Sonal Chadha, Harleen Kaur, Sachin Rajpal,
Aanchal Jindal and Jagandeep Singh from Sri Guru Gobind
Singh College Of Commerce, Delhi University.
Around 35% of India’s population—320 million
people are considered food insecure, consuming
less than 80% of minimum food requirements.
Taking into consideration the problem of poverty
and hunger, the Ninth Five Year Plan states that,
“Ensuring food and nutritional security for all,
particularly the vulnerable sections of society”
will be its main objective.
According to the Food and Agriculture
Organisation (FAO), Food security pertains to,
“Ensuring that all people at all times have both
physical and economic access to basic food they
Components of Food
Increase in food production
Providing Assured Minimum Prices to the
Procurement of Food grains
Public Distribution System
Maintaining Buffer Stock
National Food Security Act (NFSA)
WHAT IS PUBLIC DISTRIBUTION SYSTEM (PDS)?
The PDS is a form of system of rationing that was
started during the era of food shortages in 1960’s.
For building up a strong and reliable food security
system, it is not only enough to produce and supply
adequate quantity of food in the market, but also to
ensure that this food reaches the people and is
actually available to them for meeting their
It is an instrument for ensuring availability
of certain essential commodities at easily
affordable prices especially for the poor.
On an average, about 15-16 million tonnes of
foodgrains are issued by the FCI to the States at a
uniform Central Issue Price (CIP) which is much
less than the economic cost incurred by the Central
Government by way of procurement, storage,
transport and distribution.
The difference between the economic cost and the
CIP, called the consumer subsidy, is borne by the
Central Government through its annual non-Plan
• Under this system, the ration card holders were
given a certain minimum prescribed amount of
foodgrains (based on the number of family members,
every household was allotted certain number of units
of food) at highly subsidised prices.
•The Ration shops were later known as FAIR PRICE
SHOPS to supply some minimum amount of foodgrains,
sugar and some other essential items to the people at
subsidised prices. (more than 5 lakh in number).
•This system of sale of essential goods such as foodgrains,
sugar, kerosene, etc by the Government at subsidised
prices, through a network of fair price shops, is called
Public Distribution System.
“Of all the net safety operations that
exist in India,the most far reaching,in
terms of coverage as well as public
expenditure on subsidy,is the Public
TARGETED PUBLIC DISTRIBUTION SYSTEM
Scheme in existence since 1965 – earlier universal coverage.
In 1997, TPDS was introduced with greater emphasis on BPL people.
Under TPDS, foodgrains are currently allocated to 6.52 crore BPL families (1993-94 poverty estimates projected
to March 2000 population). This includes 2.43 crore AAY families (poorest of the poor).
35 Kg foodgrains per family are provided to BPL/ AAY families. For APL families, Government provides 15-35 Kg
depending upon availability of foodgrains in the Central pool. Prices are Rs.2/3 per Kg for wheat/ rice for AAY,
Rs.4.15/ 5.65 per Kg for BPL and Rs.6.10/ 8.30 per Kg for APL families.
The Revamped Public Distribution System (RPDS) was launched in June, 1992 with a view to strengthen and
streamline the PDS as well as to improve its reach in the far-flung, hilly, remote and inaccessible areas where a
substantial section of the poor live.
Under TPDS, a two-tier subsidised pricing system was introduced for special benefit of the
poor. The essential feature of TPDS is that the poor people, i.e., below the poverty line(BPL)
families are provided foodgrains at a specially subsidised rates which are almost half of the
price that is charged from those people who are above the poverty line (APL). Thus, the Fair
Price Shops (FPS) have two sets of prices, one for the people below poverty line and the other
one for those who are above the poverty line.
In order to make TPDS more focused and targeted towards the poor, the “ANTYODAYA ANNA
YOJANA" (AAY) was launched in December, 2000 for one crore poorest of the poor families. AAY
contemplates identification of one crore poorest of the poor families from amongst the BPL families
covered under TPDS within the States and providing them foodgrains at a highly subsidized rate of
Rs.2/ per kg. for wheat and Rs. 3/ per kg for rice. The States are required to bear the distribution cost,
including margin to dealers and retailers as well as the transportation cost.
Unique quota cards to be recognized an "Antyodaya Ration Card" must be given to the Antyodaya families
by the chosen power. These ration card must be having the required details regarding the Antyodaya family,
level of ration etc.
Also, to overcome the problem of Poverty and Hunger, NATIONAL FOOD SECURITY BILL was
introduced in India and also has been passed by both the houses of Parliament.
LEAKAGES TO PDS
• PDS has benefited only a small section of population i.e., the urban poor.
It has not much presence in the rural areas where a vast majority of the
poor people live.
• PDS involves a huge subsidy, which amounts to more than Rs 27 thousand
• Due to frequent upward revisions of procurement prices and MSP, this cost
of foodgrains purchases has been going up, which has resulted in high issue
• Inefficient operations by FCI, high cost of transportation, storage, etc., all
adds upto high cost of foodgrains.
• Benefits of the PDS are not uniformly spread over all regions. Some states
gain more from it than others.
• Leakages from the PDS in the form of diversion of PDS supplies to the
market by FPS owners limit the benefits from reaching the poor.Corrupt Officials
“For every Rs 4 spent
on the PDS, only Rs 1
reaches the poor”
57% of the PDS food
grain does not reach the
intended people ”
Imagine a water supply
system which is supposed to
deliver water in a tap for a
particular household. For
every 100 litres of water
supplied, the targeted
household however receives
only 10 litres of water. 19
litres is taken by the
neighbour who is not
supposed to use water from
this tap, but claims to be
dependent on this tap.
Another 43 litres is stolen
from the pipeline illegally,
while the supplier uses 28
litres of water to just run the
This is the story of India’s
Public Distribution System
[PDS] as brought out by an
Asian Development Bank
Working Paper, How Can
Food Subsidies Work Better?
Millions of tonnes of foodgrains
going waste every season said to
offer huge opportunities for supply
chain companies to enter the
business,though it is getting
increasingly politicalised of late
MEASURES TO IMPROVE EFFICIENCY AND
REACH OF PDS
A revised Citizens’ Charter has been issued in July, 2007 for adoption and
implementation by the State/UT Governments for facilitating its use by
citizens as per provisions of Right to Information Act , 2005, in relation to
functioning of the TPDS.
PDS (Control) Order,
In order to maintain supplies and securing availability and distribution of
essential commodities, PDS (Control) Order, 2001 has been notified on
August 31, 2001. The Order mainly contains provisions with regard to the
issues such as Identification of families below the poverty line; Ration
cards; Scale and issue price; Distribution of foodgrains; Licensing and
A meeting of all State and UT Food Secretaries was held under the
Chairmanship of Union Food Secretary at Hyderabad on 8.2.2008 to discuss
the measures for reforming PDS. The minutes of said meeting were sent to
all concerned for taking necessary action thereon.
Central Government has taken the initiative for end-to-end computerization of PDS
across the country in a time bound manner. For this purpose, a Scheme is being
formulated to cover all States / UTs and end-to-end computerisation of TPDS will be
undertaken upto the last mile.
Door step Delivery of Foodgrains
The state Department of Food and Civil Supplies has started the "doorstep delivery"
facility for foodgrain under the PDS. According to Commissioner of Food and Civil
Supplies, Rajeev Agarwal, the department will send the foodgrain straight to the
PDS shopowner through its own trucks — instead of the shop owner managing the
Using Aadhaar solely for identification would enable clear targeting of PDS
beneficiaries, the inclusion of marginal groups, and expanded coverage of the poor
through the elimination of fakes and duplicates. Implementing Aadhaar-based
authentication across PDS would enable the government to guarantee food delivery
to the poor.
Grievance Redressal Mechanism
Department of Food & Public Distribution, Government of India is implementing
scheme called TPDS- Training. This scheme aims at strengthening and upgrading
the skills of personnel engaged in the functioning and implementation of TPDS by
conducting training programmes and organizing lectures, seminars and workshops
on policy issues with regard to TPDS . Central Government provides financial
assistance to the State/UT Governments for conducting training programmes
There is no foolproof authentication of the beneficiary under PDS, but under
RSBY, an elaborate Key Management System (KMS) ensures that the smart card
cannot be issued to a wrong person. At the point of service as well, RSBY
facilitates a foolproof identification through biometric system as the thumb
impressions of the beneficiaries can be matched with that in the smart card.
As and when complaints are received in the Department from individuals and
organizations as well as through press reports, they are sent to State/UT
Governments concerned for inquiry and appropriate action. In case of any
grievance relating to the above- referred aspects, the Food & Civil Supplies
authorities of the State/UT concerned may be approached..
Restructuring the PDS
a) Items other than rice and wheat need to be excluded from the
purview of TPDS.Sugar should be kept outside the purview of PDS.
b) There is huge leakage of kerosene meant for PDS. The subsidy on
kerosene should be phased out by raising its supply
price.Alternately, if kerosene is to be retained under PDS, the extent
of subsidy given should be reduced so that there is less incentive for
c)The coverage of TPDS and food subsidy should be restricted to the
d)With the liberalisation of external sector, the operation of the
buffer stock can be supplemented by timely exports and imports .
e) Jean Dreze suggests the introduction of a ‘quasi-universal system’
based on specific inclusion criteria; as well as a system of food
coupons which possess a unique identification number and
As we see that PDS is playing very important role in our economy and it is providing
very essential and important items to BPL households but PDS has many leakages and
weakness which are creating obstacles in the efficiency of PDS. Like that we can say that
with the implementation of some measures the PDS can give fruitful results to poor