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SocialTransformers
1. The Social Transformers
Akriti Chadda
Manish R. Thigale
Nikhil Iyer
Rangesh R. Vittal
Shubham Jha
Plugging the Leaks – Improving reach and efficiency of the Public
Distribution System
Smart Public Distribution
System
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2. Public Distribution System In India
• Targeted Public Distribution System launched in 1997
• Aims at benefitting the ‘poor’ and keeping the budgeted food subsidies under control.
• Main objective is to sell food grains to APL Households at economic cost and confine budgeted food supply to the identified
BPL families.
• Main commodities include Rice, Wheat, Sugar and Kerosene.
• Managed jointly by the Government of India under the Ministry of Consumer Affairs, Food, and Public Distribution with
respective state governments in India.
• Food Corporation of India (FCI), a central government-owned corporation, procures, maintains and issues food grains
to the states. Distribution of food grains to the poor throughout the country is managed by respective state governments. As of
date, there are about 4.99 lakh Fair Price Shops (FPS) across India.
% of population below poverty line in India
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3. Ghost Cards Leakages Time Delay
Storage
Problems
Reach Malpractices
Some states face errors of
exclusion and some,
inclusion.
Some states have issued
more cards than the number
of households, while others
have unidentified
households.
The problems of targeting
errors and ghost cards has
lead to high scale leakages.
(36.38%)
Diversion of subsidized
grains to unintended
beneficiaries. (21.45%)
Long time taken in
delivery of stock from the
godowns to the Fair Price
Shops (FPS).
No measures taken to save
crop from getting spoilt.
The godowns as well as
FPS have poor resistance to
rain, wind, insects and
rodents.
Poor maintenance of
storage facilities.
Not all families of the BPL
have access to the fair price
shops (FPS).
PDS benefits do not reach
remote locations.
Stocks withheld for greater
profits in the open markets
by the corrupt in some
cases.
Reports suggest that more than 57% of the grains do not
reach the BPL households
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4. Our solution to the current problem in the PDS
system
Packaging reforms aiming at reducing the loss
of the grains due to the previously-mentioned
problems existing in status quo.
Introducing Smart Ration Cards (SRCs) and
linking them with the UIDAI (Aadhar) database
in order to eliminate the growing problem of
ghost cards.
Linking the central and state governments more
efficiently for better outputs.
Reducing dependability on the FPS agents by the
use of technology, like the introduction of smart
ration cards (SRCs), barcode scanners , etc. .
SOLUTION
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5. The working needs to start in the level of the central government
in order to avail maximum benefits of the policy.
Next, these packages are barcoded, and this barcode provides information on date of packing & date of
expiration, weight and content, among other things.
A dual-layer packaging, with the inner layer made of polypropylene-woven bags and the outer layer
made of reinforced cardboard cartons. Kerosene will be packed in jerry cans and sealed.
The packs will be measured accurately at the source and then sealed with tamper-proof packaging,
thus preventing pilferage and damage during transportation and handling.
The sealed packs (Smart Packs) will be available in convenient weight variants ( For example rice can
have 1 kg, 5kg and 15kg) This ensures that the customers buy as per their requirement, improving
flexibility and reducing wastage.
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6. The good work needs to be carried on by the officials at the level
of the State Govt. and further by the agents in the Fair Price Shops
(FPS).
At the state level, we integrate the UIDAI database with the state’s BPL, APL and AAY database.
People will be given Smart Ration Cards (SRC) which will be used at the FPS to buy the rations.
This card will have a password, similar to an ATM pin to ensure that only the card holder uses it.
This user will have the option to set the password in the language of his/her choice, thus ensuring
that he/she is comfortable with his/her password, at the same time, preventing misuse of the card by
someone else.
The Smart Ration Card(SRC) will work on a prepaid system, ensuring that the government gets
money directly and not through multiple “middlemen”. Every time the customer buys the ration, the
card is swiped and the money is debited from the smart card.
Distribution of cards and setting up of recharge outlets will be the responsibility of the PRIs (Panchayati
Raj Institutions) and ward officials, under the supervision of the Deputy Collector.
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7. Most of the problems of the current scenario can be attributed to STORAGE.
FPSStorage
CentralStorage
Ideal conditions include low
running costs, low labor
requirements, rapid handling,
low wastage through spillage
and rodents, and control of
aeration. The best way to
achieve the above conditions is
to:
1. Build metal silos instead of
concrete ones, which are at least
1000% cheaper.
2. Importance must be given to
maintenance of the facilities.
This can be done by training
employees on this matter and
setting up diligent maintenance
programs.
3. Frequent checks and audits
by an external agency will be
made compulsory to ensure that
these conditions are met.
The FPS shops
must be water-
proofed.
Importance again
should be given
to maintenance
of the facilities.
Frequent checks
and audits by the
state officials
will be made
compulsory to
ensure that these
conditions are
met.
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9. A cost-benefit analysis
Losses in the current system Estimated cost of the improved system
Smart Packaging: 600 crores (300 crores increment from
current scenario)
Barcode system(Generator): 1 crore
PDS corruption loss: 20,747 crores Smart Ration Cards(SRC):15 crores
Food Grain Loss: 2050 crores in the last 3 years Infrastructure(metal silos): 7 crores
Barcode scanner: 50 crores
Magnetic strip reader: 250 crores
Total additional cost: 923 crores
The total current losses outweigh the cost of the improved system !
All values are in INR(Indian Rupees)
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10. The policy being recommended helps improve the existing system
Improving quality of FPS: Once weighted, smart packaged and barcoded, the boxes can’t be opened
unless sold to the customer. This ensures quality and quantity of the ration and prevents customers
from being cheated out of their fair share. Also, use of better storage facilities and regular maintenance
reduces wastage of food.
Auditing mechanisms provide the check and balance required to curb corruption to a large extent.
Employees, if found corrupt, will be terminated.
Since the new packaging and processing system will require more human resources, this provides an
employment opportunity to people. We can use the MGNREGA (Mahatma Gandhi National Rural
Employment Guarantee Act), JRY (Jawahar Rozgar Yojana), and other related employment schemes.
Introduction of smart ration cards (SRCs) eradicates ghost cards and ensures that the right BPL and
APL families obtain the benefits with less opportunity for corrupt practices.
Timely dispatch of goods to the FPS due to efficient record-keeping, smart packaging and inventory-
keeping. The database system keeps a track of the stock available in the FPS, and the expiry date of
rations among other things.
The universal recharge system (URS) ensures that the money paid by the consumer directly reaches
government accounts, without travelling through middlemen.
The system empowers consumers and increases the dignity of the poor. It takes away the powers of the
FPS agents who dictate terms to these poor people by keeping the FPS open at their whims, make them
stand outside in rain and sun, and not providing the ration for not bringing the exact change.
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11. Expected challenges in the implementation
Distribution of Smart Ration Cards(SRC): New cards are
being issued and have to be distributed to every household.
Verification of the UID with the existing ration card is a slow
process.
Setting up of the infrastructure for printing of cards , smart
packaging and storage facilities.
Training the authorities and educating the public about the
modified system and getting them accustomed to it.
We propose this improvement in the implementation of the present system to ensure that the right needy people get their fair share
of quality food at a fair price with dignity
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12. References
1) Indian Economy by Datt & Sundharam. Page no. 552-564 ,67th edition, S.CHAND
publications
2) Press Information Bureau English Release(www.pib.nic.in)
3) Research and development issues in grain post-harvest problem in Asia by FAO
Corporate Document Repository
4) Performance evaluation of TPDS by Planning Commission of India,Year-2005
5) Food Subsidy in India: Trends, Causes and Policy Reform Options, Vijay Paul
Sharma,
W.P. No.2012-08-02,August 2012
6) Bhalla, Surjit S. (2012, Jan 7). Enhancing Corruption the NAC Way. Oxus
Investments.
7)”As Grain Piles Up, India’s Poor Still Go Hungry” a THE NEW YORK TIMES
report by Vikas Bajaj dated June 7,2005.
8) THE NATIONAL FOOD SECURITY BILL,2013 from THE HINDU archives.
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