PUBLIC DISTRIBUTION SYSTEM IN INDIA:
THE PROBLEMS AND DIMENSIONS
A Project Report submitted
INSTITUTE OF TECHNOLOGY, NIRMA UNIVERSITY
India‘s Public Distribution System, comprising of more than 0.4 million Fair price Shops,
better known as, Ration Shops, and responsible for distributing to more than 160 million
families commodities worth INR 15,000 crores, is one of the biggest of its kind in the world.
The PDS had been initiated by the government as a system for distribution of food grains at
affordable prices and management of scarcity. Over the years, PDS has become a central
tool of the Government for managing the food economy of the country. PDS is currently
operated as the joint responsibility of the State and the Central Governments. Through the
Food Corporation of India, the Central Government has taken over the responsibility of
procuring, storing, transporting and allocating the food grains to the State Governments.
The State Governments are responsible for the operation of the system and it includes the
identification of families below the poverty line, allocation of ration within the state, the
issuing of ration cards and supervising the functions of FPS. At present, commodities
namely rice, wheat, kerosene and sugar are being allocated to the states for being
distributed under PDS. This paper analyses the current PDS of the nation, throwing light on
its shortcoming, thereby suggesting a model for overcoming these shortcomings with
special focus on need of IT in the system
To study the short comings in the current Public Distribution System and suggest a
new working model.
We intend to study how the current public distribution system works. The
government of India came up with a revamped version of the Public Distribution
System in the form of Targeted PDS in the year 1997, on the suggestion of the World
Bank. However during our research we uncovered certain short comings in the
process causing a direct implication on complete supply chain as well as the
consumers. Hence we have suggested a new model thereby increasing transparency
and ease in the process.
One of the main issues to be handled is the poor offtake of commodities as
opposed to the high price of production and procurement. Despite a decline in
area under food grain crops in India the two main staple grains together registered
annual production growth of 3.59 per cent in the 1980s and 2.28 per cent in 1990s
which was above the population growth rate of 1.9 per cent (Economic Survey,
2003). In the year 2008-09, the total allocation of rice and wheat was 26.26 lakh
tonnes, but the reported offtake was a meagre 20.19 lakh tonnes (Department of
Food and Public Distribution, Annual Report 2008-09). According to a Planning
Commission report, the food subsidy by Central Government amounted to Rs. 2450
crores in 1990-91, and had more than tripled to Rs. 8100 crores in 2000-01.
Another major concern is the diversion of the food supplies. A study was conducted
by the Tata Economic Consultancy Services to know how much of PDS supplies were
diverted from the system. At the national level, it was found, there was a diversion of
36% of wheat supplies, 31% of rice and 23% sugar (Planning Commission, 2005). A
Planning Commission study (2005) found that about 58% of the subsidized food grain
issued by the Government does not reach the BPL families due to identification errors,
non-transparent operation and corrupt practices in the implementation of TPDS (N C
Saxena). In the year 2005, Transparency International and Delhi based Centre for Media
Studies undertook the India Corruption Study which encompassed 14,405 respondents
from 20 states. The common irregularities reported in the PDS were: unavailability of
rations-59%, ration diversion to open market-54%, inferior quality-51%, less quantity-
49%, faulty weights-38% and overcharging-30%
IT based solution approach
A significant part of the challenges in the PDS system emanates from Bogus (ration cards
belonging to fictitious families) and Shadow (genuine ration cards used by someone else)
ration cards in the system. If the bogus cards can be substantially weeded out and a
mechanism put 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.
§ IT illiteracy.
§ Lack of commitment level at beneath the surface level.
§ Corruption prevailing at the final distribution stage.
So what we suggest is ,as it is known that every BPL family is a registered and the database
is updated at the central and the state level so what could be done is integrate the
database both at the state and the central level so as to make the whole system more
transparent, efficient, effective and accountable with the help of Information &
Objectives Proposed Model
1) Effectiveness of service delivery by,
ensuring that correct quantities of commodities reach the FPS dealers and intended ration card
holders on time.
minimizing Transit losses and pilferages.
2) Bringing transparency in TPDS functioning by:-
establishing an effective system for redressal of public grievances,
making all important information available to citizens through multiple interfaces.
3) Ensuring accountability of functionaries by
ensuring traceability of decisions, and
Adherence to service levels.
Our basic aim behind implementing this model was Automating the whole public distribution
system. But getting into surface level through the questionnaire and one on one discussions with
various bodies we found out that implementing IT was possible but only to an extent but not
beneath the surface level.
Under the current public distribution scheme, BPL families are entitled to receive a fixed
entitlement of essential commodities such as rice, wheat, sugar and kerosene at a subsidized rate.
Besides, these four commodities certain states also provide for salt, pulses as well as processed
items like wheat flour.
So dealing with managerial perspective, we found that major corruption takes place at the
distribution level through FPS‘s (i.e final distribution stage). So to avoid this problem what we
would be doing is Instead of segregating the allocated items at the FPS and then distributing it to
the BPL families this function would be executed at the FCI only. All the items would be packed
in the ―FAMILY BAG for all‖
those families registered as the BPL families and the only job that the FPS would be doing is
handover the respective bag.
It is clear that a task of utmost importance today is to guarantee adequate access to food to
ensure food security and to end endemic hunger. A well-functioning universal public
distribution system can be the means to ensure adequate physical access to food at the
local and household levels. These proposals—for a universal public distribution system, for
universalization of ICDS with quality, and for a mid-day meal to all primary and secondary
school children—are likely to require higher food subsidies. This will all be possible through
the proposed model
-First and foremost database of every citizen must be prepared based on his household.
-Based on which a smart card must be provided to every family having information of no.
of members ,overall income of family
-Every year befor passing of the annual budget, complete analysis of each family(state
wise) must be done and which must be updated every year and each family must be put in
above poverty line
poorest of poor
And it must be updated on PDS software
-Then the estimation on the quantity of ration(rice,wheat,kerosine,suggar,pulses)required
and the requred budget for aquiring and transporting the ration must be calculated and
must be presented to be passed by the central govt.
-On the basis of the database prepared ,respective amount of money must be transferred
to every state’s PDS account which the state Pds officer will use to purchase the ration.
(proper infrastructure must be present to store the ration in every states PDS head office)
ALL THE TRANSACTIONS WILL BE DONE VIA SAPERATE PDS ACCCOUNTS(OF EVERY STATE
AND ONE AT CENTER,to make the system transparent)
-At the fps, computers will be provided to maintain the track records of packages
(packages will be made at disrtict level for every house based on its requirements)
-All money will be collected from the fps and the fps owner will be given salary instead and
the procees will be monitered by the Disrtict collector who will be monitered by higher
authorities …Any mismatch In accounts will generate error(suitable programme will be designed)
Considering the fact that India is country of poor ,PDS system plays a
pivotal role in its development.The major problems faced by the currnt pds if corrected
the thought of mera bharat swasth bharat will come true