The document discusses problems with India's Public Distribution System (PDS) including significant leakages that prevent food grains from reaching target groups. It proposes a solution of introducing information technology through a centralized server connecting procurement, state, district and individual ration shops. Fingerprint scanners would ensure delivery to cardholders. This would increase transparency and efficiency while providing jobs. Implementation would require procurement of computers and scanners through tenders, with initial costs repaid through small cardholder fees. Success would be measured by reduced leakages and ease of monitoring scarcity and demand. Challenges around literacy and costs could be addressed through training and cost recovery.

1. PLUGGING THE LEAKS: IMPROVING
REACH AND EFFICIENCY OF PUBLIC
DISTRIBUTION SYSTEM

2. Leakage
Artificial
Demand
Problems in PDS
Black
Money
Artificial
Demand
Sales in
Black
Market
Misusage of
government
subsidies
Effect of problems in PDS
Increase in number of
peoples in Mal-
nutrition and Hunger
Major reasons for problems in PDS
No transparency in
the system
During 2003-04, the 16 large States were
issued 14.07 million tonnes of BPL quota
from the Central Pool. Of
this, around 5.93 million tonnes was
delivered to the BPL families and 8.14
million tonnes intended for them never
reached them .

3. Taking into account all the inefficiencies of PDS, it is found that GOI spends Rs. 3.65 to
transfer Re 1 to the poor.
Centralisation of procurement is the another problem. 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.
Public distribution system didn’t reached to all the targeted Below poverty line peoples
because of leakages in public distribution system
0 10 20 30 40 50 60
% of BPL people covered
% of subsidized grains
reached target group
Performance of PDS
Performance of PDS

4. Flow of information
Each and every level should be connected
with a centralised server
Data in each levels are shared between each
end every levels
Solution for the problem
Procurement-
Decentralisation
(State Level)
Introduction of Information
technology
Implementation of fingerprint
scanner to conform the delivery of
items to correct person
Scarcity in one state will be met by
procuring the goods from other state
Central,state,district and
individual ration shops
Inter connected
server(Centralised)
Details about Aadhar card
must be entered in PDS
server

5. State level
District
level
Individual
Ration
shops
Flow of items from procurement to ration shops
New devices required
5,00,000 Computers- To enter the details in central,state,district and individual ration shops
in the centralised server.
5,00,000 Fingerprint scanner- Attached with computer in individual ration shops to ensure
the delivery of items to exact card holders.
Roles of each level
Individual ration shops- Deliver the items to cardholders by getting their thumb sign
using fingerprint scanner
District level office- Has to transfer goods to individual ration shops after calculating the
demand of individual ration shops and has to inform the total demand details of the entire
district to state office
State level office- It has to procure the items within the state and wants to contact central
office to get items from other states or other nations if scarcity arises in state.
Central office- Wants to contact other state offices or other nations to get items for the
state where scarcity in place.

6. Special IT team for Public distribution system alone must be
created and placed in central, state and district level to support
and correct all the technical faults and secure the server from
some external threats
Login facility for
ration card holders
People can able to check the quantity and list of
items transferred from district office to ration
shops which they belong to and also they will be
able to view their purchasing records for past one
year by logging in with their ration card number
Important merits of this solution over current system
Implementation of technology will lead to more transparency in the system
Helps in finding out and eradicating the duplicate ration cards
Give jobs to more than 5,00,000 skilled peoples to operate software in individual ration
shops, district offices, state offices and central offices

7. IMPLEMENTATION OF SOLUTION
Step 1 Central government has to pass the order for changes in
Public distribution system
Step 2 Central governments has to call for tender for hosting the
server
Step 2 State government has to call for tender for computers
Step 3 State government has to call for tender for software
implementation which connect all the offices and levels
Step 4 State government has to call for tender for fingerprint
scanners
Step 5 State government has to recruit skilled people to work on the
computers which will connect all the levels
Step 6 Training in district level for all the selected candidates about
how to use the installed software for inter connecting
purpose
Tenders for computers, fingerprint scanners and the recruitment of
employees to operate systems in ration shops must be done in state level
There should be a person from each state in central government office as an
employee

8. Financial for Implementation of the solution
The private parties who wins the tender wants to invest the amount for buying the
computers, thumb signers and software development and implementation.
The private sectors will get the amount back from the government with interest
Government will calculate the total amount including interest for each ration shops and
wants to collect it from the card holders as monthly Rs.10 or Rs.20 ( From our view 2 years
is lot more enough to give the total amount back to private parties)
Salary for the newly appointed staffs will be given by state government according to the
pay scale determined by the respective state government
Initial investments for implementation has to be made by the private players who finally wins
the tender
Amount to repay the private layers will be collected from the cardholders

9. Criteria for measuring success of solution
Removal of duplicate ration cards tells the impact of this problem
Time taken to solve the problem in transmission of food items to card holders also tells the
success of this solution
Ease in finding out the scarcity and demand
% reduction in the leakage of goods after a certain period of implementation of this
solution displays the success of this solution
Monitoring mechanisms
Monitoring technical aspects
Special IT teams must be created in district level for Public distribution system alone must be
placed in central, state and district level to support and correct all the technical faults and secure
the server from some external threats
Monitoring Functional aspects
Separate department must be created in government for public distribution system and the
Minister in charge and the secretary of the particular department both in central and state wants to
create a team in district level to monitor the functions

10. Challenges and ways to overcome the challenges
Social Problem
Illiterate peoples are very far from technologies and they don’t know how to handle the advance
technologies.
Solution
Getting a thumb sign to make sure the food items are delivered to correct card holders will not
make difficulty even too illiterate people
Economic Problem
Current account deficit is very large in our country. So additional expenditure will increase the
current account deficit
Solution
Getting money from people for the technology implemented will reduce the burden in
government spending
Technological Problem
There may be the chances for criminals to hack the server
Solution
Public distribution system monitoring agency will work towards to prevent the system from
hacking technically

11. BPL-Below Poverty Line
APL-Above Poverty Line
GOI-Government of India
PDS- Public Distribution System
IT-Information Technology
Appendix
References
www.righttofoodindia.org
www.planningcommission.gov.in
Organization and Working of Public Distribution System in India: A Critical Analysis-
Department of Public Administration, S. A. Jain College, Ambala City 134003, Haryana, India
http://www.researchgate.net/publication/228125021_Public_Distribution_System_in_India_
The_Problems_and_Dimensions