1. 9/6/2013
MANTHAN TOPIC :-
PLUGGING THE LEAKS : IMPROVING REACH AND
EFFICIENCY OF THE PUBLIC DISTRIBUTION SYSTEM
Team Details:
Gautam Singh, Mohd. Irshan ,Satyam Parashar, Siddharth Kumar
Vivek sahu.
BITS, Pilani

2. Problem Statement:
• 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).
• A 2012 Asian Development Bank study on
the subsidies offered by India’s Public
Distribution System (PDS) observed that
deserving poor receive only 10% of the
intended benefits.
• One of the reasons is exclusion of the right
candidate, and wrong inclusion i.e. inclusion
of the wrong candidate, in a targeted
program.
0.0
1.0
2.0
3.0
4.0
Wheat Rice Pulses
Average annual growth rates
calculated on yields per hectare
during 2008-12
Average annual
growth rates
calculated on yields
per hectare

3. EXCLUSION OF THE NEEDY
• 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).
• Another Planning Commission
estimate suggests that 61% of
households are excluded from the
Below Poverty Line (BPL) net and
25% of households become
unintended beneficiaries .
• The problem of identifying
beneficiaries leads to high exclusion
and inclusion errors. High exclusion
errors lead to low coverage of BPL
households. High inclusion errors
lead to APL families receiving
excessive food grain which
increases the burden on the
governments. There is also the
added burden of ghost cards.
According to the Planning
Commission, there are 10 crore
ration cards for 6.5 crore BPL
families
CAUSES
• As of June 2011, there were around 5 lakh fair price shops
(FPS) in the country. Issues relating to the viability of FPSs
have been raised by various experts. Some of the issues
include – delay in receiving the goods, losses due to
shortage of goods, unequal distribution of ration cards
between APL and BPL holders, increasing transportation
cost, low commission and blockage of working capital.
Only 23% of ration shops were deemed to be viable by the
expert committee,
Ration diversion to open market-54%
• Another challenge relating to the Public Distribution of
India is that of leakages either during transportation or due
to the existence of ghost cards. 48.3% of the food which
was to be distributed by PDS was leaked via the ration
shops. Leakage at various levels of the distribution chain
leads to increased subsidy cost. The unintended subsidy
cost is way higher than the intended cost. In Bihar, the total
central subsidy for offtake by the BPL households is Rs.
50.98 per kg while the intended subsidy cost was Rs. 4.52
per kg
PERCENTAGE OF UNSATISFIED PEOPLE
Unavailability of
rations
Ration diversion to
open market
Inferior quality
Less quantity

4. 9/6/2013
Proposed solution
• Inspite of the major issues related to the fail of
PDS in fulfilling the goals it was implemented for ,
there are ways to come out of the problems and
one of the key points in it will be AUTOMATION OF
FPS (use of technology in place of human
intervention in process .)
• This will be done by bringing the id card
computerised system in PDS i.e. no scope of
leakage at any part of the process right from
procuring to distribution to needy.
• Another set of solution will be identifying and targeting the
genuine needy
• Setting up a committee devoted only for raid purpose against
anonymous complain of people .
• A “Special Flying Squad” would also be constituted into the Anti –
Hoarding Cell for taking prompt and immediate action, as and when the
need arises. This Squad shall be functional round
the clock without exception. The Anti – Hoarding Cell should directly
report to the Commissioner, Food Supplies & Consumer Affairs.
• Zero tolerance in cases of breach of contract by transporters

5. 9/6/2013
HIGH LEVEL DESCRIPTION OF KEY STEPS INVOLVED IN
IMPLEMENTING THE SOLUTION
• To Ensure compulsory maintenance of records for each of sale, stocks, and Ration
Card Master Register by the FPS Dealers, we will introduce ID card system for
every person related to the FPS.
• We will be focus on a single fair price shop as answering to root level problem
(as the problems get amplified as a whole and thus it is the problem of whole
system )
is of course a solution to the whole problem.
• Introduction of a software that consists of account of all the people related to a fps
including all the schemes they are entitled to .This account will in turn be linked to
the AADHAR details of the individual .
• So, every time he/she comes to FPS, he can know about schemes and benefits of
the government he is entitled to . So in other way the FPS will now not only be
shops but also a platform to have information of their right.(As government
schemes are not so publicised and people do not come to know about them ,until
there are close elections) .
• This can probably put large pressure on the fps and so a different booth will be set
up in the fps adjacent places so that they can enquire easily . For this a high
speed internet facility will be required .

6. 9/6/2013
• Everytime an individual comes to FPS , he will have to produce his
Ration ID card to and login through his fingerprint password or scanning
of eye password (whichever will be feasible)
• The iris scan will directly be used from AADHAR details of the person.
• In this way we will be identifiying the Bogus (ration ID cards belonging to
fictitious families) and Shadow (genuine ration ID cards used by someone
else) ration cards in the system. After every transaction a printed receipt
will be provided to the people .
• The number of times fps will open and render services will be increased
significantly so that people do not face difficulty of being in lines for
hours. With every new day of operation an other software will keep record
of the current grocery In the shop . In this way anytime raid of central
vigilance commission or state committee on shops will be able to take
strict actions on any kind of leak or corruption in any form (in terms of
cheating people in form of weighing and pricing)
• For the leakage before reaching to fps we have a solution strong
packaging so that once seal is broken it will be the responsibility of the
movers and transporters .
• And in this way any type of adulteration and leakage will be fully
controlled.

7. Leveraging existing government infrastructure
• Using government systems and schemes
• AADHAR : Linking the aadhar details to the fair price shop account of
individuals.
• INFRASTRUCTURES :offices in government buildings for lodging
anonymous complains
FINANCIAL AND HUMAN RESOURCES REQUIRED AT EACH
STEP
• Software charges : hiring or buying software and its maintenance at
central and state levels starting right from the root levels.
• FPS workers for easy and smooth distribution atleast
2-3 shops in a village . So number of villages =645856
X 3(per village) =1937568 shopkeepers .
• Atleast same number of raid groups as there are districts in whole
country i.e 651 x5(groups in districts) =3255 responsible and devoted
people against any kind of corruption and fearless to take strict actions
against anyone.

8. 9/6/2013
• Compulsory maintenance of records for each of sale, stocks,
and Ration ID card by the FPS Dealers.
• A platform to have information to various rights of illitrate
people.
• All sort of adulteration and leakage will be come to an end
with these factors introduction in PDS
• Identification of the Bogus (ration cards belonging to fictitious
families) and Shadow (genuine ration cards used by someone
else) ration cards in the system. After every transaction a
printed receipt will be provided to the people.

9. 9/6/2013
Effectiveness and sustainability of the proposed solution
• The solution proposed will definitely cease all kinds of corruption in
the field of PDS as there are very less chances of any manipulation of
datas which are being governed online .
• Also , this system will stop leakages .Not a single kg of food will leak
until and unless the regular checking is not carried out.
• This idea is already very much successful in my own collage :Every
single student has an account of his own and any kind of bills and
credits are carried through this so , there cant be any kind of
manipulation in data related to my account and also the institute has
no such manual transactions with students, students can carry credit
system in different messes and there is a centralised data collection
at institute level) ,or in a simple way we can look at the big banks
holding account of so many clients, why can’t our government ?
• And also it is not the government which has actually to do anything it
will be work of every single village level authority to maintain record
and to make it available to the government.

10. 9/6/2013
CHALLENGES TO PROPOSED SOLUTION
• Software failure
• Data loss
• Hectic if the whole crowd comes out to take
benefit
• Corruption at individual levels and central
vigilance commission or authority designed for
this
• SOLUTIONS TO THESE
• Strong software and back up programes
• Can divide the whole group of peope affiliated to
a single FPS into groups and fixing the dates of
distribution so that there will be no problem in
dealing people properly.
• Judiciary to look at the anti corruption team
• Also we can look for ways to stop corruption
(another project of MANTHAN )

11. 9/6/2013
• http://planningcommission.nic.in/reports/genrep/rep_hasim1701.pdf
• Poverty line data
http://data.gov.in/dataset/state-wise-percentage-and-number-persons-below-
poverty-line-year-2009-10
• For reducing numbers
http://planningcommission.gov.in/reports/sereport/ser/std_pdstn.pdf
• Graph pie chart
Source:: year 2005, Transparency International and Delhi based Centre for Media
Studies undertook the India Corruption Study which encompassed 14,405
respondents from 20 states
For calculating the number of people required at each stage
http://data.gov.in/dataset/details-no-dealers-each-district-india
Various other data collected from
http://www.oxusinvestments.com/files/pdf/169enhancingcorruptiontheNACway.pdf
vi Press Information Bureau (2012, Dec 17). Review of Foodgrains Procurement Policy.
Retrieved from http://pib.nic.in/newsite/erelease.aspx?relid=90797
vii Planning Commission. (2005). Performance Evaluation of Targeted Public Distribution
System (TPDS). Retrieved from
http://planningcommission.nic.in/reports/peoreport/peo/peo_tpds.pdf
And many more papers nd reports submitted
Appendix