Mains PYQs
What are the major challenges of the Public Distribution System (PDS) in India? How can it be made effective and transparent? (2022)
Public Distribution System - An Overview
Practice Questions
QUESTION 1: India’s Public Distribution System (PDS) has faced significant challenges in terms of inefficiency, leakage, and inadequate reach to the poor. Discuss the need for reform in the PDS, particularly focusing on the issues of system leakages, implementation inefficiencies, and the role of agricultural investment.
Note: This is not a model answer. It only provides you with thought process which you may incorporate into the answers.
The Public Distribution System (PDS) emerged as a means of managing scarcity by distributing food grains at reasonable costs. It has evolved into an important component of the government’s food-economy management strategy over time. PDS is supplemental in nature, and it is not designed to meet a household’s or a group’s whole requirement for any of the commodities supplied under it.
PDS is run jointly by the central and state/UT governments. The Central Government, through the Food Corporation of India (FCI), has taken over the acquisition, storage, transportation, and bulk allotment of food grains to state governments. The State Governments bear operational responsibility for allocation within the state, identifying eligible households, issuing Ration Cards, and supervising the operation of Fair Price Shops (FPSs), among other things.
Challenges to the Public Distribution System
World Bank (2022) data shows that 12.9 per cent of Indians live on less than $2.15 (PPP) a day, an extreme level of poverty. The NITI Aayog report (2024) says that 248 million people came out of poverty in the last 9 years, with the multidimensional poverty index (MDPI) declining from 29.17 per cent to 11.28 per cent between 2013-14 to 2022-23.
PDS is inefficient, and its operations are prohibitively expensive, The procurement/transportation ratio is too high, indicating ‘wasteful’ movements.
Storage losses are extremely substantial.
The lack of trustworthy and dynamic data on consumption and mobility patterns has always been a major barrier for planners in ensuring the effective delivery of important central welfare initiatives to the most disadvantaged members of our society.
Other concerns include a lack of storage capacity with FCI, corruption and leaks, and quality issues.
Need for reform in the PDS
The Indian government was aware of significant leakages in the PDS, as noted in a 2015 report by the High-Powered Committee on Grain Management led by Shanta Kumar. According to the 2011-12 HCES, leakages were assessed to be around 46% at the time.
In 2016, the Government of India used Point-of-Sale (PoS) devices at Fair Price Shops (FPS) to plug leaks by combining biometric authentication and real-time transaction tracking. Today, over 90% of FPS nationwide are equipped with PoS machines. This has helped reduce leakages from 46% to 28%, but they are still very high.
To alleviate malnutrition, at least part of the FPS should be converted into “nutrition hubs.” They can provide a diverse range of produce, such as eggs, pulses, millets, and fruits, in addition to grains. Beneficiaries might use a digital food coupon system to redeem their coupons at nutrition hubs for a broader range of healthier foods.
The Department of Food and Public Distribution (DFPD) launched the SMART-PDS project to implement data-driven decision-making that will go a long way in addressing this deficit.
Convergence and integration, combined with the usage of AI, can be a game changer for both individuals and governments in terms of responsibility across all programs.
The Centre intends to expand PDS reforms by leveraging data analytics/BI platforms, as well as other ICT tools and technologies. The PDS operation will be standardised through the use of technology and integrated with the FCI, CWC, rail and road transport supply chains, Ministry of Education, Women and Child Development, and UIDAI. Technology-led changes are expected to address the state-level technological limits of PDS operations in terms of IT gear, software, and technical people.
Conclusion:
Currently, over 93% of the total monthly allocated foodgrains are delivered via Aadhaar authentication utilising electronic Point of Sale (ePoS) devices. This dividend is directly related to the complete digitisation of ration cards, online administration of beneficiary data, computerisation of foodgrain allocation and supply chain management systems in all states/UTs, and the installation of ePoS devices across the country.
