PUBLIC DISTRIBUTION SYSTEM
Evolution of public distribution of grains in India had its
origin in the 'rationing' system introduced by the British during the World War
II. It was really the generation of World War's own compulsions that forced the
then British Government to introduce the first structured public distribution of
cereals in India through the rationing system-sale of a fixed quantity of ration
(rice or wheat) to entitled families (ration card holders) in specified
cities/towns. The system was started in 1939 in Bombay and subsequently extended
to other cities and towns.
Public distribution of foodgrains was retained as a
deliberate social policy by India, when it embarked on the path of a planned
economic development in 1951. It was, in fact, an important component of the
policy of growth with justice. Creation of Food Corporation of India and
Agricultural Prices Commission in 1965 consolidated the position of PDS.
Government was now committed to announce a minimum support price for wheat and
paddy and procure of quantities that could not fetch even such minimum prices in
The PDS seeks to provide to the beneficiaries two cereals,
rice and wheat and four essential commodities viz. sugar, edible oil, soft coke
and kerosene oil. However, state governments, which actually manage the system
at the ground level, are exhorted to add other essential commodities like
pulses, salt, candles, matchboxes, ordinary clothes, school text books/copies
and the like.A number of state governments have set up Civil Supplies or
Essential Commodities Corporations to buy such additional items directly from
the manufacturers and use the existing structure of PDS to arrange for the sale
at lower than market rates.
Making available the six essential commodities (rice, wheat, sugar, edible
oil, soft coke and kerosene oil) to the state government is the responsibility
of the central government.
The PDS has been functioning for more than four decades now, if we leave
aside its predecessor, the rationing system. Its greatest achievement lies in
preventing any more famines in India.
Criticism of PDS
- PDS means distribution of essential commodities to larger section of the
society, mostly vulnerable people, through a network of fair Price Shops on
a recurring basis. The essential commodities under PDS at present are wheat,
rice, sugar and Kerosene.
- Today, with the network of around 5 Lakh fair price shops PDS is
virtually world’s largest system of its kind. However, PDS was criticized
for several reasons. .A few of them are as follows:
- Its bias towards the urban consumers and inability to reach to the last
corner of the country.
- Some states such as Bihar and UP were virtually out of the PDS network.
- There are no criteria of monitoring the high income group purchases more
than low income purchases.
- The coverage and network of PDS does not ensure that the poorest or the
poor is benefited
- The PDS has been untargeted and proved to be regressive in some parts of
- Consumers get inferior food grains in ration shops. Because , the
dealers replace good supplies received from the F.C.I, with inferior stock,
- Issue of the bogus cards in large numbers which are used to procure the
grains from the PDS and sell them in open market.
- The dealers have little profit so indulge in malpractices.
- In other words, despite of having world’s largest Public Distribution
System, there are people dying in the country out of hunger.
Targeting of PDS to the really needy is, therefore, immediately required and
an effective PDS maintained till such time the country has poor, needy
Suggestions for Improvement of Existing PDS
i) Delivery of Stocks to FPSs should be on actual and not on sample weight.
ii) Retail price at FPSs should be uniform throughout the state/area after
weight-averaging the transport cost for the FPS.
iii) Regular supply of good quality grains has to be ensured. iv) Entitlement
card's easy availability and improvement in its design and durability.
v) FPS doorstep delivery of PDS commodities instead of delivery to FPS owners at
vi) Improvement in the viability of FPSs.
vii) Enlarging the basket of PDS commodities to enhance its utility as also to
improve economic viability of FPSs.
viii) Steamlining of the supply chain by construction of small intermediary
godowns between FCI's base godown and FPSs in the interior.
ix) Introduction of a more effective Management Information System.
The Central government, through FCI has following responsibilities:
- Procurement, storage, transportation of food grains
- Bulk allocation of food grains to the State Governments.
- The state government’s responsibility is operational. They are as
- Identification of families below the poverty line
- Issue of Ration Cards
- Supervision of the functioning of FPS.
Aadhaar would help reduce corruption in the public
distribution system .This claim / assumption is mainly based upon the Aadhaar-based
authentication across PDS network, Which would enable the government to
guarantee food delivery to the poor.
In addition to powerfully streamlining PDS processes, an
Aadhaar- enabled MIS would make possible a more transparent, flexible system,
and enable the government to fulfil the objective of food security in times of
Aadhaar would thus be a tool - albeit, a powerful one - in fulfilling the
government’s overall objectives for the PDS and in ensuring food security for
The areas of reforms in PDS include:
- Beneficiary identification and addressing inclusion/exclusion errors
- Addressing diversions and leakages
- Managing food grain storage and ensuring timely distribution
- Effective accountability and monitoring, and enabling community
- Mechanisms for grievance redressal
- Ensuring food security ,
The role of Aadhar in these reforms can be summarized as below:
- One Aadhaar = one beneficiary: Aadhaar is a unique number, and no
resident can have a duplicate number since it is linked to their individual
- Portability in identification: Aadhaar is a universal number, and
agencies and services can contact the central Unique Identification database
from anywhere in the country to confirm a beneficiary’s identity. The number
thus gives individuals a universal, portable form of identification.
- Aadhaar-based authentication to confirm entitlement delivered to the
beneficiary: Aadhaar enables remote, online biometric and de mo graphic
authentication of identity. Such Aadhaar -based authentication can take,
place in real- time, and can even be performed through a mobile phone. One
challenge here is ensuring that such authentication is carried out at the
- Aadhaar-based authentication to track food grain movement: Aadhaar-based
authentication can be implemented across the supply chain, which will enable
governments to track foodgrain as it is exchanged between PDS
intermediaries. This would curb diversions, and help identify bottlenecks in
- Aadhaar-enabled cloud -computing infrastructure: The use of Aadhaar-based
authentication across the supply chain gives governments the opportunity to
link such authentication to a cloud-based management information system
(MIS) within the PDS Central Pool
Targeting PDS to only Poor Households
Poverty and associated hunger is a curse and every civilized
society endeavours to alleviate extreme manifestations of poverty in their own
way. The underlying policy approach is, however, more or less same and is
basically built on 'providing direct assistance to poor households' so that
their access to essentials of life like food is improved. The policy could be
implemented through an income transfer mechanism like Food Stamps or cash doles
(as in USA etc.) or a dual price system (e.g., through a PDS as in India etc.).
These mechanism or their variations, cost money and this has to come from the
food subsidy budgets of the country.
Besides, the inherent weakness of a universal PDS, as
organised now, allows quite a bit of diversion and leakage. Part of the subsidy
is, therefore, going to the non-poor and even to the FPS dealers, handling
contractors and some state functionaries involved in unscrupulous siphoning off
and replacement of commodities. Such wastage of this precious and limited
subsidy cannot be allowed any longer, and therefore, there is no alternative but
to direct the subsidy to the poor and nobody else.
Once this is accepted, the mechanism for achieving such focus
can be chosen, depending on the situation prevailing in the country. We will
also have to decide whether to create an altogether new mechanism or build upon
the four decades old foundation provided by the PDS. It will also be necessary
to ensure that the size of the population to be covered should be such that they
all can be effectively accommodated under the newly created safety net, the
largeness of the net being limited by the physical (government stocks of
foodgrains) and financial (amount available for food subsidy) resources of the
The present PDS can hardly be described as a safety net. Each
and every Indian and also some ghost card holders, presently constitute the
unorganized crowd that jostles under the ungainly net, nobody knowing who is
able to receive the shelter under it or who, requiring such shelter badly, is
being kept out or pushed out. As explained earlier, in this vast country, with
millions of poor, we cannot dispense with the net altogether; there is
therefore, no option but to mend the net, erect it afresh with only the needy
households under it.
With inputs from Food and Agricultural Organizations of the UN , The Hindu
and The Indian Express Newspaper