2 years of government
With more than 24 crore ration cards digitized and about 56% of
these cards being seeded with Aadhaar numbers of the beneficiaries getting
highly subsidized foodgrains under National Food Security Act (NFSA), the
reforms in Targeted Public Distribution System (TPDS) have gathered pace in the
last two decades. These reforms measures has curbed diversion of foodgrains as
well as ensured grains reach intended beneficiaries
Public Distribution System (PDS), till 1992, was a general entitlement scheme
for all consumers without any specific target. The Revamped Public Distribution
System (RPDS) was launched in June 1992 in 1775 blocks throughout the country. RPDS
was launched with a view to strengthen and streamline the PDS as well as to
improve its reach poor families especially in the far-flung, hilly, remote and
covered those areas where special programmes such as the Drought Prone Area
Programme(DPAP), Integrated Tribal Development Projects (ITDP), Desert
Development Programme (DDP) and certain Designated Hill Areas (DHA) were in
operations while the main focus was to improve the PDS infrastructure. Foodgrains
for distribution in RPDS areas were issued to the states at 50 paise below the
Central Issue Price. The entitlement was 20 kg grain per card.
in June, 1997, the central government launched the Targeted Public Distribution
System (TPDS) with focus on the poor families. Under the TPDS, states were
required to formulate and implement foolproof arrangements for the
identification of the poor for delivery of foodgrains and for its distribution
in a transparent and accountable manner at the Fair Price Shops (FPS) level. TPDS
aimed at benefiting about six crore poor families for whom a quantity of about
7.2 million tonne (MT) of food grains was earmarked annually.
identification of the poor under the scheme was done by the respective states
as per state-wise poverty estimates of the Planning Commission for 1993-94
based on the methodology prepared by ‘the expert group on estimation of
proportion and number of poor’ chaired by Late Prof Lakdawala. The allocation
of foodgrains to the states was made on the basis of average consumption in the
past or average annual off-take of food grains under the PDS during the
past ten years at the time of introduction of TPDS.
quantum of food grains in excess of the requirement of Below Poverty Line (BPL)
families was provided to the state as ‘transitory allocation’ for which a
quantum of 10.3 MT of food grains was earmarked annually. Over and above the
TPDS allocation, ‘additional allocation’ to States was also given periodically.
The transitory allocation was intended for continuation of benefit of
subsidized food grains to the population Above the Poverty Line (APL). However
additional allocation was issued at prices, which were subsidized but were
higher than the prices for the BPL quota of food grains.
number of BPL families covered under TPDS was increased in 2000 by shifting the
base to the population projections of the Registrar General as on March 1, 2000,
instead of the earlier population projection of 1995. With this increase, the
total number of BPL families were 6.52 crore as against 5.9 crore families
originally estimated when TPDS was introduced in June 1997.
the TPDS which was in operations till the National Food Security Act (NFSA) was
rolled out, began in September 2013, the end retail price is fixed by the
states after taking into account margin for wholesalers or retailers,
transportation charges, levies, local taxes etc. However, since 2001,
flexibility has been given to states for fixing the retail issue prices by
removing the restriction of 50 paise per kg over and above the central issue
price for distribution of food grains under TPDS except with respect to
Antyodaya Anna Yojana (AAY) where the end retail price is to be retained at
Rs.2 / a kg. for wheat and Rs.3/ a kg. for rice. The NFSA, 2013 which is being
implemented now, aims at providing highly subsidized foodgrains (5 kg per
person per month) to close to 82 crore population.
issue price for foodgrains (Rs / quintal) to states for various categories*
Other than NFSA
food ministry, *since 1.7.2002, NFSA passed in September 2013
the High Level Committee, chaired by former food minister Shanta Kumar, in its
recommendation to government last year had stated gradual introduction of cash
transfers in PDS, starting with large cities with more than a million
population; extending it to grain surplus states, and then giving option to
deficit states to opt for cash or physical grain distribution. This will be
much more cost effective way to help the poor, without much distortion in the
production basket, and in line with best international practices.
to HLC's calculations, DBT could save the exchequer more than Rs 30,000 crore
annually, and still giving better deal to consumers. “Cash transfers can be
indexed with overall price level to protect the amount of real income
transfers, given in the name of lady of the house, and routed through Prime
Minister's Jan-DhanYojana (PMJDY) and dovetailing Aadhaar and Unique
Identification (UID) number. This will empower the consumers, plug high
leakages in PDS, save resources, and it can be rolled out over the next 2-3
years,” HLC had stated.
the last two years, the NDA government led by Narendra Modi has focused on PDS
reforms specially following passage of NFSA, 2013. Cutting pilferage from the
PDS is becoming far easier with almost all of the 23 crore ration cards in the
country being digitised and 56% of these already seeded with unique
identification number Aadhaar. Besides, several states have now installed
electronic point of sale (ePOS) devices at their fair price shops to track the
sale of foodgrains to actual cardholders on a real-time basis.
to recent government estimate, DBT scheme for subsidies has resulted in
significant savings across welfare schemes, including Rs 27,000 crore in PDS,
LPG distribution and Mahatma Gandhi National Rural Employment Guarantee Act.
to the food ministry data, Andhra Pradesh, Telangana, Chhattisgarh and Delhi,
besides union territories Chandigarh and Andaman and Nicobar, have completed
seeding of all the ration cards with Aadhaar. States such as Kerala (95%),
Rajasthan (94%), Haryana (86%), Jharkhand (73%) and Odisha (65%) have also
reported significant progress in terms of seeding of PDS beneficiaries’ cards
Uttar Pradesh, Bihar, Tamil Nadu and north-eastern states such as Assam and
Manipur, have been slow in this technological process aimed at eliminating
pilferage and ensuring that subsidised foodgrains reach intended
beneficiaries. Among the laggards, Bihar, which has 1.54 crore ration
cards, still has only 9,000 cards seeded with Aadhaar. Similarly, Tamil Nadu
with around 2 crore ration cards has only 10% of these cards linked with
electronic point of sale (ePOS) installation, Gujarat and Andhra Pradesh have
almost completed the process, while others like Chhattisgarh and Madhya Pradesh
are catching up. States with large poor populations like Uttar Pradesh, Bihar
and Odisha have, however, yet to make any headway in equipping their fair price
shops with ePOS devices. According to estimate, Andhra Pradesh would save
around Rs 800 crore annually through steps like putting ePOS devices in its
28,000 odd public distribution system (PDS) outlets and seeding ration cards
with Aadhaar numbers.
objective of ePOS, of course, is to ensure that only genuine cardholders or his
or her family members whose names are mentioned in the ration card can buy the
subsidised commodities. When the ration is taken, the ePOS device captures the
buyer’s biometrics, which is verified online with the Aadhaar database.
device helps record all FPS transactions electronically, which enables
real-time accounts of opening stock, daily sales and closing stock. In turn,
this would facilitate monthly allotment of stocks to the FPSs based on the
stock position and also facilitate monitoring and detection of fraudulent transactions.
However, there is still a long way to go on this front as only 22% of the 5.3
lakh fair price shops (FPSs) in the country have installed ePOS devices so far.
the food subsidy in the current fiscal estimated at Rs 1.34 lakh crore (the
NFSA has passage of NFSA, 2013 which aims at providing highly subsidized
foodgrains to close to 82 crore population has already been rolled out in 27
states and 6 UTs), compared with Rs 1.24 lakh crore (revised estimate) for last
year, the government is keen to bolster direct transfer of subsidies to the
beneficiaries’ bank accounts. Direct benefit transfer (DBT) in PDS, however, is
still at an early stage; three UTs — Chandigarh, Puducherry and Dadra and Nagar
Haveli — have implemented DBT on a pilot basis.
for next couple of years, the government’s task is to ensure that all the
states uniformly carry forward PDS reforms so that pilferage and inefficiency
in the system could be removed.
author is a Delhi based journalist.