What is PDS System?

India's food security framework guarantees access to food and basic necessities. The Public Distribution System (PDS) plays a crucial role, evolving from wartime rationing to a universal subsidy scheme. The National Food Security Act of 2013 legally entitles a significant portion of the population to subsidized food grains. Despite its achievements, the PDS faces challenges like targeting errors, fiscal burdens, and infrastructure limitations. Reforms include online tracking, Aadhaar seeding, and the 'One Nation One Ration Card' initiative for seamless access. By addressing structural issues and embracing technology-driven reforms, India endeavors to fortify its PDS and alleviate food insecurity nationwide.

In India, food security is grounded in the Constitution, despite the absence of an explicit mention of the right to food. Article 21, guaranteeing the right to life, has been interpreted by the Supreme Court to encompass the right to live with dignity, which includes access to food and basic necessities. Additionally, Article 47 underscores the state's duty to improve nutrition and public health. The National Food Security Act of 2013 shifted towards a rights-based framework, mandating subsidized food grains for up to 75% of the rural and 50% of the urban population through the Targeted Public Distribution System, covering roughly two-thirds of the population.

The Public Distribution System (PDS) is a key component of India's food security framework overseen by the Ministry of Consumer Affairs, Food, and Public Distribution. Initially devised to manage scarcity by providing essential food grains at affordable rates, the PDS operates through collaboration between the Central and State Governments. The Central Government, facilitated by the Food Corporation of India (FCI), manages procurement, storage, transportation, and bulk allocation of food grains to states. Meanwhile, operational duties, including allocation within states, beneficiary identification, issuance of Ration Cards, and oversight of Fair Price Shops (FPSs), lie with the State Governments.

Currently, the PDS allocates commodities such as wheat, rice, sugar, and kerosene to states and union territories (UTs) for distribution. Additionally, some states and UTs include other essential items like pulses, edible oils, iodized salt, and spices through PDS outlets to meet the needs of the populace.

The evolution of the Public Distribution System (PDS) in India spans several key phases:

• Originating during World War II as a wartime rationing measure, PDS initially relied on imported food grains for distribution before the 1960s.
• The 1960s witnessed an expansion of PDS in response to prevalent food shortages. This period also saw the establishment of institutions like the Agriculture Prices Commission and the Food Corporation of India (FCI) to bolster domestic procurement and storage of food grains.
• By the 1970s, PDS had transformed into a universal scheme offering subsidized food.
• Until 1992, PDS operated as a general entitlement program without specific targeting.
• The Revamped Public Distribution System (RPDS) was introduced in June 1992 to enhance and streamline PDS operations, particularly focusing on extending its reach to remote and marginalized areas.
• In June 1997, the Targeted Public Distribution System (TPDS) was launched, concentrating on providing assistance to the poor. Under TPDS, beneficiaries were categorized into two groups: Below Poverty Line (BPL) households and Above Poverty Line (APL) households.
• The Antyodaya Anna Yojana (AAY) emerged as part of TPDS, aimed at addressing hunger among the poorest segments of the BPL population. AAY identified one crore of the poorest families from among the BPL households and provided them with highly subsidized food grains, initially at Rs. 2 per kg for wheat and Rs. 3 per kg for rice. The allocation was increased from 25 kg to 35 kg per family per month, effective April 1, 2002.
• In September 2013, the National Food Security Act, 2013 was passed by Parliament. This legislation primarily utilizes the established TPDS to provide food grains as legally enforceable entitlements to impoverished households. This represents a significant change as it converts the right to food into a legally enforceable entitlement.

• Coverage and Entitlement:
  • Legally entitles 67% of the population (75% rural and 50% urban) to receive subsidized food grains.
• Responsibilities:
  • Defines joint responsibility of the Centre and States/UTs in implementing the NFSA.
• Rule Making Power:
  • The Central Government holds the power to make rules, in consultation with State governments.
• Food Grain Pricing:
  • Provides subsidized food grains at Rs. 3/kg for rice, Rs. 2/kg for wheat, and Rs. 1/kg for coarse grains.
• Nutritional Support:
  • Special focus on nutritional support for pregnant women, lactating mothers, and children up to 14 years of age.
  • Pregnant Women and Lactating Mothers are provided with a food supplement consisting of 600 calories of energy and 18-20 grams of protein per day. This supplement is in the form of micronutrient-fortified food and/or energy-dense food, which is distributed as Take Home Ration.
  • Entitles them to nutritious meals and provides a cash maternity benefit of Rs. 6,000 to pregnant women.
• Women Empowerment:
  • Acknowledges the vital role of women in ensuring food security by granting the status of head of the household to the eldest woman, facilitating the issuance of ration cards.

• From January 1, 2023, to December 2023, the government provided 5 kilograms of free food grains under the PM Garib Kalyan Anna Yojana.
• From 1st January, 2024
  • Starting from January 1, 2024, the Cabinet, under the leadership of the Prime Minister, decided to extend PMGKAY for a period of five years. This initiative aims to provide free food grains to approximately 81.35 crore beneficiaries across the country.
  • The government has allocated an estimated cost of Rs. 11.80 lakh crore over the five-year period from January 1, 2024, to support the implementation of the PMGKAY.

• Food and Nutritional Security: Contributes to ensuring the food and nutritional security of the nation.
• Stabilization of Food Prices: Helps stabilize food prices and ensures affordability for the economically disadvantaged.
• Buffer Stock Management: Maintains buffer stocks of food grains in warehouses to sustain food flow during periods of reduced agricultural production.
• Redistribution Mechanism: Facilitates the redistribution of grains by supplying food from surplus regions to deficient regions.
• Impact on Food Grain Production: The system of minimum support price and procurement contributes to the increase in food grain production.

• Targeting Issues:
  • Prone to inclusion and exclusion errors due to lack of updated data, leading to inefficiencies in reaching the intended beneficiaries.
  • The bulk of procurement predominantly occurs in Punjab and Haryana under the Minimum Support Price (MSP) system, which does not adequately benefit small and marginal farmers, despite their significant representation among India's farming community.
• Nutritional security:
  • The Public Distribution System (PDS) primarily addresses cereal or food security needs, but its effectiveness in providing nutritional security is limited due to the constrained availability of diverse cereals and coarse grains.
• Unsustainability of PDS:
  • Imposes a burden on the fiscal deficit.
    • PMGKAY will cost Rs 11.8 lakh crore for the five-year period ending 2028, or nearly Rs 2.4 lakh crore annually.
  • FCI is overstretched:
    • Besides procurement incidentals and distribution cost, populist policies and continuous increases in Minimum Support Prices has led to overstocking of foodgrains by FCI and it has affected its financial position substantially.
• Leakage:
  • Faces issues of food diversion and the presence of ghost beneficiaries, resulting in inefficiencies and wastage.
• Storage Issues:
  • Inter-state disparity in storage facilities affects the efficient management of food grains.
  • Loss of food grains due to pest attacks, exposure to rain, and inadequate storage infrastructure.
• Issues with WTO ( World Trade Organisation)
  • India procures significant quantities of wheat and rice at minimum support prices to fulfill the needs of its Public Distribution System (PDS). However, in recent years, the high procurement of rice has resulted in India exceeding the level of support allowed under the Agreement on Agriculture (AOA).
• Inflationary Effect:
  • Government procurement reduces the availability of food grains in the open market, potentially contributing to inflationary pressures.
• Environmental Impact:
  • Discourages crop diversification, leading to a focus on water-intensive crops and contributing to groundwater depletion.
  • Deterioration of soil conditions due to monoculture practices encouraged by PDS policies.

• Online Allocation and Tracking:
  • Utilization of the Annavitran portal for online allocation of food grains to states/UTs and fair price shops (FPS).
  • Inter-state portability facilitated by the Integrated Management of Public Distribution System (IM-PDS) portal, ensuring access to migrant workers across states.
• E-PoS Installation:
  • Deployment of E-PoS devices at FPS for systematic distribution tracking and management.
• End-to-End Computerization:
  • Implementation of computerized supply chain management for enhanced efficiency.
  • Real-time tracking of trucks transporting subsidized food grains via GPS and RFID technology to prevent diversion to the black market.
• Aadhaar Seeding:
  • Aadhaar seeding to eliminate duplicate or ghost beneficiaries, ensuring targeted delivery of benefits
• One Nation, One Ration Card:
  • Introduction of the 'One Nation, One Ration Card' scheme, linking all ration cards to a centralized server.
  • Enables beneficiaries, particularly migrant workers, to purchase monthly rations from any state.
• Toll-Free Helpline:
  • Establishment of a toll-free helpline for addressing grievances and providing assistance to beneficiaries.

• Economic Survey 2020 suggested:
  • Restructure the NFSA to target the bottom 20% poorest Indians, ensuring more efficient targeting of beneficiaries.
  • Conditional cash transfer programs:
    • Exploring the implementation of conditional cash transfer programs modeled after Brazil's Bolsa Familia could be beneficial.
    • These programs provide financial assistance directly to impoverished families, allowing them to purchase food grains from the market without subsidies.
    • We should consider adopting similar methods of providing cash, food, or smart cards to reduce the burden on the Food Corporation of India (FCI) in terms of procurement and stock management.
• Strengthening PDS Mechanisms:
  • Digitize ration cards to streamline distribution and reduce errors.
  • Introduce door-step delivery of food grains where feasible to improve accessibility for beneficiaries.
• Procurement Reforms:
  • Encourage states with expertise like Punjab, Haryana, and Andhra Pradesh to procure directly from farmers for the PDS.
  • Increase the involvement of the private sector in procurement and distribution to enhance efficiency.
• Supply Side Reforms:
  • Implement end-to-end computerization of the supply chain management system
  • Utilize GPS technology to track the movement of food grains and prevent diversion issues effectively.
• Diversification:
  • Diversification in procurement for the PDS is essential, as it will encourage farmers to diversify their cropping systems as well

The "One Nation One Ration Card" (ONORC) initiative enables beneficiaries to access their food entitlements from any location in India, regardless of where their ration card is registered. This initiative brings several benefits:

• Ensuring Right to Food: ONORC facilitates the fundamental right to food by ensuring that beneficiaries can avail themselves of their entitlements anywhere in the country.
• Supporting One-Third of Population: With nearly 37% of the population comprising migrant laborers, ONORC addresses their needs by allowing seamless access to food provisions across state borders.
• Reducing Leakages: Implementation of ONORC can lead to a reduction in leakages and enhance targeted delivery of food grains, ensuring that subsidies reach the intended beneficiaries effectively.
• Reducing Social Discrimination: ONORC holds the potential to reduce social discrimination, particularly benefiting women and other marginalized groups who often face challenges in accessing their entitlements due to geographical constraints or administrative barriers.

To facilitate the implementation of ONORC and ensure transparency, the government has launched the Integrated Management of Public Distribution System (IMPDS) and Annavitran Portal. These platforms aim to enhance transparency in the distribution of food grains and streamline the process of accessing entitlements, contributing to the effectiveness of the ONORC initiative.

The Public Distribution System in India is a critical tool in addressing food insecurity and poverty. While it has made significant strides over the years, challenges such as leakages, identification errors, and inadequate infrastructure persist. Implementing reforms focused on leveraging technology, improving governance, and enhancing transparency is crucial for making the PDS more efficient, inclusive, and responsive to the needs of the most vulnerable sections of society. By addressing these challenges and embracing innovative solutions, India can further strengthen its PDS and ensure food security for all its citizens.