Public distribution system

This scheme was first started on 14 January 1945, during the Second World War, and was launched in the current form in June 1947. The introduction of rationing in India dates back to the 1940s Bengal famine. This rationing system was revived in the wake of acute food shortage during the early 1960s, before the Green Revolution. It involves two types, RPDS and TPDS. In 1992, PDS became RPDS (Revamped PDS) focussing the poor families, especially in the far-flung, hilly, remote and inaccessible areas. In 1997 RPDS became TPDS (Targeted PDS) which established Fair Price Shops for the distribution of food grains at subsidized rates.

The central and state governments share the responsibility of regulating the PDS. While the central government is responsible for procurement, storage, transportation, and bulk allocation of food grains, state governments hold the responsibility for distributing the same to the consumers through the established network of fair price shops (FPSs). State governments are also responsible for operational responsibilities including allocation and identification of families below the poverty line, issue of ration cards, and supervision and monitoring the functioning of FPSs.

A public distribution shop, also known as fair price shop (FPS), is a part of India's public system established by the Government of India which distributes rations at a subsidized price to the poor.[5] Locally these are known as ration shops and public distribution shops, and chiefly sell wheat, rice and sugar at a price lower than the market price called Issue Price. Other essential commodities may also be sold. To buy items one must have a ration card. These shops are operated throughout the country by joint assistance of central and state government. The items from these shops are much cheaper but are of average quality. Ration shops are now present in most localities, villages towns and cities. India has more than 5.5 lakh (0.55 million) shops, constituting the largest distribution network in the world.

The public distribution system of India is not without its defects. With a coverage of around 40 million below-poverty-line families, a review discovered the following structural shortcomings and disturbances:[6]

1. Growing instances of the consumers receiving inferior quality food grains in ration shops.[7]
2. Rogue dealers swap good supplies received from the Food Corporation of India (FCI) with inferior stock and sell the good quality FCI stock to private shopkeepers.
3. Illicit fair price shop owners have been found to create large number of bogus cards to sell food grains in the open market.
4. Many FPS dealers resort to malpractice, illegal diversions of commodities, holding and black marketing due to the minimum salary received by them.[8]
5. Numerous malpractices make safe and nutritious food inaccessible and un-affordable to many poor thus resulting in their food insecurity.[9]
6. Identification of households to be denoted status and distribution to granted PDS services has been highly irregular and diverse in various states. The recent development of Aadhar UIDAI cards has taken up the challenge of solving the problem of identification and distribution of PDs services along with Direct Cash Transfers.
7. Regional allocation and coverage of FPS are unsatisfactory and the core objective of price stabilization of essential commodities has not met.
8. There is no set criteria as to which families are above or below the poverty line. This ambiguity gives massive scope for corruption and fallouts in PDS systems because some who are meant to benefit are not able to.

Several schemes have augmented the number of people aided by PDS, but the number is extremely low. Poor supervision of FPS and lack of accountability have spurred middlemen who consume a good proportion of the stock meant for the poor. There is also no clarity as to which families should be included in the below the poverty line list and which are not. This results in the genuinely poor being excluded whilst the ineligible get several cards. Awareness about the presence of the PDS and FPS to poverty-stricken societies, namely the rural poor has been dismal.

The stock assigned to a single family cannot be bought in installments. This is a decisive barrier to the efficient functioning and overall success of PDS in India. Many families below the poverty line are not able to acquire ration cards either because they are seasonal migrant workers or because they live in unauthorized colonies. Many families also mortgage their ration cards for money. Lack of clarity in the planning and structuring of social safety and security programs in India has resulted in the creation of numerous cards for the poor. Limited information about the overall use of cards has discouraged families below the poverty line from registering for new cards and increased illegal creation of cards by such families to ensure maximum benefit for the family members.[10]

To improve the current system of the PDS, the following suggestions are furnished for:

1. Vigilance squad should be strengthened to detect corruption, which is an added expenditure for taxpayers.
2. Personnel-in-charge of the department should be chosen locally.
3. Margin of profit should be increased for honest business, in which case the market system is more apt anyway.
4. F.C.I. and other prominent agencies should provide quality food grains for distribution, which is a tall order for an agency that has no real incentive to do so.
5. Frequent checks and raids should be conducted to eliminate bogus and duplicate cards, which is again an added expenditure and not foolproof.
6. The Civil Supplies Corporation should open more fair price shops in rural areas.
7. The fair price dealers seldom display rate chart and quantity available in the block-boards in front of the shop. This should be enforced.
8. some social activists have suggested that pulse is an importance source of protein so besides rice / wheat pulses like arhar (toor) should also be included in PDS system

In aggregate, only about 42% of subsidised grains issued by the central pool reach the target group, according to a Planning Commission study released in March 2008.

Food stamps given to the needy and to the underprivileged by issue of coupons, vouchers, electronic card transfer etc. they can purchase commodities at any shop or outlet. The state government would then pay back the grocery shops for the stamps, said the finance minister in his budget.[11] But the United Progressive alliance, which came to power in 2004, decided on a common minimum programme (CMP) and on the agenda was food and nutrition security. Under that the government had plans to strengthen the food security program DS.[12]

However, finance minister Arun Jaitley in his budget speech went contrary to the idea proposed in the CMP and proposed the idea of the food stamp scheme.[13] He has proposed to try the scheme in few districts of India to see its viability.[14] In the CMP the government had proposed that if it is viable it would universalise the PDS; if food stamps are introduced it would be a targeted public distribution system. A group of about 40 economists have cautioned the NAC headed by Sonia Gandhi against the food security bill as it would put an additional burden on the exchequer. They instead have advised to go ahead and experiment with food stamps and other alternative methods and pointed out the flaws in PDS. This set of economists hail from institutes like Delhi School of Economics, Indian Statistical Institute, Jawaharlal Nehru University, Indira Gandhi Institute of Development Research, Centre for Development Studies, Harvard, MIT, Columbia, Princeton, London School of Economics, University of British Columbia, University of California and University of Warwick.[15] In a landmark judgment, Delhi High Court has ruled that fair price shops cannot be allotted to a below poverty line card holder.[16]

Aaj Tak news channel on 14 October 2013 performed a sting operation on PDS[17] named Operation Black. It showed how the distribution reaches to mills instead of fair price shops. All the documentation via computerisation is clean.

NDTV did a show which documented how the Government of Chhattisgarh's food department managed to fix its broken system so that the diversion of grain came down from about 50% in 2004-5 to about 10% in 2009–10.[18]

Research on the PDS suggests (as these two programmes show) that the situation varies quite a lot across the country.

• Direct Benefit Transfer
• Subsidies in India
• Malnutrition in India
• National Food Security Act, 2013

• PDS - Department of Food and Public Distribution, Official website at Ministry of Consumer Affairs, Food and Public Distribution
• Public Distribution System (PDS), in 10th Plan at Planning Commission of India
• Public Distribution System: Introduction at Right to Food Campaign
• Food Banking India at Delhi FoodBanking Network
• at Operation Black by Aaj Tak
• Excess Food Stocks, PDS and Procurement Policy Working Paper No. 5/2002-PC, by Arvind Virmani and P.V. Rajeev, Planning Commission, Government of India, December 2001
• at "EPDS Bihar"