Public Distribution System [PDS]- Steps by the Government to Make it More Effective

Updated July 22, 2022

Public Distribution System is a structure sponsored by a government which includes a chain of shops entrusted with the work of distributing basic food and non-commodities to the vulnerable groups of the society at very reasonable prices. It is an initiative to alleviate poverty with the required amount of distribution of essential commodities.

So, PDS is social welfare and antipoverty programme of the government of India where essential commodities such as rice, wheat, sugar, kerosene etc are distributed with the subsidized rates. PDS is regulated under the joint responsibility of the Central and State government of India.

Public Distribution System has been evolved as a system to manage scarcity through the distribution of food grains at affordable prices. Over the time, however, this system getting less and less effective and losing relevance in a sense.

Evolution of Public Distribution System

Public Distribution System was launched in 1939 under the British regime when the World War-II was started. It was taken as wartime rationing measure to some selected cities, which were facing the severe scarcity of food grains. PDS was extended to more cities and towns at the time of Bengal Famines in 1943.

The prolonged periods of economic stress and disruption due to wars and famines give rise to the Food Security System. Before the 1960s, distribution through PDS was mere rationing system and generally dependant on imports of food grains.

After 1965, forming Food Supply Corporation and Agricultural Prices Commission (now known as Bureau of Agricultural Costs and Prices) had changed management system of scarce supplies. The government started to procure the food grains internally (domestically), which improve the framework of management system for PDS.

By the 1970s, PDS had evolved into a universal scheme for the distribution of subsidised food. Food Security system became an integral part of a development strategy to bring about the high yielding of crops. It provides effective measures to generate employment and the well-being of the farmers. Till 1992, PDS was a general entitlement scheme for all consumers without any specific target.

The Revamped Public Distribution System (RPDS) was launched in June 1992 with a view to improve its reach in the far-flung and strengthen PDS infrastructure. It had been launched in the 1775 blocks throughout and continued up to 1997. This area-specific programmes covered hilly, remote and inaccessible areas where a substantial section of the underprivileged classes lives.

In June 1997, the Government of India launched the Targeted Public Distribution System (TPDS). The focus of the TPDS is on “Poor in all areas”. Under TPDS, beneficiaries were divided into two categories: Households below the poverty line or BPL; and Households above the poverty line or APL.

Antyodaya Anna Yojana (AAY)

AAY is a sub-scheme of the TPDS, launched in 2000, to benefit the poorest of the poor. It was a step to make TPDS more effective and deal with hunger among the poorest segments of the BPL population.

A National Sample Survey stated that about 5% of the total population in the country sleeps without two square meals a day. In order to make TPDS more focused and targeted towards the categorisation of population, the “Antyodaya Anna Yojana” (AAY) was formed for one crore poorest of the poor families.

In September 2013, Parliament enacted the National Food Security Act, 2013. The Act relies largely on the existing TPDS to deliver food grains as legal entitlements to poor households. This marks a shift by making the right to food a justiciable right.

The objective of the Public Distribution System

The goal of PDS does not restrict itself with the distribution of rationed articles. Making available adequate quantities of essential articles at all times, in places accessible to all, at prices affordable to all and protection of the weaker section of the population from the vicious spiral of rising prices is the broad spectrum of PDS. More specifically, the goals of PDS are:

(a) Provisioning subsidized food grains to poor households i.e. make goods available at the reasonable or cheaper rate to consumers, especially the disadvantaged /vulnerable sections.
(b) Check and prevent hoarding and black marketing in essential commodities.

(c) Rectify the existing imbalances between the supply and demand for consumer goods.
(d) Ensure social justice in the distribution of basic necessities of life.
(e) Rationing during situations of scarcity, and
(f) Maintaining price stability, even out fluctuations in prices and availability of mass consumption goods.

(g) Keeping a check on private trade of food grains
(h) Support poverty-alleviation programmes, particularly, rural employment programmes, (SGRY/SGSY/IRDP/Mid-day meals, ICDS, DWCRA, SHGs and Food for Work and educational feeding programmes.

Management Structure

The management structure of PDS in India includes policy formulation, fixing of objectives, strategy for procurement and distribution of food grains and other essential kinds of stuff. The policy of setting up Fair Price Shops was only due to the National Food Policy. The central government play a prominent role in determining the Support prices which influence the Central Issue Price in the state.

Moreover, the Central Government, through Food Corporation of India (FCI), owes its responsibility for procurement, storage, transportation and bulk allocation of food grains to the State Governments. While the state government is responsible for distribution to consumers through the network of FPS. In order to make the PDS effective, the central government issue guidelines regarding the operational details from time to time.

Though the guidelines of the central government were taken into consideration, the decision was dependent upon the state government. The operational responsibilities including allocation within the State, identification of eligible families, issue of Ration Cards and authorisation and functioning of Fair Price Shops (FPSs) etc., remains in the hand of State Governments. Apart from the decisions taken at the central and state level, these decisions are also taken at the district, and block level.

Administrative Functions

(a) Central Government

(i) Obtaining supplies, Procurement & imports;
(ii) Procurement price, issue Price to states, subsidies;
(iii) Guidelines to states on the design of PDS;
(iv) Allotment to states

(b) State Government

(i) Receipt of central allocation;
(ii) Procurement in the state;
(iii) Purchase from other states;
(iv) Warehousing;

(v) Determination of: – consumer issue price; commodity coverage; – Rules for issue of ration Cards, FPS License
(vi) Allotments to district & transport arrangements

(c) District and Local Agencies

(i) Lifting stocks warehousing;
(ii) Issue of ration cards;
(iii) Licensing of FPS dealers;
(iv) Arrangements/ ensuring lifting by FPS dealers
(v) Enforcement, inspection, Vigilance.

Issues with the Public Distribution System

Public Distribution System is a poverty alleviation programme and contributes towards the welfare of the vulnerable sections. It has provided a source of living a healthy life to many poverty and vulnerable sections. But, due to some issues in the public distribution system, it made PDS ineffective. There are some of the following issues in the PDS:

Inaccurate Identification of Households: This is one of the major challenges of the PDS. Due to large inclusion and exclusion errors in identification of beneficiaries. it made the loophole in the system. This implies that the person who should get the benefit, could not avail it. While who is ineligible are getting undue benefits.

Leakages in the delivery system: This takes place during the transportation of food grains to ration shops and from there to the open market. To make the PDS more effective, it needs to be considered. So that, the vulnerable sections could avail the actual amount of benefit of Food Grains.

Financially inefficient: The centre bears a large financial burden of the food subsidy as the cost of procuring and delivering food grains is about six times its sale price.

The shortfall in the storage capacity: Shortfall in the storage capacity leads to wastage of food grains. In 2019-20, India achieved a record production of 291.95 million tonnes of cereals. Out of this, around 4.6-6% is lost, according to the National Academy of Agricultural sciences. India should properly assess and resolve the issue of the storage capacity of food grains. To make the food grains distribution system more effective, it needs to be exterminated.

The provision of minimum support price (MSP) has encouraged farmers to divert land from production of coarse grains that are consumed by the poor, to rice and wheat and thus, discourages crop diversification.

Measures by Govt. to Make The PDS more Effective

The public distribution system in India has developed for many decades. Over the years, many initiatives have been taken to make it more efficient. The government used advanced technology such as computerisation of the Food Grain Distribution System to accelerate the project. The following reformative steps were taken by the government to make the food grain distribution more effective:

(i) Aadhar Linkage- Linking Aadhar with PDS has ensured online entry and verification of beneficiary data. It also enables online tracking of monthly entitlements and ration of food grains taken by the beneficiaries.

(ii) Automated Fair Price Shop- Fair Price shops have been automated by installing ‘Point of Sale (POS)’ device to swap the ration card and automatically enter the data of the beneficiary. It provides authentication to the beneficiaries and records the number of subsidised grains given to a family.

(iii) Direct Benefit Transfer- Under the Direct Benefit Transfer Scheme, the subsidy is transferred to the beneficiaries account. For taking up his model, the state/UTs would be completely digitalised and beneficiary data and Aadhar linkage will be carried out along with the bank account details of beneficiaries.

(iv) GPS Technology- Use of Global Positioning System (GPS) technology has been started to track the movement of trucks carrying food grains from state depots to FPS. This can help in preventing of diversion of food grains.

(v) SMS Updates- It allows monitoring by citizens. A beneficiary can register their mobile numbers and send/receive SMS alerts during dispatch and arrival of PDS commodities.

(vi) Web-based Citizen’s Portal- Web-based citizen’s portal has been started to address the issues of grievances redressal and management of public distribution data. This gives an important outlook and helps in effective monitoring of the PDS system. For example, Annavitran portal

Thus, these are the steps taken by the government to make the food grain distribution system more effective. And, PDS is one of the largest welfare programmes of the government, helping the farmers to sale their produce at remunerative prices as well as the vulnerable sections of society to buy food grains at subsidized rates.

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