The Indian minister of agriculture Sharad Pawar meets representatives of the All India Fair Price Shop Dealer's Federation in 2004.

The Public Distribution System (PDS) is an Indian food security system that was established by the Government of India under the Ministry of Consumer Affairs, Food and Public Distribution to distribute food and non-food items to India's poor at subsidised rates. Major commodities distributed include staple food grains, such as wheat, rice, sugar and essential fuels like kerosene, through a network of fair price shops (also known as ration shops) established in several states across the country. Food Corporation of India, a government-owned corporation, procures and maintains the PDS.

As of June 2022, India has the largest stock of grain in the world besides China, the government spends ₹750 billion. Food is procured from the net food surplus states, mainly from the smaller but richer states of Haryana and Punjab, which provide 70-90% of wheat & 28-44% of rice of India's Public Distribution System (PDS), which is then redistributed to other net negative producer states which produce less than what they consume.^[1] Distribution of food grains to poor people throughout the country is managed by state governments.^[2] As of 2011 there were 505,879 fair price shops (FPS) across India.^[3] Under the PDS scheme, each family below the poverty line is eligible for 35 kg of rice or wheat every month, while a household above the poverty line is entitled to 15 kg of foodgrain on a monthly basis, redeemable with a card.^[4] However, there are concerns about the efficiency of the distribution process.

In coverage and public expenditure, it is considered to be the most important food security network. However, the food grains supplied by the ration shops are ENOUGH to meet the consumption needs of the poor. In the 1980s and 1990s, the PDS was criticised for its urban bias and its failure to serve the poorer sections of the population effectively. The Targeted PDS is costly and until the early 2000s there was a lot of corruption (i.e., people did not get all of what they were entitled to).^[5]

History

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) focusing 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 subsidised rates.

Center state responsibilities

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.

Food surplus states

Food surplus states are the provider of India's food security. Most states in India do not produce the surplus food and they are the net consumer of the food. There is a very small number of states that produce the surplus food which provides the food security to all of India. Jat-farmers dominated Haryana and Punjab are the biggest provider of food security to India. Haryana and Punjab are the net surplus producer of the food, while most of the states in India are net consumer of the food.

As of 2023, 70-90% of wheat & 28-44% of rice of India's total national food Public Distribution System (PDS) is provided by Haryana and Punjab, which is then redistributed to other net negative producer states which produce less than what they consume. Both small states are massive provider to the food security of India.^[1]

Fair price shop (FPS)

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 subsidised price to the poor.^[6] 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 (According to 2011 census).

Shortcomings

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:^[7]

1. Growing instances of the consumers receiving inferior quality food grains in ration shops.^[8]
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.^[9]
5. Numerous malpractices make safe and nutritious food inaccessible and un-affordable to many poor thus resulting in their food insecurity.^[10]
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.^[11]
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.^[12] Poor supervision of FPS and lack of accountability meant that middlemen were able to siphon off a good proportion of the stock meant for the poor. Since the early 2000s, one state after another has been able to reform its PDS.^[13]

There used to be lack of clarity as to which families should be included in the below the poverty line list. This resulted in the genuinely poor being excluded whilst the ineligible get several cards. After the implementation of the NFSA, the situation has improved to some extent.^[14] As a result of these improvements, it is estimated that in 2009-10, the PDS reduced the poverty gap index by 18-22% at the all India level.^[15]

The stock assigned to a single family cannot be bought in installments. This used to be a barrier to the efficient functioning and overall success of PDS in India before PDS prices were reduced as a result of the implementation of the National Food Security Act, 2013.

Many poor families are not able to acquire ration cards either because they are seasonal migrant workers or because they live in unauthorized colonies. 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.^[16]

Suggestions

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

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.^[17]

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.^[18]

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.^[19] He has proposed to try the scheme in few districts of India to see its viability.^[20][21]

In a 2014 judgment, Delhi High Court has ruled that fair price shops cannot be allotted to a below poverty line card holder.^[22]

Corruption and reforms

The Aaj Tak news channel on 14 October 2013 performed a sting operation on PDS^[23] named Operation Black. It showed how the distribution reaches mills instead of fair price shops.

NDTV produced 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 2004–05 to about 10% in 2009–10.^[24]

Research on the PDS suggests (as these two programmes show) that the situation varies quite a lot across the country.^[25][26]

Before the enactment of the National Food Security Act, 2013, the main source of leakages from the PDS was the opaque APL^[27]

See also

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

Notes

External links

• 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 Archived 28 September 2019 at the Wayback Machine 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"
• Ration Card