Strengthening Public Distribution System: Evolution, Challenges, and the Way Forward for Viksit Bharat

Evolution of India’s Public Distribution System (PDS)

India’s Public Distribution System (PDS) has played a pivotal role in ensuring food security for millions. Established as a wartime rationing measure during World War II, it has undergone several transformations to become one of the largest food security programs in the world. In the 1960s, the system was expanded to tackle widespread food shortages, leading to the establishment of the Food Corporation of India (FCI) to oversee procurement and storage. In 1992, the Revamped Public Distribution System (RPDS) was introduced to extend coverage to remote areas. This was further refined in 1997 with the implementation of the Targeted Public Distribution System (TPDS), which categorized households into Below Poverty Line (BPL) and Above Poverty Line (APL) groups to ensure better-targeted benefits. In 2000, the Antyodaya Anna Yojana (AAY) was launched to provide heavily subsidized food grains to the poorest families. The most significant milestone came in 2013 with the enactment of the National Food Security Act (NFSA), which institutionalized food security as a legal right for 67% of India’s population, ensuring subsidized food grains to millions.

Reforms Taken to Strengthen PDS System in India

Despite its remarkable progress, the PDS continues to face multiple challenges, including inefficiencies, leakages, and errors in beneficiary identification. Over the years, the government has initiated several reforms to address these shortcomings. One of the most significant interventions has been the introduction of the One Nation One Ration Card (ONORC) initiative, which enables beneficiaries to access subsidized food from any Fair Price Shop (FPS) across the country. This initiative has been particularly beneficial for migrant workers and seasonal laborers, ensuring that their access to food security is not disrupted by geographical relocation. Additionally, several technology-driven reforms have been introduced to modernize the system. The SMART-PDS scheme, approved for the period 2023-2026, aims to upgrade and digitalize the PDS through end-to-end computerization. The installation of Point-of-Sale (POS) machines at FPSs has further enhanced transparency and reduced fraudulent activities. Aadhaar integration has played a crucial role in preventing duplicate and ghost beneficiaries, thus minimizing leakages. Furthermore, GPS tracking and SMS notifications have been introduced to monitor food grain movement and provide beneficiaries with real-time information about their entitlements.

Anna Chakra: Revolutionizing PDS Logistics

The Anna Chakra initiative, developed by the Department of Food and Public Distribution in collaboration with the World Food Programme (WFP) and IIT-Delhi’s Foundation for Innovation and Technology Transfer (FITT), is an innovative supply chain optimization tool. Given the vast scope of PDS operations, with its extensive network of 4.37 lakh Fair Price Shops (FPS) and approximately 6,700 warehouses, Anna Chakra provides an essential solution to enhance logistics efficiency, minimize costs, and improve the overall effectiveness of food grain distribution.

Key Features and Benefits:

1. Optimized Supply Chain: The tool employs advanced algorithms to determine the most efficient transportation routes for food grain movement, ensuring reduced transit times and enhanced operational efficiency.
2. Cost Reduction: By optimizing delivery routes, Anna Chakra is expected to save an estimated 250 crores annually, primarily by reducing fuel consumption and logistics expenses.
3. Environmental Sustainability: The optimization process helps in reducing transportation-related emissions by 15-50%, thereby contributing to a lower carbon footprint.
4. Wide Coverage: With implementation across 30 states, the tool significantly enhances the efficiency of the world’s largest food security program, benefiting 81 crore beneficiaries.
5. Seamless Integration: Anna Chakra is linked with the Railways’ Freight Operations Information System (FOIS) through the Unified Logistics Interface Platform (ULIP) and integrated with the PM Gati Shakti platform, ensuring better geo-mapping of warehouses and FPS locations.

SCAN Portal: Simplifying Subsidy Claims

The SCAN (Subsidy Claim Application for NFSA) portal is another crucial development aimed at streamlining the subsidy claim process for states under the National Food Security Act (NFSA), 2013. The portal modernizes how PDS subsidies are claimed, processed, and approved, ensuring efficient fund utilization and preventing leakages.

Key Features and Benefits:

1. Single-Window System: SCAN provides a one-stop portal for states to submit food subsidy claims, eliminating procedural delays and reducing administrative burden.
2. Automated Workflow: The portal facilitates end-to-end workflow automation, ensuring faster approval and settlement of claims.
3. Rule-Based Mechanism: Using rule-based processing, SCAN enhances transparency and speeds up scrutiny and approval processes.
4. Greater Efficiency: By digitalizing the entire subsidy management system, the SCAN portal aligns with the government’s Digital India mission, reducing the risk of fraud and ensuring timely payments.

Challenges Facing PDS

The PDS still grapples with significant challenges that hinder its efficiency. One major issue is the inaccuracy in beneficiary identification. Studies have shown that 61% of eligible households face exclusion errors, while 25% of non-eligible households wrongfully receive benefits. This misallocation not only affects the needy but also burdens government resources. Another critical concern is leakages, with approximately 28% of subsidized food grains being diverted or lost, leading to financial losses estimated at Rs. 69,108 crores annually. Storage and distribution inefficiencies further compound the problem, as inadequate storage facilities result in spoilage and wastage, while delays in transportation affect timely delivery. Additionally, the PDS has long been criticized for its overemphasis on wheat and rice, ignoring the need for nutritional diversity. A more balanced food basket, including pulses, fortified foods, and millets, is essential to improve the nutritional outcomes of beneficiaries.

Way Forward:

To address these issues and make the PDS more effective, a comprehensive and technology-driven approach is necessary. One of the most promising solutions is the end-to-end digitalization of the supply chain. Implementing blockchain and IoT technologies can enhance real-time tracking and ensure transparency at every stage, from procurement to distribution. AI-driven analytics can help detect inefficiencies and prevent pilferage. Strengthening the portability of ration benefits under ONORC, with better inter-state coordination and temporary ration card registration for migrant workers, would further enhance accessibility. Additionally, modernizing storage infrastructure by upgrading to IoT-based quality monitoring systems and fostering public-private partnerships for better warehousing facilities can reduce wastage and ensure a steady food supply.

Nutritional security should also be a priority in PDS reforms. Converting select FPSs into nutrition hubs that offer pulses, edible oils, and fortified foods can help improve dietary diversity. The introduction of E-Rupee vouchers targeted at vulnerable populations could enable beneficiaries to purchase nutritious food items beyond the conventional wheat and rice provisions. Learning from states like Tamil Nadu and Chhattisgarh, which have successfully incorporated diverse food items into their PDS, can serve as a model for nationwide reforms.

Conclusion

The launch of Anna Chakra and the SCAN portal marks a significant step in modernizing India’s Public Distribution System. By leveraging cutting-edge technology, these initiatives enhance logistics efficiency, reduce costs, minimize environmental impact, and ensure transparent subsidy disbursement. However, further technological advancements, policy reforms, and infrastructure enhancements are necessary to tackle persistent challenges and make PDS more resilient, inclusive, and efficient. As India continues to work towards food security for all, these initiatives exemplify the power of digital transformation in governance.

The Public Distribution System remains a cornerstone of India’s food security framework, but it requires continuous innovation and systemic improvements to maximize its impact. By leveraging technology, strengthening accountability, and prioritizing nutritional well-being, India can build a more resilient, transparent, and efficient PDS that truly fulfills its mission of ensuring food security for all.

(The views expressed are the author's own and do not necessarily reflect the position of the organisation)