India’s Public Distribution System (PDS) is crucial for supporting low-income families, yet it faces significant challenges. Despite all this, it still wastes nearly 28% of the food intended to reach the beneficiaries, pointing out how urgent the reforms in this system need to be. More positives do appear; the leakages, which once ranged at 46%, are now within 28% and decreasing with the usage of point-of-sale machines, though this system remains way below par. More importantly, PDS’s focus on rice and wheat cannot help break the calorie crisis for a people as diverse in need and origin as those of India. And also finding ways to sustain all citizens’ nutrition adequately is a better focus for an ideal system.
| GS Paper | GS Paper II, GS Paper III |
| Topics for UPSC Prelims | India’s Public Distribution System, National Food Security Act (NFSA), Fair Price Shops, Extreme poverty, Pradhan Mantri Garib Kalyan Anna Yojana, Food Corporation of India, Minimum support prices, National Family Health Survey-5 , One Nation One Ration Card, Household Consumption Expenditure Survey |
| Topics for UPSC Mains | Major Issues Related to India’s Public Distribution System in India, Measures can be Adopted to Enhance the Effectiveness of the PDS System |
This editorial is based on “Rationalizing leaky PDS” published in The Hindu on 07/05/2024. The article addresses inefficiencies within India’s PDS and its narrow focus on specific grains.
Since understanding the challenges and reforms needed in India’s PDS is critical for UPSC aspirants, this topic falls directly in line with what you would prepare from the UPSC syllabus under Government Policies, Food Security, and Economic Development. Knowledge of these issues helps comprehend the mechanisms of governance and the socio-economic challenges that India faces- both in Prelims and Mains.
It’s back in the spotlight of the inefficiencies of India’s Public Distribution System (PDS), with recent data pointing to the fact that up to 28% of food allocations still evade the beneficiaries despite technological improvement. It forms part of a topic relevant to UPSC aspirants as it relates to governance, food security, and economic policies, thus covered in queries relating to subsidy mechanisms and policy reforms. Understood challenges and the scope for reform in PDS, candidates can analyze the broader issues of effectiveness of public policy and welfare schemes.
The Public Distribution System is one of the most vital mechanisms established to distribute food grains at subsidized prices, aiming at ensuring food security for the population. Instituted by the National Food Security Act, 2013, PDS aims to support about two-thirds of India’s population, as per the Census, 2011. It plays an important role in handling the scarcity of food and stabilizing the food economy in this country.
The Public Distribution System, established to meet the forces of scarcity in food, has also expanded as an important policy tool for engaging India’s food economy. This also involves a mechanism of providing relatively cheap food grains, and though it doesn’t satisfy the nutrition needs of the population, it is regulated by the National Food Security Act of 2013 and provides food security to more than two-thirds of the population according to the Census 2011 data.
PDS is a joint venture between Central and State/UT Governments. The food grains are purchased by the Food Corporation of India (FCI) under the Central Government and stocked in warehouses, transported to states, and supplied to FPS. Local distribution, identification of eligible families, issuing ration cards, etc., shall be looked after by the State Governments. Through this cooperative system, the government intends to ensure that food grains are delivered effectively in all parts of the country.
India holds the Public Distribution System (PDS) important because it provides for food security, stabilizing prices, and rural support. It acts as an important safety net for the most vulnerable population through ready access to basic food supplies, particularly in times of economic distress. The PDS has also been instrumental in controlling market prices and providing agricultural incomes through systems of procurement.
It is a lifeline in a country of 129 million who live in extreme poverty. The PDS acts as a protective net for the ‘shocks of the economy’ – the Pradhan Mantri Garib Kalyan Anna Yojana alone supported 800 million people through free foodgrains during the Covid pandemic.
PDS is necessary in order to stabilize prices and help control markets. When the buffer stocks are maintained, it deters an artificial increase in price and protects the consumers from inflation. For instance, during the period of 2022-23, the Food Corporation of India released wheat to boost the supplies in the market, and it portrayed the role of PDS in stabilizing market volatility and welfare for consumers.
On procurement mechanisms and MSP, PDS sustains the incomes of farmers through assured markets. During the 2023-24 agricultural marketing year, government procurement hauled in mammoth quantities of rice, bringing farm incomes that stabilized with this period of market instability. It is critical to maintaining agricultural livelihoods and food production.
Going beyond this basic food security, PDS includes pulses and fortified rice in some states and thereby helps to bridge nutritional gaps. In a direct attack on malnutrition-related issues actually, this transition helped to reverse; National Family Health Survey-5 showed that the indicators of children’s nutrition had improved partially – a reduced decline in stunting from 38.4% to 35.5%.
PDS supports social equity with food access across geographical and social boundaries, whereby the poor benefit; One Nation One Ration Card scheme develops portability, supports migrant workers, and reduces regional imbalances, thereby promoting social justice and regional balance in food distribution.
Leakages, fraud, and inefficiencies happen to be the main issues that cause stress to this PDS in India. The very presence of foodgrain leakages and diversions afflicts its effectiveness totally. Improvement of this system and preventing it from deviating from its task of delivering food security to people necessitates facing these very challenges.
Leakages and diversion to illegal markets are two major problems of PDS. House Consumption Expenditure Survey 2022-23 shows that in 28% of allocated grains, the beneficiaries do not receive them. Even after using PoS devices in 90% FPSs, states like Arunachal Pradesh and Gujarat have a very high leakage rate, and strict measures are called for.
Though Aadhaar has been linked to beneficiaries, ghost beneficiaries, and identity fraud continue to thrive in PDS. Odisha alone claims to have over 2 lakh ghost beneficiaries; the bogus ration cards counted 47 million, which were canceled between 2013 and 2021. High migration rates are one of the reasons why cards of deceased beneficiaries don’t get closed and need better verification processes.
Poor storage infrastructure causes quality degradation as well as loss in storage for PDS. India loses around 74 million tonnes of food each year, which is equivalent to 22% of foodgrain output. This sets an imperative for upgrading storage facilities to avoid food loss and ensure quality of the foodgrains distributed through the PDSs.
Targeting errors result in the inclusion of the nonpoor and the exclusion of the actual beneficiary in PDS. Contrarily, 12.9% of Indians live under conditions of extreme poverty, whereas the current coverage in PMGKAY is around 57%. Multi-dimensional poverty, as has been observed by NITI Aayog, has reduced significantly, and so does the amount of hunger in India. Hence, this requires correct targeting to reach the destitute population.
Under-weighing and over-charging continue to exist in Fair Price Shops (FPS) and have been a major issue. Violations of the TPDS(Control) Order,2015 are liable to be prosecuted under the Essential Commodities Act,1955. During 2018-2020 more than 19,410 actions against the FPS operators speak volumes about the need for greater strict enforcement.
These swelling food subsidy bills considerably strain the pockets of governments. For 2024-25, the central government has budgeted Rs 2,05,250 crores for food subsidies while efficiency remains low with a 7% overshoot from the budget estimate in food subsidy spending in 2023-24 and thus calls for better financial management.
Being deficient in addressing overall nutritional needs through focus on cereals, PDS is also a contributory factor to India’s triple burden of malnutrition, obesity, and micronutrient deficiencies. Having 224.3 million people undernourished, it is essential that heterogeneous and fortified food items be included in PDS for the effective address on nutritional inadequacy and healthy outcomes.
Holistic measures and reforms are called for the improvement of the PDS system: end-to-end digitalization, smart FPS transformation, and enhanced portability of migrant workers. Modernizing storage infrastructure and incorporating nutritional security can help make PDS more efficient and effective in filling food security concerns.
Digital solutions would enhance efficiency in PDS through comprehensive tracking and monitoring from procurement to distribution, such as making full use of blockchain technology, IoT sensors, and AI analytics for real-time stock updates and detection of anomalies that prevent pilferage in all segments of the supply chain.
It can transform FPS into digital first “smart shops”. Biometric authentication, electronic weighing scales, and the digital payment system may also be helpful for proper distribution by FPS. Quality certification through QR codes can further strengthen the trust of genuine people.
Improved portability and support for migrant workers would be indispensable for the effectiveness in PDS. That would help smoothen the benefit flows across seasons to migrants and reduce regional disparities, with improved coordination between states and real-time tracking of migrations.
This upgrade of the storage infrastructure modernizes the effectiveness of PDS. Modern silos include in-silo temperature control and monitoring which prevent degradation in quality. Efforts for hub-and-spoke type storage models can be created. That further provides PPP opportunities for better storage capacity and efficiency as a result of reduced food loss.
Integrating nutritional security with PDS is important for the eradication of malnutrition. Some FPS can be transformed into nutrition hubs with an assortment of food items, and pulses. And also into fortified products, diversifying the diets. The E-Rupee voucher for vulnerable groups adds further complementarities to nutritional outcomes with strong health and well-being impacts.
Automated disaster response protocols will be built to enhance the quickness with which the PDS function during crises. In emergency situations, emergency distribution networks and mobile units of the PDS can be designed to respond very quickly. Quick verification of beneficiaries at such times can also accelerate aid delivery to those needy.
| Political: The government’s commitment to food security and poverty alleviation drives strong political support for PDS reforms. The interplay between central and state governments affects PDS efficiency, as each manages different functions. The National Food Security Act (NFSA) 2013 legally mandates PDS implementation, ensuring political support for widespread food distribution. Economic: High food subsidy costs impact government finances, highlighting the need for increased PDS efficiency to reduce costs. The PDS supports farmers by offering minimum support prices, which stabilize agricultural production and sustain rural incomes. A well-functioning PDS helps stabilize market prices and prevent inflationary spikes, benefiting the overall economy. Social: The PDS addresses critical issues of food security and social equity by supporting marginalized communities. For nearly 129 million Indians below the poverty line, the PDS is essential. Nutritional inadequacies, however, affect public health as cereal-focused distributions fail to meet the diverse dietary needs of the population, leaving many vulnerable to malnutrition. Technological: Digital tools like Aadhaar-based authentication and point-of-sale machines help curb leakages and improve PDS transparency. Further modernization of storage facilities and the transformation of Fair Price Shops (FPS) into ‘smart’ outlets promise improved service delivery and reduced wastage. The One Nation One Ration Card (ONORC) scheme leverages technology to make PDS benefits portable, aiding migrant populations. Environmental: PDS operations rely on sustainable agricultural practices and stable food production, both increasingly impacted by climate change. Poor storage conditions worsen environmental challenges by causing significant food loss. Legal: The National Food Security Act (NFSA) 2013 mandates the government to provide subsidized food grains to over two-thirds of India’s population. Legal reforms to address corruption, ghost beneficiaries, and duplication of ration cards are essential to enhance PDS credibility. |
While imagining a new Public Distribution System for India, we are at the decisive moment. Technologically empowered and nutritionally diversified, PDS can really become an effective tool for containing hunger and enabling well-being and equity. For the UPSC aspirant, it must mean that governance does make a huge difference to welfare. Thus cautioning a careful approach toward reform-oriented policy changes.
| UPSC Civil Services Examination, Previous Year Questions (PYQs) Mains Q. The growth of cities as IT hubs has opened up new avenues of employment, but has also created new problems. Substantiate this statement with examples (UPSC Mains 2018, GS Paper III) Q. Critically examine the effectiveness of India’s Public Distribution System (PDS) in achieving food security. Discuss the main issues, such as leakages, targeting errors, and limited nutritional diversity, that impact its performance. |
Minilateralism is transforming the global diplomacy as it introduces smaller, targeted partnerships in order to…
India’s GDP Growth Forecast Revised Downwards by RBI The Reserve Bank of India (RBI) on…
India is losing its opportunities to sustain agriculture due to severe soil degradation. Recent studies…
India’s Economic Growth Outlook Revised The Reserve Bank of India (RBI) has brought down India's…
Startup Ecosystem in India has emerged as a global leader, with over 140,000 recognized startups…
India’s GDP Growth Forecast Revised by RBI The Reserve Bank of India had trimmed its…