PDS is considered as principal instrument in the hands of State Governments for providing safety net to the poor against

the spiralling rise in prices of essential commodities. Public Distribution System (PDS) is a poverty alleviation programme And contributes towards the social welfare of the people. Essential commodities like rice, wheat, sugar, kerosene and the like are supplied to the people under the PDS at reasonable prices. PDS is a boon to the people living below the poverty line. PDS is the primary social welfare and antipoverty programme of the Government of India. Revamped Public Distribution System (RPDS) has been initiated by the Government of India from the year 1992 in order to serve and provide essential commodities to the people living in remote, backward and hilly areas. Government introduced Targeted Public Distribution System (TPDS) in the year 1997.

General problems in public distribution system

COVERAGE It counts the population being fed by PDS. Although PDS is the largest network of food grain production, still it is not in reach of every consumer. According to National Sample Survey (2004-2005), it is estimated that 73% did not get any food grains from PDS. Therefore coverage is one of the major problem in PDS. Also, stocks arrived in FPS are not always on time due to which the consumers may have to depend on private shops.

IMPLICIT SUBSIDY In this government has provided subsidy on various commodities. This government policy aims at subsidizing price of commodities lower than minimum support price. With the alarming inflation, the minimum support price will bound to increase. The subsidy will henceforth increase.

EXCLUSION ERROR This error occurs due to the proportion of poor left out of PDS. In this a poor person of BPL is not classified as one and hence is deprived of the benefits of PDS.

UNDERNUTRITION PDS aims not just to distribute food grains but also aims at providing good quality food grains/ commodities so that the problem of malnutrition is reduced. But malnutrition persists to be the most important concern of India. TRANSPORTATION LEAKAGE The distance of grains from go downs to FPS is also a major filtration point in the distribution mechanism. The grain wont reach to FPS but goes to open market for selling, getting the margins which benefits the middle men that is FPS owners and officials of the distribution wing.

BPL PROBLEMS
The numbers shown by state government for BPL families do not tally with the ration cards issued and also with the planning commission statistics. Due to this two types of problem arises - one is the number of ration card holders are less compared to the number of BPL families announced by the state government. Second is the number of ration cards issued are more than the real BPL families in the village. In the second case, huge quantity of grains got released from second but not the concerned but reselling the same at higher margins in market.

PDS is highly corrupt system which is not benefiting the needy- poorest of the poor, as per objective of the government. To reduce the filtration of the grains into open market technology usage from go downs Fair price shop consumer mechanism has to be automated.

FAIR PRICE SHOPS: A MAJOR PROBLEM

Fair price shops are not viable. Most shops do not display stock statements, and bill books are poorly maintained. Issuance of bills for the transactions undertaken is done rarely and stock books are improperly maintained. Card holders complained about the FPS owners charging higher prices for commodities and receiving less quantity than what they are entitled to. Shops use unfair practices in distribution such as adulteration, improper weighing, etc.

FPS OWNERS DO BLACKMARKETING THROUGH VARIOUS WAYS:

He fools illiterate consumers by selling them less quantity of ration through taking their thumb prints for different quantities. Adulteration is the most common thing which is done by FPS. Thus compromising with the nutritional value of ration. FPS OWNER exchange good quality of ration present in FPS stocks with poor quality of stocks from market shops, hence earning their profit with this black marketing They dont maintain proper report of ration transactions and bribe the food security inspectors. They sell the remaining ration of FPS in open market at higher for their own benefits, thus reducing the governments subsidy.

LACK OF PORTABILITY OF FPS

The consumers are bound to purchase their ration from a specifically allotted FPS. If case if there is no stock at the FPS the consumer cannot approach any other FPS for his required ration. The same problem is faced by the migrants. The tribal people who move from one place to another cannot avail the ration from new FPS with the old ration cards.

CAUSES OF THE PROBLEM

Food security inspector are not honest towards their job so there is lack of transparency in the PDS Since the food given to the PDS customers are not packed, thus the chances of adulteration of food increases. The manual billing of the ration being sold leads to forgery at the district level which in turn gives rise to corruption.

Generation of Ghost Cards

Manual Process involved Tatkal Ration Card System Lack of identity of persons in RC No accountability Registers kept at Government office (G-register) and FP Shop As per the year 2004 information, it is estimated that out of the total no. of ration cards about 5.14% ghost card exists.

PROPOSED SOLUTION
Food dispatched from central government should be in the form of small recyclable packets which will have various advantages: Food packets should be of standard weights of 2, 5, 10, 15 ,25 kgs The packaging material should be recyclable so that food packets can be easily dispersed as well as exchange effectively. Return of empty packets. For effective recycling of packets ( in order to save manufacturing cost ) It is mandatory for consumers to return the previous empty packets on the next visit. On return of 20 packets the consumers will get 2 kg packet of ration as a reward . Flexibility in FPS. The consumer must be given rights to purchase ration from any of the FPS rather than the allotted FPS. This will help the migrants (such as tribal who move from one place to another). Mobile distribution of ration in remote areas. The ration from the various FPS should be send through any transport means to remote areas which are deprived of FPS. It will cut off the transportation cost of the people hailing from remote areas for their daily meal. Centralized system at state level should maintain data that contains the contact number of all those who avail the facility of PDS. The people who are categorized in BPL will get an sms from the centralized system after arrival of the stocks at FPS. This system of keeping contact numbers will also help to bring transparency between BPL and APL. With the consumers allotted with unique Aadhar card an entry is made into the electronic device that tallies the Aadhar card number. The device is digitalized and hence chances of corruption at FPS level are reduced. Identification of consumers is made through thumb prints.

There should be state patch ups in case of calamities. It means that there must be mutual understanding between various states to help them in times of calamities.

FLAWS IN FOOD SECURITY ORDINANCE

If a family consists of 5 people the previous system provided them with 35 kg of rice. With the introduction of Food Security Bill , the quantity reduces to 25 kg. The people has to depend on private shops for this 10kg and with the inflating prices. Moreover, this bill aims at feeding 67.5lakh population of India-that is double the number of BPL families. Subsequently the burden on govt. as well as the consumer is bound to increase. Indias poverty index is measured in calories. According to FSB, the adults will be provided 165 gm of food subsidy. A normal person requires 2500 calories per day whereas 400 grams of food will provide only upto 330 calories. It is the duty/responsibility of central government to decide and make up a criteria on who can avail the facility of PDS that is norms for consideration into BPL. But the FSP, the central government is giving this duty to state governments which in turn would create interstate disparities. In case of any contingency like drought, flood, etc. The new FPS states that it is incumbent on state government for purchase/procurement of food grains. The condition of ware houses in our country is pathetic. there is no investment in terms of storage, transportation & maintenance.

DEMERITS OF GOVERNMENT POLICIES PROPOSED

Cash transfer : opening of bank accounts, availability of banks, delays in release of amounts Difficult to fix the monthly cash subsidy: fluctuation in market prices Cash cannot guarantee food security: purchase of non PDS commodities
No MSP: due to cash transfer FCI does not provide MSP, farmers not incentivize.

HIGH LEVEL DESCRIPTION OF KEY STEPS INVOLVED IN IMPLEMENTING SOLUTION

Accessibility

Integrating AADHAR CARD of every family member into a common e-ration card of family Computerized system at very fair price shop which will be linked with the centralized system at every state level. Government will provide vans that would distribute ration in remote areas. Ration will be provided on the basis of number of family members.

Monitoring and Packaging

Packaging unit will be setup in all FCI godowns. Ration will be packed in standard size packets. CCTV cameras will be there in every FCI godown. Central will monitor warehouses through its vigilance officers and CCTVs. Dispatched packed ration from ware houses and stocks reached at every FPS will be electronically monitored by a central body.

FPS working

FPS purchase data will be sent to central. Consumers can now purchase their ration from any FPS. Consumers will hold power to purchase as much ration as they want of their allotted ration (just like withdrawing money from ATM). FPS owner will earn his share in form of salary from central system on the basis of his purchase.

FCI GODOWNS

FCI database

Farmers Packaging unit in FCI godown

Database of warehouses

WAREHOUSE

WAREHOUSE

Database of all FPS

FPS

FPS

FPS

FPS

Packed ration

Packed ration

FPS
Terminal
E ration card linked with Aadhar

e-card reader

Beneficiaries

mobile FPS in remote Areas

Printer
FPS Database

FPS OWNER Purchase money

Ration BANK

FCI account

SALARY

LEVERAGING GOVERNMENT INFRASTRUCTURE Computerization

Gadgets, computers, networks must be installed in the FPS at a much professional level. A team of engineers and technicians must be appointed. Whenever there is a technical error in the automated system, the team ought to improvise it as soon as possible. The vehicles for transportation must be well equipped and well maintained such that in any emergency case when there is traffic jam or rainfall the ration must not spoil.

FUNDING
procuremen t subsidy packaging cost FCI godowns

Organization cost

90000 crore

Infrastructure cost
TOTAL FUNDING REQUIRED

CCTV cameras warehouses Central FCI godowns to warehouses

5000 crore

Transportation cost

Warehouses to FPS Mobile distribution Setting up computers + e- card reader IT software

1500 crore

Technology cost

2500 crore

CRITERA TO MEASURE IMPACT OF THE SOLUTION

ADULTERATION : In our proposed solution procured food are packed and transported to state government warehouses by the central government. When the responsibility is given to state government for packaging, the chances of adulteration are more. BLACKMARKETING : Due to punctual transfer of reports to the central server, the chances of black-marketing will reduce. GHOST CARDS: Biometric verification through Aadhar card ensures full proof identity of the beneficiary. Hence the problem of ghost cards will be eliminated. With our proposed solution, flexibility is bound to increase and therefore the existing stocks (not being used) will not rot away. Therefore the commodities available will be reasonable and quantified.

SCALABILITY AND SUSTAINIBILTY

The packaged food is now free from any possible adulteration and diversion to open markets. Also the quality of grains is ensured as well as do not spoil under adverse conditions. More and more BPL families will be taken into account and off take will increase.

CHALLENGES
1. Due to emerging trends like CLOUD technology we will always have to update the systems to cope up with the increasing data and security issues. 2. Orthodox people in rural areas will not adjust with the technology and would have an urge to pursue the older system of written stock management. 3. As we have fixed major loop holes, the ration mafias will surely outburst their frustration through political and illegal means. They may also lead to litigation and bloodshed.

MITIGATION
1. While applying the technologies, the government must be strict enough in installation and vigilance. 2. NGOs will aware people about their rights and the benefits of the new automated system. 3. Awareness about RTI will surely help in proper functioning of FPS. 4. Role of media is vital for mitigation.

Appendix
AADHAR CARD- A unique identification project which provides a unique id number to all Indian . AAY-Antyodya Ann Yogna ADULTERATION-Mixing inedibles in food grains so that quantity increase and quality decrease. APL-Above poverty line BPL-Below poverty line Cloud technology-Computing concepts that involve a large number of computers conected through a real-time communication network. FCI-Food Corporation of India FPS-Fair price shop FSB-Food Security Bill NSS-National Sample Survey,largest organization in India conducting regular socio-ecenomic surveys. PDS-Public distribution system RPDS-Revamped Public Distribution System RTI-Right to information TPDS-Targeted Public Distribution System

REFERENCE
1. Talk delivered by Mr. Akshay of Boston consultants group on PDS. 2. Ch.Srinivas and S.Abdul Jhaha Global Research and Consultancy Services , Hyderabad,Deccan Development Society. 3. Chattisgarh Cheif Minister's letter to Prime Minister on cash transfers in the PDS. 4. Dr. S. nakkiran,principal (Retd.) , TBML college Poragar, TAmil Nadu. National Food Security Bill 2013.

Submitted by :-

TEAM SAMARTHA

MANIT BHOPAL

Saumya Shivhare

Shubham Bhatnagar

Rajnandini Sharma

Vishal Jaiswal

Kamakshi Gupta