Public Distribution System reforms

The Public Distribution System (PDS), till 1992, was a general entitlement scheme for all consumers without any specific target. The Revamped Public Distribution System (RPDS) was launched in June 1992 in 1775 blocks throughout the country. RPDS was launched with a view to strengthen and streamline the PDS as well as to improve its reach poor families especially in the far-flung, hilly, remote and inaccessible areas.

In June, 1997, the central government launched the Targeted Public Distribution System (TPDS) with focus on the poor families. The number of BPL families covered under TPDS was increased in 2000 by shifting the base to the population projections of the Registrar General as on March 1, 2000, instead of the earlier population projection of 1995. With this increase, the total number of BPL families were 6.52 crore as against 5.9 crore families originally estimated when TPDS was introduced in June 1997.

The NFSA, 2013, which is being implemented now, aims at providing highly subsidized foodgrains (5 kg per person per month) to close to 82 crore population. Cutting pilferage from the PDS is becoming far easier with almost all of the 23 crore ration cards in the country being digitised and 56% of these already seeded with unique identification number Aadhaar. Besides, several states have now installed electronic point of sale (ePOS) devices at their fair price shops to track the sale of foodgrains to actual cardholders on a real-time basis.

With the food subsidy in the current fiscal estimated at Rs 1.34 lakh crore (the NFSA has passage of NFSA, 2013 which aims at providing highly subsidized foodgrains to close to 82 crore population has already been rolled out in 27 states and 6 UTs), compared with Rs 1.24 lakh crore (revised estimate) for last year, the government is keen to bolster direct transfer of subsidies to the beneficiaries’ bank accounts.

Direct benefit transfer (DBT) in PDS, however, is still at an early stage; three UTs Chandigarh, Puducherry and Dadra and Nagar Haveli have implemented DBT on a pilot basis. However for next couple of years, the government’s task is to ensure that all the states uniformly carry forward PDS reforms so that pilferage and inefficiency in the system could be removed.