Public Distribution System (PDS) in India: Functioning, Limitations, Initiatives

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The Public Distribution System, India’s landmark food security system, was commenced in 1944 to address the poverty that was affecting the country during that time. It is a vital instrument that ensures the availability of certain essential commodities at an affordable price for the poor. Regardless, this system is often criticized for its inefficiency and corruption. The low-quality food grains from the ration shops are not enough to address the needs of the poor. India has the largest stock of grains in the world besides China. Yet, 21% of the Indian population remains undernourished. The government must address the corruption, inefficiency and low-quality food grains of the PDS for its success.

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What is PDS?

  • Public Distribution System is a government-sponsored chain of shops that are entrusted with the distribution of basic food and non-food commodities to the needy at a cheap rate.
  • Wheat, rice, kerosene, sugar are the major commodities distributed through the PDS.
  • Some states/UTs also distribute other commodities like pulses, edible oils, iodized salt, etc.
  • It was established under the Ministry of Consumer Affairs, Food, and Public Distribution.
  • It is managed under the joint responsibility of the Central government and the State governments.
  • Food Corporation of India under the Central Government is in charge of the procurement, storage, transportation and bulk allocation of food grains to the State governments.
  • The State Governments are responsible for the identification of the beneficiaries, allocation of the goods within the State, issuing of ration cards and management of the Fair Price Shops, etc.

Evolution of PDS in India

  • The PDS originated from the “rationing system” that was introduced by the British during the Second World War.
  • Before the 1960s, distribution through the PDS was dependent on the imports of the food grains.
  • It was further developed in the 1960s to address the food deficits within India.
  • Consequently, the government had established the Agriculture Price Commission and the FCI to improve the nation’s capacity to procure and store food grains for PDS.
  • In the 1970s, PDS was developed into a universal scheme for the distribution of subsidized commodities to all the citizens.
  • Till 1992, PDS was a general entitlement scheme to all citizens without any specific target.
  • The Revamped Public Distribution System (RPDS) was launched in 1992 to strengthen and streamline the PDS.
  • It also aimed to reach the beneficiaries in the isolated areas where a considerable number of poor are present.
  • The Indian government had launched the Targeted Public Distribution System (TPDS) in 1997.
  • Under this new system, the beneficiaries are categorized into two groups:
  • Households that are Below Poverty Line (BPL)
  • Households that are Above Poverty Line (APL)
  • In 2000, Antyodaya Anna Yojana (AAY) was launched in 2000 for the “poorest of the poor” to provide them with food at a highly subsidized rate. This scheme was expanded twice in 2003 and 2004. The families that are recognized under this scheme are given a unique “Antyodaya Ration Card”. This card, also known as the PDS yellow card, acts as a form of identification to receive the level of rations the card describes.
  • National Food Security Act, 2013 was enacted in September 2013. This Act provides legal entitlement to the poor through the existing TPDS.
  • This shows the shift of making the right to food a justifiable right.

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How does it work?

  • The Central government and the State Governments share the responsibility of providing subsidized commodities to the beneficiaries under the Targeted Public Distribution System.
  • The Centre is responsible for procuring grains from the farmers at a Minimum Support Price (MSP).
  • Then the procured grains are sold at the central issue prices.
  • The Centre is also in charge of transporting the goods to the godowns of the States.
  • The States are responsible for transporting the commodities from these warehouses to each of the ration shops, where the beneficiaries buy the commodities at a centrally issued price.
  • The States may further reduce the price of the commodities that are sold in the ration shops.

Why is it important in India?

  • It is an important tool used by the government to ensure Food and Nutrition Security.
  • It ensures the availability of food grains to the poor at an affordable rate.
  • The systems of MSP and procurement of food grains by the government has provided financial security to the farmers.
  • It allows maintenance of the buffer stock of food grains so that the flow of food is not affected even when there is lesser return from the agricultural sector.
  • It ensures the transfer of grains by supplying them from regions that has surplus to the region which does not have enough grains to distribute to all the beneficiaries.

What are the issues with regard to the PDS System in India?

  • Recognition of beneficiaries: The targeting mechanisms like TPDS have made errors in the inclusion of the beneficiaries. Many of the needy are left out while those who do not need it are getting excessive benefits. According to the estimates in 2009, PDS was hurt from nearly 61% exclusion and 25% inclusion of the beneficiaries. This is due to the misclassification if the poor and non-poor.
  • Loss of food grains: This may be due to transportation leakage. The losses occur when the food grains are transported to and from ration shops into the open market. The Planning Commission found 36% leakage of PDS rice and wheat at the national level.
  • Procurement: Open-ended Procurement, that is, all the incoming grains are accepted even when there is a surplus in the buffer stock has created a shortage in the open market, not allowing for the growth of the related industries.
  • Corruption: The Food Corporation of India, the government body that manages PDS, is often blamed for its inefficiency and rural-urban bias. It has not been able to fulfill its objective for which it was established. It is often criticized for its corruption and black marketing.
  • Storage issues: A performance audit by Comptroller and Auditor General had revealed the serious limitations in the government’s storage capacity. The increased procurement by the government is increasing the rotting of food leading to get wasted. The lack of sufficient covered storage has created concerns over the quality of food that is stored.
  • Discourages diversification: The provisions like MSPs have encouraged the farmers to cultivate more of rice and wheat rather than that of coarse grains, the ones that are consumed by the poor. This has prevented the diversification of crops.
  • Overexploitation: Due to the increased emphasis on attaining self-sufficiency and surplus, it has led to over-consumption of water and land degradation. It has led to unsustainable agricultural practices. It is causing environmental stresses like groundwater depletion, deteriorating soil, and water pollution due to the use of fertilizers. It was found that due to the cultivation of rice in north-west India, the water table had come down by 33 cm per year between 2002 and 2008.

What are the reforms made in the PDS system in recent years?

  • Aadhar: The linking of Aadhar with the TPDS had helped improve the accuracy in identifying the beneficiaries under the TPDS. According to the study by the Unique Identification Authority of India, the use of Aadhar had helped eliminate fake beneficiaries and make identification easier and accurate.
  • Universal PDS: The Government of Tamil Nadu had implemented Universal PDS that allowed every household in Tamil Nadu to obtain subsidised grains.
  • Technological reforms of TPDS: Wadhwa Committee, which was appointed by the Supreme Court, found that certain state governments made use of new technologies to make TPDS more efficient.
  • Digitization of Ration Cards had allowed for the online entry and verification of the beneficiaries. The states that have this capacity include Andhra Pradesh, Tamil Nadu, Chhattisgarh, Madhya Pradesh, Karnataka, etc.
  • Computerized allocations to Ration Shops had allowed for quick and efficient tracking of the transaction of grains to the ration shops within the states. The states that are implementing these reforms include Chhattisgarh, Delhi, Madhya Pradesh, Tamil Nadu, etc.
  • Smart Cards are being issued instead of the ration cards by several states like Haryana, Andhra Pradesh, etc. Through this reform, the data of the beneficiaries are stored in the secured electronic devices. It ensures transparency and prevents instances of counterfeiting.
  • GPS is used to track the movement of trucks that carry goods for the FPS from the state warehouses.
  • The governments like Tamil Nadu, Chhattisgarh, and Uttar Pradesh have ensured the registration of the beneficiaries’ mobile numbers so that they (beneficiaries) can receive alerts during the dispatch and arrival of TPDS commodities.

What can be the way forward?

  • PDS is one of the innovative welfare schemes of the Indian government. It had ensured food security to the poor while also providing financial security to the farmers.
  • The use of innovative technologies to implement this momentous scheme can help address certain limitations and drawbacks like corruption and food wastage.
  • States are thinking of shifting to Direct Benefit Transfer. The Economic Survey 2016-17 had called for caution and better infrastructure development before replacing subsidized PDS with Direct Benefit Transfer.
  • Training and Skill development of the implementation authorities are essential to enhance the existing capacity of the TPDS.
  • The government must encourage the participation of SHGs, cooperatives, and NGOs to ensure transparency and accountability in the existing system of TPDS at the grass-root level.
  • The government must ensure the diversification of procurement by buying coarse grains so that the diet of the people is diversified and not wheat or rice-centric.


PDS is an efficient tool to address poverty and malnutrition within the country. The government must ensure that the existing system’s performance and efficiency are improved by promoting innovative technologies and diversification of goods. This allows for transparency and accountability of the government and a healthy lifestyle for the poor.

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