Public Distribution System

Public Distribution System

India had built the largest, though not necessarily the strongest, PDS in the world. Public Distribution System (PDS) hailed as a means of distribution of essential commodities to a large number of people forms an important constituent of the strategy for poverty eradication and intends to serve the undernourished. With a network of more than 400,000 Fair Price Shops (FPS), the Public Distribution System (PDS) in India is perhaps the largest distribution machinery of its type in the world. PDS is said to distribute each year commodities worth more than Rs 15,000 crores to about 16 crore families. This huge network can play a more meaningful role if only the system is able to translate into micro level a macro level self-sufficiency by ensuring availability of food grains for the poor households.

Why an priority issue

  1. Decline in purchasing power of poor because of structural imbalances in the economy:
    1. Rising capital intensity,
    2. lack of land reforms,
    3. failure of poverty alleviation programmes,
    4. growing disparity between towns and villages, and like that.
  2. production problems in less endowed regions,
  3. Huge pile-up inside Food Corporation of India’s (FCI) godowns,
  4. If consumption of the poor does not increase there would be serious demand constraints on agriculture and could make the growth target of 4.5% per annum unachievable.

Implementation of TPDS

As per the mandate of PDS, the Union Government is responsible for the procurement, transportation and bulk allocation of food grains whereas the State government looks after the allocation, identification of Below Poverty Line (BPL)families and issue of ration cards, as well as monitoring the distribution process. Off late, the Gram panchayats have also been involved to improve the functioning ofPDS to verify the entries of items of PDS made in the stock registers of the fair priceshops of the State Food and Supplies Department. But in the whole set up of overlapping responsibilities, PDS is no one’s baby. It has been left to operate on the whims and fancies of the depot holders; and with the lack of awareness and empowerment within the community, the situation is further deteriorated.


PDS was criticised on a widefront:
1) its failure to serve the population Below Poverty Line (BPL),
2) for its perceived urban bias,
3) negligible coverage in States with a high density of rural poor and
4) lack of transparent and accountable arrangements for delivery.


Given that backdrop, the Government acted to streamline PDS during the Ninth Five Year Plan period by issuing special cards to BPL families and selling to them foodgrains through PDS outlets at specially subsidised prices (with effect from June, 1997).


Under the new Targeted Public Distribution System (TPDS)
A BPL card holder should be given 35 kg of foodgrain and the card holder above BPL should be given 15 kg of food grain as per the norms of PDS.
This is likely to benefit about six crore poor families, to whom a quantity of about 72 lakh tonnes of food grains per year is earmarked.


The identification of the beneficiaries is done by the States, based on state-wise poverty estimates of the Planning Commission.
The thrust is to limit the benefit to the truly poor and vulnerable sections:
landless agricultural labourers,
marginal farmers,
potters, tappers,
carpenters in the ruralareas;
similarly those covered by TPDS in urban areas are – slum dwellers and
peopleearning livelihood on a daily basis in the informal sector like the porters and rickshawpullers and
hand cart pullers,
fruit and flower sellers on the pavements, etc.

Other problems associated with the scheme are:
¾ The poor do not have cash to buy 20 kg at a time, and often they are notpermitted to buy in instalments.
¾ Low quality of foodgrains – inferior quality
¾ Weak monitoring, lack of transparency and inadequate accountability ofofficials implementing the scheme
¾ Price charged exceeds the official price by 10% to 14%.
Illicit fair price shop owners have been found to create large number of bogus cards to sell food grains in the open market.
Many FPS dealers resort to malpractice, illegal diversions of commodities, hoarding and black marketing due to the minimal salary received by them.
Numerous malpractices make safe and nutritious food inaccessible and unaffordable to many poor thus resulting in their food insecurity.
Identification of households to be denoted status and distribution to granted PDS services has been highly irregular and diverse in various states. The recent development of Aadhar UIDAI cards has taken up the challenge of solving the problem of identification and distribution of PDs services along with Direct Cash Transfers.
Regional allocation and coverage of FPS are unsatisfactory and the core objective of price stabilization of essential commodities has not met.


To improve the current system of the PDS, the following suggestions are furnished for:

  1. Vigilance squad should be strengthened to detect corruption, which is an added expenditure for taxpayers.
  2. Personnel-in-charge of the department should be chosen locally.
  3. Margin of profit should be increased for honest business, in which case the market system is more apt anyway.
  4. F.C.I. and other prominent agencies should provide quality food grains for distribution, which is a tall order for an agency that has no real incentive to do so.
  5. Frequent checks & raids should be conducted to eliminate bogus and duplicate cards, which is again an added expenditure and not fool proof.
  6. The Civil supplies Corporation should open more Fair Price shops in rural areas.
  7. The Fair Price dealers seldom display rate chart and quantity available in the block-boards in front of the shop. This should be enforced.

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