General Studies Paper 3 (Indian Economy): Public Distribution System in India

Public Distribution System

IAS Junior Mains Answer Writing June-Sep 2019 Schedule (Click Here)


Syllabus: General Studies Paper 3 (Indian Economy)


Discuss the importance of Public Distribution System in India and also explain the challenges involved and reforms required to overcome these challenges.



The Public Distribution System (PDS) evolved as a system for distribution of food grains at affordable prices and management of emergency situations. Over the years, the term PDS  has become synonymous with the term ‘food security’ and also an important part of Government’s policy for management of food economy in the country.



The PDS of India was established by the Government of India under the Ministry of Consumer Affairs, Food and Public Distribution and these are managed jointly by the State and the Central Governments of India. The Public Distribution System of India was launched in India in June 1947.

The introduction of Public Distribution System is meant to manage the food system of the country. This scheme provides staple food grains such as wheat, dal, sugar, salt, kerosene etc through a network of public distribution shops in the whole country.  

Importance of Public Distribution System

  • Public distribution system has helped in stabilizing prices of the food grain and making food available to poor people at affordable prices.
  • Helped to ensure that the poor section of society also have the access to the food. 
  • It maintains the buffer stock of food grains in the warehouse so that the flow of food remains active even during the period of less agricultural food production.
  • Food grains are directly purchased from farmers, assuring farmers with a greater price.
  • The PDS distributes the commodities more than Rs 30,000 Crore annually to about 160 million families. 

Challenges before the Public Distribution System

The PDS systems have quite a lot of problems and are often criticised for its performance towards the public benefits. There are millions of ineligible and fraudulent ration cards and at the same time, the poor families have no ration card. The PDS shop owners get involved in the scams along with the Government officials and divert the subsidized food supply and kerosene to the black market.

Limited Benefit to Poor Through PDS

  • The people staying in the rural region have a limited supply of the PDS benefits.
  • It is because the PDS is more dependent on the open market and is much higher than on the PDS for most of the commodities.
  • “The cost-effectiveness of reaching the poorest 20 percent of households through PDS cereals is more”.

Issue of Urban Bias

  • The Urban places have more reach to the PDS benefits and facilities than rural places. There is an insufficient coverage in the poor cities and villages.

Issues with procurement

  • Open-ended Procurement: All incoming grains accepted even if buffer stock is filled creating a shortage in the open market.
  • The recent implementation of Nation food security act would only increase the quantum of procurement resulting in higher prices for grains.

Storage of food grains

  • Inadequate storage capacity with FCI.
  • Food grains rotting or damaging on the CAP or Cover & Plinth storage.

Allocation of food grains

  • Inaccurate identification of beneficiaries.
  • Illicit Fair Price shops: The shop owners have created a large number of bogus cards or ghost cards(cards for non-existent people) to sell food grains in the open market.

Leakages from PDS

Another major issue is the problem of leakages from the losses of transportation and storage and diversion to the open market. This issue rises due to the diversion of food grains to the open market of the widespread of the corrupt practices.


Reforms to overcome these challenges

The need of the hour is PDS reforms to ensure that public distribution functions the way it is intended. Technology based reforms play a very important. The government has taken certain measures to improve the food security system (PDS) and prevent it from corruption, leakage, and diversion in PDS rations.

  • Aadhaar Enabled Beneficiary
    • The bank accounts and the ration cards are linked to the Aadhaar cardand the Government has made it mandatory.
    • This procedure will help to differentiate and identify the genuine person and eligible beneficiaries and prevent from the ineligible and duplicate person from registering.
  • Aadhaar Enabled Direct Benefit Transfer
    • The Aadhaar- enabled service delivery helps to prevent from corruption in retail by directly crediting the benefit money in the beneficiary’s account. This technique is called as Direct Benefit Transfer (DBT).
    • This removes the fraud and ineligible beneficiaries. Various financial and other services have been Aadhaar enabled.
  • Aadhaar Enabled in Eligibility Check
    • The Aadhaar applicant enabled eligibility is checked by comparing the service delivery database with another database.
    • Like for an example: PDS Kerosene eligibility is checked by comparing the PDS Database with the LPG Database.
    • The subsidy of the Kerosene allocation will be reduced if the subsidy is detected for that household.
  • Introduction To E-Ration Card Services
    • With the help of e-Ration service, one can obtain the ration cards and check their food grain availability online, and check their costs.
    • This will help to end corrupt practices and help to provide cards to those who are in need.
    • The Department of Food Supplies and Consumer Affairs website provides the eligibility details and the food security plan. The service was first introduced in Delhi and was later followed by the State of Government of Tamil Nadu.
  • Use of GPS technology
    • Use of Global Positioning System (GPS) technology to track the movement of trucks carrying food grains from state depots to FPS which can help to prevent diversion.
  • SMS-based monitoring:
    • Allows monitoring by citizens so they can register their mobile numbers and send/receive SMS alerts during dispatch and arrival of TPDS commodities.
  • Use of web-based citizens portal
    • Public Grievance Redressal Machineries, such as a toll-free number for call centres to register complaints or suggestions.
  • Computerized Fair Price Shops
    • FPS automated by installing ‘Point of Sale’ device to swap the ration card. It authenticates the beneficiaries and records the quantity of subsidized grains given to a family.
  • One nation one ration card
    • The Indian Government had planned  to roll out the one nation one ration card to digitise its public distribution system(PDS).
    • One nation one ration card’ which will ensure all beneficiaries, especially migrants, can access PDS (public distribution system) across the nation from any ration shop of their own choice.
    • This move will provide freedom to the beneficiaries as they will not be tied to any one ration shop and reduce their dependence on shop owners and curtail instances of corruption.
    • Biggest beneficiary of this will be those migrant labourers who move to other states to seek better job opportunities and will ensure their food security”.
    • The IMPDS will be a real time database — inspired and augmented  from the government’s Goods and Services Tax Integrated Management (GSTIN).
    • Integrated Management of PDS (IMPDS) will curtain corruption in the system by removing the chances of duplication. 
  • Strengthening of PDS not only requires computerisation of operations but also an active involvement of Panchayati Raj Institutions and local community through transparent and open processes.
  • A strong community ownership would require the setting up of a responsive grievance redressal mechanism.
  • The Common Service Centres set up in various States should be optimally used and the support of multi-lateral organizations like World Food Programme (WFP) could be taken for capacity building and spreading of awareness among the stake holders.
  • The Government needs to develop a dynamic agriculture sector keeping in mind that the Public Distribution System can cover the needs of the growing population making it more convenient and more public oriented so as to achieve the main target of issues regarding the Food Security system.
  • It is our responsibility that the legal entitlement made to deserving beneficiaries is honoured and efficiently delivered. All States and UTs should undertake modernization of PDS in a time bound manner.



The importance of PDS in India lies in the fact that it allows the poor to purchase food grains from the government  at prices lower than the market rate while also allowing farmers to sell their crop directly to the government as per a pegged ‘fair price’. Information technology should be used right from the time of purchase of food grains till distribution to increase overall efficiency and curb corruption. End to end computerization would bring in transparency in the whole process. It would help to prevent leakages and diversion of food grains to a great extent.


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