Indian Govt to spend INR 884 crore on end to end computerization of public distribution system

“For every Rs 4 spent on the PDS, only Rs 1 reaches the poor. 57% of the PDS food grain does not reach the intended people” – Computerization of PDS will help minimize this inefficiency.

To improve state of Public Distribution System and make its reach more effective, the Government of India has planned end-to-end computerization of Targeted Public Distribution System (TPDS) with an outlay of Rs. 884.07 crore .

India’s Public Distribution System (PDS) with a network of 4.78 Lakh Fair Price Shops (FPS) is one of the largest retail system and currently, under PDS scheme, each family below the poverty line is eligible for 35 kg of rice or wheat every month, while a household above the poverty line is entitled to 15 kg of foodgrain on a monthly basis.

“For every Rs 4 spent on the PDS, only Rs 1 reaches the poor”
“57% of the PDS food grain does not reach the intended people”

The plan consists of digitization of rations cards/beneficiary and other databases, computerization of supply-chain management, setting up of a website for bringing transparency  and effective grievance redressal mechanisms.

While digitisation of beneficiary database aims to help government in weeding out the bogus ration cards and better targeting of subsidies, with computerization of supply-chain, the movement of foodgrains upto Fair Price Shop (FPS) level can be tracked and the problem of leakage and diversion can be addressed.

According to a study conducted by Planning commission (link), about 58% of the subsidized food grains issued from  the central government do not reach the BPL families because of identification errors, non-transparent operation and unethical practices in the implementation of TPDS. For one rupee worth of income transfer to the poor, the Gol spends Rs.3.65, indicating that one rupee of budgetary consumer subsidy is worth only 27 paise to the poor. About 57% of subsidized grains does not reach the target group, of which a little over 36% is siphoned off the supply chain.

Under the new policy, facilities of SMS, e-mails, toll free numbers will be used to inform the beneficiary about the availability of the TPDS supplies in the FPS, which will ensure timely and transparent distribution of foodgrains to beneficiaries as per their entitlement. Transparency portal and social audit aims to strengthen the functioning of FPSs and ensure accountability at various levels. Beneficiaries will also be able to register their grievances through proposed cell having toll free numbers. Digitisation of beneficiary database and computerization of supply-chain are expected to be implemented by March, 2013 and October, 2013 respectively.

Interestingly, Bihar government has already implemented computerized information of PDS (link) in Gaya which is fully automated and computerized with inventory and asset management to contain storage loss, pilferage, theft and black marketing

– Recommended read: For more information about computerization of TDPS, click here.

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