Targeted PDS

The Targeted Public Distribution System (TPDS) was launched by the Government of India in June 1997. It marked a strategic shift from the “Universal PDS,” which provided subsidized foodgrains to all citizens regardless of income, to a “Targeted” approach aimed at focusing resources on the poor. The system is managed under the joint responsibility of the Central and State Governments to ensure that the “Right to Food” is translated into reality for the most vulnerable sections of society.

Institutional Framework and Evolution

TPDS operates under the administrative control of the Ministry of Consumer Affairs, Food and Public Distribution. Its evolution is defined by the transition from general welfare to precise socio-economic targeting.

• Universal PDS (Up to 1992): Distributed food to everyone; criticized for being urban-biased and failing to reach the poorest.
• Revamped PDS (1992–1997): Launched in 1775 blocks located in drought-prone, tribal, and hilly areas to strengthen the supply chain in difficult terrains.
• Targeted PDS (1997–Present): Introduced the distinction between Below Poverty Line (BPL) and Above Poverty Line (APL) households based on the Lakdawala Committee’s poverty estimates.

Functional Mechanism: Joint Responsibility

The efficiency of TPDS relies on a bifurcated governance structure:

Role of the Central Government

• Procurement: Buying foodgrains (Wheat, Paddy, Coarse Grains) from farmers at Minimum Support Price (MSP) through the Food Corporation of India (FCI).
• Allocation: Determining the quantity of foodgrains for each State/UT based on the number of identified beneficiaries.
• Logistics: Transporting grains to the “Central Godowns” in each state.

Role of State Governments

• Identification: Identifying eligible households based on specific socio-economic criteria.
• Licensing: Issuing licenses to Fair Price Shop (FPS) owners and monitoring their operations.
• Last-Mile Delivery: Moving grains from state godowns to the FPS and ensuring distribution to ration cardholders.

Categorization of Beneficiaries and Entitlements

Under TPDS, and subsequently aligned with the National Food Security Act (NFSA) 2013, beneficiaries are categorized to prioritize the depth of the subsidy.

Pricing Structure: Central Issue Price (CIP)

The Central Issue Price is the price at which the Central Government provides foodgrains to the States for distribution. These prices are significantly lower than the “Economic Cost” (the total cost of procurement, storage, and transport incurred by the FCI).

• AAY/PHH Prices: Under NFSA, grains are provided at highly subsidized rates: Rice at ₹3/kg, Wheat at ₹2/kg, and Coarse Grains at ₹1/kg.
• Food Subsidy: The gap between the Economic Cost and the CIP is borne by the Union Budget as the “Food Subsidy,” which is one of the largest components of India’s revenue expenditure.

Major Reforms in TPDS

To eliminate leakages, “ghost” ration cards, and diversion of grains to the open market, several technological and policy reforms have been integrated into TPDS.

End-to-End Computerization

• Digitization of Database: States have digitized nearly 100% of ration card data, enabling the removal of millions of fake or duplicate cards.
• Online Allocation: Transparency in the movement of foodgrains from FCI to FPS through web-based portals.

Aadhaar Seeding and Biometric Authentication

• e-POS Devices: Electronic Point of Sale devices are installed at Fair Price Shops. Grains are only issued after successful biometric (fingerprint or iris) authentication of the beneficiary.
• Elimination of Intermediaries: This prevents the “diversion” of foodgrains where FPS owners might otherwise sell subsidized grain in the black market.

One Nation One Ration Card (ONORC)

• Portability: This reform allows beneficiaries, especially migrant workers, to claim their foodgrains from any FPS across India. It breaks the “geographical tie” of a ration card to a specific shop.

Challenges and Bottlenecks

Despite its scale, TPDS faces structural issues that impact its efficacy:

• Inclusion and Exclusion Errors: Inclusion errors (wealthy people getting BPL cards) lead to subsidy leakage, while exclusion errors (eligible poor left out) lead to malnutrition.
• Nutritional Focus: The system is “Cereal-centric,” focusing mostly on wheat and rice. This fails to address “Hidden Hunger,” which requires proteins (pulses) and micronutrients.
• High Carrying Costs: The FCI maintains stocks much higher than the buffer norms, leading to massive interest and storage costs that inflate the food subsidy bill.
• Regional Imbalances: Procurement is heavily concentrated in states like Punjab, Haryana, and Andhra Pradesh, while consumption needs are higher in Bihar, Uttar Pradesh, and Odisha.

Factsheet for UPSC Prelims

• Legal Backing: Since 2013, TPDS operations are governed by the National Food Security Act (NFSA), making the right to food a legal entitlement.
• Identification Authority: The identification of BPL families is done by the States/UTs, but the Central Government (based on Planning Commission/NITI Aayog estimates) sets a ceiling on the total number of beneficiaries.
• Head of Household: For the purpose of issuing a ration card, the eldest woman of the household (18+ years) is considered the Head of the Household.
• Wadhwa Committee: This High-Powered Committee was appointed by the Supreme Court to look into the maladies of the PDS and recommended complete computerization and the use of GPS for tracking trucks.
• DBT in PDS: Direct Benefit Transfer (Cash instead of grain) has been piloted in Chandigarh, Puducherry, and Dadra & Nagar Haveli.