Public distribution system (PDS) is a system for distribution of food grains and essential commodities for poor at subsidized prices. Central and state governments jointly manage the PDS. Center makes procurement, storage and bulk allocation through Food Corporation of India (FCI). States take operational responsibility such as identification of beneficiaries through ration cards and last-mile delivery through fair price shops.

As per experts, many of the issues in PDS are a result of the problems in FCI as discussed below:

1. Rice-Wheat Bias:
2. a) PDS distribution as well as FCI procurements are biased towards rice and wheat.
3. b) Low priority towards millets, vegetables, dairy for FCI harms nutrition security through PDS’ basket of items.
4. Storage Infrastructure: The period of purchase-and-distribution window under PDS is constrained on account of poor storage infrastructure of FCI.

E.g., 1-month limit from end of harvesting period for purchase of coarse-grains.

3. Public Stockholding: Requirement to serve 67% of the population under PDS (as per NFSA) and open-ended procurements by FCI create large public food stocks. Resulting subsidies and off-budget lending overburden public finances.
4. Quality: The first-in-first-out (FIFO) principle of grain distribution results in poor quality grains in dormant old stocks, which ends up in PDS. 

E.g., poor quality rice in midday meals.

5. Supply chain issues: There are leakages to the black market along with transit and storage loss.

E.g., sufficient food to feed 8.2 crore people was wasted over 2016-2020 period.

6. Role of States: Decentralized procurement scheme for efficient procurement and distribution has had lukewarm response from states. As per a report by Parliamentary Standing Committee, only 15 states have implemented DCP for rice and 8 states for wheat.

But despite the related challenges, some of the issues in PDS are also distinct from FCI such as:

1. PDS suffers from inclusion-exclusion errors.
2. Portability challenges result in exclusion of migrants.
3. Digital Barriers exist. 

E.g., failure of biometrical authentication due to unclear fingerprints.

4. Food stockholding issues is not due to PDS as Food Stocks at FCI (50-90 million ton) are far in excess of requirements under NFSA (26 million ton).

Following measures can help address the issues:

1. Diversification: FCI’s purchases and distribution under PDS must shift towards non-rice, non-wheat crops, such as millets and vegetables.
2. Decentralized Procurement Scheme: As per Shanta Kumar Committee’s recommendations procurement function in rice and wheat should be handed over to states in gradual manner.
3. Universalization of distribution under PDS and assured procurement for all crops under FCI should be pursued. Crop-basket of MSP-regime may need to be narrowed to avoid unsustainable fiscal burden.
4. The private sector’s role should be expanded such as under Private Entrepreneurs Guarantee (PEG) scheme for storage infrastructure, promotion of FPOs etc. SHGs must be used to distribute local cuisines-based food in PDS.
5. Technological Interventions: Issues such as leakages, poor price realization, inclusion exclusion can be addressed through technology.

E.g., GPS-tracking, direct-benefit transfers, digital vouchers such as e-RUPI etc.

Reforms in PDS as well as FCI are long due. Capacity-augmentation, decentralization and technological overhaul are the needs of the hour to address the inherent challenges.