In this blog post, we discuss the processes involved in the last-mile delivery of Aadhaar-enabled Public Distribution System (AePDS) in five states of Southern India namely, Tamil Nadu, Karnataka, Kerala, Andhra Pradesh, and Telangana. We highlight the differences in protocols followed in each state and the implications they may have on the quality of delivery. For our analysis, we rely on each state’s official PDS guidelines and secondary evidence available in the public domain. We also summarise the various rules and protocols in greater detail here.
The Public Distribution System (PDS) in India is an important part of the social protection system which provides essential food commodities to targeted households at subsidized rates[1]. In 2013, food subsidies became a legal entitlement for targeted households[2] under the National Food Security Act (NFSA)[3]. The Act also provided for end-to-end computerisation of PDS to ‘ensure transparency and better targeting through Aadhaar’[4]. It is against this backdrop that we explore both back-end and citizen-interface processes to comment on the delivery architecture currently in place under PDS.
Back-end Processes under PDS
Instances of allotted entitlements being pilfered or diverted to open markets by underselling to beneficiaries have been well documented in various studies[5]. End to end computerisation in PDS was introduced with the aim of reducing these leakages in the supply chain[6]. It entailed digitisation of beneficiary records, tracking the movement of food grain stock, and setting up of transparency portals and grievance redressal mechanisms[7]. Each of the five states follows different computerisation mechanisms in the supply chain in order to control leakages. For instance, Karnataka maintains a supply chain monitoring software called Financial and Stock Accounting System (FIST) to trace the amount of grains received in the PDS godowns and lifted by the ration dealers[8]. This keeps track of food grains allotted and utilised every month, reducing the probability of leakages. However, this system is inadequate as the software was not utilised in all godowns and food inspectors preferred to rely more on manual records[9]. Kerala introduced a similar software, ‘Allocation 2.0’[10] to manage transactions and allocations to ration shops. The system falls short as it fails to monitor the entire supply chain. There is no biometric authentication of individuals involved in the transfer of food grains from Food Corporation of India (FCI) to local godowns and FPSs, raising questions of accountability in case of leakages[11]. However, a recent study highlights that attempt to reduce leakages have also generated high transaction costs and significant reductions in benefits disbursed to beneficiaries due to a process called reconciliation[i], [12].
Citizen-interface Processes under PDS
The existing Targeted PDS (TPDS)[ii] has also been criticised for its poor targeting protocols as it has resulted in an increase in exclusion errors[13]. These errors occur at two stages: failure to identify and enrol an eligible citizen and failure to provide ration even when enrolled[14]. Among the five states, Tamil Nadu is the only state that follows Universal PDS (UPDS)[iii] while all other states have shifted to TPDS. AePDS follows Aadhaar Based Biometric Authentication (ABBA), where beneficiaries provide their biometrics for authentication in the e-Point of Sale (ePoS) machine. After successful authentication, the FPS officer (FPSO) selects commodities based on the beneficiary’s entitlement displayed and weighs them[15]. All four states practice biometric authentication except Tamil Nadu which offers smart cards with QR-codes followed by OTP verification. A few villages in Karnataka disburse grains in two phases, authentication in first 3-5 days and disbursement in the next 1-3 days due to connectivity issues[16]. Tamil Nadu, which practices UPDS and non-biometric authentication is less likely to experience exclusion errors, during authentication[17] or identification[18].
Since PDS works on ABBA, it is imperative to ask whether states provide an alternate mechanism in case of a biometric failure. Such alternatives ensure that those who fail to get authenticated under ABBA are not deprived of their legal entitlements. Andhra Pradesh provides one such system where the Deputy Tahsildar or Mandal Civil Supplies Officer (MSCO) may authenticate on behalf of the beneficiaries if biometric authentication fails[19]. In Telangana, if any beneficiary is denied ration due to unavailability of grains or for any unforeseen reasons, the state offers food security allowance in lieu of ration[20]. However, there is no documented evidence of such a practice taking place regularly. Further, Karnataka introduced coupon-based authentication in 2016 which allows beneficiaries to generate coupons online which can then be used at FPS for authentication[21].
Given the various points of exclusion in PDS which may lead to denial of ration, it is important to have a citizen-centric grievance redressal system to allow beneficiaries to resolve such errors. Section 14 of the NFSA provides for an internal grievance redressal mechanism which includes helplines and online portals. All five states offer offline and online portals[22] for beneficiaries to lodge grievances and view their complaint status. Andhra Pradesh and Kerala seem to have a more transparent system as they display the live count of complaints received and processed under each category[23]. Studies conducted to assess the system in Karnataka and Telangana show that despite the presence of grievance redressal mechanisms, most beneficiaries are unaware of them, resulting in underuse[24]. It was also reported that grievance redressal systems are almost non-functional, in that the complaints were not processed or contact numbers of concerned authorities not updated[25].
Any system for delivering welfare provisions must ensure that the benefits reach the most vulnerable households without disruption. Leveraging Aadhaar may eliminate undeserving citizens but may also exclude deserving citizens from being successfully identified and authenticated. A preliminary scan of these aforesaid delivery protocols reveals significant differences between the five states and gaps in the implementation of AePDS. With shocks such as COVID-19 showing just how important PDS as a safety net[26] is, it is crucial that states address such gaps in their delivery systems to ensure food grains reach the vulnerable.
The full compilation is available here.
[1] Khera, R. (2017). Impact of Aadhaar in welfare programmes. Retrieved from SSRN 3045235: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3045235
[2] According to NFSA, only two categories of citizens are identified as beneficiaries, namely Priority Households (PHH) and Antyodaya Anna Yojana (AAY). The former refers to households which fall under the below poverty line and the later refers to households identified as landless, agricultural labourers, daily wage earners etc
[3] Balani, S. (2013). Functioning of the Public Distribution System. Retrieved from PRS India: https://www.prsindia.org/policy/discussion-papers/functioning-public-distribution-system
[4] National Food Security Act (2013). Retrieved from Department of Food and Public Distribution System, Government of India: https://dfpd.gov.in/fgAvAHcAcgBpAHQAZQByAGUAYQBkAGQAYQB0AGEALwBQAG8AcgB0AGEAbAAvAE0AYQBnAGEAegBpAG4AZQAvAEQAbwBjAHUAb
[5] See Overbeck, D (2016), Gulati, A., & Saini, S. (2015), Drèze, J., & Khera, R. (2011).
[6] Implementation Guidelines for States and UTs. Retrieved from Department of Food and Public Distribution System, Government of India: https://pdsportal.nic.in/Files/Implementation%20Guidelines%20Finalised.pdf
[7]ibid
[8] Prakash, A., & Masiero, S. (2015). Does Computerisation Reduce PDS Leakage? Lessons from Karnataka. Retrieved from Economic & Political Weekly: https://www.epw.in/journal/2015/50/notes/does-computerisation-reduce-pds-leakage.html
[9] ibid
[10] Masiero, S. (2015). PDS computerisation: What other states can learn from Kerala. Retrieved from Ideas for India: https://www.ideasforindia.in/topics/trade/pds-computerisation-what-other-states-can-learn-from-kerala.html
[11] ibid
[12] Muralidharan, K et al., (2020). Identity verification standards in welfare programs: experimental evidence from India. Retrieved from National Bureau of Economic Research: https://www.nber.org/papers/w26744.pdf
[13] Khera, R. (2017). Impact of Aadhaar in welfare programmes. Retrieved from SSRN 3045235: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3045235
[14] ibid
[15] Radha, C et al., (2015). Aadhaar enabled PDS System (AePDS) – electronic Point of Sale (ePoS). Retrieved from Informatics, Government of India: https://informatics.nic.in/uploads/pdfs/1413826f_Pds.pdf
[16] Hundal, H et al., (2020). A Conundrum of Efficiency and Inclusion: Aadhaar and Fair Price Shops. Retrieved from Economic & Political Weekly: https://www.epw.in/engage/article/conundrum-efficiency-and-inclusion-aadhaar-and
[17] Allu, R., Deo, S., & Devalkar, S. K. (2019). Alternatives to Aadhaar based biometrics in the Public Distribution System. Retrieved from Economic & Political Weekly: https://www.epw.in/journal/2019/12/special-articles/alternatives-aadhaar-based-biometrics-public.html
[18] Anuradha, G. (2018). Public Distribution System in Tamil Nadu: Implications for Household Consumption. Retrieved from LANSA: http://59.160.153.187/sites/default/files/Public%20distribution%20system%20in%20Tamil%20Nadu%20Implications%20for%20household%20consumption.pdf
[19] Andhra Pradesh State Targeted Public Distribution System (Control) Order. (2018). Retrieved from Department of Consumer Affairs, Food & Civil Supplies, Government of Andhra Pradesh: https://civilsupplies.ap.gov.in/apcivil/Downloads/msp/01082018FCS_MS15.PDF
[20] Telangana Food Security Rules. (2015). Retrieved from Department of Consumer Affairs, Food and Civil Supplies, Government of Telangana: http://www.civilsupplies.telangana.gov.in/extrapdf/Gazette%20of%20telanganaF%20S%20Rules.27.2.16.pdf
[21] Kapoor, A., & Ravi, V. (2017). Understanding Karnataka’s Food Coupon System. Retrieved from MicroSave – India Focus Note: http://www.microsave.net/files/pdf/IFN_141_Understanding_Karnataka_s_Food_Coupon_System_3.pdf
[22] Grievance redressal mechanism for Tamil Nadu, Karnataka, Telangana, Andhra Pradesh and Kerala
[23] See Andhra Pradesh and Kerala
[24] See Ganesh, M et al., (2019), Sreedharan, S., et al, and Jayan, T. (2018).
[25] Times of India. (2020). PDS grievance redressal system is not working. Retrieved from MicroSave – India Focus Note: https://timesofindia.indiatimes.com/city/ahmedabad/pds-grievance-redressal-system-is-not-working/articleshow/76251120.cms
[26] Agrawal, N., & Ashraf, H., (2020). COVID-19 Impact on Daily Life (CIDL) Survey. Retrieved from Dvara Research Blog: https://dvararesearch.com/wp-content/uploads/2020/06/COVID-19-Impact-on-Daily-Life-CIDL-Survey.pdf
[i] Every month during grain allotment, the following month’s allocation of food grains to Fair Price Shops (FPS) are based on the previous month’s utilization and leftover. For instance, if only 85% of food grains have been disbursed by FPS in a month, the government reduces the amount of grain sent to the FPS next month by 15%. This is called reconciliation.
[ii] Under Targeted PDS, commodities are made available only to identified priority households which fall Below Poverty Line and those individuals identified as landless, agricultural labourers, daily wage earners etc. at subsidized rates.
[iii] Under Universal PDS, commodities are made available to all citizens at subsidized rates where citizens are categorized differently based on their socio-economic status.
