The government has made efforts to invest in digitalisation in critical areas linked to PDS.

By Gaurav Taneja & Muralidhara Honnur

The government announced the ‘one nation, one ration card’ scheme amid the Covid-19 crisis to address food security challenges. The scheme is expected to benefit 67 crore people in 23 states by August 2020 and all eligible beneficiaries pan-India by March 2021.

The government had the confidence to announce the above plan based on work done on the public distribution system (PDS) over the years. PDS was stress-tested at the start of the crisis when the government launched a food security mission under Pradhan Mantri Garib Kalyan Anna Yojana for distributing free ration to beneficiaries for three months starting April 2020. The government had near-accurate data of impacted communities, stock positions of foodgrains in warehouses the ability to ensure accurate targeting (through Aadhaar authentication) of beneficiaries. Two months into this mission, it is clear PDS has delivered.

Technology backbone supporting the ‘now’ phase The government has made efforts to invest in digitalisation in critical areas linked to PDS. For years, Targeted PDS (TPDS) was inundated with several malpractices that prevented government benefits from reaching the intended beneficiaries, and lack of real-time information made it difficult for the authorities to monitor delivery of benefits. Investments were needed to strengthen the system. That’s where the National Food Security Act (NFSA) came in, by providing Rs 170/tonne as incentive to undertake automation of fair price shops (FPS). The Centre also strengthened ‘end-to-end computerisation’ to provide the IT backbone for FPS automation.

The Centre and states started strengthening TPDS under four pillars: ration cards, supply chain operations, FPS operations and grievance redressal with the National Informatics Centre (NIC) as tech partner. It resulted in digitalisation of ration cards, visibility of stock positions at warehouses, online transactions at FPS with biometric authentication for ration distribution, and most importantly beneficiaries could lodge grievances online and through IVR directly with the government. These initiatives led to timely availability of foodgrains at FPS, targeted beneficiaries availing their entitlements, and elimination of bogus beneficiaries.

This success has led to ‘one nation, one ration card’ and initial trials have shown good results. National portability plays a major role in assuring the poor that they can access their entitlements wherever they are; different family members can also draw ration at different location based on overall entitlement. This will be true game-changer.

The ‘next’ and ‘beyond’ phase—digitalisation of TPDS
Digitalisation has played a major role in PDS, but given the advancements in technologies and stakeholders’ appetite to adopt, there are areas that can be easily targeted by the government in the next phase.

Digital payments: It has seen a quantum jump with infrastructure developed by both public and private enterprises. The government should look at driving digital payments for FPS purchases as it moves PDS towards demonstrating transparency and popularising Jan-Dhan bank accounts and the wallets system. This would go a long way in ensuring the entitlements reach the beneficiaries, and the ability of the government to reach out to them with multiple services including universal income guarantee.

Modernisation of supply chain: Two critical components of PDS are quality of foodgrains and timeliness of distribution. Much needs to be done to digitalise procurement, storage and movement of goods along with modernisation of physical infrastructure. The government should explore options for private investments in this area, given the recent announcements by the finance minister in strengthening the post-farmgate infrastructure.
Enhance food basket: Growth in rural economy is expected to increase disposable incomes. Food being at the top of the value chain (roti, kapda and makaan), families are expected to increase spend on pulses and other food items. The government can explore the possibility of increasing food basket at FPS by connecting its digital platforms with e-commerce platforms.

Mobile platform: The government, as part of digitisation of physical data, can explore the possibility of sharing this data with the right stakeholders as per guidelines from MeitY. This would fuel innovation at multiple levels and enhance quality of information services that can be provided to beneficiaries and intermediaries without impacting data privacy.

We see a clear roadmap with benefits for all the stakeholders, and all that is required is a proactive approach by the government.

Authors are partners, Government & Public Sector, EY India