Targeted Public Distribution System
Food, Civil Supplies and Consumer Affairs Department

A. Problem Analysis

 1. What was the problem before the implementation of the initiative?
Targeted Public Distribution System (TPDS) is an instrument of public policy to safeguard the interests of vulnerable sections of the society from either the price shocks or supply shortages. Under this programme, the Government of India (GoI) & State Government supply essential commodities viz. wheat/millets, rice and other items at the subsidized or economic rates. However, outcome of TPDS depends on the efficiency and effectiveness of the governance framework of TPDS. Over the years, TPDS functioning has come under severe criticism due to high level of leakages/diversion in the system. One study of the Planning Commission1 concluded that 58% of subsidized food grains do not reach the Below Poverty Line (BPL) families because of the identification errors, non-transparent operations and unethical practices in the implementation of TPDS. TPDS FAULT-LINES (i) Ineffective Identity Management: Due to decentralized nature of decision making and data keeping particularly in respect of the issuance of ration cards to the card holders at the Block level quite often one comes across instances of card population in excess of the total population of that Block. In other words, there are duplicate/ bogus ration cards which not only create distortions in the allocation of essential commodities to the districts and FPS dealers but also result in diversion and leakages of such commodities. Through proper management of card holders’ identity and centralized data keeping, one can largely eliminate and prevent issue of bogus/ duplicate ration cards. (ii) Lack of Beneficiary Empowerment: Further, irrespective of the number of duplicate/bogus cards in a given FPS area and despite full allocation of the essential commodities to the FPS dealers, yet the card holders may not get timely & full delivery of essential commodities as per their entitlement. As a matter of fact, often it has been observed that the FPS is irregular and inaccessible. In any case, in the absence of any reasonably effective and responsive grievance redressal system within the reach of the card holder, ration card is too weak an instrument to empower the card holder to claim his/her entitlement. In other words, with or without the ration card, the beneficiary needs another empowerment tool to claim his/her entitlement each month and as per the convenience. (iii) Structurally Weak Vigilance: Voluminous nature of monthly transactions between FPS and the card holders is a major hurdle in ascertaining the genuineness of these transactions. Thus, despite stringent FPS license conditions, inability to carry out comprehensive verification of transactions provides an easy escape route to the FPS dealers to avoid and evade consequences of misconduct, if any. This issue can be best addressed if each transaction with the card holders is dutifully recorded, maintained, and monitored in a transparent manner and aggregate sum of all such transactions becomes the basis of subsequent FPS operations. (iv) Near Absence of Accountability: Nonetheless, present TPDS system works on the premise of trust between the Administration, FPS and the card holders. In case of breach of trust, proving the guilt of the delinquent is a prerequisite for any punitive action. This is a tedious and time consuming process especially with limited man power, motivation and competence at the Block level supply set up. Further, collusion and rent seeking may provide better private gains than otherwise. Moreover, in the context of decentralized TPDS administration, it is very difficult to establish accountability of the delinquent quickly and efficiently. Therefore, ease in fixing responsibility and establishing accountability should be another key parameter of TPDS reforms.

B. Strategic Approach

 2. What was the solution?
More than 25 years ago, the Late Prime Minister of India, Shri Rajiv Gandhi had said that only 15 paise (out of One Rupee) ever reach the poor. This is the development paradox of India. Could there be a Mechanism/System to at least reverse this ratio of transmission loss upside down? One looks forward to immense opportunities offered by Modern Technology since Traditional Governance approach has failed to solve this paradox. In addition, a proactive State Government such as Gujarat makes it a fertile breeding ground for incubation and implementation of innovative ideas in governance. Existing TPDS administration functions in an Open-loop. Subject to the State’s monthly allocation of the essential commodities; category-wise entitlement and the number of ration cards, Director of Food & Civil Supply (DFCS) at State HQ and District Supply Officer (DSO) make District-wise and Taluka-wise allocation of the essential commodities, respectively. In turn, the Taluka Supply administration issues monthly Permits of essential commodities to the Fair Price Shop (FPS) dealers for distribution to the Ration Card holders. This open-ended approach has no direct correspondence with the actual delivery of food grain by FPS dealers to the card holders. Physical inspection(s) of the FPS and cross verification of its various Registers with the beneficiary Cards is the only method to establish genuineness of the delivery transactions to the Ration Card holders. Such inspections are not only time consuming and tedious but also prone to corruption. One could eliminate/minimize irregularities from TPDS if the TPDS delivery system operates in a Closed-loop mode i.e. the card holders should somehow authenticate every single delivery transaction. In other words, the card holders would be the fulcrum of TPDS administration while District/ Taluka Supply administration along with FPS dealers would provide necessary facilitation. In addition, introduction of transparency, accountability, market orientation & speedy roll out were other priorities of the Project.

 3. How did the initiative solve the problem and improve people’s lives?
This reform initiative establishes that citizen-centric public service delivery can be assured in a hassle-free and cost effective manner, if the technology along with business process re-engineering (BPR) is used in an innovative manner. Design of the reform processes is such that the official discretion of the District/Taluka Supply Administration has been minimized while optimizing the accountability, transparency and rule based administration. Project roll out has been quite smooth without disrupting services to the card holders , while costs have been kept at the minimum by leveraging available e-Governance infrastructure, to the extent possible. The very design of the Project is based upon Centralized Architecture and therefore, it has been easy to replicate the project across FPS areas in the State. That the beneficiaries are empowered with biometric verification and transparency; FPS becomes more viable; savings in food grains accrue to the government; and improved viability of the local Village Panchayat Kiosk are necessary ingredients for the project’s success. This project would be replicable/ scalable because its expansion across the State enhances beneficiary’s empowerment, FPS viability, and savings to the government.

C. Execution and Implementation

 4. In which ways is the initiative creative and innovative?
This is a very important aspect of Solution development. Present TPDS suffers from bogus and duplicate ration cards which have crippling effect on the functioning of the system. Therefore, top priority should be assigned to the cleaning of card holders' data base. For this purpose, the State government evolved an entirely new format and asked all existing card holders to fill up the same giving their full details including present identities such as EPIC no., Driving License no., LPG connection no., BPL no. etc. Basic idea is that any duplicate or bogus card holder cannot have multiple of all the identities provided by different government organizations at various points of time. Taking FPS as a unit, once all existing card holders fill up the prescribed application form, the data entry work is undertaken. After completion of the entry of the application form, card holder's identity details are verified against the existing data bases maintained in the government system. In case there is identity mismatch or missing data in the government data bases, local officials take up physical verification of card holder's family. Subsequently, prior to the issue of bar coded ration card in lieu of existing ration card, photo and biometric detail(s) of at least one adult member of the card holder's family is captured at FPS or Village Panchayat location. Effectively, bio-metric identity along with bar-coded ration card becomes authentication key of the card holder's identity. Also, card holder's card details are cross-linked with the government data bases which is protection against misuse of the same in future.

 5. Who implemented the initiative and what is the size of the population affected by this initiative?
State Government, Food & Civil Supply Department (FCS&CAD), Block Level Officers, Fair Price Shopkeepers & Ration Card Holders are the main stakeholders for the implementation of TPDS in the State. Processes of different calculation of permit have become simple and smooth. For this purpose, FCS&CAD subject to the directions of the Government of India, formulates policies and implementation guidelines in the State. Since, TPDS is an ongoing scheme; therefore, any reform intervention has to be such that there is continuity in the scheme implementation. Further, TPDS being a mass based scheme, its reform cannot succeed without necessary political will and administrative/ financial support of the Government. To provide the guidelines to stake holder more than two dozen Government Resolutions have been issued during last two years. NIC, Gujarat Unit under the overall charge of Shri Rajnish Mahajan, SIO & D.D.G. and his team has been actively involved in the development of TPDS software application along with management of hardware, networking aspects. Based upon users’ feedback, NIC has been carrying out changes in the software. Implementation of such a gigantic State-wide Project has been possible through regular online monitoring of various tasks coupled with time bound targets and reviews.
 6. How was the strategy implemented and what resources were mobilized?
As is well known, the PDS functioning suffers from powerful vested interests. Implementation of the Project has led to reduction in leakages/diversion while making the supply machinery more accountable. Through appropriate risk and reward structure for the stake-holders coupled with political/administrative will and firmness, the State Government has been able to overcome resistance to the implementation process and ensure their participation, as shown below; • Door to Door survey and Digitization of beneficiary data and to capture biometrics of ration card holders. • Establishing the identity of beneficiary. • Food coupons from e-Gram(CSC) centres. • Transaction capturing at FPS level by providing hand held terminal (HHT) to FPS dealer. (Proposed) • Incentives to FPS dealer on each commodity transaction. • Door step delivery of food grains to the FPS dealer. • SMS alerts to VVC, FPS dealer and registered beneficiaries. • Biometric authentication by decision makers at Taluka (Village) level.

 7. Who were the stakeholders involved in the design of the initiative and in its implementation?
In the 1st Phase of Project implementation (during 2010) existing card holders were asked to submit application in the prescribed Form-1 along with their Elector’ Photo Identity Card (EPIC) details. Thereafter, these application forms were digitized and about 16 lakh Ration Cards have been discontinued/cancelled (approximately12% of the total) during 2011 and overall distribution efficiency of essential commodities has gone up by about 10%. Thereafter, in the 2nd Phase in 225 Pilot FPS areas (@ one FPS per Taluka), along with capturing of biometric details Bar-coded ration cards have been distributed to all the beneficiaries who have applied in Form No.1 and were available in the village(s) to provide their biometric details. This has led to further reduction in the number of card holders by about 11%. As a result, there have been savings in the quantum essential commodities supplied to these 225 FPS dealers. In the final Phase, using online bio-metric authentication process the beneficiary card holders would avail Food Coupons from the E-GRAM/ i-coupon outlets / (Common Service Center) and hand over these commodity-wise coupons to the FPS dealers. In the subsequent month supply of essential commodities to FPS dealers would be linked to the Food Coupons and hopefully there would be further savings. (i) As against 1.25 Crs Ration cards in the beginning of 2010 there are only 1.09 Cr eligible Ration Cards as on 1st Dec 2013. (ii) With digitization of ration card data base, centralized processing of FPS-Area wise allocation is completed on the last day of the previous month while there is on-line monitoring of FPS-wise issue of Permits and these are issued to the FPS dealers in the first week of the month. (iii) Food Coupon linked compensation has resulted in additional income to the FPS dealers where food coupons are operational. (iv) Issue of Delivery Challans from State Civil Supplies Godown against the FPS Area permit (v) Transport Pass System while lifting commodities from FCI godown to State Civil Supplies Godown

 8. What were the most successful outputs and why was the initiative effective?
Regular review meeting held at State & District Level to monitor the progress Evaluation of Pilot phase of 225 FPS has been carried out by State Government and Evaluation for full implementation has been planned at later stage. Various real time reports are available online to the Senior Management officers.

 9. What were the main obstacles encountered and how were they overcome?
 Matching Electoral Roll Data (EPIC) of all adult members of the family is a time consuming task.  Distribution of Bar Coded Ration Cards along with capturing of Bio-metric and Photographic details of at least one member of more than 1 Cr Card Holder families would also be an elaborate exercise.  Availability of operationally viable E-Gram/ Cyber Café within reasonable distance of the habitation.  Ensuring FPS viability as diversion/ leakage is brought under control.  Door step delivery is operational  Additional payment linked to bar coded commodity coupon (per transaction) to FPS dealers has been approved.  Enhance Commission  Passive attitude of Civil Supply staff as their discretion is minimized and accountability has gone up.  Earlier the exercise was being carried out by Online. Looking to the constraint, various private agencies have been engaged to capture biometric data and distribution of cards.  This has overcome by encouraging Shopkeepers themselves to procure a computer/ HHT & Biometric device along with internet connection (Landline/Broadband/Mobile Connectivity). It is also under consideration to permit the operation of this device offline & collect the electronic data of transactions on monthly basis.

D. Impact and Sustainability

 10. What were the key benefits resulting from this initiative?
• Distribution of more than 9.5 millions of biometrics based Barcoded new ration cards • Food Coupons operational in more than 10,000 FPS Areas. • Central allocation and e-Permit • Delivery challans at State Civil Supplies Godown • Transit pass system while lifting commodities from FCI godown to State Civil Supplies Godown • Reduction of Bogus Ration Cards by 12.8% (i.e. From 12.5 Million to 10.9 Million.) • Beneficiaries getting full entitlement and in a timely manner. • Reduced leakages in the distribution system.

 11. Did the initiative improve integrity and/or accountability in public service? (If applicable)
Since, improvements in the delivery efficiency of essential commodities would bring about substantial savings to the government along with enhancement in customer satisfaction; this project initiative should be sustainable both administratively and financially. Eligibible cards as on 1st Dec. 2013 are 10.9 million. Total of 9.5 million cards generated with Biometric data. Total fingerprint captured for 13.37 million beneficiaries. 3.3 million Food coupons issued to beneficiaries A total of around 10,980 FPS area involved in coupons as on date. 4,464 e-Gram centres provide food coupons to the beneficiaries Food coupons to the beneficiaries are also issued by more than 7,000 Private operators Approximately 74,000 number of permits are being issued per month Average number of delivery challans issued per month: 28,000 Total Transit pass generated from the system as on date: 58,577 Total Ration Card applications received as on date (from Jan 2013): 2.1 million Total grievances received as on date: 3,474

 12. Were special measures put in place to ensure that the initiative benefits women and girls and improves the situation of the poorest and most vulnerable? (If applicable)
- Technology can help to bring 100 % effectiveness but not 100% efficient - Simple Solution may be more successful - Active participation of all stake holders ( Team work) - Will power to bring the change in processes.

Contact Information

Institution Name:   Food, Civil Supplies and Consumer Affairs Department
Institution Type:   Government Department  
Contact Person:   R. P. Gupta
Title:   Principal Secretary. FCSCA  
Telephone/ Fax:   +91-79-23251163/ +91-79-23251199
Institution's / Project's Website:  
Address:   14/5, New SAchivalaya
Postal Code:   382010
City:   Gandhinagar
State/Province:   Gujarat

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