1. Plugging The Leaks
TEAM DETAILS
UTKARSH KUMAR, NAVEEN KUMAR, RUBAL PRAKASH,
ABHIYUDAYA MISHRA , VIKAS RANJAN.
BIRLA INSTITUTE OF TECHNOLOGY, PATNA.
Improving reach and efficiency of the Public Distribution System
TEAM NAME : AASMAAN

2. Despite for the Indian Government spending Rs 85000cr,
about 230 million people strive for food in India
 In fact to provide Re 1 to the poor, the GOI spends Rs 3.75 but due to corruption in PDS
only Rs 0.375 reaches finally.
PROBLEMS :-
• Identification Error
Rs 4,360 cr of the subsidy goes to the non-poor in 2012-13.
• Leakage at Different Levels
57% of the PDS does not reach the intended people, due
to leakage at different levels.
• Storage
Approx Rs 380 cr & 1.7 lakhs Tonnes of food grains were wasted
In 2012-2013 due to storage problem .
• Transportation
Approx Rs 339 cr & 18.4 lakhs. Tonnes of food grains were wasted
In 2012-2013 due to transportation problem .
•Non-Transparency
Non-transparency at different levels and lack of Public Awareness.
Virtually non existence vigilance machinery at the grass root level.
• Weak & corrupt Administration –
Undue political interference, lack of adequate supervision
over PDS operation at field level and laxity which often does
not result in any punishment to culprit found at the supervisory.
Unit 2004-
2005
2009-
2010
Distribution of Food
via PDS ration shops
Mn Tons 41.5 48.9
PDS Food Received
by the population ,
NSS
Mn Tons 13.2 25.3
% Leakage of Food
via PDS ration shops
68.2% 48.3%
Food Subsidy-
Ministry of Finance
Rs.
Crores
24479 59621
Food subsidy
according to NSS
Rs.
Crores
8474 38875
PDS corruption
estimate
Rs.
Crores
16005 20746

3. A Major Problem : Corruption
GOI
FCIFarm
FPS Block
District
State
Corruption
(20,747cr)
Poor
Food subsidy for
PDS Rs.85,000 cr
(2012-13)
73% Money spent
in public transfer.
Rs.62,050 cr
27% expected to
reach the poor.
Rs.22,950 cr Rs.20,747 cr
(24.4%)
Drained out due
to corruption
Finally only 3.6%;
Rs.2203 cr reach
the poor.
Problem
The country facing the problem today is not one of
shortage of food grains but of managing the surplus.
Corrupt implementing machinery and sleepy and sloppy programme where there is freedom
to play with its great objectives with impunity to derive unlawful pecuniary benefits.
The Present Scenario of PDS

4. Complaint &
Awareness
Centre
MULTI-
APPLICATION
SMART CARD
(MASC)
Bar-Code in
Packets of
Food Grain
Reform of
PDS System
The whole power of controlling the PDS will be exercised by the
District . This decentralises the powers to the state.
Smart cum ATM cards for all citizens, with the Thumb
Impressions(of atleast 2members in a family) as their password.
It would result from surveys done on a regular basis conducted
by NSS and asserted by UIDs. The Smart Cards will be registered
with Mobile no. and bank account of the people.
All food grains will come properly packed with a unique barcode
on each of them.
Each packet contains the amount of food grain which the GOI
seeks to provide to each person. This ensures efficient
distribution system.
The packing of food supplies will be done by electronic system.
IVRS System , Toll Free No. & Internet Complaint Box to make
the people aware of their rights and latest government schemes
and also to Register complaints.
Brief of The Proposed Solution :-

5. New policy
for FPS
Owners
Web Portal
Building
Transport
Network
Advantage
over existing
System
FPS owners earn Commission on the supplies they render and
amount of food grains they store.
Licence to the FPS are given on Storage basis.
Web Portal containing all the information about PDS, visible to
all people.
A separate Login Section for Monitoring Committee & concerned
officers to manage information on procurement , allocation and
off take at all levels of the distribution system.
Distribution of supplies is done on district level basis.
Each district is responsible for procurement and deliver of food
grains in its area.
In case of shortage of Food Grains in a District, it collects supplies
from its surrounding nearby districts having surplus.
Effective handling of complaints.
Error free and correct allotment and movement of foodgrains to FPS
through E-Governance.

6. Implementing the plan :-
*The work of Block level & FPS can also
be substituted by Private Agencies .

7. Name, photo, Address, Bank
account , UID no., Mobile no.,
biometrics category in which the
beneficiary falls and the monthly
entitlement of the beneficiary,
family members.
Data stored on smart cum ATM card
Data is developed on the basis of
survey, verified by bank, UID, LPG
card and other cards(PAN, D.L,
Credit, visa card, etc.)
Verification of data or identity
Working of card
Distribution of card
Using biometrics as a tool for
authentication of identity of
beneficiaries.
Response on complete transactionRegister complaints.
• Swiping the card
• Thump impression
• Scanning barcode on packets
• Providing sealed packets of
food grains
• Updating system
• Conformation message on
registered mobile no.
• Circulating updated
information to district
center
• Getting information through
IVRS
• Filling complain through toll
free no.
• Online Complaint Box to make
the people aware of their
rights and latest government
schemes and also to Register
complaints
MULTI-APPLICATION SMART CARD (MASC)

8. District head
District food &
supply team
Transport
team
Monitoring
team
Finance
team
Technical
team
Block level
supply team
District management system
At Centre – Manages fund, does survey and set up guidelines to the System.
e.g.– set MSP(Minimum Support Price), Subsidized Price, Amount of food grain allotted
to the people
At State – Manages fund (optional) & does survey of the system.
At District – District Level Management System
At block -- F.P.S level supply team
Provides food grains by electronic
Keeps a store of food grains atleast one month in advance
Organisational Structure
Collects supplies from
other districts and
provides it to other
districts & block level.
Provides Food grains
to the FPS.
Transports Food
grains & keeps an
account of the
supplies received
& dispatched
Deals with money
related issues
Web portal
management,
IVRS and SMS
updates.
Keeps a Check of
proper functioning
of other Teams

9. Transportation cost
Storage(Commission) cost
Barcoded packet cost
Computerization cost
Technical team(5×4.5lakh pa)
Finance team(6×4.6lakh pa)
Logistics cost
Technology cost
Organization cost
TotaladditionalFundingRequired
Card Swapping Machine
INR
50lakh
Pa
Smart card cost
INR 75
lakhs
INR 50
lakhs
INR
1.4 cr
# An average of 2.65cr of additional funding will be required, per district annually.
IVRS &
Toll Free No. cost
Proposed funding will be provided by the central govt.
Total funding required for implementing this scheme(for whole country) will be 1714.65cr (647×2.65cr) which is
8.26% of the total estimated PDS corruption(20747cr).

10. Impact & Reach
Minimum
Leakage
Benefits for
Poor
Reduced
Wastage
Easy monitoring
and inspection
Food grain for
every card.
Choice to collect
grains from any FPS
centre.
Awareness of
their rights.
 Toll free number
for complaints.
 Satisfaction, in
terms of quality &
quantity.
Reduced
wastage/spoilage of
food grains.
Availability of
sufficient food at
the FPS, when
required.
 Reduced storage
burden on FCI.
 FCI can buy &
store more grains.
 Increased
Storage &
Transportation
infrastructure.
Transparent
operation at each
level.
Easy data
updating.
Better
identification.
Detailed
information about
allocation & off
take of PDS, at any
level.
**The GDP of India would get increased.
Ensuring no loss
in weight of
packets.
Proper record of
each card holder
through UID &
Computer
Database.
Transaction
through Bank
Accounts, instead
of cash.

11. Challenges and Risks
Concept Risks
• Difficulty in handling Multi-Application Smart
Cards by illiterate people
• There are still some chances of Inclusion errors
• Unavailability of skilled workers at FPS.
• Problem of identifying a customer, if the Card
Swapping Machine goes out of order.
• Lack of interest among rural people towards
learning and use of new technologies/facilities.
• Chances of change of fingerprints of labourers.
Mitigation Factors
Implementation Factors
• Government do not see the viability of this
scheme.
• Advertising and Awareness Campaign
• Workers will be trained with new
technology.
• Universalization of PDS : Entitlement of same
PDS, i.e. equal subsidies/food grains to all,
irrespective of their financial/social status
(along with the proposed plan)
to completely remove the Inclusion errors.
Source of funds for universal PDS : -
o Money saved from leakage.
o Reducing TAX exemptions.(The Right to Food
Campaign estimates that Rs.1,56lakh crore
would be required for universal PDS, which
is about 1/3rd of tax exemptions given by
the Central govt. in 2009-10.)
• An alternate offline mechanism, by which the
IVRS system would generate a customer’s
unique code to identify the customer, using his
registered mobile no.
• The proposed Biometric System would accept
if the fingerprints match is more than 75%.

12. References
•Planning Commission. (2005). Performance Evaluation of Targeted Public Distribution System
(TPDS).
•Bhalla, Surjit S. (2012, Jan 7). Enhancing Corruption the NAC Way. Oxus Investments
•Press Information Bureau (2012, Dec 17). Review of Food grains Procurement Policy RBI
handbook of Statistics, Ministry of Finance, Budget statements, different years.
•International Journal of Business Economics & Management Research.
•Discussion paper (DEC 2012): National Food Security bill, Ministry of Agriculture ,Govt. of
India.
•Report on computerization of PDS by JUSTICE WADHWA COMMITTEE.
•Report by Ministry of Rural Development on the methodology for conducting the BPL Census.
•Report on National Food Security Bill by Dr. C.RANGARAJAN
• RBI handbook of Statistics, Ministry of Finance, Budget statements, different
years.
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