1. Team- Samadhan
IIM Lucknow
Niraj Agarwal | Rohit Bhagat | Utpal Meena | Mitesh Chauhan | Neha Poonia

2. Problem recognition
• High exclusion and inclusion errors
– High exclusion error results low coverage of BPL
households
– High inclusion error results burden on government
• Leakage during transportation or due to
existence of ghost cards
• Delay in receiving goods
• Unequal distribution of ration cards
between APL and BPL holders
• Increasing transportation cost
• Low commission and blockage of working
capital
Total leakage Leakage through ghost cards
Source: Planning Commission. (2005). Performance Evaluation of Targeted Public Distribution System (TPDS)
Targeting errors

3. Proposed method for minimizing exclusion error
• Based on Vulnerability criteria method of consumer expenditure survey of NSS
• Household is defined as vulnerable if it bears at least one of the following
criteria:
– households do not own a dwelling unit
– households that do not own any land and are not self-employed in non-agriculture and
whose no member is a regular salary earner
– where members of the households primarily work as agricultural and other labour
having only homestead land with no regular salary earner
– households that hold less than or equal to 2 ha of standardised cultivable land with no
regular salary earner and primarily engaged in agricultural and other labour activities
– households belonging to scheduled caste and scheduled tribe
– households which spend less than Rs 216.29 per capita on clothing during a year
• A value of “one” when a household had any of these possession and “zero” in an
otherwise situation is assigned to prevent complete substitutability across the set
of these criteria
• Score of the ith household in all the six dimensions are added to arrive at an
aggregate score
• Aggregate score expresses the extent of a household’s vulnerability by the number
of dimensions
Reference: Errors of exclusion and inclusion, Conference, Institute for Social and Economic Change, Bangalore
Inclusion
Exclusion errors
Food grain
allocation
Food grain
movement
Ration card
management

4. • Reducing possibility of reducing few deserved households
• Attribute to be included in BPL list:
– single woman member (in most cases this would be either widow, divorced/separated,
or unmarried)
– disabled person as a single breadwinner from casual works
– no member above the age of 14 years age
– any member works as a bonded labour
– destitute characteristics
Proposed method for minimizing exclusion error
Minimizing inclusion error
• Proper verification of the applicant for the ration card, an effective PMT
• It will be minimum when integrated with UID
• Self-targeting technique
Community based survey can help in reducing both exclusive as well as inclusive error, which
have been practiced in African countries and can be pilot tested in India
Inclusion
Exclusion errors
Food grain
allocation
Food grain
movement
Ration card
management

5. Existing: Food Grain Allocation
Levels
Dept
Generates District
wise Food Grain
Allocation
Allocation Letter
is dispatched to
each District
DC/DSO
District prepares the FPS wise
allocation on the basis of
allocation received and current
re-tagging/de-tagging status of
FPS provided by SDO
FPS Dealer
Draft Submission by
Dealer
DM
Draft Reconciliation
Which is large in
number
SIO
Generation
Day 1
Day 2
Day 10
Day 14
Day 24
Day 30
Source: http://dfpd.nic.in/fcamin/sites/default/files/userfiles/DetailedGuidelines.pdf and JAPIT, Jharkhand
Inclusion
Exclusion errors
Food grain
allocation
Food grain
movement
Ration card
management

6. Up to 21 days saved
Additional Benefits:
 Food Grain allocation available over internet
 No more hassle of preparing Demand Drafts and managing
physical instruments
 Bank reconciles all the payments received from FPS Dealer
instead of DM Office
 Bank will provide data on payment details which will be passed
into PDS application making SIO generation automatic
Proposed: Food Grain Allocation
Time
LevelsDept
Generates
District wise Food
Grain Allocation
DC/DSO
District prepares the FPS
wise allocation on the
basis of allocation
received and current
re-tagging/de-tagging
status of FPS provided
by SDO
Bank
Auto debit from
Dealer’s A/C using
ECS
Optional: NeFT
based payment
DM
SIO
Generation
Day 1
Day 2
Day 6
Day 7
Day 24
Day 30
Completed
In Progress
Inclusion
Exclusion errors
Food grain
allocation
Food grain
movement
Ration card
management

7. Existing: Food Grain Movement
On the basis of allocation,
cash transferred by State
Food Corp. head through
RTGS to FCI for RO
Release RO based on
stock availability
State department lifts
food grains and deliver
to block godown by
appointed transporter
Stock unloaded in state
warehouses shed and
accepted after verification
Gunny Bags are stacked
On the basis of SIO, stocks
are delivered to FPS under
Doorstep Delivery system
by DC appointed
transporter
Food grains are unloaded
at FPS and counter signed
SIO is handed over to
transporter for sharing with
AGM
Challenge
Data related to stock issuance, movement & delivery is not
timely available for monitoring & proactive steps
Inclusion
Exclusion errors
Food grain
allocation
Food grain
movement
Ration card
management

8. Proposed: Food Grain Movement
On the basis of allocation,
Cash Transfer through RTGS
to FCI for RO
Daily Stock lifting will
be entered into PDS
application and will
be available online
At State Food Corp. Godown, Loaded trucks will be
weighed through weight scales linked to PDS
database where FCI can match with the quantity
released
On the basis of SIO,
stocks are identified by
AGM for delivery to FPS
under Doorstep Delivery
system ward/panchayat
wise
Food grains are unloaded
at FPS and counter
signed SIO is handed
over to transporter for
sharing with AGM. AGM
records the acceptance
in the PDS application
Each gunny bags will be weighed
and details regarding weight,
quality, stacking pos will be
entered into PDS application
Loaded quantity is
measured through
Weighbridge/ weighscale
and Road Challan is
issued to DC appointed
transporter
Reference: Guidelines by planning commission
Inclusion
Exclusion errors
Food grain
allocation
Food grain
movement
Ration card
management

9. Proposed solutions to key problem areas
• Lobbying between SFC and transporters will be reduced as digital weighing scales
will lead to stock inventory data with the FCI
• FPS dealer will not be able to bypass the system as the automated Adhaar
database system will detail the quantity bought at the shop, thus giving the
difference left with the dealer as inventory
• Available weighing scales have to be modernized to link with computers integrated
with main application
Inclusion
Exclusion errors
Food grain
allocation
Food grain
movement
Ration card
management
Key concern areas
• Possible lobbying between SFC Officers and transporters leading to pilferage of food
grains
• Change in the quality of the food grains in transit
• End of the chain tracing at FPS, where the FPS dealer and transporter may come
together to evade food stocks
• Unavailability of digital weighing scales at various points
• FPS dealer may sell less quantity at subsidised rate and hoard the food stock to sell in
black market at exorbitant prices

10. FPS Automation: Integration of TPDS with UIDAI
•Ration Card No.
UID CIDR Database
•Biometrics of Beneficiary
Visit the FPS
along with
Ration Card
Validate the Ration
Card No. and forward
to UID server through
secured lineReturn Yes/No
Authenticate Biometrics
of beneficiary
Beneficiary
Authenticated
Sale of
Commodity
Aadhaar linked
Ration card database/SRDH
•Ration Card No.
•Biometrics of
Beneficiary
Enrolment Sytem
CIDR with
Biometrics
Authentication Service Agency
(ASA) – secured leased line
Authentication User Agency (AUA)
Commodity wise delivery details are entered in PDS
application. Biometric captured as acknowledgement of
beneficiary is forwarded with the Ration card details to
Aadhaar linked Ration card database/State Resident
Data Hub (SRDH) through GPRS
Inclusion
Exclusion errors
Food grain
allocation
Food grain
movement
Ration card
management

11. Solution Matrix
Objectives Proposed Solution Outcomes Measurable Criteria
Increase
Operational
Efficiency
Supply Chain
Computerization
a) Reduction in time for information exchange
b) Optimized commodity storage and movement
for higher availability at FPS
c) Approved information availability in various
forms and formats
a) Real time information availability
b) % improvement in stock availability at FPS
c) Report preparation and submission will be
near real time
Increase
effectiveness
of service
delivery
Digitization of
beneficiary records
a) Minimize leakages/diversion of food grains
b) Minimize inclusion/exclusion errors
a) Real time display of category wise list of
beneficiaries
b) % Offtake against digitally available card-id
Computerized
Allotment till FPS shop
Community driven monitoring of stock
movement and availability
Average time gap between allotment from GoI and
to FPS
Ration Card
Management System
Better utilization of rationing facility by
beneficiaries
Average time gap between submission of
application and service fulfillment
Supply Chain
Computerization incl.
procurement
a) Community participation in monitoring &
evaluation
b) Minimize leakages/diversion of food grains
c) Improving Procurement and payment to
intended farmers at MSP
d) Improve availability of food grains at FPS
a) Time gap reduction between starting of
harvesting season and actual procurement
post target fixation
b) Real time public disclosure of procurement
from intended farmers
c) Real time public disclosure on food grain
movement
Transparency Portal &
Grievance Redressal
a) Minimize inclusion/exclusion errors
b) Facilitation of social audit and ensure that
beneficiaries receive their entitlement
c) Higher accessibility to channels of
complaints/grievances
a) No. of site hits
b) Real time status update
c) Usage of escalation flow
FPS Automation a) Minimize leakages/diversion of food grains
b) Encourage transparency
c) Improve availability of food grains at FPS
a) Near-Real time public disclosure of beneficiary
wise offtake details
b) % of offtake recorded digitally

12. Lets revolutionize Public distribution system !!!
Thank you