Answer: The Public Distribution System (PDS) is a government-run program implemented in India to ensure food security for the country's vulnerable population. The primary objective of the PDS is to provide essential food grains and other commodities at subsidized rates to the economically disadvantaged sections of society. 

Rationale of PDS 

• Poverty Alleviation: The PDS aims to reduce poverty and hunger by providing adequate quantity of food grains at affordable prices. 
• Buffer Stock Management: The PDS acts as a buffer stock management mechanism, allowing the government to maintain adequate reserves of food grains to meet emergencies.  

• For example, During the COVID-19 pandemic government used its buffer stock to provide 5 kg additional food grains under PM Garib Kalyan Anna Yojana. 

• Price Stabilization: Government can use its buffer to increase the supply in case of shortage to maintain price stability.

Functioning of PDS 

The functioning of the Public Distribution System involves the following key components: 

• Procurement: The government procures food grains, such as rice and wheat, from farmers at MSP through government agencies like the Food Corporation of India (FCI). 
• Allocation: The procured food grains are allocated to various states based on their population, poverty levels, and specific requirements. 
• Ration Shops: Fair Price Shops (FPS) or ration shops are established at the grassroots level to distribute subsidized food grains to eligible beneficiaries. Ration cards, issued by the state government, act as identification and entitlement documents for individuals or households to avail of the benefits. 
• Subsidized Distribution: Eligible beneficiaries can purchase food grains and other essential commodities from the FPS at prices lower than the market rates. 

It is important to periodically revisit and reform the Public Distribution System (PDS) to address the existing and new challenges and enhance its effectiveness in achieving food security and poverty alleviation. 

Revisiting PDS System 

• Procurement: The FCI currently follows open ended procurement system. Presently, there is no limit on procurement of food grains such as Rice and Wheat leading to higher procurement. This results into higher economic cost of food grains. 

• Recommendations: NITI Aayog has advocated for a closed procurement policy. Moreover, the procurement should not be limited to rice and wheat. Schemes like PM-AASHA are a step in the right direction. 

• Transportation: According to Shanta Kumar Committee, 46% of food grains got diverted towards market. 

• Recommendations: Trucks should be monitored through GPS. Further, there should be end to end computerization of the whole process. 

• Storage: There is a shortage of scientific storage capacity in India.  

• Recommendations: There is a need to promote private investment in the storage and warehousing. This can be done through amending the essential commodities act by allowing private players to stock the agri products. (Eco Survey) 

• Distribution of Food grains: There are inclusion and exclusion errors in allocation of ration cards. The people do not have choice regarding food grains in the PDS system.  

• Recommendations: Regular assessment of allocation of ration card should be conducted. Moreover, ration cards should be integrated with Aadhar.  

• Increase in Economic Cost: This is due to higher MSP, increase in the absolute number of beneficiaries and higher procurement due to open ended procurement system. Along with this, Central issue price has not been revised by Central government since 2013. 

• Recommendations: NITI Aayog has advocated for rationalization of beneficiaries from 67% to 40%. It also recommended to increase the Central Issue Price to lessen the fiscal burden on the Central Government. 

The government should undertake a review of the overall implementation of PDS system and bring suitable changes through a consultative process.