Fair Price Shop Sustainability in Automated TPDS: A Mirage or Possibility?

This note highlights the importance of the sustainability of fair price shops (FPS) and provides detailed options to ensure their continuity. It also suggests methods to ensure the continuity of FPSs.

Targeted Public Distribution System (TPDS) is the largest social security programme in the world but has been bogged down with heavy diversion and leakages. To address diversion, the government started digitisation of PDS supply chain, ensuring subsidised grain access only to the Aadhaar authenticated beneficiaries. However, the income and revenue of Fair Price Shop owners has come down drastically as one of the outcomes of digitisation. This note highlights the importance of FPS sustainability and details options to ensure its continuity. It thus becomes imperative to cross-subsidise FPS operations to ensure service availability. The note suggests two methods to ensure FPS continuity. The first method is to deliver TPDS through social organisations such as NGOs/cooperatives/Self-Help Groups. The second method is for FPSs to sell items other than only subsidised food grains, as is currently the practice. We give examples of cooperative-run FPS networks (Chhattisgarh and Madhya Pradesh) and public-private partnership model in the form of Annapurna Bhandar Yojana in Rajasthan.

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