MSC undertook a study in July, 2019 to assess the nutritional gaps in households1 served by the Public Distribution System (PDS)2. We conducted the study in Ranchi district of Jharkhand state and West Godavari district of Andhra Pradesh, India. The respondents of the study were women—most of them belonged to households where the primary breadwinner was a wage-laborer who carried out “heavy work”3. Our study revealed that the target populace severely lacked dietary diversity 4.
The respondents reported that staple grains, such as rice and wheat formed a large part of their daily food consumption with little to no inclusion of pulses, vegetables, meat, or fruit. Most respondents did not even consume dairy products.
Various socio-economic challenges hampered the dietary diversity of the respondents. The primary challenges were the availability and affordability of food. For example, dairy farming was not prominent in the region where we conducted our research and many fruit and vegetables were not cultivated locally. Despite the availability of low-cost diet alternatives in local markets, respondents were unaware of their nutritional importance.
In the table given below, we compare the nutritional outputs of the most commonly consumed diet to a diet that incorporates local food sources.
Note: All the values are calculated using standard recipes as stated by the National Institute of Nutrition (NIN). *Replacing potato with local green leafy vegetables will further increase the nutritional intake significantly, even if it is three times a week. #Jawa is a healthy drink made of Ragi (Eleusine coracana or finger millet) also known as Ragi malt.
The table highlights the importance of incorporating local and diverse food items5 into the diet.
People need to consume diverse food items to take advantage of the different nutritional benefits associated with them. Locally available food is an accessible and cost-effective option that results in better nutritional output without changing the dietary habits of the community. For instance, replacing rice with wheat flatbread (roti), potato with egg, and adding millet to the diet can contribute 404 kcal of extra energy. It also amounts to 18 g of extra protein, two times the fat, 412 mg additional calcium, 10 g of extra iron, 152 mg of additional magnesium, 5 mg of extra zinc, and 51 µg of additional folic acid. The outcomes would certainly be substantial if these changes are adopted regularly at the household level.
The existing PDS system is largely responsible for the lack of dietary diversity. PDS contributes to approximately 40%6 of the food grain7 consumed by an average beneficiary. MSC recommends that both the central and state governments should come together to implement policy-level changes to rectify the problem of inadequate dietary diversity. It is necessary to look beyond hunger and focus on nutrition as well. Existing channels that have a wide outreach, such as PDS, Integrated Child Development Services (ICDS), and the Mid-day Meal (MDM) initiative should be utilized to promote diversity in diets. The government should consider including local food items like millets, pulses, among others, in the PDS food basket as they cost less and have better nutritional components.
The availability and affordability of food items are the primary considerations that govern dietary choices. State governments should draw inspiration from the Government of Andhra Pradesh and a few other states that offer a range of food items in their PDS baskets. However, this will only take care of supply-side issues. Nutritional literacy8 is therefore essential to ensure the uptake of diverse food items in the PDS basket. The government should play a key role to enhance nutritional literacy by designing awareness and behavioral “nudge” campaigns to ensure an understanding of dietary diversity. We have examined the demand-side aspects of PDS in another blog in this series.
The intake of proper nutrition is essential for good health. A healthy person is more productive, makes fewer visits to the doctor, and relies less on supplements in their diet. Proper nutrition and dietary diversity produce cascading effects—a woman with a nutritious diet is more likely to give birth to a healthy baby, which paves the way to a healthy childhood. Similarly, a family with a well-rounded diet is more likely to be fit for work, happy, prosperous, and would save considerable amounts of money over time on healthcare costs.
Dietary diversification is a straightforward concept—consume a variety of food items to ensure the proper intake of various macro and micronutrients, which would result in a healthy life9. A wholesome diet need not be an expensive proposition or a luxury. Diversity can be incorporated through locally available options and eating traditional dishes. Even small changes in daily food choices can improve nutritional intake, at little or no additional cost.
Heavy work is intense manual work and sports activities—hand tilling the land, wood cutting, carrying heavy loads, running, and jogging, among others. The prescribed nutritional intake for adults depends on the nature of work conducted.
Dietary diversity is defined as the number of different foods or food groups consumed over a given reference period
India has been a food-sufficient country for more than 30 years – but it hasn’t always been that way. Though the nation now produces enough food for its entire population, recurring famines plagued it for decades. In response, the government strengthened the distribution system to prevent the large-scale loss of lives from starvation. Controlled and systematic distribution of food grains began in India under British rule during the Second World War. Then, after the country gained independence, the government modified the system of distributing essential food grains—known as the Public Distribution System (PDS)—multiple times to address the challenges associated with food security: targeting, procurement, storage and the transportation of grains to different parts of the country.
Presently, the National Food Security Act (NFSA) governs the PDS, guaranteeing supplementary food grains to 50% of urban households and 75% of rural households in India, and reaching almost 800 million people. Under NFSA, the PDS has considerably improved people’s access to food grains by covering a substantial part of the food grain requirement for most marginalized households. However, improving access to food is not the same as ensuring optimal nutrition.
The enhanced global focus on food and nutrition security
There’s a growing recognition of this reality in the development sector. Globally, modern approaches to food security are measured based on nutrition outcomes – not simply access to food. The objective of such programs is to ensure adequate nutrition for every individual using an overall ecosystem-based approach. For instance, the UN’s Zero Hunger Challenge program works to ensure that every person can enjoy their right to adequate food, while empowering women, prioritizing family farming, and helping food systems everywhere to become sustainable and resilient.
Countries such as the United States have also adopted such holistic approaches to food security, through its Supplemental Nutrition Assistance Program. Similarly, the Food Assistance for Refugees program administered by the World Food Program focuses on health, food and also nutrition. At a larger scale, initiatives such as the Global Hunger Index focus on food security, nutrition and health indicators, measuring and tracking hunger at the global, regional and national levels.
The impact of poor nutrition in India
India has yet to fully embrace this focus on nutrition. Over the past few decades, programs such as PDS, Mid-Day-Meal (MDM) and Integrated Child Development Services (ICDS) have evolved and improved in various ways. However, these efforts do not seem to have affected India’s nutrition indicators positively. An undernourished population affects the economic growth of the nation, resulting in productivity loss and otherwise avoidable health care costs. The World Bank estimates that India loses over US $12 billion annually in GDP from vitamin and mineral deficiencies.
But the impact of poor nutrition goes far beyond productivity numbers. The recently published Comprehensive National Nutrition Survey (2016-18) highlights that 35% of Indian children under five years of age, and 22% of children between five to nine years of age suffer from stunting. Additionally, the report found that 33% of children under five, and 10% of children between five and nine were underweight. Even among adolescents between 10 to 19 years of age, 24% were found to be thin for their age. These statistics are further supported by the National Family Health Survey report of 2015-16. With long-running programs like the PDS working to improve marginalized people’s access to food grains, why are these nutrition issues so persistent?
Identifying the gaps in India’s nutrition programs
MSC has been seeking an answer to that question. An MSC study concluded in August, 2019 assessed the nutrition gap in households that receive support from the PDS. This study found that on average, PDS grains contribute to approximately 40% of an average beneficiary’s actual monthly food grain consumption at the household level. (The term “food grains” in this context includes rice, wheat, pulses and millets – grains which form the basis for all meals in India.)
The study also found that most beneficiary segments – comprising men, women, pregnant women, lactating mothers and children – had low levels of basic macro and micronutrients, including protein, fat, calcium, iron and folic acid. Clearly, the operational changes to targeting and outreach in PDS over the years have not led to significant improvements in the nutrition intake of beneficiaries. Similarly, the MDM and ICDS programs’ contribution towards nutrition intake of pregnant women, lactating mothers and children were not found to be optimal.
One of the obvious and primary reasons for undernourishment is a lack of dietary diversity. Ironically, PDS, which primarily supplies rice or wheat (or both) seems to be partially responsible for instilling dietary habits that lack in diversity: It sets the norms, and the staples it distributes are often exactly the same grains that beneficiary households already grow on their farms and consume from. Further, current PDS practices are so deeply entrenched in the beneficiaries’ psyches, that they are reluctant to accept modifications to the food baskets the program provides. For example, the government of the state of Andhra Pradesh implemented a laudable initiative and expanded its PDS food entitlements to include finger millet powder (a good source of energy, protein, vitamins and minerals), pigeon peas, and groundnuts. But MSC’s research revealed that most beneficiaries avoided these grains and consumed the food baskets’ rice exclusively.
How can India shift from food security to nutrition security?
In light of our findings, it’s clear that along with food modifications, nutrition literacy must be part of interventions that aspire to improve nutrition statistics. Studies from other countries that examine large-scale nutrition outcomes show that food choice and eating habits are influenced by a wide variety of factors, such as socioeconomic status, demography, ethnicity, convenience, advertising and even biological triggers. Additionally, the potential to incur lower health care costs has also been shown to influence food choices.
Considering these influences – along with the on-the-ground realities that enable access and encourage a willingness to choose more nutritious foods – MSC believes that a holistic strategy will facilitate the shift from food security to nutrition security. Practitioners should incorporate modifications to the existing programs and facilitate “nudges” to influence beneficiary behavior through positive reinforcement and indirect suggestions. We recommend the following ideas for practitioners to use in combination:
Let’s look at these ideas in more detail:
PDS food baskets should include more dietary diversity, featuring local millets such as ragi and jowar, which are cheaper than wheat or rice. The program could then use the money saved to provide subsidized lentils to beneficiaries. This variety of food would ensure adequate dietary diversity among recipients. These interventions should accompany nutrition literacy initiatives to ensure uptake and penetration among the target population.
Among our recommendations, the least expensive and easiest to implement initiative is food fortification, which should be carried out using WHO guidelines to inform the appropriate selection of safe fortification levels and modes of delivery.
Many studies indicate that giving beneficiaries choice – e.g.: by transferring cash to recipients, so they can buy food items of their choice and preferred quality – improves the nutritional outcomes of food security schemes. Existing cash transfer schemes in India’s union territories should be further analyzed so that the model can be improved and replicated in other parts of the country. The cash coupon model (in which a combination of cash and food coupons allow beneficiaries to buy particular food items within the cash limit) should also be further tested to determine its viability at the national
India should utilize behavioral science-based approaches that focus on local communities taking greater ownership (i.e.: embracing long-term sustainable changes that become a habit over time – unlike interventions that deliver either one-time or short-term benefits). The goal of these approaches would be to develop practical and workable solutions to help program beneficiaries adopt good nutrition practices. Together with nutrition literacy drives, these types of interventions would help solve demand-side issues that hamper good nutrition practices.
The inclusion of additional micronutrients in existing nutrition-focused programs, such as the MDM and ICDS, is required to increase nutritional output. Additionally, supply chain oversight and data management should be more robust. Integrating technology into the delivery system of these schemes will help improve efficiency and efficacy.
What role can the private sector play?
The recommendations above open several opportunities for engagement with the private sector. Public-private partnerships can play a big role in the transition towards nutrition security, by bringing together experts, institutions and organizations that can help the government implement various nutrition-focused programs in different ways. These collaborations can focus on:
Strategy: Private sector entities can be involved in designing the strategy and roadmap for new public initiatives. This could include various components, like research, advocacy, impact assessments, etc.
Implementation support partnerships: Private sector players can provide support to the government as it rolls out the program at a large scale – as is the case with many other large public safety net programs run by the government. These support functions could include monitoring, evaluation and assessments.
Supply chain and procurement: There could be additional possibilities for engaging with the private sector to procure micronutrients and manage the fortification process. Without many changes in terms of channel and logistics, fortified food could easily replace the food items provided under existing programs such as PDS, MDM and ICDS.
Nutrition literacy: This has been one of the major drivers of persistent malnutrition levels in the country. We need to look for alternatives to ineffective approaches, and private sector players could provide new options for expanding nutrition literacy among the populace.
India’s economic growth projections are predicated on the assumption that, as a young country, its economy is likely to continue its rapid growth. But India will be hard-pressed to realize such growth if its population lacks appropriate nutrients and energy, and cannot contribute fully to society. That’s why it is imperative that the country optimize its food policy going forward. The above recommendations can guide the design of the government’s food programs, so that India may begin the slow march from food security to nutrition security.
The blog was first published on Next Billion on 29th January 2020
India’s Public Distribution System (PDS) is the largest food security program in the world that guarantees subsidized food grains to almost 800 million people.
MSC’s report examines the PDS food basket and the dietary intake of beneficiary households to quantify nutritional gaps at the household level and to increase the nutritional efficiency of the PDS. We also provided recommendations to increase the overall nutritional output of various government programs like Mid-Day Meal and ICDS.
Samina and Malti live in a village in a central-eastern district in Uttar Pradesh, the most populous state in India. Both opened a bank account in 2016. They had come to know about the PMJDY scheme (a flagship financial inclusion product of the government of India) from their husbands. Malti has since been using the account to only receive remittances sent by her husband, who works in another town. Samina, however, has never used the account. She doesn’t even know what has happened to that account.
Both Samina and Malti have contributed to India’s impressive growth rate in women’s financial inclusion — recent statistics show that 79% of women in India are financially included (FII 2018). But are they, and the many women like them, who have such accounts truly financially included?
This question is troubling — not just for us at MSC, but for the entire global financial inclusion community. We wonder if the sector’s combined efforts are failing to make an impact on women, ensuring that they actively use and benefit from their financial accounts. A recent study by MSC on women users throws some light on this challenge. The study’s findings indicate that we are overlooking two simple, yet extremely important aspects of the issue: first, that women are not a homogenous group and the significant variations in their behavior and engagement with formal financial services should be appreciated; and second, that ecosystem players generally overlook gender centrality in the design of financial products and services.
Women are not a homogenous group
When measuring financial inclusion, we tend to make a traditional binary classification between “users” and “non-users” of financial products. But this is fundamentally misleading. In fact, there are six distinct sub-segments of women, when it comes to financial services usage:
Advanced users are financially independent, using multiple banking and other financial products.
Regular basic users have regular cash flows into their accounts, either from remittances or wages.
Irregular basic users have irregular cash flows into their accounts, leading to less experience with formal financial services.
Proxy users have accounts operated by someone else in the family (primarily husbands or other male family members).
Dormant users have an inactive account.
Excluded women do not have a formal financial life, particularly a bank account.
Financial services providers (FSPs) need to cater to each of these groups appropriately. To that end, much can be learned from the fast-moving consumer goods industry, where a particular soap or face wash is presented in a variety of ways to serve the diverse needs of different sub-segments of women customers, and retailed with different stock-keeping units (SKUs). The financial services industry also needs this sort of nuanced understanding of women customer sub-segments.
Lack of gender centrality in financial product design
We define gender centrality as a way to recognize that women and men have different needs, aspirations, perceptions and behaviors, which are influenced by prevailing social and cultural norms and associated inequalities. We need to apply this understanding to the design, delivery and provision of financial services. The financial services space (FSS) framework below clearly highlights the importance of gender centrality. The FSS framework explains the distinct and diverse groups of women in terms of their financial behaviors, and the “triggers” that can bring out the behavior changes that will lead to increased financial inclusion.
An FSS (see Figure 1) can be understood as a three-dimensional space that represents a conducive environment for a person to conduct financial transactions independently. Each woman user has a unique FSS — determined by thresholds on each dimension. Ideally a woman needs to cross the threshold of all three dimensions to start using financial services, and to sustain the usage. However, if a woman crosses the threshold for even one or two of these dimensions, it can lead her to use financial services, including digital services.
The FSS in Figure 2 is for a regular basic user like Malti, who we introduced at the beginning of this article. Malti has crossed the threshold for all three dimensions: The suggestion by her husband acted as the motivation factor to open the account; the regular remittances he sends covers the dimension of volume/frequency; and the digital financial services (DFS) agent in Malti’s village makes the cash-out operation quite convenient for her.
We find a completely different FSS for our dormant account holder Samina. As Figure 3 indicates, Samina has a restricted FSS. The motivation component of her FSS was quite high when she first opened her account. However, the volume of her needs has been small — she does not have a regular cash flow or income, so she does not need to use her account. The convenience component is low as well — because of her restricted mobility (imposed by social norms) she does not go out of her house alone anyway, and is not able to realize the benefits of banking services offered via agent networks. As a result, her bank account has remained dormant.
This recent MSC study shows that each of these three FSS dimensions has its own triggers that can often be generalized for specific user groups. For example, in the case of volume/frequency: Income, government-to-people transfers and remittances are the most common and important triggers. Similarly, in the case of convenience: Access (in terms of distance/time) and confidence are crucial triggers that dictate the financial services space for any customer sub-segment. For the dimension of motivation, we found that family and financial services providers (especially DFS agents) are the important triggers. For example, the convenience dimension of FSS for both irregular and proxy users can be enhanced by gender-sensitizing the male/female DFS agents on how to better serve women customers’ needs (they can provide women customers with assistance in making transactions, to overcome the ever-growing digital divide). Ultimately, these agents could provide customers with the skills, confidence and trust to use digital tools themselves, so that they can conduct self-initiated transactions.
These triggers provide useful insights to financial services providers to help them address the needs and aspirations of each sub-segment uniquely, rather than providing them with basic, standardized products (sometimes even disguised as “gender neutral”) — a practice that has been the norm. This will help to bring more women users to advanced financial inclusion.
It is time to rethink financial services for women, viewing it through the lens of gender centrality. A holistic approach with gender-centric policies and products can bring about this change. The sector is already progressing in this direction through initiatives like AFI’s GRID framework, which aims to increase women’s financial inclusion using DFS. But there are still promises to keep — and miles to go.
The blog was first published on Next Billion on 14th January 2020
This note examines portability in the public distribution system (PDS) as a reform to strengthen government service delivery in India. It captures the status of intrastate and interstate portability in India. The note highlights the views and perceptions of beneficiaries, the impact of portability on fair price shop (FPS) dealers, and the challenges faced during implementation. The findings are based on a diagnostic study conducted by MSC in September, 2019 after the first phase of interstate portability was rolled out in India.
The study sought to understand the effects of portability on end-users and identify the major challenges that need to be addressed before the national roll-out of the Integrated Management of Public Distribution System (IM-PDS) program–“One Nation, One Ration”.
India’s National Food Security Act (NSFA), which came into effect in 2013, declared that the poor in urban and rural areas of the country had a constitutional right to food. The NFSA provides monthly food subsidies to roughly 800 million poor individuals in all 36 Indian states and union territories in the country. The subsidy is in the form of 5 kilograms of rice, wheat, or a combination of both. This system of delivering subsidies is known popularly as the Targeted Public Distribution System (TPDS).
TPDS is a complex process of grain procurement from farmers, grain storage at warehouses or depots, grain allocation and distribution, and delivery to beneficiaries through licensed food distribution shops called fair price shops (FPS). These FPSs distribute food grains to NFSA beneficiaries every month. The TPDS chain encompasses around 2,000 depots—storage centers used to store procured grains safely—besides over 8,000 warehouses and a network of more than 500,000 FPS to facilitate movement and distribution of grains from farmgate to poor households.
The central and state governments co-manage the entire operation of moving grains from the farm gate to the NFSA beneficiary. The Food Corporation of India (FCI) manages the process of moving grains on behalf of the central government to the FCI warehouses after procuring them from farmers. The state governments and union territories handle the movement of the grains from the FCI warehouses to state-owned warehouses and then on to FPS dealers. The central government provides financial assistance for transportation and handling to states to ensure the delivery of food grains to each FPS. This financial assistance is capped at INR 100 (USD 1.4) per quintal (100 kg) to northeastern states and INR 65 (USD 1) per quintal to other states.
FCI has played a significant role in transforming India’s food subsidy delivery system to one that is stable and dependable. FCI procures food grains at the minimum support price from farmers in grains-surplus states—ones that produce more grain than they consume. It then distributes the grains to grain-deficit states and union territories. This daunting and massive task requires the movement of more than 4.1 million tons of food grains every month. It involves multiple steps, procedures, stakeholders, checks, and expenses that require on-the-ground daily management to ensure TPDS functions smoothly.
Vulnerabilities in the system
The complexity and scale of TPDS, however, introduce the scope for vulnerabilities in the system. The TPDS supply chain is notorious for operational lapses and leakages that range between 40 to 50 percent. The primary reason is that in the process of grain movement, food grains change hands or ownership multiple times through private transporters and warehouse employees who are hired through tenders. This leaves room for fraud and malpractice as the states’ capacities to monitor and check operational lapses regularly are limited.
Further, state food grain warehouses are often rented out. The renting entities are usually the state civil supply cooperatives, agriculture marketing cooperatives, or state warehousing cooperatives, none of which falls under the state food departments’ supervision. Additionally, the absence of automated protocols for quantity and quality checks makes the system vulnerable during the movement of grains.
“End-to-end computerization” of TPDS
The central government introduced “end-to-end computerization” (E2EC) of TPDS operations in 2012 to address the key logistical challenges of TPDS and improve food grain distribution across the country. The E2EC initiative had the following features:
• Complete digitization of the NFSA beneficiary database in all states and union territories;
• Online allocation of grains to states;
• Computerization of supply-chain;
• Transparency portal implemented in all states and union territories
E2EC works to revamp and strengthen TPDS and make the system more transparent, efficient, and accountable by making use of electronic solutions. A key initiative under the E2EC scheme is the Food & Essential-commodities Assurance & Security Target (FEAST). The FEAST module helps to automate and digitize stock inventory management, allocation policies, online generation of allocation orders, stock release orders, stock movement receipts, and delivery orders. Concurrent with the implementation of the FEAST module, other innovations have significantly improved the monitoring of grain movement and the availability of real-time grain inventory. These innovations include automated tracking of commodity movement using geo-positioning systems, digitization of grain weighing machines at warehouses, computerization of state-owned warehouses, and automation of FPS. Each FPS employs an electronic point of sale machines to record transactions and authenticates beneficiaries at the shop level.
We at MSC intended to gauge the efficiency in grain movement, flow of information, and sufficiency of the financial assistance given to states for transportation for the benefit of the Indian government. We conducted a comprehensive assessment of the TPDS supply chain in five states—Haryana, Tamil Nadu, Telangana, Assam, and Uttar Pradesh. Results from the assessment led us to conclude that these states continue to use the resources available to accommodate the newer systems and replace manual processes that have defined their operations for years. However, the states face hurdles, as one supply chain system cannot be adapted to the disparate systems across the entire country.
The TPDS supply chain is mammoth, in terms of both geographic spread and population coverage. As a result, many factors including terrain, stakeholders, ground-level facilities, resources, and infrastructure affect the way the program runs. Automation requires not only buy-in from all stakeholders but robust IT infrastructure and network connectivity, all of which are either not available or are beset with challenges in India.
MSC observed that different states have been able to implement these changes in varying degrees. Telangana and Tamil Nadu were far more advanced with near-complete digitization of their supply chain on a real-time basis. Both states found success in establishing their state supply chain management (SCM) system and even track the grain procurement process efficiently. Similarly, Telangana and Uttar Pradesh adopted advanced technologies like GPS and geo-fencing, and have an impressive command center to track trucks carrying food grains. Other states like Assam and Haryana use an SCM designed by the central government, FEAST.
Adopting this system in Assam, however, required several tweaks and customizations. For example, FEAST was incapable of accommodating state-specific needs, which include:
• Multiple stakeholders that operate the state warehouses and consequently require multiple logins;
• Different modes of transportation, such as carts, animals, and boats used to transport food grains in hilly and riverine geographies.
The situation is also unique for states, such as Uttar Pradesh, where the government runs its own mobile-based application to track food grains dispatched from warehouses as adequate IT infrastructure does not yet exist. In Haryana, warehouse digitization has presented difficulties as warehouses are owned by unrelated entities and stock positions continue to be maintained manually. FEAST required customization in Haryana to track grain movements and subsequently generate release orders accurately.
The future of food security in India
Over the next 10 years, TPDS will undergo drastic changes to include:
One Nation One Ration Card: In TPDS, each eligible beneficiary household has a ration card tagged to their home state with which they visit the FPS and pick up the food grains they are entitled to. With the “One Nation One Ration” card initiative, the government intends to introduce an inter-state portability feature through which any NFSA beneficiary can pick-up their ration entitlement from any state regardless of where they reside. This is particularly helpful for migrant populations who leave their home states to earn livelihoods elsewhere. Currently, inter-state portability is active in two sets of states—namely Andhra Pradesh & Telangana and Gujarat & Maharashtra. The government plans a pan-India implementation by June, 2020.
To ensure portability on such a large scale, states will require an automated system that captures demand requirements at every FPS dealers’ location to determine monthly grain allocations. Existing SCMs are not designed to plan for demand based on the uptake at FPS. The states manage the changes to allocations at the shop level manually, based on demand from FPS dealers. This results in a lag in demand and allocation. In the case of Haryana, the state handles demand due to portability through increased allocation to all FPS dealers by 10%. A data-driven system of grain allocation that can manage “one nation one ration card”, therefore, would require significant improvements to the current hardware and software capabilities of state SCMs.
Fortification: The Indian government has been gradually moving from food security toward nutritional security. The government plans to provide fortified rice and wheat that is enriched with essential vitamins and minerals to poor households under the National Food Security Act (NFSA). This requires many changes to the existing TPDS process. Fortification of rice and wheat introduces another step in transportation to the supply chain, where grains would need to move to and from fortification mills, which necessitates additional man-power, cost and time.
Some governments have been experimenting with fortification on a small scale. In 2015, the Haryana State Cooperative Supply & Marketing Federation Limited (HAFED) started a wheat flour fortification program in two blocks of the Ambala district. Under this program, the government provided fortified wheat flour to TPDS beneficiaries instead of wheat kernels to address deficiencies of vitamin B12, folic acid, and iron. For a national-level fortification program to succeed, the existing TPDS would require a re-engineering of processes and systems to absorb the additional requirements of time and resources (labor and cost).
Providing choice to beneficiaries: The Indian government has been experimenting with various models for the transfer of food subsidies. The mode of transfer is either in cash, as in the case of Direct Benefit Transfers in Puducherry, Dadra & Nagar Haveli, and Chandigarh, or in-kind, as with the physical distribution of grains throughout the rest of India. It appears that policymakers prefer the physical distribution of food grains due to existing challenges related to financial inclusion and the unavailability of markets in rural India.
However, MSC believes that beneficiary choice will characterize the future of TPDS. Maharashtra launched a pilot under which NFSA beneficiaries have the option to choose the mode of subsidy transfer, that is, cash or in-kind with an option to revert to the original choice if they are not happy. At the national level, this would demand the management of dynamic data of more than 200 million poor NFSA households on a monthly basis. MSC does not believe TPDS in its current avatar is capable of this feat.
Next steps
The future of TPDS in India is gradually transitioning from one characterized by food security to one of “nutrition security”, which means that the poor will not only have access to food, but essential micronutrients to improve their overall health and nutritional standards. The Indian government has started to take steps to improve the nutritional efficiency of PDS through fortification and through diversification of the food basket. To achieve this and ultimately place more choice in the hands of beneficiaries will require further strengthening and automation of the supply chain, as well as close coordination between states.
A greater emphasis on technology and the development of systems is essential to ensure that states are able to move away from archaic manual processes. Unfortunately, a one-size-fits-all approach to the automation of TPDS is yet to come to a country as diverse as India.
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