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Note on end-to-end Computerisation of targeted public distriburtion system (TPDS) Operations

As part of efforts being made to bring in reforms in the Public Distribution System and to improve the distribution of foodgrains across the country, the Department of Food and Public Distribution, in association with all States & UTs, is implementing a Plan Schemeon "End-to-end Computerisation of Targeted Public Distribution System (TPDS) Operations”. The scheme is being implemented on cost sharing basis with States/UTs under the XII Five Year Plan 2012-17. The costs are being shared on 90:10 basis in respect of North Eastern States and on 50:50 basis with other States/UTs. (Since some of the States/UTs could not complete all of the activities under the scheme within the timelines of the plan scheme, therefore due to this reason, the Government has extended the validity of the by 1 year (i.e. up to 31st March 2019, without any escalation in the project cost of the scheme).

2. Following are the key activities and their expected outcomes under Component-I of the scheme:

  • i.Digitization of Beneficiary Database– Enable correct identification of beneficiaries; removal of bogus cards and better targeting of food subsidies
  • ii.Online Allocation of foodgrains– System generated allocation of foodgrains to bring transparency in allocation of foodgrains, up to the Fair Price Shops level.
  • iii.Computerisation of Supply Chain Management– Timely availability of foodgrains to intended beneficiaries at FPS; check leakages/diversion
  • iv.Grievance Redressal Mechanism and Transparency Portals– Introduce transparency & public accountability in the implementation of TPDS through transparency portals, online grievance registration and toll free helpline numbers.

3. The Scheme was approved by the CCEA in October 2012. The Department conveyed administrative approval for the scheme to all States/UTs on 10.12.2012. The Scheme has been declared as a Mission Mode Project (MMP) by the Government. National Informatics Centre (NIC) is the Technical Partner under the scheme. Total project cost approved by CCEA is Rs. 884.07 Crore, which includes Government of India’s share of Rs. 489.37 Crore and States/UTs share of Rs. 394.70 Crore. So far, financial assistance of Rs. 397.66 Crore has been released to 31 States/UTs, NIC, etc. During financial years 2012-13 (Rs.41.69 crore), 2013-14 (Rs.187.05 crore), 2014-15 (Rs. 34.35 crore), 2015-16 (Rs. 59.85 crore), 2016-17 (Rs. 53.64 crore) 2017-18 (Rs. 20.45 crore) and 2018-19 (Rs. 0.63 lakh) Details are at Annex-I. As regards remaining 5 States/UTs, Gujarat and Karnataka didn’t seek central financial assistance for Component-I of the scheme. State Govt. Haryana and UT of Chandigarh were provided funds under the pilot scheme which have been subsumed in the Plan Scheme. Recently, UT of Andaman & Nicobar Islands has requested for central financial assistance. Further funds would be provided to States/UTs only after they exhaust the funds already released to them and they furnish Utilization Certificate of the same.

4. A National Transparency Portal http://pdsportal.nic.in has been developed by NIC through which citizens may access the Portals of the respective State/UT Food and Civil Supplies Departments. Based on the reports received from States/UTs and NIC, the activity-wise progress in States/UTs is at Annex-II. Activity-wise progress is summarized as below:

  • i.Complete digitization of ration cards under NFSA in all States/UTs. Ration card details are available on transparency portal of all States/UTs.
  • ii.Online Allocation has been implemented in 30 States/UTs.
  • iii.Supply-chain has been computerised in 21 States/UTs.
  • iv.Transparency portal are implemented in all States/UTs.
  • v.Grievance redressal facilities (Online Grievance Registration System / Toll-free helpline numbers (1967/1800-series) are available in all States/UTs

5. Further, to identify and weed-out duplicate/ineligible beneficiaries, and to enable rightful targeting of food subsidies, all States/UTs have been requested to seed Aadhaar numbers in Ration Card database. At present overall seeding stands at 83.53% at the National level. Also, in pursuance of the provisions in the Section-7 of the Aadhaar Act 2016 this Department has notified the use of Aadhaar to receive subsidised foodgrains or Cash transfer of food subsidy under NFSA, on 8th February 2017 (as amended from time to time).

6. As an outcome of digitization of RC/beneficiary records, de-duplication due to Aadhaar seeding, transfer / migration / deaths, change in economic status of beneficiaries, and during the run-up to and implementation of NFSA, a total of 2.75 Crore ration cards have been deleted/cancelled in 29 States/UTs. Based on this the Government has been able to achieve an estimated ‘Rightful Targeting of Food Subsidies’ of about Rs. 17,500 Crore per annum.

7. Under the Component-II of the scheme, while in consultation with NIC (Technical Partner for the scheme), and Unique Identification Authority of India (UIDAI) this Department has prepared guidelines for the automation of Fair Price Shops, and have shared with all States/UTs. The FPS automation involves installation of electronic Point of Sale (ePoS) devices at FPSs for – authentication of beneficiaries, recording of sales to beneficiaries, and uploading of transaction data in a central server. As per the said guidelines, NIC is entrusted to develop software for ePoS device and overall solution and this Department has signed a Memorandum of Understanding (MoU) with STQC Directorate for testing of PoS/Mobile terminal device. As regards financial assistance, Government has approved an FPS dealers’ margins @ Rs. 87/quintal to State/UT Governments under NFSA, which also includes reimbursement of Rs. 17/quintal for their expenditure towards purchase and operations of ePoS devices at their FPSs. Such expenditure would be shared between Centre and State/UT Governments on 75:25 basis for Special Category States/UTs and on 50:50 basis for General Category States/UTs. So far, more than 3.33 Lakh FPSs are automated across the country. As a result, State/UT Governments are able to reduce ghost lifting, and are able to achieve rightful targeting of food subsidies by authentication of eligible beneficiaries, improvement in service delivery, weeding out bad FPSs, etc.

8. In pursuance of enabling provisions under Section-12 of NFSA, Department has started DBT (Cash Transfers) for foodgrains to check leakages and diversions of foodgrains, and is pursuing with States/UTs to opt for DBT (Cash Transfers). Under this, the subsidy component is credited directly in to the bank accounts of eligible beneficiaries who are free to buy foodgrains from anywhere in the market to ensure their foodgrains entitlement. In this regard, the Department has notified ‘Cash Transfer of Food Subsidy Rule, 2015’ in August 2015. For taking up this model, pre-requisites for the States/UTs are – (1) complete digitization of beneficiary data seeded with Aadhaar numbers and bank account details of beneficiaries, (2) adequate availability of foodgrains in the open market, and (3) availability of banking facilities near to beneficiaries.

9. The DBT (Cash Transfers) scheme has been implemented in UTs of Chandigarh and Puducherry on w.e.f. 1st September, 2015; and in Dadra & Nagar Haveli (in few urban areas)w.e.f. 1st March, 2016. Presently, about 2.77 lakh, 6.15 lakh, and 0.28 Lakh beneficiaries are covered under DBT (cash transfer) scheme inthe three UTs of Chandigarh, Puducherry, and Dadra & Nagar Haveli respectively.

10. A pilot DBT scheme on the pattern of "PAHAL” has been launched in the Nagri Block of Ranchi District in Jharkhand w.e.f. October 2017. Under this scheme, the subsidy amount (economic cost – central issue price) is directly transferred into the bank accounts of the eligible NFSA beneficiaries in advance, in the beginning of the month, so that beneficiary could purchase his/her allocated foodgrains from the Fair Price Shop at Economic Cost of the foodgrains after authentication on Point of Sale (PoS) device. Central Issue Price is added by the beneficiary him/herself.

11. To promote the use of less-cash/digital payment mechanisms for day-to-day financial transactions, this Department in collaboration with all States/UTs has also started the implementation of these digital payment mechanisms in the PDS. At present the digital/cashless transaction facilities have been enabled by 10 States/UTs in their FPSs, using one or more payment modes. So far, as per reports available from States/UTs, a total of 51,479 FPSs have been equipped with digital payment facilities (mostly AePS) in 10 States/UTs.