Evaluating India’s Public Distribution System

India runs one of the largest food security networks in the world, feeding roughly two-thirds of its population through a web of ration shops spread across every state and union territory. The Public Distribution System (PDS) has saved countless families from hunger, yet anyone who has actually walked into a fair price shop knows the system is far from perfect. Inferior grains, missing supplies, ghost beneficiaries, and corrupt dealers continue to haunt a programme meant to guarantee the most basic human need. A serious appraisal of the PDS must look past the success stories and examine where the machinery creaks, so that reforms can finally match the scale of ambition.

Why the PDS matters in the food security landscape 🔗

The PDS distributes rice, wheat, sugar, and kerosene at subsidised rates through a network of fair price shops operated jointly by the central and state governments. After the National Food Security Act of 2013 turned food access into a legal right, the system began serving nearly 80 crore people. The Food Corporation of India procures the grain, largely from surplus states like Punjab and Haryana, and moves it to deficit regions.

On paper, this is a remarkable logistical feat. In practice, the scheme is dogged by structural issues that undermine its reach and effectiveness. An honest appraisal therefore has to confront both what the PDS achieves and what it fails to deliver.

Structural shortcomings that weaken the system 🔗

The PDS is not a single failure point but a chain of weak links, each feeding the next. Understanding these shortcomings helps explain why reforms have taken so long to show results.

Urban bias and rural neglect 🔗

For decades, economists have pointed out that the distribution of subsidised food grains has been skewed toward urban centres, while rural areas – where the majority of the poor actually live – receive insufficient and irregular supplies. Studies of PDS functioning repeatedly find that rural households depend more on the open market than on ration shops simply because the shops are poorly stocked or unreliable. Earlier assessments of the PDS flagged this urban bias along with failure to effectively serve poorer sections of the population.

This bias is particularly painful given that chronic food insecurity is concentrated in rural pockets. When ration shops in remote villages open only a few days a month, or run out of stock before the poorest can reach them, the very purpose of the programme collapses.

Insufficient and irregular supply of food grains 🔗

Beneficiaries routinely complain that the quantity of grain they receive falls short of their legal entitlement. A study of beneficiaries in Telangana found that poor quality food grains and the non-availability of specified items were the most pressing concerns reported by families in both urban and rural areas. Supply chain bottlenecks, storage shortages, and transportation delays mean that grain often reaches fair price shops late or in smaller quantities than sanctioned.

The Food Corporation of India struggles with inadequate storage capacity, and CAG audits have repeatedly documented grain rotting in open storage. When food meant for the hungry decays under tarpaulin sheets, it represents both a governance failure and a moral one.

Distribution of inferior quality grains 🔗

One of the most persistent complaints against the PDS is that consumers receive grain of visibly poorer quality than what government records show was dispatched. Rogue dealers frequently swap good-quality stock received from FCI godowns with inferior grain purchased from the open market, pocketing the difference. Reviews of PDS beneficiaries have documented adulteration, distribution of inferior quality goods, and underweighment as recurring problems across states.

Worryingly, even the government has limited data on the quality of food grains actually distributed. Regular testing by state food safety officers exists, but separate monitoring of PDS grains is patchy, which makes it difficult to hold the supply chain accountable.

Corruption, leakages, and rogue dealers 🔗

If there is one issue that defines public distrust in the PDS, it is leakage. Subsidised grain intended for the poor routinely gets diverted to the open market, where it fetches a far higher price. The Planning Commission’s 2005 performance evaluation of the Targeted PDS estimated around 36% leakage and 21% diversion of subsidised grains, with roughly ₹2,640 crore of central subsidy never reaching any consumer.

More recent estimates suggest matters have improved but remain serious. A 2025 review hosted by Cornell’s TCI noted that food grain leakage estimates now range between 22-28 percent, down from around 42 percent a decade earlier. The Shanta Kumar Committee in 2015 had pegged leakage at nearly 47% during 2011-12, underlining how severe the problem historically was.

Bogus ration cards and malpractices by FPS owners 🔗

The system has long been plagued by ghost beneficiaries – ration cards issued to people who do not exist, have died, or have moved away. Fair price shop owners exploit these cards to claim grain allotments that are then sold in the black market. Academic reviews have identified bogus cards and inadequate functioning of fair price shops as core problems that persist even after multiple rounds of reform.

Malpractices by FPS owners include underweighing rations, overcharging beyond the issue price, running shops at arbitrary hours, and refusing service to beneficiaries who question the quantities. Because FPS dealers often enjoy local political patronage, grievance redressal is weak and punishment rare.

Targeting errors and the poverty line problem 🔗

The shift from a universal PDS to the Targeted PDS in 1997 was supposed to improve efficiency by focusing benefits on the poorest. Instead, it created a new class of problems: inclusion errors, where non-poor families obtain BPL cards through political or bureaucratic connections, and exclusion errors, where genuinely poor households are left out because they lack documents or are miscategorised.

Where the poverty line falls short 🔗

The lack of clarity in how poverty is measured has made targeting a chronic weakness. A policy review in 2025 highlighted that about 61% of eligible households face exclusion errors, while roughly 25% of non-eligible households wrongfully receive benefits. This double-sided failure means scarce subsidies leak to the comfortably off while the actually hungry are turned away.

Daily-wage earners whose incomes fluctuate, migrant labourers without settled documentation, and newly impoverished families after events like COVID-19 frequently slip through the cracks. The poverty line, based on outdated survey data, simply cannot keep pace with the reality on the ground.

Irregular performance across states 🔗

The quality of the PDS varies dramatically across the country. Tamil Nadu, which runs a near-universal PDS, has historically achieved strong coverage and low leakage. Kerala, Chhattisgarh, and Himachal Pradesh also perform well. Meanwhile, states like Bihar, Jharkhand, and Uttar Pradesh have struggled, though some – notably Bihar – have made striking gains. Reporting on recent estimates shows Bihar reduced leakage from 68.7% in 2011-12 to 19.2% in 2022-23, a remarkable turnaround driven by political will and computerisation.

These disparities raise important questions about federal design: should the Centre push uniform standards, or allow states to innovate? Both approaches have costs, but the current patchwork leaves beneficiaries in poorly governed states at a systemic disadvantage.

Reforms and technology-driven fixes 🔗

Over the last decade, governments have tried to address these weaknesses through a mix of technology, identification reforms, and experiments with cash transfers. Some have worked; others have introduced new problems.

Aadhaar-based identification and biometric authentication 🔗

Starting around 2015-16, Aadhaar-Based Biometric Authentication (ABBA) was rolled out in many states to ensure that only genuine beneficiaries could collect rations. By linking ration cards to Aadhaar numbers and requiring fingerprint verification at electronic point-of-sale (ePoS) devices, the government aimed to eliminate ghost cards and identity fraud. Andhra Pradesh’s early rollout in Krishna district reportedly saved around ₹88.9 crore in subsidy leakage within the first 15 months.

But the picture is mixed. A large randomised controlled trial in Jharkhand, summarised on the VoxDev platform, found that biometric authentication on its own did not reduce leakage; gains came only after a reconciliation reform that tracked past transactions. More troubling, the study highlighted real tradeoffs between lower corruption and higher exclusion – when authentication fails due to worn fingerprints, poor connectivity, or Aadhaar seeding errors, genuine beneficiaries are turned away. Around 2.5 million beneficiaries in Rajasthan and Andhra Pradesh were reportedly denied rations because of authentication failures.

Direct Benefit Transfers and the cash-versus-kind debate 🔗

Direct Benefit Transfer (DBT) for food subsidies was introduced in 2015 on a pilot basis in Chandigarh, Puducherry, and parts of Dadra & Nagar Haveli. Under DBT, instead of physical grain, the subsidy amount is credited to the beneficiary’s Aadhaar-linked bank account, which they can then use to buy food from the open market. Analysis by IMPRI estimates that food subsidy DBT has contributed around ₹1.85 lakh crore in cumulative savings, largely through deduplication of Aadhaar-linked ration cards.

DBT has obvious attractions: it reduces logistical costs, gives beneficiaries choice, and cuts out the middleman. But critics point out that it also assumes well-functioning rural grain markets, strong banking infrastructure, and stable prices – none of which exist uniformly across India. In-kind transfers shield poor households from inflation in a way that fixed cash amounts cannot. The debate over whether cash or grain better serves the poor remains unresolved, and most policy thinkers now advocate a blended approach.

One Nation One Ration Card 🔗

The One Nation One Ration Card (ONORC) initiative, launched in 2019 and expanded nationwide during the pandemic, allows beneficiaries to claim their entitlements at any fair price shop in India using biometric authentication. This is especially valuable for migrant workers who earlier had to return home to access their rations. An evaluation study by Dalberg, Kantar, and Omidyar Network India across five states found that while 48% of ration-card-holding households were fully aware of portability, awareness gaps, documentation issues, and technical glitches continued to limit uptake, particularly for the migrant construction workers it was meant to help most.

The road ahead: balancing efficiency and inclusion 🔗

An honest appraisal of the PDS reveals a system that has evolved significantly but still struggles with its founding challenges: reaching everyone who is genuinely in need, delivering what has been promised, and doing so without pilferage. Technology has plugged some holes but opened others. Reforms have improved accountability but sometimes at the cost of excluding the most vulnerable.

A smarter way forward would combine several strands: retaining in-kind grain distribution for those who need it most while offering DBT as an option in better-served regions, investing in offline authentication fallbacks so nobody is turned away because a scanner failed, strengthening grievance redressal so that complaints against FPS dealers actually lead to action, and updating beneficiary lists with current data rather than the ageing 2011 Census. Diversifying the food basket to include pulses, coarse grains, and millets would also address the nutritional gaps that the current focus on rice and wheat cannot cover.

What do you think? If you had to choose between a reformed in-kind PDS and a fully cash-based Direct Benefit Transfer for food, which would you trust more to reach the poorest families – and why? And how much should technology be allowed to decide who eats and who does not?

References

1. https://prsindia.org/theprsblog/food-security-in-india
2. https://en.wikipedia.org/wiki/Public_Distribution_System_(India)
3. https://www.researchgate.net/publication/321771115_Public_Distribution_System_in_India_Key_Issues_and_Challenges
4. https://www.researchgate.net/publication/312053968_Major_Drawbacks_of_Public_Distribution_System_in_India-A_Review
5. https://dmeo.gov.in/sites/default/files/2019-10/Performance%20Evaluation%20of%20Targeted%20Public%20Distribution%20System%20(TPDS).pdf
6. https://tci.cornell.edu/?blog=key-takeaways-from-tcis-meeting-on-the-future-of-indias-public-distribution-system
7. https://spmrf.org/strengthening-public-distribution-system-evolution-challenges-and-the-way-forward-for-viksit-bharat/
8. https://www.dalvoy.com/en/upsc/mains/previous-years/2025/economics-paper-ii/structural-shortcomings-public-distribution-system-india
9. https://dbtbharat.gov.in/success-story/view?id=NQ%3D%3D
10. https://voxdev.org/topic/social-protection/balancing-corruption-and-exclusion-incorporating-indias-aadhaar-public-food
11. https://www.impriindia.com/insights/dbt-2-0-transforming-welfare-delivery/
12. https://idronline.org/article/rights/addressing-the-portability-gaps-of-one-nation-one-ration-card-scheme/