This document proposes using UID and biometric authentication to improve India's Public Distribution System (PDS). Key issues with PDS like leakages and lack of transparency could be addressed by tracking each beneficiary's monthly grain collection using point-of-sale devices connected to a central database. This unique identification of beneficiaries would eliminate bogus cards and allow portable access to rations. Increased accountability across the supply chain would also incentivize better monitoring and services for both beneficiaries and the government.

1. Plugging the leaks: Improving the reach &
efficiency of PDS
Report By:
Lokireddy Siddhartha
Karthik Akunuru
BVK Aditya
Muthali Ganesh
Praveen Kartha

2. Effective Food security bill need an effective PDS!!!
There are many systemic challenges that plague the PDS
system today
• PDS Leakages: Accessibility Issues, Bogus ration
cards, Errors in categorization, Products Diverted to
open market.
• Scale and Quality of Issue: Many FPS are open only
for a few days in a month and beneficiaries who do
not visit the FPS on these days are denied their right.
• System Transparency and Accountability: The most
serious flaw plaguing the system at present is the lack
of transparency and accountability in its functioning.
• Grievance Redressal Mechanisms: Malpractices
abound to the great discomfiture of the common man.

3. Our Solution: An IT based solution approach to positively confirm and track the
individual beneficiary offtake on a monthly basis.
Advantages of an IT based solution:
• Removal of Bogus and Shadow ration cards: This solution will effectively weed out bogus and
shadow ration cards from the system. By putting a mechanism in place to positively confirm and track
the individual beneficiary offtake on a monthly basis, the problems relating to PDS leakages,
Transparency and Transportation would get resolved, as leakage would become more difficult to hide.
• Better Identification - Program will lead to better identification of individuals and families leading to
better targeting and increased transparency and therefore better functioning of the system and
increased public approval.
• Duplicate and Ghost Detection – This provide duplicate detection infrastructure to the PDS program.
It can also assist in the development of special tools to assist in the assessment of eligibility of
applicants.
• Eliminate Malpractice in FPS: The shop keepers are accountable for the quantity of food grains sold.
• Support for PDS reform – This system can further be extended to old age pension scheme and other
schemes were government fund needs to be transferred to a person’s bank account directly.

4. UID – Targeting each beneficiary uniquely
The Solution Components --The draft food security act implicitly requires a computerization of
various elements of the PDS system. The key components of the proposed solution and how they can
be implemented in a rapid and cost effective manner is briefly described in this section.
 Creation of a Beneficiary Database
 Enrollment of identified family members by enrolling them into the UID
 The inclusion of all families in the beneficiary database is important for an effective elimination of
Shadow and Bogus cards.
 Individual Beneficiary Tracking -- Deployment of a Point of Sale (PoS) system that is equipped
with a fingerprint reader to positively identify a beneficiary before an issue is made. The PoS
system can generate a receipt and automate the bookkeeping reducing the time required for a
transaction. The data on eligible beneficiaries for the next month is transferred to the PoS each
month with the offtake information for the previous month is collected.

5. • Information, Communication Technology Infrastructure -- Information
Communication Technology (ICT) infrastructure will need to be deployed to
connect all the key offices of the Food Department including the Secretariat,
Commissioner cell, District Offices, Teshil/Block offices and Whole Sale Points.
• This could include the use of handheld devices or the PoS Device for managing
inspections and other data collection activity.

6. UID DATABASE
. BIOMETRIC SCAN
. ID
. FAMILY DETAILS
. RATION CARD NO.
FPS DATABASE
Region 1
. BIOMETRIC SCAN
. Product Sold
. Inventory
. Next Order date
FPS DATABASE
Region 2
. BIOMETRIC SCAN
. Product Sold
. Inventory
. Next Order date
FPS DATABASE
Region 3
. BIOMETRIC SCAN
. Product Sold
. Inventory
. Next Order date
District NIC

7. Implementation Mechanism
• The PDS Control order stipulates that as part of the monitoring “State
Governments shall ensure monitoring of the functioning of the Public Distribution
System at the fair price shop level through the computer network of the NIC
installed in the District NIC centers. For this purpose computerized codes shall be
issued to each FPS in the district.”
• The program can be implemented by the State Governments with minimal changes
to the clause in the PDS control order referred above.

8. Enabling effective accountability and monitoring
• The PDS today has put in place vigilance groups and monitoring systems to ensure that food subsidies
reach the poor. A limitation the program faces however, is a lack of transparency and the clear
accountability – the government and the public have no means of verifying whether vigilance checks and
inspections were carried out, and who is accountable for delays and leakages. UID authentication would
be a tool for the government to implement high levels of accountability across the system:
I. Accountability in food grain movement: The use of UID authentication at subsidy exchange points
would ensure that the responsibility of each individual – supplier, transporter, FPS owner, inspector – is
traceable, and clearly visible across the PDS infrastructure.
II. FPS accountability: Requiring UID authentication every time the beneficiary collects the entitlement
from the FPS would ensure that the FPS owner must clearly account for the offtake claimed by his
store.
III. Beneficiary accountability: UID authentication by the beneficiary would ensure that proxy
withdrawals of entitlements are no longer possible. Beneficiaries would also not be able to withdraw
more subsidies than they are entitled to through duplicate ration cards.
IV. Community participation in monitoring: Communities in both rural and urban India have turned to
Right to Information, as well as public activism, in order to access FPS records and monitor the
functioning of ration shops. However these community monitoring efforts by individuals and civil
society organizations have been constrained by the limited access they have to records across the PDS
supply chain, before the foodgrain arrives at the FPS.

9. Incentives for residents
i) Ease in identity verification: With UID, residents can easily establish their identity, wherever they
are in the country. Identity verification will be simpler while obtaining a ration card.
ii) Expanded coverage: Ease in identity verification will allow poor residents who have so far been
shut out of food subsidies, to access food entitlements
iii) Address exclusion of eligible poor: A centralized, Aadhaar-enabled registration system for PDS
applicants would encourage governments to respond more quickly to applications, and limit the
exclusion of eligible individuals.
iv) Portability and choice in accessing benefits: A universal identification number gives governments
the chance to offer portable food entitlements, which beneficiaries can claim wherever they are in
the state.
v) Improved services through increased transparency: Clear accountability and transparent
monitoring would significantly improve access and quality of entitlements to beneficiaries.
vi) Better grievance redressal: Transparent, centralized system of grievances would encourage rapid
responses from governments on complaints.

10. Incentives for government
I. Lower costs in procurement and storage: Use of an UID-enabled MIS in
farmer registration, food grain movement, delivery and payment can ease costs
and complexity within the PDS infrastructure.
II. Ease in capacity additions: By easing registration of suppliers as well as
distributors, an UID-enabled MIS can make capacity additions and changes more
convenient for the government to implement.
III. Effective monitoring: UID would greatly improve the power of vigilance
committees and overall monitoring, as it would enable the government and public
to track delays and diversions.
IV. Expansion to other schemes: In India, a variety of programs, including the
ICDS and the MDMS, offer food entitlements to the poor. These multiple benefits
can eventually

11. Appendix
• http://uidai.gov.in/
• http://en.wikipedia.org/wiki/Public_Distribution_System
• http://www.thehindu.com/multimedia/archive/01404/National_Food_Secu_1404
268a.pdf