PDS computerisation: What other states can learn from Kerala
06 Jul 2015
Given the leakage in the Public Distribution System, Indian states are being encouraged to computerise their PDS. This column analyses Kerala’s experience with PDS computerisation and highlights mechanisms through which technology combats leakage in the state’s PDS. However, it argues that computerisation needs to be coupled with deeper interventions to remove incentives for corruption.
Over the last few months, the discussions around the
Public Distribution System (PDS) have become increasingly heated. Different
takes on leakage rates, as represented in the debate between Gulati and Saini
(2015) and Drèze and Khera (2015), have caused fervent discussion not only regarding
the different estimates of diversion, but also their
policy implications. In this context, the key question revolves around mechanisms of improvement: how, if at all, can PDS reform be
enabled, and can this possibly remain successful in the
As a researcher on information systems for poverty
reduction, I have been studying the PDS from the angle of computerisation of
its supply chain. As stated by the National e-Governance
Plan (2012), Indian states are now being exhorted to digitalise
their PDS. The ‘enemy’ to be tackled is clearly identified, that is, the
massive rates of leakage from the system, ascribable for the most
part to illegal diversion of PDS commodities to the black market (Khera 2011).
As a result, end-to-end computerisation of PDS is being considered
a panacea for improvement, adopted with increasing faith by reforming states.
So far, examples of PDS computerisation have taken
different shapes, according to the parts of the supply chain on which
e-governance is focused. The Justice Wadhwa Committee Report for PDS (2011)
divides computerisation into two parts: a first one to prevent
diversion, and a second one to enable secure identification at ration shops.
The Committee has recognised Chhattisgarh as a model state for the first
component, and Gujarat as a model for the second. Other states have embarked upon
the ambitious effort of computerising the whole supply
chain, most notably Karnataka, where electronic PDS (e-PDS) covers
transactions with authorised wholesale dealers and a biometric database of
Does computerisation work, and does it provide a
viable means to improve the PDS? In recent work
(Masiero 2015), I collect ethnographic data1 on the Kerala experience with a computerised
PDS, across eight months in 2011-2012. My research
focuses on improving the PDS through computerisation, and its implications for
Towards a computerised
PDS in Kerala
Before moving to a targeted PDS (TPDS)2 system in 1997,
Kerala was recognised for having the best PDS in the nation, catering to almost
all of its citizens and yielding a significant impact on nutrition (Kumar
1979). However, the impact of targeting was destructive in several ways: first,
the new policy left Kerala with less than 10% of the previously allocated goods
(Swaminathan 2002). At the same time, drastic reduction of the Above Poverty Line
(APL) subsidy led these households to leave the PDS, shrinking the
customer base of ration shops and leading many of them to shut down
(Krishnakumar 2000). In the wake of a collapsed PDS, Kerala was by far “the
worst hit” by the shift to a targeted system
(Suchitra 2004). Therefore, in the late 1990s the state government decided to use
computerisation as a means to break out of the programme’s crisis.
Computerisation of the Kerala PDS occurred in three
phases. The first one, started in 2001, involved the digitisation of the data
of all ration cardholders, registered in a unified PDS database: their records
can now be accessed and modified on request by Taluk (block) Supply
Offices (TSOs). The second phase consisted of the
construction of a software used by TSOs for three functions: operating a Ration
Card Management System, managing allocation to ration shops (through a suite of
software called ‘Allocation 2.0’), and using an inspection monitoring system to
organise inspections in the shops. The third phase, still ongoing,
involves computerisation of the ration shops themselves: a
biometric interface has been piloted in a set of ration shops in Thiruvananthapuram
district, using Aadhaar3 as a means of user recognition. This is performed
through point-of-sale machines4,
installed in each ration shop, which identify Aadhaar-registered users through their
fingerprints5. The Kerala
government is promoting this measure very actively, to the point that the terms
‘digital PDS’ and ‘biometric PDS’ are often used interchangeably by the
Why does the use of biometric recognition receive
so much attention, across all levels of intervention, and why is it much more
actively promoted than any other measure? On the field, I have witnessed a
strong relationship between promotion of biometric
PDS and the embeddedness, in this specific measure, of three mechanisms for PDS
improvement. First, Aadhaar-based
recognition assures, at least in principle, that the user actually is who he or
she claims to be, thereby preventing the use of ‘bogus cards’ through which
goods aimed at poorer households are diverted.
Secondly, the biometric mechanism also prevents illegal practices
of ration dealers, who cannot freely
divert their goods to the market now. In the biometric system, every transaction
needs to correspond to a valid Aadhaar
number, and cannot therefore involve non-entitled entities. Third, biometric
identification can be performed from all ration shops, meaning that citizens
can easily opt out of transacting with a ration dealer who
is suspected of irregular behaviour. It
is these three mechanisms through which a successful PDS reform can be
Two unresolved issues
Studying Kerala’s computerisation effort is
paramount today, given that state-level PDS reform
seems to be the main antidote to widespread leakage from the system. However,
there are still two main issues in the programme design, which need to be
considered to understand what computerisation can, and cannot, do to combat illegal
diversion from the PDS.
First, as a result of Aadhaar’s integration, ration dealers
are controlled, and prevented from selling PDS commodities in the
black market. While logically correct, this measure overlooks
diversion at all other stages of the supply chain: no biometric control is there
when goods are transferred from the Food Corporation of India (FCI) to local
godowns, then to authorised
across the state, and only then to the ration shops which cater to the people.
A long, complex supply chain (more complex for the food-deficit Kerala) needs
monitoring at all its stages, especially as diversion, fieldwork revealed, is
widespread - for example, a border mafia is responsible for disappearance of huge loads of
goods at the border with Tamil Nadu, and incentives for
diversion, given the dual price system of PDS versus
the market, are present at all levels. On the one hand, ration dealers have
been endangered by the shift to a targeted PDS, and may
therefore be more prone to corruption than others; on the
other hand, a system that constructs them as the ‘one guilty part’, brackets a
large part of the corruption phenomenon, as this may ignore
corruption in the early stages of the supply chain.
Second, the biometric PDS prevents ration dealers
from diverting goods, but crucially, it does not remove their incentive to do so, which can be done by
enabling a more viable future for their businesses. In Kerala,
where a wave of debt-induced ration dealers’ suicides pervaded the state after
1997 (Suchitra 2004), ration dealers had been highly threatened with
unviability, and resorted to all means to maintain their businesses. As in
other states, corruption became a “requirement for economic survival” (Khera
2011): the Government of Kerala did take measures to sustain their businesses,
ranging from recognising an additional 17% of households as Below Poverty Line
(Swaminathan 2002), to giving credit concessions and allowing sale of non-PDS goods
in ration shops (Nair 2000). While these measures helped continuation of the
Kerala PDS, they did not constitute a long-term fix to unviability;
unfortunately, that fix has not come with computerisation either. As a result,
the incentive for corruption persists, and leads to a prospectively worrying
scenario wherein technology may be bypassed by ration dealers, in order to
ensure survival of their shops.
Removing incentives for corruption
As a citizen has powerfully pointed out, in a
letter to the Economic and Political Weekly (Jana 2015), PDS experiences
problems of both design and governance, and different fixes are required for
these. My study of PDS computerisation in Kerala has found three mechanisms
through which technology combats leakage: if properly implemented, it prevents
access to non-entitled households, detects illegal sales from ration shops, and
allows citizens to opt out of transacting with ration
dealers suspected of cheating. However, the focus
is almost exclusively on ration dealers, and the system does not remove the
incentives for them to be corrupted. Both issues go beyond the
governance level, and require fixes in terms of programme design.
So computerisation can, as Kerala
demonstrates, be deep enough to enable substantial reform of the PDS. If the
programme is to be given a chance of survival, now that plans to
replace it with cash transfers are being voiced, computerisation will have a significant
place in state-level reform. At the same time though, an eye needs to be
kept on programme design: a digital PDS can detect and monitor
corruption, but this needs to be done
holistically across the supply chain, rather than only focusing on
a sole ‘guilty part’ in the system. In addition, digital reform should
be coupled with deeper, substantial intervention in the
programme’s functioning, so that prospects of survival of
ration shop businesses are not dependent on illegal sales of goods to the
market. Both streams of intervention require careful planning,
and will be crucial to maintaining the PDS - if it
is to survive the leakage crisis that still affects it.
is the systematic study of people and cultures. It is designed to explore
cultural phenomena where the researcher observes society from the point of view
of the subject of the study.
- TPDS was introduced in June 1997. TPDS envisaged that the BPL population
would be identified in every state and every BPL family would be entitled to a
certain quantity of food grains at specially subsidised prices. Thus, TPDS intends to target the subsidised provision of food
grains to ‘poor in all areas’.
- Aadhaar is a
12-digit individual identification number issued by the Unique Identification Authority of India (UIDAI) on behalf of the
Government of India. It serves as a proof of identity and address anywhere in the country.
- Point-of-sale machines enable recognition of the
user and of his/ her entitlements on
the basis of fingerprint identification.
- After my fieldwork, an order by the Supreme Court of
India (2013) has prevented states from making Aadhaar enrollment compulsory for
access to social safety schemes. However, biometric recognition of users is
still being conducted, in a number of states (example,
Andhra Pradesh (AP),
Chhattisgarh, Karnataka) using, instead of Aadhaar,
independent biometric registration
- Anand, G (2013),
‘Biometric ration cards in the state soon’, The
Hindu, 25 March 2013.
- Drèze, Jean and Reetika Khera
(2015), “Understanding leakages in the Public Distribution System”, Economic
& Political Weekly, 50(7): 39-42.
- Gulati, A and S Saini
(2015), ‘Leakages from Public
Distribution System (PDS) and the way forward’, Working Paper
294, Indian Council for Research on International Relations, New Delhi.
- Khera, Reetika (2011), “India´s Public Distribution System: Utilisation
and Impact”, Journal of Development Studies, 47(7): 1038-1060.
- Krishnakumar, R
(2000), “Public Distribution System: A system in peril”, Frontline, 17(19), 16-29.
- Kumar, SK
(1979), ‘Impact of subsidized rice on food consumption and nutrition in Kerala’,
International Food Policy Research Institute, Washington DC.
- Jana, Jaydev (2015), “Reforming
PDS”, Economic and Political Weekly, 50(13), 4-5.
Wadhwa Committee on Public Distribution System (2011), ‘Report on the State of
Kerala’, Central Vigilance Committee on the Public Distribution System, New
- Masiero, Silvia
(2015), “Redesigning the Indian Food Security System through E-Governance: The
Case of Kerala”, World Development, 67(3): 126-137.
- Nair, Chandrasekharan (2000),
Interview, Frontline, 17(19), 30-34.
- Suchitra, M (2004),
a fine Public Distribution System in Kerala’, Policy Brief, India
Madhura (2002), “Excluding the needy: The public provisioning of food in India”, Social
Scientist, 30(3), 34-58