Targeted Public Distribution System

Policy Update
Asmeet Kaur

The Targeted Public Distribution System is India’s largest initiative, drafted to provide essential food grains at subsidized prices to the most vulnerable section of society. The government of India launched it in June 1997 to replace the erstwhile Public Distribution System(PDS). It is now operated by the National Food Security Act, 2013, and is a safety net that aims to combat hunger and malnutrition in the nation.

Background

The Public Distribution System (PDS), the precursor to the Targeted Public Distribution System (TPDS), was introduced during World War II to manage food shortages. Over time, especially in the 1990s, it drew criticism for its urban bias, high fiscal burden, and leakages. Most importantly, it failed to reach those who needed it the most—many non-poor households availed subsidies, while a large number of poor households were left out.

In response, the Government of India launched the TPDS in June 1997 to make food subsidies more targeted and equitable. Beneficiaries were classified into two categories: Below Poverty Line (BPL) and Above Poverty Line (APL) families. BPL households received larger quantities of food grains at highly subsidized rates, while APL households were provided smaller quantities closer to the market price. This marked a significant shift in India’s food policy—from a universal system to a targeted approach —with the intent of ensuring that subsidies reached those who needed them the most.

Further reforms were made, and the Antyodaya Anna Yojana (AAY) was launched in December 2000 to provide food security for the poorest of the poor by distributing food grains at a highly subsidized price. The Act also mandates women as heads of ration-card households and doorstep delivery to Fair Price Shops (FPS).

Functioning

TPDS is shared responsibility between the Central and State Governments. The Central Government, via the Department of Food & Public Distribution—DFPD and primarily through FCI, is responsible for :

Procurement: Buying food grains (mainly wheat and rice) from farmers at a Minimum Support Price (MSP).
Allocation: Distributing the food grains to the states/UTs based on their population coverage under the NFSA.
Transportation: Moving the procured grains to designated FCI depots across the country.

However, the operational responsibilities fall on the State/UT governments. They lift grain, handle intra-state logistics, identify beneficiaries, and run FPS outlets where ePoS devices authenticate beneficiaries and record transactions. Since the 2010s, reforms such as computerization, Aadhaar seeding, and electronic Point of Sale (ePOS) have been introduced, which aim to curb diversion, eliminate ghost cards, and improve transparency.

Since the implementation of the NFSA, the system has standardised the price and quantity of food grains. The Priority Households(PHHs) receive 5kg of food grains per person per month. Antyodaya Anna Yojana (AAY) households receive 35kg of food grains per household per month.

Initially, the prices for these grains were highly subsidized, with rice at ₹3/kg, wheat at ₹2/kg, and coarse grains at ₹1/kg. In 2023, the government announced the provision of free food grains for all NFSA beneficiaries for one year under the PMGKAY scheme, further strengthening food security.

Performance

Coverage and Free Grain Policy: The Cabinet decision in 2023 to extend free food grains under PMGKAY for five years has committed to a uniform, zero price entitlement across the nation. Estimates suggest a multi-year fiscal outlay of around ₹11.8 trillion for the 2024–2029 period.
Automation and Authentication: By December 2024, about 99.8% of Fair Price Shops(FPS) were ePoS enabled, and over 97% of transactions were recorded through biometric/ Adhaar authentication. According to the official reviews, these metrics have been consistently high in 2025.
One Nation, One Ration Card (ONORC) Scheme: This is a landmark reform that allows beneficiaries to collect their subsidized food grain from any ePoS-enabled Fair Price Shop in the country. This is beneficial for the migrant workers and their families, ensuring that they don’t lose their food security entitlements when they migrate. Since its implementation from August 2019 – December 2024, there were over 158.8 crore portability transactions, delivering 315.8 LMT of grains, evidence that migrants and mobile beneficiaries are actively using it for access nearer to workplaces or new residences.
Digitization of Ration Cards: The Government has digitized almost all the Ration Cards, creating a centralized database to eliminate duplicate and fake cards. This has led to the cancellation of millions of counterfeit cards, which have a substantial amount of government subsidy.

Impact

TPDS has had an extreme impact on India’s food security. It has been influential in stabilizing the food prices and ensuring a consistent supply of essential goods, hence protecting the poor from market volatility. The system also plays a crucial role in providing income support to farmers through MSP Procurement.

However, the impact has been uneven:

Targeting Errors: There are still significant errors in exclusion (poor households being left out) and inclusion (non-eligible households being included). The main reason for this is the use of outdated census data for beneficiary identification.
Food security cushioning & consumption smoothing: Free of cost NFSA entitlements in 2024-25 have provided a strong buffer against the price spikes in cereals and the higher inflationary pressure for low-income households.
Nutritional Inadequacy: The system’s heavy focus on rice and wheat leads to a lack of nutritional diversity, adding to “hidden hunger” and micronutrient deficiencies.
Leakage control and transparency: ePoS-linked authentication and transaction logging curbs the ghost beneficiaries. With 99.8% automated FPS and 97% biometrically authenticated transactions by Late 2024, the system’s audibility has improved compared to the pre-ePoS era.

Emerging Issues and Way Forward

Nutritional Quality vs. Cereal Heavy entitlement: TPDS mostly remains cereal-centric. While NFSA ensures the staple security, it also does little to improve the intake of proteins and micronutrients. Some states add oil/salt/pulses in the scheme, but it is uneven and fiscally contingent.

Way Forward: The Centre and State must collaborate to expand procurement of regionally suitable crops, especially millets and pulses, while also running awareness campaigns for their nutritional value.

Technology dependence and Exclusion Risks: The use of Adhaar-based ePoS systems has helped reduce leakages but also introduced exclusion errors. Biometric mismatches, connectivity issues, or device malfunctions temporarily deny beneficiaries their entitlements, particularly in rural and remote areas.

Way Forward: The planned SMART-PDS platform should be made human-centric by offering options like iris authentication, OTP, or manual overrides. Multilingual prompts, offline capabilities, and grievance redressal mechanisms are crucial to ensure that no household is denied food due to technical glitches.

Portability and Interstate Coordination: The One Nation, One Ration Card (ONORC) has been a game-changer for migrant workers. However, sustaining it requires accurate, timely reconciliation of stock and subsidy flows across the state. FPS malpractices and Weak settlement systems could undermine beneficiary confidence.

Way Forward: ONORC 2.0 should add new features such as public dashboards of portability data, cross-state grievance portals, and analytics to pre-position stocks during peak migration sessions. Allowing beneficiaries to rate FPS outlets or flag service gaps would further improve accountability.

Conclusion

Over the past few years, TPDS has integrated into a digitally authenticated, portable, and now free-of-cost grain entitlement for NFSA households. The outcomes are evident: ePoS devices now cover almost the entire network, ration cards are portable across the country, and migrant workers are making extensive use of the system. The next stage is not just more technology but better delivery, such as nutrition-oriented diversification, reliable authentication, stronger grievance redress, and stock management. TPDS can move from being a safety net for calories to a dignified, citizen-centric food security system that keeps pace with India’s mobility, urbanisation, and nutritional needs.

References

Press Information Bureau. (2025, January 3). Cabinet approves comprehensive reforms in Public Distribution System under ‘Smart PDS’ scheme [Press release]. Government of India. https://www.pib.gov.in/PressReleasePage.aspx?PRID=2086345
Press Information Bureau. (2023, June 7). One Nation One Ration Card (ONORC) plan successfully implemented across all States/UTs [Press release]. Government of India. https://www.pib.gov.in/PressReleaseIframePage.aspx?PRID=1980689
Government of India. (nd). One Nation One Ration Card (ONORC) plan [Dataset]. Open Government Data (OGD) Platform India. https://www.data.gov.in/catalog/one-nation-one-ration-card-onorc-plan
Lok Sabha. (2023, August 8). Answer to Unstarred Question No. 4518: Implementation of ONORC [PDF file]. Parliament of India. https://sansad.in/getFile/loksabhaquestions/annex/185/AU4518_ge2pFO.pdf
National Food Security Act (NFSA) Portal. (nd). Public Distribution System (PDS) . Department of Food & Public Distribution, Government of India. https://nfsa.gov.in/portal/PDS_page
Department of Food & Public Distribution. (nd). Distribution of food grains . Ministry of Consumer Affairs, Food & Public Distribution, Government of India. https://dfpd.gov.in/distribution-of-food-grains/en
Department of Food, Civil Supplies and Consumer Protection, Maharashtra. (nd). Scheme for modernization and reform through technology in Public Distribution System (Smart PDS) . Government of Maharashtra. https://mahafood.gov.in/en/scheme-for-modernization-and-reform-through-technology-in-public-distribution-system-smart-pds

About the Author

Asmeet Kaur is a researcher at IMPRI and an undergraduate student at Indraprastha College for Women, Delhi University, with a keen interest in Public policy and administration.

Acknowledgement: The author sincerely thanks Ms. Aasthaba Jadeja and the IMPRI team for their valuable support.

Disclaimer: All views expressed in the article belong solely to the author and not necessarily to the organization.