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PDS gets smart

In Chhattisgarh's capital, Raipur, smart cards are helping plug pilferage and weed out corruption from the Public Distribution System

R Krishna Das  |  Raipur 

Basant Jagat pulls a rickshaw in Raipur, the capital of Chhattisgarh, to support his family. On a good day, he can earn up to Rs 200; on bad days, he has to contend with Rs 150. The money is just enough for his family of six to keep body and soul together. If he doesn’t go out to work for a day or two, the financial stress begins to tell. Till a couple of months ago, Jagat would face a dilemma every month. He draws from fair price shops, where grain, sugar, and kerosene are sold at prices subsidised by the government. There would be serpentine queues in front of these shops. He would have to wait the whole day to get his quota of At times, the wait could be as long as three days. That would deprive him of his earnings. What should he sacrifice: inexpensive or his income?

But now he has no such worries. That’s because the has launched an innovative scheme that aims to revamp the public distribution system, or PDS, and, in the process, weed out pilferages to the black market, remove corruption and make life hassle-free for poor folks like Jagat. The scheme is called CORE PDS, and is based on the latest information technology tools: smart cards, hand-held point-of-sale devices at shops and servers that store all data and monitor all transactions. It is the brainchild of a technical director with the National Informatics Centre who is currently posted at

Here’s how it works. Instead of a traditional card made of paper, people like Jagat have been issued smart cards which carry his personal details and also his entitlement. Every time his card is swiped at a shop, the state knows how much he has drawn vis-à-vis his quota. All the shops have been linked by satellite. So, if there is a queue of people at one shop, Jagat is free to go to another shop. It is like modern banking — customers are no longer tied down to one branch or shop. The pilot is running successfully in where 72,000 smart cards have been issued, and will be extended to Rajnandgaon and Durg from November 1. By June next year, it will be in operation in all the towns and cities of the state.

This works in different ways. One, the shop has to electronically inform how much stock it has received, which can be matched instantly with what was despatched from the government’s warehouse. Earlier, when all records were offline, much of the was stolen in transit, and the work of matching despatches and receipts was enormous, and therefore seldom undertaken. So, that leakage has been plugged. Two, the government knows precisely how much of the received by each shop has been sold to the card holders. In the past, unscrupulous shopkeepers would show on paper that the was sold to the poor and then sell large quantities in the open market. (Halwais, for instance, are known to be big buyers of sugar meant for PDS). That cannot be done now, unless the shopkeeper gives lesser to the buyer than what is swiped on the card. Actually, it is now in the shopkeeper’s interest to see that his stocks are full and not leaked to non-entitled buyers. Or else, the smart-card holders will just go to the next shop.

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Officers of the are satisfied with the outcomes, though they don’t have a precise idea of how much of the meant for PDS was getting stolen. But the numbers could be substantial. Consider this. In Delhi, half the petrol sold in fuel stations is believed to be adulterated with kerosene meant for PDS. At least 40 per cent of the grain meant for the poor gets diverted to the market. Economists have estimated that the national scam here could be to the tune of Rs 16,000 crore in a year. It’s a small beginning to solve a monumental problem.

The process of computerising the PDS supply chain started some six years ago and was completed in 2007-08. The CORE PDS scheme started in July 2011 when the state began to compile data of individuals from the card. Based on that data, each below-poverty-line beneficiary was provided with a smart card. In April this year, 147 shops were equipped with a point-of-sale device with GPRS connectivity to operate the smart card. is given manually at the shop but the authentication and recording of transaction on the server is done electronically, through the point-of-sale device.

On the beneficiary’s demand, the shopkeeper or his salesman enters the quantity of he wants to purchase and submits it to the server, which updates the transaction and gives the success report. Thereafter, a receipt is printed and the commodities are issued to the beneficiary. Chief Minister has named the point-of-sale device — an The beneficiary can use the card anywhere in the city and collect He has the freedom to buy sugar from one outlet and wheat from another — the details of his purchase and entitlement appear on the smart card at all times. “I now carry the card with me while peddling my rickshaw through the city and purchase from any shop where the rush is less,” Jagat says. Of course, this doesn’t crimp his daily earnings.

This is just an instance of relief; the 72,000 card holders in can’t stop recounting the advantages of CORE PDS, and how it has improved their lives. “Earlier, the head of the family on whose name the card was issued had to go to the shop for collecting ration,” says Tahshil Kanpan who works in a private automobile components shop. Now, his children take the smart card to the shop and get the without any problem. This has helped Kanpan attend office without break.

Over the years, the shopkeepers had become brazen. They perhaps knew that a large number of poor people depended on them for their food; as a result, not only had they become corrupt but also arrogant. But all that is history, in at least. Punitram Pradhan, who stays in Shakti Nagar, says the shopkeeper in his area was so arrogant that he wouldn’t give to you if you failed to pick it up for one month. “We are poor people and depend on daily wages,” Pradhan says. Sometimes, people like Pradhan may not have enough money to purchase from the shop. Earlier, they would be penalised for it. But now they can just move to another shopkeeper. And that’s precisely what Pradhan and most of the people in his area have done.

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Many shops in the city have had to close down following such migration to other shops. Kaushlendra Singh, the managing director of Chhattisgarh Food and Civil Supplies Corporation, says about 25 shops in the city had closed after CORE PDS started. “Since there is the condition that the shop has to lift 25 per cent of the allotted stock, these 25 shops failed as people weren’t turning up,” Singh says, adding that the district administration had to close the shops. This has kicked off competition among the shops. “The competition has forced the owners to ensure that they stock the best quality of commodities and to behave properly with the customers,” says Roshani Sahu who heads a self-help group that runs a shop in Rajatalab. It was her outlet from where CORE PDS started. Significantly, another store is located adjacent to her outlet. “This is causing us problems as people return the commodities collected from that shop claiming that the other one has better quality,” Sahu says. So Sahu needs to stock more

This large-scale migration from one shop to another, however, has caused a new headache for the Chhattisgarh administration. It now needs to target its delivery better, in line with the shifting demands. So, a control room has been set which constantly monitors the stock status in the shops. “When people started switching over from one shop to the other, the demand for stock in one shop would increase and decline in another one; that was a big problem that we faced initially,” Chhattisgarh Food Secretary says.

The success of this scheme has prompted the state to start a mobile shop. “At present, three mobile vans are moving around the city,” Singh says. The day and time are fixed for each locality, where the van is stationed with the in-charge equipped with the point-of-sale device. Santoshi Kumari, a housewife in Shakti Nagar, claims that in the shops often one does not get all the commodities. The van carries all commodities and helps people cope with shortage in any outlet.

But this was a minor irritant in a scheme that has cleared a lot of dirt around PDS. In the past, out of all the complaints that the government received from people, 25 per cent were related to irregularities in PDS. In Raipur, such complaints have fallen to almost zero.

First Published: Sun, October 28 2012. 00:44 IST