Bumps in Gujarat's PDS highway

System formally in place for Aadhaar-linked payment through the state but people yet to adopt it

When young housewife Sarojben Rabari comes to buy rice from the Public Distribution System (PDS) shop in Ramnagar, on the northern fringes here, the shopkeeper asks her to pay by using her Aadhaar card. The woman refuses — she has  neither an Aadhaar card nor a bank account. She wishes to pay in cash; after all, it’s a paltry Rs 20.

The shop was anything but crowded, being the end of the month. As such, the average transaction size at these shops is in the range of Rs 60-100. Hence, the preference for cash. 

The situation is similar at most PDS outlets around here, Vadodara, Surat or Rajkot, the main urban centres in Gujarat. A state whose government recently claimed to have implemented the digital system across all PDS shops. 

A reality check shows while efforts are definitely on, PDS transactions are anything but cashless. For instance, a shop in the Ghatlodia area of western Ahmedabad was not only awaiting a point-of-sale (machine) delivery but also facing a technical snag in the food and civil supplies department’s portal, through which shopowners are supposed to make digital transactions. 

“My bank account hardly has any cash most of the time. My earnings are just enough to meet our daily requirement. I am not even aware of how to use a debit card and do not feel it is a secure process. I, therefore, prefer cash,” says Ganeshbhai Marwadi, 42, a mason who came to buy wheat and sugar at Ghatlodia. 

Most ration card holders come from lower income groups and are daily wage earners. Many PDS shops do not have point-of-sale (PoS) machines installed. Also, the Aadhaar-enabled payment system (AEPS) does not work efficiently. On top of it, consumers are mostly unaware of the new payment mode. 

The state government, however, is firm on its stand that the new AEPS has been installed across the state and cashless transactions are gaining popularity, even in rural areas. 

“We are fully ready with the cashless payment system or AEPS. At a very short notice of only 25 days, we have prepared and launched the entire system across Gujarat and all 17,250 PDS shops are on the AEPS platform. There are some issues but those are network-related, which we will soon resolve,” claims Manoj Kumar Das, principal secretary of the department of food, civil supplies and consumer affairs.

Issues

PDS shopowners say the government has imparted some initial training but they are not comfortable with the system. One of them said there had been only one training session, of one hour. 

Their reluctance to switch to the digital system and discontent with the training gets starker when one finds that most of them (at least in urban areas) are actually graduates. The real reason seems to be monetary. Shopowners get a commission of Rs 60 per quintal of grain sold, with income of Rs 6,000-7,000 per month.  However, they have been asked to deposit Rs 5,000 for the infrastructure required for switching to the digital platform. Most have paid but given the low income from these shops, it is non-lucrative. 

The department says it plans a second round of training for them. And, an awareness drive is being planned for consumers in the coming months.

According to the department, of 37.5 million people, 58 per cent have Aadhaar-linked bank accounts. Of these, 25 per cent have already moved to the cashless platform.