Feeding India’s Poor: Plugging Leakages, Without Doing Any Harm

Policy implications and recommendations for direct benefit transfers and its automation

India’s Public Distribution System (PDS) has long come under fire for its high cost of delivery and susceptibility to corruption and leakages. The attempts to reform in the last decades however, offer hope that leakages can be significantly reduced if dedicated action is taken.

This policy brief discusses two distinct and more recent approaches, namely, Direct Benefit Transfers and e-PDS (i.e. Automation in PDS), as undertaken by different states to address leakages. The findings are primarily discussed from the perspective of delivery to all eligible citizens and highlight existing issues with both approaches. These have implications depending on the specific state context and on this basis, recommendations are made to policymakers and implementing agencies.

The brief discusses the following key points:

  • The PDS sustains the food security of India’s poor and its coverage has been extended as per the NSFA, which is currently being implemented in 29 States/UTs;
  • In the interest of addressing leakages in PDS, some states have embarked on end-to-end automation. Others, such as Chandigarh and Puducherry, are providing direct cash transfer (also referred to as DBT) of food subsidy to the beneficiaries;
  • Both approaches require a prerequisite step of digitization of records that helps weed out ghost beneficiaries (de-duplication).

About this Publication

By Sivalingam, I. , Singh, L.