Public Distribution System: Objectives, Functioning, Limitations


The detailed syllabus released by FCI for the post of Assistant General Manager describes the important topics for Agriculture and Agriculture Economy. One of those topics is “Public Distribution System: Objectives, Functioning, Limitations, Revamping”. The topic is of major importance for exams like FCI AGM, NABARD Grade A, and also for UPSC. If you aim to clear the FCI AGM exam, then read this article thoroughly to know all the important points for this topic. 


The Public Distribution System plays an important role in ensuring food security. The country’s Public Distribution System allows for the subsidized distribution of food grains to the poor. It also aids in the management of free-market prices for goods sold through the scheme. The government places a high value on the goal of evaluating PDS outcomes in order to ensure that the equal distribution system serves the function for which it was established.

History of Public Distribution System (PDS)

India’s Public Distribution System is a vast network. The idea of Public Distribution System in India emanated during 1942 for the very first time in a revised form as a consequence of the shortage of food grains during World War II. As a result, the government began to interfere with the distribution of food to the people. Rationing was first implemented in 1939 in Bombay by the British Government as a measure to ensure fair distribution of food grains to urban consumers as a result of increasing prices.

Thus, rationing during a crisis period, especially during scarcity, was the historical precursor to the national policy of food grain stabilisation and management. After India’s independence in 1947, the government’s primary goal has been to provide food security to all of its people. The Ministry of Consumer Affairs, Food, and Civil Supplies established a public distribution system to achieve this goal.

To address the needs of poor communities, the government established the Targeted Public Distribution System (TPDS) in 1997. The primary goal of TPDS is to provide low-income people with subsidised food and fuel through a network of ration shops. Food grains such as rice and wheat are purchased from farmers, allocated to states, and shipped to the ration shop where the beneficiary purchases his entitlement. The responsibility for identifying the poor, procuring grains, and supplying food grains to beneficiaries is shared between the centre and the states. 

The National Food Security Act, 2013, was passed by Parliament in September 2013. The Act primarily relies on the current TPDS to provide food grains as legal entitlements to low-income households. This ushered in a new era by making the right to food a legally protected right. The note maps the food supply chain from the farmer to the beneficiary in order to explain the consequences of this Act, discusses barriers to TPDS implementation, and debates solutions to strengthen TPDS.


The Public Distribution System (PDS) is a network that ensures the availability of essential goods to customers in all parts of the country. This is a transaction mechanism in which food grain, sugar, and other necessities such as kerosene oil and edible oil are made available to the citizens of the state at a reasonable price in order to meet their basic needs. Regular and timely supply is ensured through a tight monitoring scheme, making the Public Distribution System an effective instrument against various powers in the open market and keeping inflator tendencies in check. The following are the major commodities:

  • Wheat
  • Rice
  • Sugar
  • Kerosene

The government of India established the Ministry of Consumer Affairs, Food, and Public Distribution to manage and distribute food grains more efficiently. The Ministry of Food and Public Distribution has been divided into two departments: Department of Food and Public Distribution and Department of Consumer Affairs. The food and public distribution department is further divided into two sections for the procurement and storage of food grain.

Objectives of PDS

The purpose of the Public Distribution System is not limited to the distribution of rationed products. The primary goal of the public distribution system is to make adequate quantities of essential goods available at all times, in locations accessible to all, at rates affordable to all, and to protect the poorer sections of the population from the malicious spiral of rising prices. Major goals of public distribution system are as under:

  • Make products available to customers, especially the disadvantaged/vulnerable sections of society, at reasonable prices
  • Correct the current supply and demand imbalances for consumer products. Check and prevent hoarding and black marketing in essential commodities
  • Ensure social justice in the distribution of basic necessities of life
  • Even out fluctuations in the costs and availability of mass-consumption products
  • Support poverty-relief programmes, especially rural jobs programmes (SGRY/SGSY/IRDP/Mid-day meals, ICDS, DWCRA, SHGs, and Food for Work), as well as educational feeding programmes

Major functioning of Public Distribution System

  • Food Grains Procurement: The food grains given to TPDS recipients are obtained from agrarians at MSP. The MSP is the price at which the FCI buys the crop directly from farmers; it is usually higher than the market price. This is intended to provide farmers with price support while also incentivizing production. The central government is in charge of this. They obtain food materials at minimum prices from the Food Corporation of India and state agencies, such as wheat, rice. Other necessities, such as iodized salt, palm oil, candles, ghee, and linen, have also been purchased.
  • Ration cards for the poor: A Ration Card is a file provided by the State Government under an order or authority of the Public Distribution System for the purchase of basic goods from Fair Price Shops. State governments issue distinct Ration Cards to Above Poverty Line, Below Poverty Line, and Antyodaya families, and Ration Cards are reviewed and checked on a regular basis. Any Circle Office may provide an application form for a new Consumer (Ration) Card to an Indian person.
  • Identification of the poor and needy: The centre and states use a detailed method to classify qualifying BPL households

Table: Process of identification of BPL families: (Sources: Department of Food and Public Distribution; Planning Commission; Ministry of Rural Development; PRS).

National sample survey organizationConduct sample survey of consumer expenditure every five yearConsumer expenditure refers to the expenditure of a household on certain basic goods and services. The expenditure on this basket of goods is the basis of the poverty line. 
Planning commissionEstimates state wise poverty such as the number of people below the poverty line. Uses NSSO household expenditure data
Central governmentAllocates food grains to each state based on the state wise poverty estimates of planning commission and population estimates of the Registrar General of India as March 2000The number of BPL families was estimated using the Planning Commission’s 1993-94 poverty figures. Despite the Planning Commission’s publication of new poverty figures in 2004-5, 2011-12, this figure has not been updated.
Ministry of rural developmentAs part of its BPL census, the government releases requirements for inclusion and exclusion from the BPL list.According to the BPL census 2002, criteria such as land holding size, clothing owned, food security, and means of livelihood are used to classify BPL families. 
State governmentIdentify eligible householdsBased on above criteria

Since the government does not recognize APL families, any household earning more than the poverty line is eligible to apply for a ration card. In addition to BPL families, the centre allocates food grains to states for APL families. Nonetheless, this distribution is focused on the availability of food grains in central stocks and the average amount of food grains purchased from the centre by states over the last three years. As a result, if a state’s offtake increases from the previous years, the allocation to that state increases.

Limitations of Public Distribution System

The problems with the Public Distribution System have not abated in the country. The government in some states is inept and deceptive. In these states, deficiencies such as massive stock shortages, forged supply entries on ration cards, commodity diversion for open market sale, and forged ration cards are reported. The Public Distribution System suffers from erratic and low quality food grain supplied by Fair Price Shops.

The public delivery scheme has the following drawbacks in general:

  • State identification of the poor is not foolproof. A large number of poor and vulnerable people are excluded, and a large number of fake cards are also released.
  • The owner of Fair Price Shop obtains forged ration cards and sells food grains in the open market
  • People do not purchase the necessary number of food grains from the Fair Price Store
  • Food grain diversion by a Fair Price Shops holder and mediator
  • Good quality food grains are often replaced with lower quality, low-cost food grains
  • The public distribution system only contains a few food grains, such as wheat and rice, and therefore does not include full nutrition

Latest Update

The government had announced that it will provide an additional 2 kg of subsidised foodgrains under the PDS over the next three months, bringing the total monthly quota to 7 kg per individual. After a nationwide lockdown to control the spread of COVID-19, the Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Narendra Modi, approved the Food Ministry’s proposal to supply an additional two kilo subsidised foodgrains to over 80 crore people registered under the Public Distribution System (PDS).


The Public Distribution System is a critical resource for the food security of the poor, especially the urban poor and women who manage household food supplies. Increasing the food supply to the poor is a major challenge for the government. As many people died due to starvation in the past, the Public Distribution System has played an important role in helping the needy. In the Indian sense, India’s Public Distribution System is the world’s largest distribution network of its kind.

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