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Answer: Over the years, the Public Distribution System has become an important part of the government’s policy for the management of the food economy and poverty alleviation. However, in the context of the rising food subsidy burden, the Economic Survey has recommended a renewed and revamped approach to the current system. Issues pertaining to PDS:

• Rising food subsidy bill: From 2016-17 to 2019-20, the subsidy amount, clubbed with loans taken by the FCI towards food subsidy, was in the range of Rs. 1.65-lakh crore to Rs. 2.2-lakh crore.
• High utilization by the states: Over the last few years, states have been drawing around 91% to 95% of their allocation. NFSA norms and rising commitment toward food security have made it even more difficult to reduce the economic cost of food management.
• Issue prices: An increase in the Central Issue Prices of rice and wheat without a corresponding rise in the issue prices by the State governments (owing to political compulsion) would only increase the burden of States, which are already reeling under resource crunch.
• Overflowing granaries: PDS is not being universalized despite food stocks at such a historic high. The government seeks to get rid of grain through the Open Market Sale Scheme (OMSS) where it sells the grains at prices lower than the procurement cost but much higher than the issue prices under PDS.
• Issues pertaining to hunger and malnutrition: The current PDS includes only a few food grains such as wheat and rice, it does not fulfill the requirement of complete nutrition.

Measures that can be considered for a Revamped and Need-Based System:

• Revisiting NFSA norms and coverage: NITI Ayog is reported to have suggested a reduction in coverage to 60% from the current 75% of the rural population and to 40% from the current 50% of the urban population.
• Voluntary withdrawal: For all ration cardholders, a “give-up” option, as done in the case of cooking gas cylinders, can be made available. Furthermore, even though States have been allowed to frame criteria for the identification of PHH cardholders, the Centre can nudge them into pruning the number of such beneficiaries.
• Tiered pricing: The existing arrangement of flat rates should be replaced with a slab system. Except for the needy, other beneficiaries can be made to pay a little more for a higher quantity of food grains.
• Digitization of PDS system: End-to-end computerization of operations, digitization of data of ration cardholders, seeding of Aadhaar, and automation of fair price shops must be scaled up further.

To address the existing issues of pricing and rising food subsidy burden, a revamped, need-based PDS may serve the purpose. Greater political will and continuous revision of existing systems must drive action.