On January 9 at the India Habitat Centre in New Delhi, the Tata-Cornell Institute (TCI) brought together a group of researchers interested in food-based safety nets to discuss future pathways for India’s Public Distribution System (PDS).

Welcoming the group, TCI Director Prabhu Pingali highlighted the critical connection between agriculture, food, and nutrition in reducing poverty. He emphasized the need for sustainable production systems and a comprehensive understanding of the current state of the PDS and related schemes, such as the Integrated Child Development Scheme (ICDS) and the Mid-Day Meal (MDM) program. While discussing the impact of digitization and the role of Aadhaar in providing transparency, he emphasized the need to address challenges to the accessibility of technology, especially for low-income households living in remote areas. He also discussed the importance of local procurement for the PDS, the inclusion of millets, and the debate between food-based benefits and cash-based transfer programs.

The event had two panels. The first focused on the past decade of the PDS under the National Food Security Act (NFSA) and the second discussed potential future pathways for the PDS. In this blog post, we summarize some of the important takeaways from each panel.

The PDS under the NFSA: reflecting on the past decade

The first panel, which was chaired by Pingali, featured three speakers: International Food Policy Research Institute (IFPRI) Senior Research Fellow Avinash Kishore, independent researcher Dipa Sinha, and TCI Research Associate Raghav Puri.

Key takeaways

• The PDS has seen an expansion in coverage and significant modernization (such as end-to-end computerization, Aadhaar-based authentication, and the introduction of “portability of benefits” under the One Nation, One Ration Card, or ONORC program). Despite improvements to the PDS, estimates of food grain leakage range between 22–28 percent (down from 42 percent a decade ago).
• While the share of PDS food grain continues to increase in the declining per capita consumption of total cereals, there are concerns about the stagnant per capita consumption of pulses and declining per capita consumption of millets.
• State policies have strengthened the PDS, which acted as a safety net during the COVID-19 pandemic, preventing many households from experiencing starvation. However, coverage issues persist, particularly in urban areas, due to the delay in the conducting of the national census. India’s diversity requires varied PDS models, as a uniform approach has proven ineffective.
• Digitization presents challenges, including technological failures and the opportunity cost of time usage. The recent e-KYC (electronic know your customer) process showed how people can get excluded from the PDS—especially migrant families—highlighting the need to balance the costs and benefits of digitization.
• Exclusion from the PDS is a bigger issue than leakage, especially in urban areas where households are more vulnerable. The PDS often discriminates against the urban poor, acting like a migration tax. Major grain leakages and the need for local transparency and accountability are critical issues.
• Procurement challenges persist due to minimum support price (MSP) incentives, leading to an imbalance between procurement and production, with supply exceeding local demand in some regions. Adding more crops to the PDS might lead to reduced market linkages for these crops.
• PDS coverage and its budgetary allocation are substantial, raising questions on public spending and the environmental costs associated with it. The PDS cannot be decoupled from the political economy as any redesign of the PDS within the larger food system is tied to politics.

Avinash Kishore (left), Raghav Puri (center), and T. Nandakumar (right) discuss the PDS during TCI’s event at the India Habitat Centre in Delhi. (Photo provided)

Future pathways for the PDS

The second panel, which was chaired by Indian Council for Research on International Economic Relations Distinguished Professor Ashok Gulati, featured three speakers: Puri, Arcus Policy Research CEO Shweta Saini, and former Union Food and Agriculture Secretary T. Nandakumar.

Key takeaways

• There are substantial ecological costs associated with the PDS and there is currently an overaccumulation of grain buffer stocks at three times the required levels. There is a critical need for diversification and the enhancement of nutritional outcomes as strategic priorities.
• The transition to direct benefit transfers (DBT) in Karnataka’s PDS demonstrates mixed preferences—people in urban areas and rural landowners favor cash for its flexibility, while rural laborers and tenants prefer grains for food security. Nutritionally deprived and remote regions should retain grain transfers, while cash transfers could improve diet diversity, financial inclusion, and beneficiary agency where feasible. This highlights the need for a context-specific, hybrid approach rather than a one-size-fits-all solution.
• Direct benefit transfers offer several advantages, including improved diet diversity, administrative efficiency, and the empowerment of rural women. However, challenges like exclusion, limited savings patterns, and the modest impact on household incomes persist.
• A qualitative assessment of the transition to direct benefit transfers in Puducherry and Chandigarh reveals that while cash transfers are preferred by many, they are often inadequate and need to match the food grain entitlement under NFSA. Implementation challenges include limited access to banks, market proximity, and women’s diminished agency in decision-making.
• To enhance the effectiveness of direct benefit transfers, policy efforts should focus on increasing cash adequacy, introducing a choice-based PDS, and gradually reforming the current system, while addressing gaps in financial and technological literacy and improving banking infrastructure.
• Improving the efficiency of the PDS and transitioning to direct benefit transfers require addressing governance challenges, political considerations, and systemic inefficiencies. While direct benefit transfers are more efficient in delivery, key issues include addressing the linkage between procurement and the PDS.
• Future strategies should focus on unified beneficiary systems, balancing cash and grain transfers, decentralizing procurement, and redefining the role of the Food Corporation of India as a financial intermediary. A governance-centric approach and enhanced state accountability are critical for redesigning and streamlining the system.

Bharath Chandran C is an associate researcher at the TCI Center of Excellence in New Delhi.

Naveen Sridhar Kottayil is a research support specialist and a TCI alumnus.

Featured image: Attendees of TCI’s event on the future of the Public Distribution System during one of the event’s two panels. (Photo provided)