Last month, Union food minister Ram Vilas Paswan announced the Centre’s ambitious goal of ‘One Nation, One Ration Card’—an initiative that would allow beneficiaries of the Public Distribution System (PDS) to collect their ration from any shop in the country. This initiative, also referred to as ‘pan-India portability’, has two stated objectives. First, to enable migrant workers obtain their monthly PDS entitlements from any ration shop.
With migrant workers spending about 40% of their monthly income on food, this move has the potential to enhance their welfare. Second, it can reduce the dependency of beneficiaries on a single ration shop. Issues such as the shop not being open, long queues and ill-treatment by dealers have been reported from all over India. The idea promises to alleviate the intensity of these issues.
While one cannot argue against this laudable vision, it is unclear if national portability is necessary to achieve these objectives. Answering this question is particularly important given the magnitude of operational complexities this initiative involves.
The recent objection from Tamil Nadu, centred around cost-sharing and constitutional legality of this scheme, is only the tip of the iceberg of several such implementation challenges. Based on our research on portability in Andhra Pradesh, we contend that a more pragmatic approach to portability is to first introduce it within all states and union territories, learn from those experiences and draw informed plans for pan-India portability, if needed.
In our study, we observed that the primary benefit of portability is in reducing dependence of households on one ration shop and not in enabling migrant workers to access their entitlements. We find that about 20% of beneficiaries use this functionality every month. This magnitude of utilisation after about three years of the functionality’s introduction suggests that beneficiaries are indeed deriving some utility out of it.
Most portability users transact at an alternate shop within their neighbourhood either when their assigned shop is closed or for some other household-specific conveniences. As high as 95% of portability transactions occur within the same sub-district. One could argue that portability in Andhra is limited to the state and pan-India portability is intended to benefit inter-state migrant workers. However, a very generous estimate by Economic Survey of India (2016), says the number of inter-state migrants is about 9 million.
Even if one were to assume that all of them are eligible for PDS under the National Food Security Act, these would at best constitute 1.5% of total beneficiaries in the country. Therefore, the first priority for the Centre should be to ensure that dependency of households on a single ration shop is eliminated across the country. Given that several state governments are digitising their PDS, this can be achieved through intra-state portability in a shorter span of time and with lesser complexities. Currently, only 10 states (Andhra Pradesh, Chhattisgarh, Delhi, Gujarat, Haryana, Jharkhand, Karnataka, Rajasthan, Telangana and Tripura) offer portability.
Also, pan-India portability runs the risk of significantly increasing the cost to government. For instance, traditionally, allocation of a beneficiary to a unique ration shop provided administrators with clear visibility of shop level demand for commodities. This visibility is likely to be compromised with the introduction of portability, thus increasing the possibility of shops running out of stock.
To minimise such occurrences, the government of Andhra is shipping excess grain to all ration shops in the state. On average, inventory of grains carried by ration shops in the state is about 22% more than the total quantity needed. Extending such strategy to all shops in the country will significantly add to the administrative cost of PDS. While ensuring food security for the 1.5% is important, whether pan-India portability is the most cost-effective mechanism to achieve it, needs a careful evaluation.
And the idea that just enabling portability will achieve the objectives is too simplistic. In Andhra, we observe that SC/ST households are less likely to use portability. Several studies have reported the discrimination faced by these households in accessing government schemes.
We also observed that around 27% of beneficiaries do not have another shop within 1 km radius from their assigned shop. One can argue that the increased cost of accessing an alternate shop can preclude them from the advantages of portability.
Even in regions with multiple ration shops, we observed in our field visits that there were instances of ration shop owners colluding to not honour beneficiaries from each other’s shops. Such instances have also been reported from Chhattisgarh. Most shop dealers quote the lack of adequate incentives from the government as the reason for such collusion. Factors such as these are very contextual and might exacerbate the issues that plague the PDS now. Introducing intra-state portability will enable the Centre to uncover such issues.
In summary, our research suggests that introducing portability within all states and union territories delivers most of the Centre’s intended benefits at much lesser complexity. However, there is a need to perform a detailed cost-benefit analysis of extending this idea throughout the country. Such extension, if needed, should also include a careful consideration of context-specific factors in its design and execution.