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LATEST NEWS UPDATES | Nandan Nilekani suggests computerized PDS mechanism to curb pilferage by Mahendra Kumar Singh

Nandan Nilekani suggests computerized PDS mechanism to curb pilferage by Mahendra Kumar Singh

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published Published on Nov 3, 2011   modified Modified on Nov 3, 2011

A taskforce, headed by Unique Identification Authority chief Nandan Nilekani, has recommended the setting up of a dedicated mechanism for end-to-end computerization of public distribution system (PDS) across the country to check pilferage.

Once the taskforce's report is implemented, PDS consumers will have a choice to either get subsidized goods from their preferred locations or receive cash as the panel wants to give maximum choices to the beneficiaries.

Consumers can go to any PDS shop of their choice, choose any commodity and can purchase goods in convenient quantities and in any number of installments.

As part of its two-phase strategy, the panel has suggested creation of a national information utility or a public distribution system network (PSDN) by April, 2012. The pilot projects are likely to start by December, 2012. The first phase of PDS revamp will aim to improve the supply chain, and the second one will focus on direct transfer of subsidy.

To plug loopholes in the PDS is big challenge before the UPA government, which is working on food security legislation. There are about 4.62 lakh fair price shops (FPS), which distribute commodities like wheat, rice, sugar and kerosene to 18 crore families at a cumulative annual cost of more than Rs 30,000 crore. The spending is expected to go up after the food security Act comes into effect.

The taskforce pointed out that real beneficiary suffers due to "wholesale problems such as large-scale pilferage and diversion...duplicates and ghost beneficiaries, wrongful exclusion and inclusion". The PDSN is designed to implement and operate the information technology infrastructure for PDS, considering the mammoth scale and complexity of operations.

The report argued that a strong, robust IT infrastructure is key to bring about reforms in the functioning of the PDS. "The large focus of the report is to make the system more efficient (and) to make sure people have choice," Nilekani said.

It suggested that commission rates for FPS owners should be fixed to ensure that they earn adequate returns on their investment. A token-agnostic technology solution is on the anvil that can accept physical coupons, smartcards, electronic coupons and even facilitate direct cash transfers where different states can choose from different solutions based on their needs.

The Times of India, 3 November, 2011, http://timesofindia.indiatimes.com/india/Nandan-Nilekani-suggests-computerized-PDS-mechanism-to-curb-pilferage/articleshow/10587434.cms


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