Asserting that there are major deficiencies in the Public Distribution System (PDS), the Economic Survey has mooted the idea of providing food coupons to poor people to address the issue of diversion of foodgrain.
"...It may be useful to introduce food stamps/coupons which may be valid outside the PDS outlets once the markets get better integrated. Food coupons will allow the consumers a wider choice," the survey said.
The report noted that the value of food coupons needs to be indexed to food inflation.
PDS is a major initiative of the government to ensure food security for the poor.
According to the survey, the 11th Five-Year Plan (2007-12) has observed that the PDS seems to have failed in making foodgrain available to poor people.
The survey noted that there are some major deficiencies in the targeted PDS including non-availability of fair price shops, leakages and failure in price stabilisation.
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The NDA government had redesigned PDS as TPDS by dividing the beneficiaries into three categories — AAY, BPL and APL — and fixing the rates of wheat and rice for each category separately.
Further, the report has said multi-application smart cards would help in reducing the incidence of bogus ration cards or diversion of foodgrain.
The Centre may soon introduce smart cards for PDS beneficiaries as a pilot project in two districts of Haryana and in the union territory of Chandigarh.
"Leakages can also be restricted by re-directing subsidies currently under PDS to better funding of other schemes like Mid-Day Meal scheme or the ICDS," it added.
The food subsidy bill, to meet the difference between economic cost of foodgrain and their sales realisation through TPDS, stood at Rs 43,668 crore in fiscal 2008-09.