As the backbone of India’s Public Distribution System (PDS), fair price shops (FPS) play a crucial role in ensuring food security for millions of citizens. Reforms are needed to enhance the profitability of FPS dealers, strengthen their livelihood, and ensure they serve citizens’ entitlements.
There are approximately 5.37 lakh ration shops in the country, of which around 2.95 lakh are operated by private individuals. The remaining are operated by cooperative societies, self-help groups, panchayats, and others. State governments also provide private dealerships to the disadvantaged. These shops, which are visited by millions of beneficiaries every month, can also function as social change establishments that promote citizens’ nutrition.
Stepping into the future
In the past, the central and State governments have undertaken initiatives to support FPS operators in expanding their offerings and making them sustainable through additional sales and better uptake of rations by beneficiaries.
For instance, the PDS Control Order 2015 allowed dealers to sell non-PDS commodities. The Ministry of Consumer Affairs, Food, and Public Distribution has been partnering with other Ministries and agencies to broaden the range of products and services available, including Common Services Centre services, banking services, and the sale of cooking gas cylinders.
In 2023, the government started exploring ways to make ration shops vibrant, modern, and viable by enabling them to offer more products and services along with the PDS operations.
The Department of Food and Public Distribution (DFPD) started an initiative to develop 75 model ration shops. These model shops could have waiting spaces, CCTV cameras, toilets, and drinking water facilities, among other things.
This initiative has shaped a programme for establishing SMART-FPS or Jan Poshan Kendra. It is a step in the right direction, addressing the viability of FPS while also focusing on improving nutritional outcomes. This initiative can potentially transform the country’s food distribution landscape.
The United Nations World Food Programme (WFP) in India and the DFPD are collaborating at the national and State levels to increase efficiency, accountability and inclusion in the supply chain and distribution of food entitlement schemes. Apart from the Jan Poshan Kendra, these transformational initiatives include route optimisation, rice fortification, smart warehouses, grain ATMs, and mobile storage units.
Unlocking entrepreneurship
One of the critical issues FPS face is the need for more access to credit to initiate new businesses. The proposed Jan Poshan Kendra programme recognises this challenge and aims to empower FPS owners to expand their business opportunities and revenue streams. The programme seeks to create an environment where these shops can establish creditworthiness through simple-to-use digital solutions and leverage credit facilities from the Small Industries Development Bank of India and other institutions.
Furthermore, the lack of entrepreneurship skills and training has been a significant barrier for FPS owners in diversifying their operations. The emphasis of the Jan Poshan Kendra programme on boosting the confidence of FPS owners and equipping them with essential entrepreneurship skills is a crucial step towards addressing this challenge. The programme aims to enhance their digital literacy and provide training in retail business, enabling FPS owners to leverage digital platforms and technologies effectively. This will further contribute to their success as they tap into the existing e-commerce market like aggregators already doing business with kirana or local grocery stores.
Jan Poshan Kendra as change agent
Transitioning from food security to nutrition security is another critical aspect that the Jan Poshan Kendra programme aims to address by encouraging FPS dealers to offer affordable and diverse food to influence choices and preferences towards nutritious options. Thus, the programme aligns with the Prime Minister’s Overarching Scheme for Holistic Nutrition (POSHAN) Abhiyan, creating a new pathway for improved nutrition for all citizens.
WFP Annapurti pilots showed the potential of FPS dealers as change agents. For example, a dealer in Uttarakhand transformed his shop into a modern, citizen-friendly space, attracting more beneficiaries and increasing PDS sales. This demonstrates that FPS dealers can change their behaviour and become agents of change with the right incentives.
The WFP supports DFPD pilots at 30 locations in Gujarat and Telangana by helping create a model for better infrastructure, skill-building, and income-generating opportunities. Additionally, WFP is setting up standalone Annapurtis in two locations to give beneficiaries 24-hour access to PDS foodgrains, mainly benefiting migrant populations. The proposed upgrade includes installing solar panels for renewable energy, waste management areas, and provisions for wheelchair access, creating an inclusive and sustainable environment for FPS and their customers.
The Jan Poshan Kendra programme aims to provide the support the FPS owners need to thrive. It envisions a future where they can sustain their businesses and contribute to building a healthier and more food-secure India.
Elisabeth Faure is Country Director of the World Food Programme in India
