Case Studies
       Case Studies .::.   PDS Project

Union Budget 08-09 (INDIA) 
Ref: Page No. 3 


The Public Distribution System (PDS) is a poverty alleviation programme in India and provides “Food Security” for below poverty line population. It is one of the largest social safety net programs in the world. Under PDS essential commodities like rice, wheat, sugar and kerosene are supplied to targeted beneficiaries at affordable prices through the Fair Price Shops (FPS). The current format of PDS, called the Targeted Public Distribution System (TPDS) introduced in 1997, classifies beneficiaries in several categories based upon income level and accordingly provides benefits to the beneficiaries.

Several problems have been identified in the management and administration of the TPDS system in its current form, including

• Identification of targeted beneficiaries and correct classification
• Identification of beneficiaries at point of distribution
• Leakages and diversion of commodities at various points of the supply chain
• Escalating cost of managing and administering the TPDS

Business Problem

The Government of India is evaluating various alternatives to address these issues. The Feasibility Study for Introduction of Smart Cards for PDS Pilot, undertaken by CAL2CAL, was a Government of India, Ministry of Finance (Department of Economic Affairs) project and was sponsored by The World Bank, to evaluate the feasibility of introducing Smart Cards as a technology-based tool that will assist the TPDS administration to

• Identify and authenticate beneficiaries
• Record, maintain and report on benefit utilization
• Minimize or eliminate the leakages in the supply chain
• Enhance accountability
• Streamline the distribution process

Additionally, the report produced by CAL2CAL addressed the following:

• Assess the infrastructure requirement and cost for the deployment of the proposed Smart
   Card based system
• Assess the impact on and suggest suitable modification of the policy framework
• Evaluate and reengineer business processes
• Evaluate the Public-Private Partnership (PPP) Model for service delivery


CAL2CAL conducted several one-on-one meetings with key stake holders in the PDS chain and conducted on-site Focus Group meetings with government officials and providers to establish the project baseline. The project was conducted in selected areas of Thane and Anand.

The primary study involved extensive field interviews with the targeted beneficiaries of the PDS system, as well as the FPS owners and other involved in the distribution chain. CALDSGTM, our ground breaking product for dynamic generation of data collection Forms, was deployed on Palm® PDAs and extensively used to collect data and responses in the field. Our professionals designed the questionnaire with the CALDSG DesignerTM and the CALDSG Palm ComponentTM was used for electronic data collection in the field on Palm® devices.

The Operations team contacted the local youths of Gujarat and Maharashtra for the collection of field data after briefing them on the PDS and providing necessary training to use Palm® devices with CALDSGTM for data collection. The CALDSGTM Device and Data Management module was used to clean and consolidate the data collected from the field and the same was tabled to our panel of domain experts for analysis.

Clockwise from top: 1 – Focus group meeting at Anand, 2, 3 & 4 - Field survey in the villages of Anand and Thane using CALDSGTM and PDAs.

Post Analysis results were translated as the Institutional Report and the Technical Report. The Institutional Report addressed the policy and governance issues in implementing a Smart Card based system, while the Technical Report addressed the technical, infrastructure, cost and training issues. A combined report with projected cost of implementing a Smart Card based system, was tabled with the respective authorities to aid their process of decision making.

Figure 1: Representative Analysis of Electronic Data Collection

Solution Overview

Figure 2: Process flow Depicting Ration Drawing Process Using Smart Cards

Process Description

(a) The beneficiaries present their cards and are authenticated at the POS terminal and thereafter necessary sales are made.

(b) All sales, sales summary and stock balance reports will be available at the POS Terminal and the summary of these are available in the SAM /Service smart card of the FPS owner, and the data is uploaded to the Taluka Server at the end of the day (in an online system) or uploaded using the SAM/Service card (in an offline system).

(c) The allotment of rations to FPS is based on the stock details and consumption patterns received online/offline from the FPS. This automatically stops manipulation of stock demand by FPS owners.

(d) Information flow is either online or smart card based, depending on the type of solution fielded.

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