Strengthening Food Security Through Ration Portability

Source: Indian Express
GS II: Governance; GS III: Inclusive Growth, Issues of buffer stocks and food security

Why in the News?

The One Nation One Ration Card (ONORC) reform has improves the portability of subsidized foodgrain entitlements under the Public Distribution System (PDS).

News in Brief

• India operates one of the world’s largest food-based safety net programmes, providing subsidized foodgrains to eligible households through nearly five lakh Fair Price Shops.
• Before 2019, ration entitlements were linked to the location recorded on the ration card, making it difficult for migrant workers to access foodgrains outside their home districts or States.
• Introduced in 2019, ONORC enables beneficiaries to access their entitled foodgrains from any participating FPS across India using Aadhaar-based authentication.
• Research based on ration transaction data from Bihar suggests that portability gives beneficiaries greater choice of ration dealers and can improve their bargaining power.

The Problem of Ration Shop Monopoly

• The traditional PDS system tied beneficiaries to designated ration shops.
• This limited their ability to switch dealers, even when they faced problems such as;
  • Shortage of foodgrains or reduced quantities.
  • Poor-quality grains and inadequate services.
  • Unfair treatment by ration ddealers.
• The problem particularly affected migrant workers, women and economically weaker households, who often had limited alternatives.
• Beneficiaries had little bargaining power, while dealers faced limited competition.

One Nation One Ration Card Reform

• ONORC was introduced to address the geographical restrictions of the PDS and improve access to food security for migrant workers.
• It has two important features;
  • Portability: Beneficiaries can collect their entitled foodgrains from any participating FPS across India, subject to applicable authentication and distribution procedures.
  • Divisibility: Eligible households can split their entitlements, collecting part of their foodgrains at one location and the remaining quantity elesewhere.
• These features allow migrant workers to access foodgrains near their workplace without losing access to their entitlements at their home location.

Why Bihar is an important Case Study

• Bihar is a major migrant-sending State, making it useful for understanding the impact of ration portability.
• The study discussed in the report uses data from 891 ration shops, drawing on the Aadhaar-enabled Public Distribution System (AePDS) portal and inter-State transaction data.
• Its findings indicate that beneficiaries use portability not only to address migration-related needs but also to seek better service from ration dealers.

Two Types of Portability

The study distinguishes between two forms of ration portability.

Type 1: Nearby portability

• Beneficiaries switch to another ration shop in the same locality .
• This may occur when they are dissatisfied with the price, quantity, quality of foodgrains or service provided by their assigned dealer.
• It allows beneficiaries to choose a better-performing dealer without travelling long distances.

Type 2: Long-distance portability

• Migrants access ration benefits at a location far from their registered or usual ration shop.
• This addresses the difficulties faced by workers who move between States or districts for employment.
• The study suggests that nearby portability is more common than long-distance portability in Bihar.

Evidence from Bihar

• The study provides several important findings:
  •  62 out of every 100 transactions in February and March took place at the assigned ration shop.
  • Approximately 38% of transactions occurred at the assigned shop, 55% at another shop in the same block, 4% at a shop in a different block of the same district, 2% in another district and 1% in another State, according to the reported decomposition.
  • The findings suggest that many beneficiaries use portability to access alternative dealers within their local area rather than exclusively to address long-distance migration.
  • The share of portable transactions has increased by roughly six percentage points a year since April 2022, with growth largely concentrated in nearby portability.
• Portability serves both as a safety net for migrants and as a mechanism through which beneficiaries can respond to poor service.

How ONORC Reduces Dealer Monopoly

ONORC changes the relationship between ration dealers and beneficiaries.

• The ability to switch shops gives beneficiaries an exit option.
• If a dealer provides poor service, beneficiaries can take their business elsewhere, potentially encouraging better service and accountability.
• However, the study notes that divisibility is used comparatively sparingly.
• Limited awareness, dealer incentives and other practical constraints may explain this patttern.

Challenges

• Despite its benefits, ONORC faces challenges such as limited awareness among beneficiaries, authentication failures and poor internet connectivity in some areas.
• Uneven service quality across ration shops and biometric authentication difficulties may prevent eligible households from accessing their entitlements.
• The limited use of divisibility also reduces the flexibility available to beneficiaries.
• Strengthening awareness, grievance redressal and monitoring of ration dealers is essential to ensure effective and inclusive implementation.

Way forward and Conclusion

Strengthening ONORC requires greater awareness among migrant workers, reliable connectivity, alternative authentication mechanisms and effective grievance redressal. Regular monitoring of ration shops, social audits and transparent electronic transaction records can improve accountability and prevent the denial of entitlements.

ONORC has the potential to transform the PDS from a dealer-dependent system into a more flexible, beneficiary-centred model. Ensuring fair access, effective implementation and accountability can strengthen food security and empower vulnerable households.

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