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The Indian government is planning a major facelift for ration shops. As part of the post-election five-year plan that all ministries have been asked to chalk up for the next government, the country’s 5.38 lakh fair price shops (FPS) will be turned into nutrition hubs right down to the village level. The government believes that this would be the most effective mass connect with the 80 crore people who avail of various items distributed through ration shops.
“We plan to make these FPS become a nutrition hub at the local level,” a top official said. Under the plan, the government will disburse mass level nutritional products such as millets and millet-based items. “However, sourcing of those locally could be an issue,” sources said. The Food Ministry may rope in farmer-producer organisations (FPOs) and primary cooperatives to fill the gap in sourcing of nutrition-rich products.
SIDBI, NIESBD be roped in
Small Industries Development Bank of India (SIDBI) will provide the finance to each ration dealer with a government guarantee, while the Noida-based National Institute for Entrepreneurship and Small Business Development (NIESBD) under the Ministry of Skill Development and Entrepreneurship will train the shop owners to enhance their skill, he said.
“As the government has already rolled out the SMART-PDS, there is a need for transforming the fair price shops which work as the window for the government. The facelift will involve and promote healthy nutrition among the large number of beneficiaries who come to the shop to take their monthly ration,” an official source said.
Already, Aadhaar authentication and linkage of ration cards have been done, and work is in progress to link the weighing machine with the e-PoS so that the exact quantity getting disbursed to each beneficiary is recorded automatically through technology, said a top official of the Food Ministry. As many as 4.88 lakh FPS have been using e-PoS, while the government expects the remaining 50,000 shops to be enabled in the current fiscal.
Pilot programme
Once the new government approves the transformation, nutritional hubs may be rolled out in some 100 districts as a pilot programme. Based on the feedback, necessary changes will be made to roll it out across the country. SIDBI’s invoice financing will be crucial to address the credit challenge for the FPS dealers.
Last month, the Department of Food and Public Distribution signed MoUs with the Ministry of Skill Development and Entrepreneurship (MSDE) and SIDBI to tackle skill development challenges faced by ration dealers, particularly in areas of digital literacy, financial literacy and entrepreneurial skills needed to adapt to the market changes and explore new business opportunities.
Under the MoU, SIDBI will offer a simple-to-use digital solution for providing working capital assistance to FPS through its GST Sahay application to help them operate on a credit model for selling non-PDS commodities. The same MoU will help in making the ration shop as nutrition hub as FPS dealers will get access to credit to purchase the millet-based products, the sources said.
The SMART-PDS scheme, launched in April 2023, intends to standardise PDS operation through the usage of technology and integration with FCI, CWC, Ministry of Education and UIDAI by March 2026.
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