The Finance Ministry on Wednesday said Andhra Pradesh, Karnataka and Gujarat are among the nine states that have completed One Nation One Ration Card reform and thus are eligible for additional borrowing of over ₹23,523 crore.

Early this year, the Centre approved a mechanism for additional borrowing permission of 2 per cent of the Gross State Domestic Product (GSDP) in 2020-21. This has enabled the States to mobilise additional financial resources to fight the pandemic and maintain standards of service delivery to the public. However, to ensure long-term debt sustainability and prevent any adverse impact on the future, a part of the additional borrowing was linked to the States carrying out reforms in sectors critical for service delivery to the citizens.


One of the sectors identified for reforms is the Public Distribution System. Of the additional borrowing limit of 2 per cent of GSDP, 0.25 per cent is linked to the implementation of the One Nation One Ration Card system. This is aimed at ensuring that beneficiaries under the National Food Security Act (NFSA) and other welfare schemes, especially migrant workers and their families, get ration from Fair Price Shops (FPS) across the country.

Among the other objectives of the intended reform were to better target beneficiaries, eliminate bogus/ duplicate/ ineligible ration cards, and thus enhance welfare and reduce leakage. For this, the reform conditions stipulated Aadhar seeding of all ration cards, biometric authentication of beneficiaries, and automation of all Fair Price Shops (FPS) in the states. So far nine States have successfully completed reforms in PDS and implemented the One Nation One Ration System and permitted additional borrowing.

The Department of Food and Public Distribution is the nodal department responsible for certifying that a State has met conditions stipulated for this reform. Further, to become eligible for additional borrowing, the states have to complete the reforms by December 31.

It is expected that many more states will complete this reform before the stipulated date.

In addition to the One Nation One Ration Card, other reforms specified as a precondition to avail of additional borrowing are ease of doing business reform, urban local body/ utility reforms, and power sector reforms.