Contesting the claims of 28 per cent leakage of food grains under the Public Distribution System (PDS) in a study released by ICRIER and reported in businessline’s November 19 edition, the Food Ministry on Tuesday said that there are significant discrepancies in the data interpretation and methodology used by the report’s authors.

The ministry statement said:

The ICRIER study claimed substantial food grain leakages of about 28 per cent, amounting to roughly 20 million tonnes (mt) under the Public Distribution System (PDS). However, the Food Ministry strongly contests these figures. we have critically evaluated the claims made in the ICRIER study, highlight inaccuracies, and showcase the significant measures taken by the Government to create a more transparent and efficient PDS.

This Department relied on the same primary sources—data from the Food Corporation of India (FCI) and the Household Consumption Expenditure Survey (HCES) 2022-23—to analyze and compare distribution figures available in the public domain.

The Department found significant discrepancies in the data interpretation and methodology used by the study’s authors. This response also highlights the comprehensive reforms undertaken by the Government in recent years to ensure a leakage-free system.

The report titled “ICRIER study pegs PDS leakage at ₹69,108 crore” includes the following observation under the section “Estimation of PDS Leakage”:

“Analysing monthly offtake data from the Food Corporation of India (FCI) from August 2022 to July 2023—including distributions under NFSA, tide-over, non-NFSA state-level allocations, and PMGKAY—and aligning it with the reference period of the HCES, 2022-23, we compared reported offtake with actual household consumption levels. The findings reveal a significant discrepancy: 28 percent of the allocated grains, amounting to approximately 20 mt of rice and wheat, fail to reach their intended recipients.”

The aforementioned report has cited 51.7 mt household PDS consumption figure. However, basis for calculation and methodology has not been given in the article.

HCES data includes cereal consumption from multiple sources, such as state-specific schemes and private purchases, which complicates any direct correlation with PDS offtake.

As per HCES 2022-23, monthly per capita cereal consumption is 5.321 kg rice and 3.935 kg wheat in rural areas, and 4.281 kg rice and 3.583 kg wheat in urban areas. When scaled to the total NFSA beneficiary population of 80.6 crore, the annual household consumption exceeds 85.56 mt which includes consumption apart from PDS sources.

This figure far surpasses the claimed consumption of 51.7 mt mentioned in the ICRIER report. The ICRIER report mentioned figure of actual household consumption taken from HCES report whereas the tables mention total HCES PDS consumption. These inconsistencies underscore fundamental flaws in the report’s assumptions.

Further, the ICRIER report erroneously mixes offtake and distribution as same processes. Offtake refers to the quantity of food grains lifted by states from central depots, while distribution represents the delivery of these grains to beneficiaries.

Offtake figures account for stocks in transit, buffer allocations, operational reserves and stocks allocated for other social welfare schemes, Open Market Sales etc. Hence offtake figures should not be confused with PDS stocks used for distribution in households. By failing to account for these distinctions, the report’s leakage estimates are fundamentally flawed.

The claim of significant leakage also fails to consider critical operational nuances, including technological advancements in tracking and distribution.

It is crucial to comprehensively analyze and address the discrepancies and insights observed in the comparative analysis of offtake, consumption, and distribution within the Public Distribution System (PDS).

(i) Offtake: It is pertinent to mention that there is wide discrepancy between actual offtake (73.8 mt) by states for NFSA/PMGKAY vis-à-vis offtake figures given in ICRIER report. It is highlighted that offtake figures indicated by ICRIER includes several non-NFSA allocation also such as schools (PM-Poshan/MDM), ICDS Scheme for Adolescent Girls, etc, which are not consumed directly at household level, but are consumed under specific social schemes. This underscores the fact that the overestimated offtake figures have been used for calculation. This leads to a wide gap between the actual household consumption and offtake figures, as cited in the report.

(ii) Consumption: Basis the HCES data analysis, as per the department, the gross consumption by the NFSA beneficiaries (80.6 crore) is 7.13 mt per month (which includes PDS , state schemes and private purchases) translates to 85.56 mt per year. The figures of gross consumption of 51.7 mt, as given in the report, is disputed. Moreover, the report does not show the source of calculation of this figure. Query sent to ICRIER in this regard has not been responded to, so far.

(iii) Distribution: Approximately, 98% of the distribution of food grains under NFSA is being done using Aadhaar authentication mitigating any risk of pilferage which has already been shown above. All the transactions are made through ePoS.

The Government has undertaken several measures to reform the PDS, focusing on digitization, transparency, and efficient distribution mechanisms. These efforts have resulted in substantial reductions in leakages and enhanced targeting.

a) Supply Side - Integration of Supply Chain Management System for end to end operations and services at all levels FCI organisation , Development of Central Food Procurement Portal (CFPP) for streamlined MSP operations, implementation of Warehouse Inventory Network and Governing System (WINGS) application to automate tagging of mills with depots, as well as allocation of stack space in FCI, Vehicle Location Tracking System (VLTS) innovative with integration with Railways for online real time tracking of food consignment and WDRA registration of all FCI Godowns.

b) Distribution Side - In terms of distribution, the government against all challenges has computerised entire distribution process. All 20.4 Cr household ration cards covering entire 80.6 Cr beneficiaries has been digitised with 99.8 per cent ration cards and 98.7 per cent individual beneficiaries are Aadhaar-seeded, as against the figure of 95 per cent digitization given by authors in the report. Foodgrain distribution is operationalised through 5.33 lakh e-PoS devices, covering nearly all Fair Price shops in the country. These e-PoS devices enable Aadhar authentication of beneficiary during distribution process enabling principle of rightful targeting. Today Aadhaar authentication is used for distributing approx. 98 per cent of total foodgrains, reducing leakages to ineligible beneficiaries and ensuring rightful targeting.

Rightful Targeting - The department has also taken extensive steps ensuring through process of eKYC to validate identities of beneficiaries with their Aadhar credentials and ration card details leading to exclusion of ineligible beneficiaries. As of today, 64 per cent of all PDS beneficiaries have completed their eKYC and the process is in full swing to complete the remaining beneficiaries. Digitalization and Aadhar seeding have led to de-duplication of ration card data and 5.8 Cr ration cards have been removed ensuring only eligible persons are included in NFSA.

National Portability of ration card under One Nation One Ration Card (ONORC) initiative ensures regular availability and accessibility of free foodgrains to all 80.6 Crore NFSA beneficiaries in the country in any part of the country, through the same existing ration card, irrespective of the ration card issuing and foodgrains distributing Government/ Authority.

The departmental analysis highlighted robust PDS operations and minimal scope for leakages due to Aadhaar-enabled safeguards. Claims of significant wastages are inaccurate and fail to consider technological and operational improvements. These measures underscore the Government’s commitment that food grains reach intended recipients while minimizing inefficiencies.

The Department’s analysis highlighted the robustness of current PDS operations and the strides made in reducing leakages. The claim that 28 per cent of food grains do not reach beneficiaries lacks a sound basis, given the operational safeguards in place.

Through digitization, Aadhaar-based targeting, and supply chain innovations, the Government has set a global benchmark for food security systems. The allegations of systemic wastage are both overstated and dismissive of the significant advancements made in recent years.

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