The Centre recently launched a pilot project to transform 60 Fair Price Shops (FPS) in four States into Jan Poshan Kendras (JPKs) or nutrition hubs. Per the definition of JPKs, FPS must stock at least 50 per cent of products or commodities under the nutrition category, and the remaining products can be household items.

While JPKs aim to reduce hunger and malnutrition, the selection criteria and modus operandi of JPKs remain unclear.

Ration Shops Selection

First, ration shops are a critical midstream actor in the food security ecosystem as they perform storage, sales and distribution of essential commodities. So, transparency and operational efficiency are important criteria of FPS selection for Jan Poshan Kendras. These include area and beneficiaries’ coverage, sales of essential commodities and transaction receipt given to beneficiaries, proper weight measures and stock declaration, zero leakage or diversion of PDS foodgrains to the open market.

Second, FPS’s creditworthiness and repayment ability can assess their working capital or trade credit access from the SIDBI, considering FPS’s working days, monthly sales of essential commodities (turnover), and incomes and expenses.

Third, the ownership structure also influences the selection for JPKs. The lion’s share of FPS is held by individuals (58 per cent), followed by others (18 per cent) and cooperative societies (16 per cent) (see Table). The ownership structure affects transparency in ration shop operations, including commodity-wise records, list of beneficiaries, availability of stock register and register of sales. Cooperative societies and women-run SHGs may be selected to rolling out the JPKs project for their collective decision-making in governance and management.

Fourth, FPS’s digital infrastructure and geo-referencing influence FPS selection for JPKs. There are 5.20 lakhs FPS in 771 districts, of which 2.27 lakhs are GIS mapped, and 4.88 lakhs are equipped with ePoS (electronic point of sales). Bihar, Uttar Pradesh, and Maharashtra have the maximum number of active ePoS-enabled FPS.

So, the concentration of JPKs could be more in these three States followed by States/UTs lagging in the nutrition security index.

FPS turned JPKs must stock PDS and non-PDS food items to improve their incomes, while profit realisation comes from price markups on sales volumes of non-PDS commodities. So, formalising the food supply chain from sourcing to distribution is vital for FPS’s makeover to JPKs.

The National Institute of Entrepreneurship and Small Business Development should help the selected FPS strengthen the supply chain management, while Small Industries Development Bank of India can provide short- and long-run credit requirements to select JPKs.

Delivery commitments, liquidity needs, and transaction costs affect FPS’s operational efficiency and profitability. So, the (state) government can increase commissions to FPS for selling PDS commodities and reduce the turnaround time from invoice generation to billing.

Third, the (state) government can empanel some vendors to supply vitamins and minerals pre-mixture and bio-fortified food items to select FPS.

Fourth, quality checks of nutritive items must adhere to the quality manual handbook. NABL-accredited labs must perform assaying of FPS stocks at regular intervals. The digital quality management system should be in place and interoperable with the Mera Ration 2.0 app.

Fifth, ONORC’s portability must help migrant workers and formal sector employees buy their rations and household items from JPKs.

To sum up, the frequency of purchases by PDS and non-PDS beneficiaries determines the fortune of this ambitious project.

Dey is a faculty member, and Jay is a doctoral scholar at IIM Lucknow. Views expressed are personal.