Ration card (India)

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In India, ration cards are primarily used when purchasing subsidized foodstuffs (wheat and rice) and fuel (LPG and kerosene). The cards have been used since World War II and their use continues in the 21st century. They are an important subsistence tool for the poor, provide proof of identity and a connection with government databases. India's public distribution system (PDS) is based on the ration card, which it uses to establish identity, eligibility, and entitlement.^[1][2][3][4]

Physical appearance

Two versions of the ration card exist; the A4 folded paper card and a plastic card embedded with an integrated circuit (IC). Both versions bear a photograph of the head of the bearer's family. One card per family is issued by the state government. Three categories of card are issued: extreme poverty level (Antyodaya), below poverty line (BPL), and above poverty line (APL). The poverty lines are regularly defined by the Planning Commission of India based on data collection and analysis from various sources.^[5]

Obtaining ration cards

In India, ration cards are voluntary; they are needed to obtain subsidized food and fuel. Eligibility for the Antyodaya, BPL and APL ration cards is based on the economic status of the family. To get an APL or BPL card in the state of Delhi, the applicant must present two copies of a photograph of the head of the family (HoF), proof of identity and address, and ₹25 fee, along with the old ration card, if any. Processing typically takes one month.^[6]

Karnataka state only accepts online ration card applications under the e-governance initiative; the old, paper application system has become obsolete. Applicants must upload a scanned PDF copy of his/her proofs of identity, age, address, and income, and are acknowledged with an appointment. On the day of the appointment, the applicant, along with all members of the family, visit the ration registration office with originals of their uploaded documents for verification and biometric data collection, including photographs and fingerprints of all family members. Physical verification of the information is made at the home address, for example, LPG connection for kerosene eligibility, house type to determine income level for BPL card eligibility. The ration card for which the applicant is eligible is issued in one month by the district supply office (DSO). The status of applications can be checked online. All front-end work on registration, biometric data collection, and physical home verification is done by DSO-appointed private firms under the Public Private Partnership (PPP) model for efficiency reasons.^[4][7][8][9]

Social security benefits

The following table shows financial size of the social security benefits/subsidies funded by the Union Government of India. The table does not cover other programs operated by State Governments (see Public welfare in India). The social security benefits and subsidies offered by state governments is estimated to be above ₹600 billion (US$10 billion), making a total of ₹3,600 billion (US$60 billion) in subsides.^[10][11] The PDS-related subsidy for food is ₹1,250 (US$20.83); with subsisdes for kerosene and LPG the total is ₹600 billion (US$10 billion); approximately 60% of the total petroleum subsidy.

Problems

Many problems with the PDS ration system exist. There are millions of ineligible and fraudulent ration cards;^[12] at the same time, millions of poor families have no ration card.^[13][14] PDS shop owners in collusion with government officials divert the subsidized food supply and petroleum to the black market. The number of cards is inflated by bogus ration cards held under false names, in the names of dead people, real but ineligible people, and duplicate names from other areas. The ration quota of non-existent people and unused quota by real beneficiaries is shown as fully used-up, and material is diverted to the black market, causing huge subsidy loss of public money.^[15][16]

Steps to resolve problems

The Government of India is taking steps to prevent corruption, leakage and diversion of PDS rations.^[17]

Aadhaar-enabled beneficiary The bank accounts and ration cards of eligible beneficiaries are linked to their Aadhaar numbers. A bank account can be enabled as AeBA by seeding (linking) it with an Aadhaar number. Seeding makes mapping information stored on the NPCI payment gateway that facilitates the subsidy payment. Seeding helps identify genuine and eligible beneficiaries and prevents duplicate and non-existent persons from registering.^[18] Users can link a bank account as self-service option through ATM kiosks, the Internet, bank websites, telephone, or by providing a copy of the Aadhaar letter to a bank.

Prior to Aadhaar, the issues that have been plaguing and derailing social security programs in India were caused by corrupt officials and middlemen manipulating the paper records and stand-alone databases of the social security services. Due to lack of a unique identifier like Aadhaar, stand-alone databases cannot detect and eliminate duplicate and fraudulent beneficiaries. The most common modus operandi adopted by these corrupt people have been to inflate the beneficiary list by 10 times by inserting duplicate entries, non-existent names, and the names of dead and non-eligible people. They then attempt to steal 90% of the social security benefits money, thus depriving genuine claimants.^[19][20][21]

Aadhaar-enabled DBT

Aadhaar-enabled service delivery (AeSD) prevents corruption in retail by directly crediting the benefit money into the beneficiary's bank account; this is called Direct Benefit Transfer – DBT. It eliminates the middlemen, and fraudulant and ineligible beneficiaries. Aadhaar saves billions of rupees of public money annually and enables poor people to access social security benefits.^{[16][22][23][24][25]}

Various financial and other services are being Aadhaar-enabled, called Aadhaar-enabled Service Delivery (AeSD), in a phased manner.^[26] By 1 January 2014, half of India (289 districts across various states) has been covered by DBT for subsidized LPG. By August 2013, 6.3 million duplicate connections of LPG were detected by Aadhaar seeding and have been cancelled. The national government saved $1 billion on reduced imports by mid-2013.^[27]

Aadhaar-enabled eligibility check

Eligibility of applicants is checked by comparing the service delivery database with other databases. For example, PDS kerosene eligibility is checked by comparing the PDS database with the LPG database and the subsidy on kerosene allocation is reduced if the LPG subsidy is detected for that household.^[28] The Aadhaar-enabled direct benefit transfer (DBT) is an Aadhaar-enabled financial service used for direct payment of social security benefits into the bank account of the Aadhaar holder.^[22][29]

Eligibility for ration cards is cross-checked with other related, Aadhaar-linked databases. This approach is designed to improve the audit trail; add efficiency; prevent corruption, middlemen, and delayed payments; and eliminate non-existent, duplicate and ineligible beneficiaries. It results in direct benefit access for eligible people and saves billions of rupee from corruption annually.^[20][30] Tangible benefits became visible from 2014; a report by UBS Securities published in January 2014 showed Aadhaar DBT can save 1.2% of GDP. The GDP of India is US$1,800 billion; the saving is thus $22 billion (₹1.32 trillion), which equals a 33% reduction in overall social security spending.}

Finance Minister informed the Parliament during Vote on Account that as of 31 January 2014, under DBT ₹33 billion for 21 million LPG subsidy and ₹6.28 billion (628 crores) have been transferred for various social programs in 5.4 million transactions.^[31][32]

e-Ration Card Services

With the help of e-Ration service, applicants can obtain ration cards and check the availability of food grains and their cost online. This will help end the corrupt practice of holding back rations and ensure cards reach the needy. Holders of Aadhaar cards can apply for e-ration card. The website of the Department of Food Supplies and Consumer Affairs provides details of people eligible for the food security scheme. This service was first introduced in Delhi.^[33]

PDS ration in Andhra Pradesh

PDS ration in some districts of Andhra Pradesh can be an illustrative example of using modern technology to prevent retail corruption. Ration cards and corresponding bank accounts of the heads of families (HoF) have been seeded (linked) with Aadhaar Numbers of family members.^[17][34][35]

When a beneficiary buys rations from a PDS shop, her or his eligibility is authenticated instantly through an Aadhaar KYC handheld device. The PDS computer system reads out the quantity eligibility and balance of each item in the local language. After purchase, the balance quantities for that month are read out. The buyer pays the open market rate to the PDS shop. A computer prints a receipt showing all items purchased, balance items, money paid and subsidy amount. The subsidy amount is credited to the beneficiary's bank account under the DBT program.^[36][37] Because the PDS computer system is connected to a central server, beneficiaries can buy ration items from any PDS shop. The system is flexible and provides access and options to the public that was not seen before in PDS.^[38]

Once all PDS shops in the state are linked to Aadhaar-enabled central server, beneficiaries can buy their ration anywhere in the state without changing ration card, which will benefit migrant workers in the state. In the similar way, subsidized LPG is linked with the Aadhaar Number and delivery is made at market rate. The subsidy amount is credited as DBT to the eligible beneficiary. Leakage and diversions of subsidized commodities provide no benefit to middlemen and retail corruption comes to a halt.

See also

• Public distribution system (India)
• Aadhaar
• Aadhaar-enabled service delivery
• Subsidies
• Public welfare in India

References

External links

• PDS Portal of India
• rasancardstatus