Union Government Launched Anna Chakra and SCAN Portal for Public Distribution System Optimization

07-12-2024

On 5th December 2024, Shri Pralhad Joshi, Union Minister of Consumer Affairs, Food and Public Distribution, and New & Renewable Energy, launched two important initiatives aimed at modernizing India’s Public Distribution System (PDS) and subsidy claim mechanisms:
1. ‘Anna Chakra’ – A tool for PDS Supply Chain Optimization.
2. SCAN Portal – A Subsidy Claim Application for the National Food Security Act (NFSA).
These initiatives are designed to enhance the efficiency, transparency, and cost-effectiveness of India’s largest food security program, which serves over 81 Crore beneficiaries.

Anna Chakra: PDS Supply Chain Optimization Tool

‘Anna Chakra’ is a state-of-the-art PDS Supply Chain Optimization tool developed by the Department of Food and Public Distribution (DFPD) in collaboration with:
1. World Food Programme (WFP)
2. Foundation for Innovation and Technology Transfer (FITT), IIT-Delhi
The tool uses advanced algorithms to identify the most efficient routes for the transportation of food grains across the country, ensuring optimal movement of food from warehouses to Fair Price Shops (FPS).
The supply chain involves multiple stakeholders, including farmers, warehouses, and retailers, making this tool essential for improving the logistics of the Public Distribution System (PDS).

Objectives and Impact of Anna Chakra:

Efficiency Enhancement: The tool will help improve the speed and efficiency of the PDS, making the movement of food grains quicker and more reliable.
Cost Savings: By optimizing delivery routes, the initiative aims to reduce fuel consumption, logistics costs, and time spent on transportation, with an estimated Rs. 250 Crore savings annually.
Environmental Benefits: The optimization will reduce the carbon footprint of PDS transportation, contributing to lower emissions due to the decreased use of fuel and shorter travel distances.
Wide Coverage: The route optimization has been conducted across 30 states, covering 4.37 lakh Fair Price Shops and approximately 6700 warehouses.

The initiative also integrates with several platforms:

Freight Operations Information System (FOIS): To optimize railway transportation.
PM Gati Shakti Platform: To map geo-locations of FPSs and warehouses for better coordination.

These integrations will allow for a seamless and streamlined logistics network across the country, benefiting millions of people who rely on PDS.

SCAN Portal: Subsidy Claim Application for NFSA:

The SCAN portal is another key initiative designed to simplify and streamline the subsidy claim process under the National Food Security Act (NFSA).
The portal enables a single window submission for food subsidy claims by states, with features like:
1. Claim Scrutiny and Approval: Ensuring quick review and processing of subsidy claims by the Department of Food and Public Distribution (DFPD).
2. End-to-End Workflow Automation: The portal automates the entire process, ensuring fast and efficient release and settlement of food subsidies using rule-based processing.
The SCAN portal will ensure:
1. Transparency: States can submit their subsidy claims and track progress through a centralized platform.
2. Faster Processing: The automation of processes reduces delays and allows for quicker settlements of food subsidies.

Significance of These Initiatives

Optimizing the World's Largest Food Security Program: India’s Public Distribution System is one of the largest in the world, and initiatives like ‘Anna Chakra’ will significantly enhance its efficiency, making it more responsive to the needs of beneficiaries.
Economic Impact: By optimizing transportation routes and automating subsidy claims, these tools can lead to substantial cost savings for the government while improving service delivery to citizens.
Environmental Impact: Reduced fuel consumption and optimized logistics will contribute to sustainable practices within the public distribution system.

These tools are expected to make India’s food distribution system more resilient, efficient, and future-ready in the face of evolving logistical challenges.

What is the Public Distribution System (PDS)?

The Public Distribution System (PDS) in India is a government-run program designed to provide essential food items, like rice, wheat, sugar, and kerosene oil, at subsidized rates to economically vulnerable populations.

PDS evolved to distribute food grains at affordable prices and manage emergencies.
Ministry: PDS is under the Ministry of Consumer Affairs, Food, and Public Distribution.

Evolution:

Before 1992: PDS was a general entitlement system for all consumers.
1992 - Revamped PDS (RPDS): Focused on poor families, especially in remote areas.
1997 - Targeted PDS (TPDS): Established Fair Price Shops (FPS) to distribute food grains at subsidized rates.

Objectives of PDS:

Provide essential food items at affordable prices to vulnerable populations.
Stabilize prices of essential commodities in the market.
Prevent hoarding and black marketing of food grains.
Combat hunger and malnutrition among economically disadvantaged communities.

Significance of TPDS:

Supreme Court Ruling: In the People’s Union for Civil Liberties v. Union of India case, the Court declared that the "right to food" is essential to the right to life under Article 21 of the Constitution.
National Food Security Act (NFSA) 2013: Made the right to food a legal entitlement, providing subsidized food grains to nearly two-thirds of the population, relying on the TPDS mechanism.

Importance of PDS:

Provides food grains at subsidized prices, lower than those in private markets.
Direct purchase of food grains from farmers at a Minimum Support Price (MSP), ensuring better prices for farmers.
Supplies essential commodities like rice, wheat, sugar, and kerosene oil.
Primarily targets Below Poverty Line (BPL) families, though the identification process has evolved.
Some states have extended PDS coverage to Antyodaya Anna Yojana (AAY), targeting the poorest of the poor.
NFSA 2013 extended PDS to include priority and eligible households.

Functioning of PDS:

The process involves four key steps:

Procurement of Food Grains:
1. The central government procures food grains from farmers at MSP.
2. MSP is set by the Commission for Agricultural Costs and Prices (CACP).
3. Procurement Methods:
  1. Centralized Procurement: By Food Corporation of India (FCI).
  2. Decentralized Procurement: 10 states/UTs procure grains on behalf of FCI.
4. Issues:
  1. Open-ended procurement creates shortages in the open market when buffer stocks are filled.
  2. Storage capacity gaps lead to inefficient storage.
Storage of Food Grains:
1. Food grains are stored in covered godowns and silos. If FCI lacks storage space, it rents space from other agencies like CWC, SWC, or private entities.
2. Storage Issues:
  1. Inadequate storage capacity.
  2. Damage or rotting of food grains due to improper storage methods like CAP (Cover and Plinth).
Allocation of Food Grains:
1. Food grains are allocated from the central pool to state governments at a uniform Central Issue Price (CIP).
2. State Governments are responsible for identifying eligible households (BPL, AAY) and managing Fair Price Shops (FPS).
3. Issues:
  1. Inaccurate identification of beneficiaries.
  2. Bogus or ghost cards for non-existent people lead to food grains being sold in the open market.
Transportation of Food Grains:
1. FCI manages interstate transport of food grains from surplus to deficit states.
2. State Governments distribute food grains from state depots to Fair Price Shops (FPS) for distribution to consumers.