Ration cards are an official document issued by state governments in India to households that are eligible to purchase subsidized food grain from the Public Distribution System (under the National Food Security Act). They also serve as a common form of identification for many Indians.
Fake ration cards
Many problems with the PDS ration system exist. There are millions of ineligible and fraudulent ration cards; at the same time, millions of poor families have no ration card. PDS shop owners in collusion with government officials divert the subsidized food supply and petroleum to the black market. Card numbers are inflated by those held under false or duplicate names, in the names of dead people, or by real but ineligible people.
Steps to resolve problems
The Government of India is taking steps to prevent corruption, leakage and diversion of PDS rations.
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. Users can link a bank account as self-service option through kiosks, the Internet, bank websites, telephone, or by providing a copy of the Aadhaar letter to a bank. rationcardgov.in
Prior to Aadhaar, the issues plaguing and derailing social security programs in India were caused by corrupt officials and middlemen manipulating paper records and stand-alone databases of social security services. Due to lack of a unique identifier like Aadhaar, stand-alone databases cannot detect and eliminate duplicate or fraudulent beneficiaries. The most common modus operandi adopted to inflate the beneficiary list is by inserting duplicate entries, non-existent names, and the names of dead and non-eligible people. Attempts are then made to steal the social security benefits money, depriving genuine claimants.
Aadhaar-enabled service delivery (AeSD) prevents corruption in retail by directly crediting benefit money into the beneficiary’s bank account; this is called Direct Benefit Transfer (DBT). It eliminates middlemen and fraudulent, ineligible beneficiaries. In this way, Aadhaar saves billions of rupees of public money annually and enables poor people access to social security benefits.
Various financial and other services are being Aadhaar-enabled, called Aadhaar-enabled Service Delivery (AeSD), in a phased manner. By 1 January 2014, half of India (289 districts across various states) had been covered by DBT for subsidized LPG. By August 2013, 6.3 million duplicate LPG connections were detected by Aadhaar and were cancelled. The national government saved $1 billion on reduced imports by mid-2013.
Aadhaar-enabled eligibility check
Applicant eligibility 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. The subsidy on kerosene allocation is reduced if the LPG subsidy is detected for that household.
Ration card eligibility is cross-checked with other related, Aadhaar-linked databases. This approach is designed to improve the add efficiency and prevent corruption. It results in direct benefit access for eligible people and annually saves billions of rupees from corruption. Tangible benefits became visible from 2014; a report by published in January 2014 showed Aadhaar DBT can save 1.2% of GDP.
The 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.
e-Ration Card Services
With the help of e-Ration service, applicants can obtain ration cards and check their costs and food grain availability online. This will help end the corrupt practice of holding back rations and ensure cards reach the needy. Aadhaar card holders can apply for e-ration cards. The website provides eligibility details for the food security plan. This service was first introduced in Delhi. Later this has been followed by the state Govt of Tamil Nadu
PDS ration in Andhra Pradesh
PDS rationing in 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 linked with Aadhaar Numbers of family members.
When a beneficiary buys rations from a PDS shop, their eligibility is authenticated 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.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.
Once all PDS shops in the state are linked to Aadhaar-enabled central server, beneficiaries can buy their rations anywhere in the state without changing their ration card, which will benefit migrant workers in the state.Similarly, 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.
While submitting application for Ration Card in Andhra pradesh, Form D1 needs to be submitted to the nearest rationing office