Ration card (India)

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The Indian ration card is mainly used for purchasing subsidized food and fuel (LPG, kerosene, wheat and rice). It is an important subsistence tool for the poor, providing proof of identity and a connection with government databases. India's public distribution system (PDS) operates based on the ration card, including its functions of identity, eligibility, and entitlement.^[1][2][3][4]

Physical appearance

The ration card is either an A-4 size folded paper card or a chip-embedded smart card. It bears photograph of head of the family (HoF). It is issued one per family by the state government. It has three categories – extreme poverty level (Antyodaya), below poverty line (BPL) and above poverty line (APL). These poverty lines are defined by the Planning Commission of India every few years based on data collection and analysis from various sources.^[5]

Obtaining ration card

While it is voluntary to obtain ration cards in India, they are needed to obtain subsidized rations. Eligibility for the Antyodaya, BPL and APL ration cards is based on the economic status of the family.

To get an APL card in the state of Delhi, the applicant must present two copies of a photograph of the head of the family (HoF), proof of ID, proof of address, and a ₹25 fee, along with the old ration card, if any. Processing typically takes 1 month.^[6]

A BPL card entitles the holders' family to more benefits; for example, more rations and more kerosene at the subsidized rate. Acquiring a BPL card follows the same process as acquiring an APL card.

Karnataka state accepts online ration card applications only, under the e-governance initiative; the old system of paper applications has become obsolete. An applicant gets acknowledgement with appointment upon filling an online application and uploading a scanned pdf copy of his / her ID proof, age proof, address proof and income proof. On the day of the appointment, the applicant, along with all members of the family, visit the ration registration office with originals of uploaded documents for verification and biometric data collection (photos and fingerprints of all members). Physical verification of the information is made at the home address (e.g. LPG connection for kerosene eligibility, house type to determine income level for BPL card eligibility). Then the eligible ration card is issued in one month by the district supply office (DSO). One can check the application status online. All front-end work for registration, biometric data collection and physical verification at home is done by DSO appointed private firms under the public private partnership (PPP) model for efficiency reasons.^[7][8][9] Procedure to Apply new Ration Card and Status Online ^[10]..

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 various State governments, see Public welfare in India. The social security benefits / subsidies offered by various state governments is estimated to be above Rs. 600 billion (US$10 billion). Thus total subsidies become Rs. 3,600 billion (US$60 billion).^[11][12]

Thus PDS related subsidy alone for food is Rs. 1,250 (US$20.83) plus kerosene and LPG together Rs. 600 billion (US$10 billion) i.e. approx. 60% of total petroleum subsidy.

Problem areas

There are plenty of problems with PDS ration system. There are millions of ineligible, fake and bogus ration cards.^[13]

At the same time, there are millions of poor without any ration card.^[14][15]

PDS shop owners in collusion with government officials divert the subsidized food supply and petroleum to black market. Inflated number of ration cards – bogus ration cards, fake people (imaginary, dead, real person but nor eligible) and duplicates from other areas. The ration quota of fake people and unused quota by real beneficiary is shown as fully used-up and material is diverted to black market, causing huge subsidy loss of public money.^[16][17]

Steps to resolve problems

Government is taking various steps to prevent corruption, leakage and diversion of PDS ration.^[18]

Aadhaar-enabled beneficiary

The bank account and ration card of eligible beneficiary is linked to Aadhaar number. A pre-existing or new bank account can be enabled as AeBA by seeding (linking) it with Aadhaar number. Seeding makes mapping information stored onto NPCI payment-gateway, that facilitates the subsidy payment. The seeding helps identify the genuine and eligible beneficiary, and prevents duplicate and nonexistent (fake, dead) persons.^[19] One can link bank account as self-service option thru ATM kiosk, Internet, bank website, telephone or by providing a copy of the Aadhaar letter to bank. Bank links the account with Aadhaar number after online verification thru RASF (Remote Aadhaar Sharing Framework link).^[20]

Prior to Aadhaar, the issues that have been plaguing and derailing all social security programs in India, were caused by corrupt officials and middlemen by manipulating the paper-records and stand-alone databases of the social security services.Due to lack of unique identifier like Aadhaar, stand-alone databases cannot detect and eliminate duplicate & fake beneficiaries. So the most common modus operandi adopted by these corrupt people have been to inflate the beneficiary list 10 times larger, by inserting duplicates and fake people (imaginary, dead, real person but not eligible). Then steal the 90% of the social security benefits money, thus depriving the deserving poor.^[21][22][23]

Aadhaar-enabled DBT

Aadhaar-enabled service delivery (AeSD) prevents corruption in retail area by directly crediting the benefit money into beneficiary's bank account (called Direct Benefit Transfer – DBT). It eliminates the middlemen, duplicates, fake and ineligible beneficiaries. Thus Aadhaar saves public money to the tune of multi-billion rupee annually from the corrupt, and also enables poor to access various social security benefits.^{[17][24][25][26][27]}

Various financial as well as non-financial services are being made Aadhaar-enabled, called Aadhaar-enabled Service Delivery (AeSD) in phased manner.^[28] By 1 January 2014, half of India (289 districts across various states) has been covered under DBT for subsidised LPG. By August 2013, 6.3 million duplicate connections of LPG were detected by Aadhaar-seeding and cancelled. Thus government saved $1 billion on reduced import by mid-2013.^[29]

Aadhaar-enabled eligibility check

Eligibility check of beneficiaries is done by comparing the service delivery database with other databases. Example – PDS kerosene eligibility check is done by comparing PDS database with LPG database; and subsidy on kerosene allocation is reduced if LPG subsidy is detected for that household.^[30]

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.^[24][31]

Eligibility of beneficiary is applied based on rules and is cross-checked with other related databases which are also Aadhaar linked. This approach is designed to improve the audit trail, add efficiency; prevent corruption, middlemen and delayed payments; eliminate non-existent, duplicate and ineligible beneficiaries. It results in direct benefit access to the eligible people; and saves multi-billion rupee from corruption annually.^[22][32]

Tangible benefits become visible from 2014. A report of UBS Securities published in January 2014 shows that Aadhaar DBT can save 1.2% of GDP. GDP of India is $1,800 billion, thus the saving is $22 billion (Rs. 1.32 trillion), which ultimately translates to 33% savings on overall social security spending.

Finance Minister informed the Parliament during Vote on Account that as of 31 January 2014, under DBT Rs. 33 billion for 21 million LPG subsidy and Rs. 6.28 billion (628 crore) have been transferred for various social programs in 5.4 million transactions.^[33][34]

e-Ration Card Services

Through e-Ration service people can apply and obtain ration cards and also check the availability of food grains and their cost online. This will help in ending the corrupt practice of holding back rations and ensuring that the cards reach the needy. Anyone who has an Aadhaar card can apply for e-ration card. The website of Department of Food Supplies and Consumer Affairs will provide the details of people coming under food security scheme. This service is introduced in Delhi for the first time.^[35]

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. Here ration card and corresponding bank account of the head of the family (HoF) have been seeded (linked) with Aadhaar Numbers of family members.^[18][36][37]

When a person goes to PDS shop to buy ration, the person is authenticated instantly thru Aadhaar KYC handheld device. The PDS computer system reads out the quantity eligibility and balance of each item in local language. After purchase, the balance quantities for that month are read out. The buyer pays the open market rate to the PDS shop. Computer printed receipt is generated with all purchased item, balance items, money paid and subsidy amount. The subsidy amount is credited to the bank account of the beneficiary under DBT program.^[38][39]

Since the PDS computer system is connected to the central server, therefore people can buy ration items from any PDS shop. If some item is not available at one shop, then people can buy from another shop. It is like anytime anywhere bank ATM. Thus it provides tremendous flexibility, access and options to the general public that was never see before in PDS.^[40]

Once all PDS shop of the state are linked to Aadhaar-enabled central server then people can buy their ration anywhere in the state without changing ration card (like bank ATM card). It will prove to be a boon for the migrant workers in the state.

In the similar way, subsidized LPG is linked with Aadhaar Number and delivery is made at market rate. The subsidy amount is credited as DBT to the eligible beneficiary. Thus leakage and diversions of subsidized commodity do not give any benefit to the middlemen, hence this retail corruption comes to halt.

PDS ration in Karnataka

It is similar to PDS ration in Andhra Pradesh except that it is not yet Aadhaar enabled, hence there is no DBT. The PDS computer system reads out the quantity eligibility and balance of each item in local language.

DBT on LPG is same standard process all over India.

Low acceptance of ration card as ID and address proof

It has very low acceptability and reliability as ID and address proof. Therefore, it is not considered the primary proof by various agencies. Because there is no mechanism to authenticate it online instantly at the point of service unlike digital Aadhaar. And there are millions of defunct, invalid, fake ration cards. Therefore, passport office and banks consider it only as secondary proof, not the primary.

See also

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

External Links

• The Blog of Ration Card

References