Distribution of Food-Grains in India

Distribution of essential commodities to larger section of the society, mostly vulnerable people, through a network of fair Price Shops on a recurring basis is done by the Public Distribution System (PDS). This system is jointly operated by the Central and State Governments. The Central government, through FCI has following responsibilities:

  • Procurement, storage, transportation of food grains. Procurement is done at Minimum Support Prices.
  • Bulk allocation of food grains to the State Governments, which in turn deliver the same to recipients. This is done at Central Issue Price (CIP)

Minimum Support Price (MSP) is the price at which central government procures the foodgrains from farmers. Central Issue Price (CIP) is the price at which government makes these foodgrains available to states. The states fix retail price to be charged at fair price shops.

The state government’s responsibility in PDS is operational. It includes:

  • Identification of families below the poverty line
  • Issue of Ration Cards
  • Supervision of the functioning of FPS.

The PDS commodities viz. wheat, rice, sugar and kerosene, are allocated to the States/UTs for distribution by the Central Government. Cloth, exercise books, pulses, salt and tea, etc. are distributed by the state governments.


Initially, the public distribution system was untargeted so any consumer could approach the Fair Price Shops to get the available commodities. This system was criticized due to ignorance of the poor and vulnerable. In 1990s, the system was first changed to Revamped PDS (RPDS) and then later to Targeted PDS (TPDS). The focus of TPDS is “poor in all areas”. In this system the states were allocated food grains meant only for BPL people. But since sudden withdrawal of APL from the TPDS was not appropriate; the central government also made a “Transitory Allocation” for APL population. The retail prices of the Transitory Allocation were set little higher than the BPL prices.

Initially, the allocation for a BPL household was made to be 10 Kg per month. Later, the Vajpayee Government launched Antyodaya Anna Yojana (AAY) which increased this to 20 Kg. per family per month. This was further increased to 25 kgs in 2001 and currently stands as 35 kilogram.

Identification of Poor

Under the TPDS, the state governments had responsibility of identifying the poor. The states identified the poor on the basis of some planning commission formulae such as Lakdawala formula.


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