PDS Traceability and Blockchain

Subsidized rationing or Public Distribution System (PDS) forms the core of survival for many families. The manual ration distribution mechanism had some flaws that don’t guarantee ration access to beneficiaries while ensuring lack of transparency & grievance redressal mechanism and leakages in the supply chain of food grains, maximizing loss to the public exchequers. Digitization seemed to be the way forward to eradicate the overall inefficiencies.

Digitization of PDS was initiated to track the movement of food grains to their designated beneficiaries and weed out fake or duplicated ration cards from the system. This digitization also revolutionized the supply chain with automated public distribution supply by plugging in existing leakages.

A primary issue of the existing PDS is the lack of transparency in the entire supply chain process; most of the flaws or manipulations occur at different stages. Blockchain could manage ration supply more efficiently and crystal clear Transparency using distributed ledger technology (DLT). A decentralized platform could track and record the supply chain process from procurement till ration disbursement.

Challenges with the PDS System in India

Identification of beneficiaries: Studies have shown that targeting mechanisms such as TPDS are prone to significant inclusion and exclusion errors. This implies that entitled beneficiaries are not getting food grains while ineligible are getting undue benefits.
Leakage of food grains: (Transportation leakages + Black Marketing by FPS owners) TPDS suffers from significant leakages of food grains during transportation to and from ration shops into the open market. In an evaluation of TPDS, the erstwhile Planning Commission found 36% leakage of PDS rice and wheat at the all-India level.
The procurement issue: Open-ended Procurement, i.e., all incoming grains accepted even if buffer stock is filled, creates a shortage in the open market.
Issues with storage: A performance audit by the CAG has revealed a severe shortfall in the government’s storage capacity.
Environmental issues: The over-emphasis on attaining self-sufficiency and a surplus in water-intensive food grains is environmentally unsustainable.

Problem Statement

Ability to Track and Trace Food grains in the Public Distribution System

Proposed Solution

Using emerging technologies such as Blockchain for additional security addresses the critical challenge of Transparency.

The Need for Blockchain Technology

Introducing a Blockchain-based framework can be an effective solution for bridging loopholes in the Public Distribution supply chain. It will help design a structured and integrated process that can remove the inconsistencies with the provision of uniform procedures and solutions.

With Blockchain, a decentralized mechanism can be introduced to provide secured transactions and keep track of ration while creating a secured framework. Nodes at designated processes can review and verify the updates. Every transactional detail of the produce gets recorded in the digital ledger, simultaneously helping track the status.

TRST01 Platform

TRST01 blockchain-enabled traceability platform describes a digital platform that will gather verified data from the production to the distribution chain to allow customers to trace in details of the production process until the sales to have a quality and controlled product. The unified cloud blockchain platform ensures all data points in the supply chain to be securely stored and accessed. TRST01 platform’s primary goal is to create traceability throughout the entire chain, from end to end, with Transparency for the consumer as the main benefit.

Prospective Benefits:

Decentralized mechanism securing the whole system against network and system failures
Security from the prevailing several cyber threats
Eradication of adulteration, black marketing, and theft of produce
Uniform system, facilitating migrants of service delivery across India
No fake sales bookings
Ease of monitoring and tracking for Governments
Effective logistical planning

The way blockchain technology (BCT) brings a revolution in the world can be a ray of hope for the Indian government. BCT stores every information in electronic format, and once the data is stored on a blockchain, it’s immutable (as it works on consensus algorithms). All the information is shared with the complete network and is accessible to all; thus, it inhibits fraud.

Smart contracts are self-executed codes based on BCT that help eliminate intermediaries and maintain the process swiftly and as per the encoded information. If we design a smart contract for PDS or MGNREGA, identifying beneficiaries to disbursal subsidies, everything gets done using self-executed codes written on the Blockchain. The need for involving middlemen can be eliminated by adopting BCT.

Conclusion:

The full potential of the food security scheme can only be realized if target homes are properly identified, the distribution system is modernized, and the food security program is effectively monitored. The lack of continuous monitoring of products can result in the delivery of counterfeit products to the customer. Hence the high level of traceability implementation using Blockchain can give all the sectors the competitive advantage and help manage their inventory better. TRST01 is determined to provide convergence technology through its solution platform for two critical goals of the public distribution system: food security and Nutrition Safety.

By Ananth Iyer Management Trainee TRST01

Write to us journey@trst01.com

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