PDS is operated under the joint responsibility of the Central and the State/UT Governments.
The central government is responsible for making available the food grains needed for the PDS through the Food Corporation of India and providing a subsidy to make it affordable.
The state governments are responsible for ensuring that beneficiaries can access commodities sold under the PDS, co-ordinating the entire supply process from FCI godowns to the beneficiaries and monitoring PDS
Fair price shops (FPSs) functioning under the PDS are nodal points of immense importance since beneficiaries purchase subsidised PDS goods through the FPS.
The method of licensing FPSs and monitoring compliance through vigilance committees and other government officials are elaborately discussed in the PDS Control Order 2001 (GOI 2001), issued by the Department of Food and Public Distribution, Government of India.
The FCI purchases food grains from farmers at the minimum support price (MSP) and issues food grain at a uniform central issue price (CIP) to all states.
The CIP is lower than the economic cost incurred by the central government to procure food
The main components of economic cost include payment to growers and costs for transporting, handling, storing and distributing the grain, in addition to the cost of maintaining the prescribed buffer stock.
The difference between the economic cost and the CIP is the food subsidy borne by the central government from its annual non-Plan budget.
The states fix consumer end prices (CEP) at the FPS level at not more than Re.0.50 per kg over the central issue price (CIP), particularly for the population below the poverty line.
The states are also free to add to the coverage under the BPL category and meet the subsidy from their own resources.
The operational responsibility including allocation within State, identification of eligible families, issue of Ration Cards and supervision of the functioning of Fair Price Shops (FPSs) etc., rest with the State Governments.
Under the PDS, presently the commodities namely wheat, rice, sugar and kerosene are being allocated to the States/UTs for distribution.
Some States/UTs also distribute additional items of mass consumption through the PDS outlets such as pulses, edible oils, iodized salt, spices, etc.
