The Government of India benefits nearly 6.5 Crore BPL families and 11.5 Crore APL households by providing them food grains at asubsidized cost through the PDS Scheme.
However, the current Public Distribution System is marred by the problem of leakages at many level.The most recent study regarding leakages of PDS by Asian Development Bank in 2012, shows that deserving poor receiveonly 10% of the intended benefits.
Another report by The Hindu claims that the diversion rate of PDS is as high as 85-90 % in states like U.P., Bihar, Rajasthanand Jharkhand.
Due to such high leakages, the Bihar Government ended up spending Rs. 51 per Kg as unintended subsidy cost instead of their intended cost, which was Rs. 4.52 per Kg.
Due to these leakages, India still ranks a poor 65
on the Global Hunger Index.
With the passage of Food Security Bill in both the houses of Parliament, it has become very important to design an efficient systemto reduce the leakages in PDS.
Scope of the Problem