“One Nation, One Ration Card Scheme” (ONORC) was introduced by the Ministry of Consumer Affairs, Food and Public Distribution as a pilot in four states in 2019. ONORC is an update of the existing ration card scheme which entitles more than 80 core people to obtain subsidised grains from “ration shops.”
Food security policy in India
India’s effort to provide the poorer sections of society with subsidised food originates in the 1960s, where the government mainly addressed food shortages in urban areas. This was done through the Public Distribution System (PDS), which has since been further extended to reach more geographies and more people struggling with food scarcity. Notably, in 1992 the Revamped Public Distribution System (RPDS) introduced new measures to support remote and tribal areas and strengthen the infrastructure of the scheme.
The Targeted Public Distribution System (TPDS) of 1997 sought to further pinpoint the food subsidy by introducing new measures to identify Below-Poverty-Line (BPL) people and allocate food rations through infrastructure provided by the state/ Union Territories (UT) governments, while at the same time Above-The-Poverty-Line (ABPL) families continued to receive “transitory” allocations at slightly higher prices than BPL households. In 2000, the government increased the food allocation to BPL families and increased the number of BPL households based on updated population projections. In 2001, state/ UT governments were granted some flexibility to fix retail issue prices by removing the Central Issue Price (CIP) requirement.
Despite all the efforts, in 2000 a national survey revealed that a significant part of the population (5%) still sleeps without two square meals per day. Following this, the government launched Antyodaya Anna Yojana (AAY) to support the poorest among the BPL households (“poorest of the poor”), which allows eligible families to buy food grains at a highly subsidised price of Rs. 2 per kg for wheat and Rs. 3 per kg for rice and a total of 25 kg grains monthly per household, regardless of family size (increased to 35 kg in 2002). Since its introduction AAY has been extended from covering 1 crore families to 2.5 crores in 2005, which equals 38% of all BPL families.
The National Food Security Act 2013 (NFSA) prescribed that 75% of the rural and 50% of the urban population should have access to subsidised grains under the PDS. These national coverage ratios were converted into state-wise ratios, according to each state’s socio-economic profile and thus poorer states getting more coverage than richer states. In addition to Antyodaya ration cards, the NFSA establishes a second category of “Priority” ration cards through which each member of eligible households can buy from FPS every month 5 kg for the price of Rs. 2/3/1 per kg of wheat/ ice/coarse grains. The centre government is responsible for procuring grains, storage, transport and bulk allocation to states/ UTs, while states are in charge of identifying the beneficiaries, issuing ration cards, allocation of grains within states and supervising the operations of FPS. While wheat, rice, sugar and kerosene are provided by the centre government, some states also distribute additional food items (e.g. pulses, edible oils, iodised salts, spices)
Why ONORC was introduced
Before ONORC, beneficiaries could only buy their rations from an FPS that was assigned to them in their home town/ district where they were registered. This posed a problem for India’s large inter- and intra-state migrant population. Firstly, people who had migrated away from their home districts were unable to lift their grains in their destination locality, while their rations in their home FPS remained unaccessed. Secondly, because of the defined coverage ratio for each state, migrant beneficiaries faced difficulties to have a new ration card issued in their destination town. And if such new cards were issued, it created duplicity in the system, potentially leaving out other entitled beneficiaries. Lastly, the un-accessed food grains in the “home” FPS were prone to “diversion” by the FPS owners and thus resulting in a loss of food subsidy.
How ONORC works
Under the new ONORC scheme, ration cards are no longer linked to a specific FPS or home town, but are characterised by nationwide “portability” – a feature that enables beneficiaries to buy subsidised grains from any FPS anywhere in the country. Migrant workers can now buy rations from FPS in their destination city, while their families back home can claim their food balance from their local FPS on the same ration card. Furthermore, beneficiaries who have not migrated but remain in their home locality now can choose from a variety of FPS, as per their liking and convenience.
The portability feature is enabled through electronic Point of Sale (ePoS) devices that are installed at every FPS, Aadhar seeding and an IT-driven system to update transactions and offset grain balances:
- Aadhar cards of all family members are linked (“seeded”) with ration cards, which enables all beneficiaries in one household to access their rations by using the same card. Each member of the family can quote either the household’s ration card or their Aadhar card at the shop.
- When at the shop an ePoS device, which is installed at every FPS, is used to identify beneficiaries through biometric Aadhar authentication (thumb print or iris scan) and see their entitlement. Hence there is no need to carry any card to the shop. Once the authentication is done and ration card details are verified on the ePoS device, the dealer hands out the entitlement.
- The ePoS server matches in real-time the beneficiary with their details on the technology platform that records transaction data and offsets food balances. The portal for nationwide/ inter-state portability is the Integrated Management of Public Distribution System (IM-PDS), while the Annavitran portal hosts the data of intra-state/ inter-district grain distribution.
The Department of Food And Public Distribution together with the National Informatics Centre (NIC) has made available in the Google Play Store a mobile app “mera ration”, through which beneficiaries can track their card details, food grain balance, the transaction details of the last six months and the location of nearby FPS. Currently, the app can be downloaded in 12 languages.
Status of implementation
As of December 2021, ONORC has been rolled out is 34 states and, according to the Ministry of Food and Public Distribution, is reaching 77 crore beneficiaries – which is about 96% of the entitled target population (80 crore people). To close this gap, the government has extended several times the deadline for linking Aadhar with ration cards – currently until 30 June 2022.
However, researchers have doubted whether the ONORC scheme reaches all its intended beneficiaries, claiming that over 400 million people do not receive the support they are entitled to. They argue that the government’s target population of 80 crore people constitutes only 59% of the population (as per the projected total population of 1.372 bn for 2020), which falls short of the two-third requirement mandated by the NSFA. The reason for this shortfall was the outdated 2011 census data used by the government for its projections. In addition, there is variation between states that operate their own system and to what extent they provide additional food rations and sometimes at lower prices or for free.
Recently, the media has widely quoted and celebrated a study by Dalberg which found that 58% of migrants used the portability feature and more than half of all ration card holders were aware of it. However, it can be doubted that these numbers reflect the actual experience of ONORC beneficiaries, and especially migrants, because it was conducted among a sample of beneficiaries that are unlikely to be representative for a number of reasons.
Firstly, because the sample was drawn from states in which the implementation of ONORC is highly advanced and where there is great general awareness about ONORC. Secondly, most people (98%) in the interview sample had successfully seeded Aadhar with their ration cards, and most FPS (95%) had ePoS devices installed. Given that linking Aadhar with ration cards is a major roadblock for beneficiaries to access ONORC, it appears that the study looked only at successful cases to evaluate the overall scheme. Thirdly, only 25% of interviewees were migrants, and less than 1% were inter-state migrants, hence the study does not represent the experience of the population for whose benefit ONORC was intended. Lastly, the interviewees were identified through a phone database from a consulting company, not a comprehensive list of the population, and the migration data used for statistical analysis is 14 years old. In light of all this, it seems advisable not to overrate the findings of the study and take them with a grain of salt.
Success and remaining challenges
Although we do not seem to have accurate and high-quality data on whether the ONORC scheme is overall effective, there are some clear and evident benefits of the revised policy. Notably the fact that ONORC does not only provide migrant workers with portability, but also gives non-migrants more choice among FPS, which encourages competition among shop owners to provide better services. This and also digitisation can also help to eliminate incentives for corruption.
However, digitisation and linking with Aadhar has reduced the number of duplicate cards in the PDS system, but less so the instances of fraud, such as FPS owners withholding subsidised food grains from beneficiaries and diverting them to the external market. There also have been exclusion errors after linking with Aadhar, so that entitled beneficiaries are unable to access their food rations.
Another challenge is related to Aadhar documentation requirements. Many poor households face immense difficulties to obtain ID documentation that is sufficient for Aadhar. ID documentation in general is a huge issue for poor people to get access to anything, such as bank accounts, education, healthcare and welfare schemes. The Aadhar requirements thus introduces a big hurdle for ONORC beneficiaries. Even the Dalberg study, which only looked at a highly successful sample of beneficiaries, found that half of the people who had not linked Aadhar with their ration card did not do so because of documentation issues. This was also the case for updating ration cards, and marginalised women were particularly affected by the documentation issue. Although the Supreme Court has determined that Aadhar is not mandatory, the government’s ONORC policy effectively makes it mandatory for a large part of India’s vulnerable population, which constitutes a violation of constitutional law.
Technology failure is another significant hurdle to avail the benefits of the ONORC scheme. Poor connectivity, biometric authentication failures and other technology-related problems lead to transaction failures. Although there are alternative verification processes (generating a mobile phone OTP) and exception-handling procedures available, half of the FPS owners do not utilise them, mainly because of lack of awareness and explicit guidelines.
Another challenge concerns FPS owners, who need greater flexibility in stock acquisition to deal with fluctuations in demand through ONORC. Currently, they can order only every three months, which has led some dealers to run out of food grains or deny services to portability customers due to fear of stock depletion.
Due to the fact that different states continue to operate their own systems above and beyond central requirements, providing different items at different prices, there is a need for elaborate logistics operations and settlement procedures in order to ensure that migrant workers can get the same rations as entitled to in their native state. Especially with regard to migrant workers, there is a general lack of data, both on intra- and inter-state migration. It is safe to assume that the data from the 2011 census is no longer representative. This makes it difficult for the government to develop policies based on evidence and accurately identify the beneficiaries of food security and welfare policies in general.