Cabinet clears tech-driven overhaul of PDS; extends SARTHAK Scheme with ₹25,530 crore outlay

What Happened

• The Cabinet Committee on Economic Affairs (CCEA) approved the SARTHAK-PDS umbrella scheme on May 27, 2026, with a central outlay of Rs 25,530 crore for five years (April 2026 – March 2031), aligned with the 16th Finance Commission cycle.
• The scheme integrates two existing programmes: (i) "Assistance to State Agencies for intra-State movement of foodgrains and FPS dealers' margin under NFSA" and (ii) the "Scheme for Modernization and Reforms through Technology in Public Distribution System" (SMART-PDS).
• SARTHAK-PDS aims to modernise and intelligently optimise PDS operations using Artificial Intelligence (AI), Machine Learning (ML), Natural Language Processing (NLP), and Blockchain technology.
• The scheme will support subsidised foodgrain delivery to approximately 81.35 crore beneficiaries across 36 States and Union Territories covered under the National Food Security Act (NFSA), 2013.
• Key deliverables include state-level Command and Control Centres, unified digital databases for real-time monitoring, AI-driven grievance redressal systems, standardised digital architectures, and ISO-certified process frameworks for Fair Price Shops (FPS).

Static Topic Bridges

Public Distribution System (PDS) and Targeted PDS

The Public Distribution System is the primary institutional mechanism through which the Government of India distributes subsidised foodgrains to eligible households. Historically a universal system, it was restructured into the Targeted PDS (TPDS) in 1997 to focus benefits on Below Poverty Line (BPL) and Antyodaya Anna Yojana (AAY) households. The TPDS operates through a three-tier structure: central government procurement and storage (primarily via the Food Corporation of India), state government allocation and transportation, and distribution through a network of approximately 5.43 lakh Fair Price Shops (FPS). Challenges historically included leakages, ghost beneficiaries, diversion of grains, and inadequate dealer margins that made FPS operations unviable.

National Food Security Act (NFSA), 2013

The NFSA, 2013 (enacted September 12, 2013) converted existing food security programmes into legal entitlements, making access to subsidised foodgrains a justiciable right. It covers up to 75% of the rural population and 50% of the urban population — approximately 81.35 crore persons in total. Beneficiaries are classified into two categories: Priority Households (PHH), entitled to 5 kg of foodgrains per person per month, and Antyodaya Anna Yojana (AAY) households (the poorest of the poor), entitled to 35 kg per household per month. Under Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY), extended through December 2028, these entitlements are provided free of cost.

SMART-PDS: Technology Predecessor

The Scheme for Modernization and Reforms through Technology in Public Distribution System (SMART-PDS) was approved for the period April 2023 – March 2026 with a budget of approximately Rs 349.9 crore. It comprised four modular sub-systems: (i) food grain procurement and stock management, (ii) supply chain management with real-time allocation and inventory tracking, (iii) ration card and FPS management with Aadhaar seeding, and (iv) biometric-based grain distribution via ePoS devices (eKYC). SMART-PDS operationalised digitisation of ration cards and computerised supply-chain management across all 36 States and UTs. SARTHAK-PDS now scales and deepens this digital infrastructure with next-generation AI/ML/blockchain tools and a substantially larger financial outlay.

Intra-State Movement of Foodgrains and FPS Dealer Margins

A standalone central assistance scheme has long provided financial support to states for the cost of transporting foodgrains from the point of central allocation (typically the nearest FCI depot or rail head) to the FPS, including handling and storage costs. This "intra-state movement" assistance recognises that the central procurement and interstate logistics are FCI's responsibility, while last-mile logistics within the state are a shared Centre-State cost. FPS dealer margins — the per-quintal commission paid to FPS licensees — directly determine whether FPS operations are financially viable. Low margins have historically led to adulteration, diversion, or shop closures. SARTHAK-PDS merges this scheme with SMART-PDS into a single umbrella, ensuring both the physical logistics support and the technology reform are co-funded under one framework.

One Nation One Ration Card (ONORC)

ONORC, launched in August 2019 and implemented across all 36 States and UTs, enables portability of PDS entitlements — allowing any NFSA beneficiary to collect their entitled foodgrains from any FPS in the country using Aadhaar-based biometric authentication. This is critical for migrant workers who change their location of residence but retain their NFSA entitlements from their home state. ONORC is operationally dependent on the digital backend (ePoS, centralised ration card management, Aadhaar seeding) that SMART-PDS and now SARTHAK-PDS underpin.

Key Facts & Data

• Scheme name (full form): SARTHAK-PDS — Scheme for Assistance in Ration Transport and Handling-Income with Automation in PDS
• Approval authority: Cabinet Committee on Economic Affairs (CCEA)
• Central outlay: Rs 25,530 crore
• Duration: April 2026 – March 2031 (5 years; 16th Finance Commission cycle)
• Beneficiaries covered: ~81.35 crore persons under NFSA, 2013
• Fair Price Shops (FPS): ~5.43 lakh across India; 99.6% (5.41 lakh) already automated with ePoS
• States/UTs covered: 36
• Predecessor schemes merged: (i) Assistance to State Agencies for intra-State movement of foodgrains and FPS dealers' margin under NFSA; (ii) SMART-PDS (approved 2023, budget ~Rs 349.9 crore)
• Technology deployed: AI, ML, NLP, Blockchain; State Command and Control Centres; ISO-certified FPS process frameworks
• NFSA 2013 coverage: Up to 75% rural population and 50% urban population
• NFSA entitlements: PHH — 5 kg/person/month; AAY — 35 kg/household/month
• ONORC: Implemented in all 36 States/UTs since 2019; enables portability of ration benefits for migrants
• PMGKAY: Free foodgrain scheme extended through December 2028; merged with NFSA entitlements from January 2023