FPS Automation - Issues & Challenges Chhattisgarh Experience COREPDS-म र मर ज़. A.K.Somasekhar

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1 FPS Automation - Issues & Challenges Chhattisgarh Experience COREPDS-म र मर ज़ A.K.Somasekhar

2 What was there before COREPDS? Chhattisgarh computerized the whole PDS supply chain in Increased Transparency,Accountability, Efficiency

3 Can Technology Stop Corruption? (Discussion)

4 3 Point Strategy to use technology to reduce leakages in PDS Create transparency so that every one knows what is supposed to happen and what is happening. Provide most convenient system to lodge complaint, in case some discrepancy is found. Build confidence that all the complaints lodged through the system shall be investigated at the earliest.

5 Situation before initiative As a result Leakages and diversion have drastically come down Genuine beneficiary in Chhattisgarh is no doubt, getting her full entitlements. But still there are problems faced by beneficiary at FPS.

6 Most common problems faced by beneficiary at FPS FPS is not open when the beneficiary wants to take her rations, leading to additional trips. FPS declares 'no stock' even when the FPS has sufficient stocks, leading to additional trips. The sales person does not accord due respect to the beneficiary or sometimes misbehaves.

7 Most common problems faced by beneficiary at FPS (contd.) Overcharging The sales person charges more than what is chargeable. Deliberate under-weighment & Adulteration of the commodities by sales person. Beneficiary may need to spend at least half a day to take commodities because of long queues.

8 Solution to above problems No technology can solve the above problems. But portability can solve the problems. Portability empowers beneficiary to go to an FPS giving better services, there by creating a reason for improvement in service at FPS. Solution is the Beneficiary empowerment

9 Power of right to chose Q Why your colony's provision shop-wala shall never ill-treat you? A if he ill-treats you or hurts your ego you will stop going to the shop. Because you have freedom to chose where to purchase he will treat you well.

10 What COREPDS offers The convenience that technology has given to a bank account holder to withdraw money from any ATM, is being offered to a poor BPL beneficiary in COREPDS

11 COREPDS Objectives To empower beneficiary To improve Service Delivery To reduce Diversion To weed out Bad FPS To create Transparency

12 CORE PDS- How it works

13 Every FPS has a POS device

14 Smart Ration card for a BPL beneficiary Smart card has no biometrics. Uses KMS supplied by NICHQ

15 Click to Issue PDS Commodities through SRC 15

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17 Inserting Beneficiary s SRC 17

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19 Click if Beneficiary Details are Correct 19

20 RC Number 20

21 RC Number Member Details Beneficiary Food Balances 21

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23 Select Member Enter Quantities 23

24 Click to Issue 24

25 Transaction ID, Quantities Issued, Member ID, TransactionDate 25

26 Transaction ID, Quantities Issued, Member ID, TransactionDate Success Report 26

27 Process Success 27

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29 Click to Print Receipt 29

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31 APL Benficiaries They are not given smart cards. They will register mobile numbers They take commodities using OTP

32 Issue PDS Commodities without SRC There will always be a situation where a small percentage of genuine beneficiaries do not have SRCs because either they could not take in the distribution camps or they have lost and duplicate is not yet been received. This use case is to serve these genuine beneficiaries even with the risk of a few proxy issues. These beneficiaries shall not get the advantage of portability. But can take the commodities from their linked FPS.

33 RSBY Cards to be used as Ration cards COREPDS uses RSBY smart card as ration card Government of Chhattisgarh has recently decided to universalize RSBY through out Chhattisgarh. COREPDS rolled out in Durg city at 69 FPSs without issuing a separate smart cards, but using RSBY cards as ration cards

34 COREPDS is readily scalable to Aadhaar authentication

35 Server RC Number, Member ID RC Number Name Biometric Auth Pratap Sahu N RC Number Name Aadhaar Number Pratap Sahu NA Food A/C Balances Preethi Sahu NA Shivesh Sahu NA

36 Server Member ID, RC No., Finger Print RC Number Name Biometric Auth Pratap Sahu Y RC Number Name Aadhaar Number Food A/C Balances Pratap Sahu Preethi Sahu Shivesh Sahu Y/N Aadhaar No., Finger Print

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38 RISKS, CHALLENGES & MITIGATION STRATEGY

39 Risk 1 Implementation of CORE PDS acts against the interest of many FPS Agencies. It is not wise to assume that FPS will sincerely try to implement CORE PDS

40 Mitigation Strategy When one FPS says that the POS is not working beneficiary can go to a near by FPS. FPS that can not run COREPDS loses its business to other FPSs. FPS automation without portability as tried in some States is difficult to sustain

41 Risk 2 In the initial days, all FPSs in an area can form a nexus and see that POSs do not work.

42 Mitigation Strategy CGSCSC operates mobile FPS.

43 Mitigation Strategy Whenever a report is received that many FPSs are not working in one area, these trucks will be sent to that area. They serve the beneficiaries in front of the FPSs. Thus, FPSs who do run CORE PDS shall lose their business.

44 Risk 3 Competition does not help if everyone is bad. FPSs may intentionally do not improve their service to prove that COREPDS is a failure.

45 Mitigation Strategy Good performers NGOs, Corporates under their CSR will be introduced 50 FPS buildings under construction, each costing 10 lakhs They will set benchmark for service

46 Risk 4 Connectivity is either not available or speed is not sufficient

47 Mitigation Strategy Connectivity Survey was done. GPRS connectivity is available at 7200 FPSs out of 8000 FPS served. Effective speeds vary from 20 KBPS to 70 KBPS.

48 Location of FPSs in Raipur

49 Risk 5 Unreliable connectivity

50 Mitigation Strategy COREPDS by design is an online system. But it allows a limited offline issues also in case of connectivity failure ( 3 for a beneficiary and 100 for an FPS) Offline records will be uploaded whenever Smart card is inserted in a connected POS device or through FI module

51 Thoughts for Debate

52 FPS automation without portability FPS automation without portability creates more inconvenience to the genuine beneficiary

53 Biometric authentication Waive-off facility Friend families With any other genuine beneficiaries authentication

54 Portability in Rural areas? Migrated labourers To serve small villages at door steps Social reasons

55 Weighing Scale integration? Under-weighment is due to disempowerment. Empower the beneficiary. No need to integrate weighing scales with POS device.

56 Freedom to chose Currently 20% of beneficiaries are using portability. Remaining beneficiaries are taking at their own FPS, but now with their choice not by compulsion. At this context I want to refer Amartya Sen s quotation which is as follows

57 From 'Development as Freedom', p 27 "A person produces the same commodities in the same way and ends up with same income and buys the same goods, she may still have very good reason to prefer the scenario of free choice over that of submission to order" Amartya Sen Winner of the nobel prize in economics

58 Conditional DBT FPS purchases at market price and sells to the beneficiary at market price Subsidy amount transferred to beneficiary s bank account

59 Advantages FPS is not benefitted by showing proxy issues. Hence, diversion on account of proxy issues will be eliminated. very difficult to maintain duplicate or fake ration cards as each ration card should have one different bank account number to get the subsidy benefit. Aadhaar seeding shall solve this problem of duplicate or fake ration cards completely.

60 Process Government will transfer one month s subsidy amount as advance to the bank accounts of all the beneficiaries FPS shall get PDS commodities at market price commission Beneficiary will be sold the PDS commodities at market price

61 Process FPS shall record the sale transactions on a tablet At the end of the day FPS shall confirm all the sale transactions entered in the system & uploads into the server. Server shall calculate the subsidy price to be transferred to the bank accounts and creates digitally signed bank transfer files for different banks

62 Process Banks will process the files and transfer the money to the respective bank accounts. Banks will give a feedback file with the details of successful transfers or unsuccessful transfers with the reason.

63 Disadvantages Subsidy payment is dependent on FPS action, it may attract Rent Seeking.

64 Disadvantages As FPS cannot benefit by diverting PDS commodities, he may try to get benefit from the genuine beneficiaries by under weighing the PDS commodities or over charging.

65 Disadvantages FPS has no reason to give good service to the beneficiaries. The quality of service at some FPSs may further deteriorate

66 Solution Portability of entitlements Portability can be offered without any authentication in this model

67 FPS is not benefitted by recording a false transaction Beneficiary is not benefitted if he takes more than her entitlements

68 Secondary benefit Public shall not satisfy with inferior quality commodities as they now know the actual cost of the commodity. There will be public demand for better quality.

69 No single model may serve We may adopt different models for different areas, no single model may be suitable for the whole state.

70 What kind of FPS automation? Online system, but should support a limited offline transactions Aadhaar-based Biometric authentication with alternate authentication mechanism Conditional DBT where ever possible

71 What kind of PDS envisioned? Empowered beneficiary with choice of FPS, choice of commodities and choice to take cash instead of commodities NGOs/ MNC running FPS chain treating beneficiary as a valued customer, to capture fortune at the bottom of the pyramid Mobile FPS to serve remotest villages at their door steps

72 Thank You This kind of PDS is not a distant dream with available technology and growing political and burocratic will for improving PDS A.K.Somasekhar som@nic.in,