June 2009

Public Distribution System in Maharashtra

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www.spanco.com

Kaustubh Dhavse

Introduction

Public Distribution System (PDS) is a national program that distributes subsidized food to the poor population of the country. Major commodities distributed under this system include rice, wheat, sugar and kerosene, These food grains are partly procured from Food Corporation of India (FCI) which is a central body and partly contributed by the state from its own produce. It reaches the end consumers through Fair Price Shop (FPS) spread across the nation. This is the largest distribution network in the world operated with collaborative efforts of Union and State governments in India. Since the system is huge and operational task is mammoth, it is no hidden fact that the entire network is exploited by corrupt and anti-social elements in every link of the distribution chain. A 2003-04 data reveals that, 14.07 million tones of subsidized grains were issued to the 16 large states for delivery to Below Poverty Line (BPL) families of which only 5.93 million tones were actually delivered and a whopping 8.14 million tones of subsidized food grain did not reach the poor. Therefore, State Governments are looking for solution to overhaul the distribution system.

Maharashtra Government is one of the front runners in this initiative and intends to repair the flaw by introducing technology solution in this food supply and distribution system. An Expression of Interest (EOI) was published by the state government which attracted interest of five bidders that included TCS, CMC, CMS and ECIL along with Spanco. TCS and Spanco were short listed as the final contenders on technology grounds and the project was bagged by Spanco (PPP model) on BOOT basis for 3 years.  The total size of the project is about INR 250 crores. The scope of the contract is to computerize the entire ration distribution system and introduce new technology in order to stop pilferage in the system, so that the subsidized item reaches the needy. Once implementation starts the entire project will be completed in a span of one year and shall be operated by Spanco for 3 years along with having the provision  for extension by another one year.

Spanco Ltd (Spanco, BSE: 508976) which has emerged as a preferred “Government Transformation ServiceTM” provider, has been entrusted with the task of transforming the current supply and distribution chain into a technology driven system. Once complete; the new model will solve issues related to pilferage in transit

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