India's Food Safety Net Programme

Summary of Key Points on India's One Nation One Ration Card (ONORC) Reform

Constitutional References and Policy Context

• Article 21: Right to life and personal liberty, which encompasses the right to food security.
• The reform aligns with the government's objective of providing sustenance to the population, particularly for the impoverished, by enhancing the Public Distribution System (PDS).

ONORC Reform Overview

• Launched in 2019, the One Nation One Ration Card (ONORC) aims to enable portability of food security entitlements across India, addressing the limitations of previous systems that tied ration access to geographical locations (local fair-price shops).

Key Features of ONORC

1. Portability: Beneficiaries can now collect rations from any fair-price shop (FPS) using Aadhaar authentication.
2. Divisibility: Ration entitlements can be split across multiple transactions, allowing beneficiaries to take some rations home and the rest while at their place of work.

Economic and Social Impact

• A study conducted using 891 million transactions from the Aadhaar-enabled Public Distribution System (AePDS) portal highlights ONORC's impact since its implementation.
• Utilization of ONORC:
  • 62% of transactions from Bihar occurred at shops near cardholders' assigned FPS, demonstrating a trend towards geographical proximity over long-distance migration.
  • Breakdown of transaction types:
    • 38% at assigned FPS (type 1 portability).
    • 55% at a different FPS in the same block.
    • 4% in a different block within the same district.
    • 2% in another district.
    • 1% in other states (type 2 portability).

Bargaining Power Shift

• The reform has shifted bargaining power towards beneficiaries:
  • Previous monopolistic practices by dealers constrained food quality and price, adversely affecting marginalized communities (low-power, female-headed, lower-caste households).
  • Beneficiaries can now threaten to switch FPS, incentivizing dealers to improve services and offerings.
• The positional advantage gained by beneficiaries via ONORC signifies the most significant welfare change in the PDS in decades.

Challenges and Observations

• Divisibility Usage: Although ONORC provides for splitting rations, it is underutilized, possibly due to:
  • Lack of awareness among beneficiaries.
  • Dealers' disincentives to encourage divisibility.

Conclusion

• The ONORC reform has fundamentally altered the PDS, promoting empowerment and freedom for ration cardholders, particularly benefiting migrant families.
• Structural changes achieved through this policy represent an essential advancement in India's fight against food insecurity and improving the socio-economic standing of marginalized groups.