Transforming Food Distribution through Technology


The National Food Security Act (NFSA) of 2013 legally entitles over 80 crore beneficiaries to receive highly subsidized food grains through the Public Distribution System (PDS). Eligible households include those under the Antyodaya Anna Yojana (AAY) and Priority Households (PHH) categories. AAY households, considered the poorest, receive 35 kg of food grains per household per month, while PHH households receive 5 kg per person per month. Since January 1, 2024, food grains are provided free of cost under the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY).

The nation’s food security relies on a complex supply chain managed by the Central and State Governments, with a network of 5.3 lakh Fair Price Shops (FPSs) serving as pivotal last-mile delivery agents. FPSs, licensed and managed by States/UTs, distribute food grains to ration card holders through the PDS and receive compensation via dealer margins based on per-quintal transactions. FPSs are critical for efficient delivery to beneficiaries.

The Department of Food and Public Distribution (DFPD), Government of India, has introduced various technology-based interventions to modernize the PDS and enhance transparency, accountability, and efficiency. The ‘End-to-end computerization of TPDS operations’ scheme, implemented during the 12th Five Year Plan (2012-17), significantly improved efficiency and helped curb leakages and prevent food grain diversion. Today, nearly 100% of ration cards are Aadhaar-seeded, and 97% of transactions use biometric/Aadhaar authentication. However there are following issues still need addressing -

1) FPSs are primarily utilized for food grain distribution over 1-2 weeks each month, leaving them underutilized for the remaining period. This presents an opportunity to leverage FPS infrastructure to provide additional community services and increase FPS dealers' income.

2) Financial Viability of FPSs* FPS dealers’ earnings depend solely on commissions from distributed rations. The dealer margins, last revised in April 2022, vary by state category:

  Category of States Prior norms (Rate in rupee per quintal) Revised norms (After April 2022) (Rate in rupee per quintal)
FPS Dealers Margin General Category States/UTs 70 90
Additional margin 17 21
FPS Dealers Margin North-Eastern states, Himalayan states, and the island states 143 180
Additional margin 17 26

With rising living costs, FPS dealers have become increasingly dissatisfied with their income. Less than 11% of FPSs earn more than Rs 10,000 per month on dealer margins, and approximately 76,500 FPSs manage fewer than 100 ration cards. Despite state and central government measures to mitigate financial challenges, such as authorizing additional services at FPSs (e.g., CSC, banking services) and permitting the sale of non-PDS commodities, financial sustainability remains a concern.

3) Transition from Food Security to Nutritional Security* DFPD currently provides free food grains to 81 crore individuals through the PDS, ensuring food security with energy-rich cereals (rice and wheat). Additionally, DFPD supplies fortified rice with iron, folic acid, and vitamin B12 through the PDS. While these measures have improved food security, a significant portion of the population still suffers from nutritional deficiencies, as evidenced by NHFS-5 data. High anemia rates (67.1% in children, 57% in women, and 25% in men) and persistent stunting, wasting, and underweight issues in children under five highlight ongoing nutritional challenges.

Thematic areas

In context of the issues at hand which is challenging both FPS delivery network and nutrition among beneficiaries, the Department is seeking innovative proposals to improve nutritional outcomes, along with enhancing FPS dealer income. This may include a holistic transformation of FPS (Fair Price Shops) to nutrition hub with a aim to ensure that all citizens including the 80 crore beneficiaries under PMGKAY are adequately provided with sufficient wide nutrition rich food and other essential items. Additionally, the Department is also seeking innovative solutions to empower FPS owners to enhance their earnings through sustainable business model.

Problem Statement

a. Transforming FPS into Nutrition Hubs for Comprehensive Nutritional Access

Transforming existing FPS (Fair Price Shops) into Nutrition Hubs to ensure the poor and vulnerable are not only having access to essential food grains but also to proper nutrition. Towards this a wide range of ‘nutrient-rich’ edibles such as millets, pulses, cooking oils, raw fruits & vegetables, milk, eggs, soybean, and other available packaged food available in the market which will offer diverse nutrition to beneficiaries.

b. Empowering FPS Owners through Sustainable Business Models and Technological Innovation

The department is looking forward to unlocking new possibilities and opportunities for empowering the FPS owners in adopting sustainable business models through use of cutting-edge technologies. The essence is to transform FPSs into sustainable and financially viable option by leveraging technology ensuring to improved operational efficiency through selling non-PDS items at scale and innovative use of existing space.

Eligibility criteria

  1. All entities recognised as Start-ups, Innovators, schools/academic institutions, skill development institutions and so on.
  2. All entities must provide innovative solutions in the aforementioned thematic areas

Evaluation Process & Criteria

A screening process will be adopted to evaluate the submissions. The screening committee will do an initial shortlisting of the forms, submitted by the participants. Thereafter, an Expert Committee’ comprising members from academia, start-ups, domain experts etc. will do the final screening of the solutions to zero down on the winners.

The following broad parameters shall be considered by committees for the evaluation of the proposals:

  1. Innovation
  2. Usability
  3. Relevance to the subject matter
  4. Impact on society i.e., how helpful will it be in solving the provided challenges?
  5. Replicability
  6. Scalability
  7. Ease of deployment/roll-out
  8. Potential risks involved in the implementation of the solution.
  9. Completeness of the proposal

Terms and Conditions

  1. Participants must address the complete problem statements and the parameters defined by the Department and submit innovative, comprehensive solutions.
  2. All participants must meet the eligibility criteria outlined for the challenge.
  3. Winners will be chosen based on the  innovativeness and feasibility of their ideas. Going ahead, if the Department finds a solution innovative and potentially implementable, then winners will be called up and asked to give a detailed presentation. Once approved, the Department will then ascertain the financial implications for implementation in the FPS.
  4. Winners will retain ownership of the solution/product developed but must adhere to the terms and conditions specified for the challenge.
  5. Disputes will be resolved based on the decision of the Department of Food and Public Distribution.
  6. Organizers reserve the right to withdraw participation or reject submissions at their discretion.


1 Start Date- Form Submission 25th June,2024
2 Last date of Form and Idea Submission 25th July,2024
3 Evaluation of Idea 20th August,2024
4 Announcement of Winner 27th August,2024


The Department of Food and Distribution will handle all essential communications, including notifying important dates and other relevant information.


The top 3 most innovative idea will be awarded the following prizes:

  1. INR. 40,000 for the most innovative solution.
  2. INR. 25,000 for the second most innovative solution; and
  3. INR. 10,000 for the third most innovative solution.

Join us in addressing the challenge of nutritional security and transforming the lives of millions in our society! We look forward to your participation and creative solutions.