Executive Summary:
The Ministry of Consumer Affairs, Food and Public Distribution addresses a question regarding the financial viability of Fair Price Shops (FPSs), particularly in Goa. The response details the roles of central and state governments in supporting FPSs under the National Food Security Act, 2013 (NFSA). It outlines measures to improve FPS viability, including enhanced dealer margins and additional business opportunities.
Key Points / Main Content:
Responsibilities and Regulations:
* The Targeted Public Distribution System (TPDS) operates under the joint responsibility of Central and State/UT Governments.
* State/UT Governments are responsible for issuing FPS licenses, supervising, and monitoring FPS operations.
* State Governments must fix and periodically review FPS owner's margins to ensure sustained viability, as per the TPDS Control Order, 2015.
* State Governments must ensure advance payment of FPS dealer margins, potentially by adjusting foodgrain prices or through other methods, according to Food Security Assistance to State Governments Rules, 2015.
* The Central Government provides assistance to States/UTs for intra-state movement, handling of foodgrains, and FPS dealer margins under NFSA.
* The Central Government has no role in fixing the actual rate of fair price shop dealers margin or payment.
Enhancements to FPS Dealer Margins:
* FPS dealer margin norms were enhanced, effective April 1, 2022.
* For General Category States/UTs, the margin increased from Rs. 65 to Rs. 70 per quintal.
* For Special Category States/UTs, the margin increased from Rs. 105 to Rs. 143 per quintal.
* State Governments can set higher rates, but central assistance is limited to the rates specified in the rules or the actual average rates incurred by the State Government, whichever is lower.
Additional Measures for FPS Viability:
* State Governments should allow the sale of commodities other than TPDS foodgrains at FPSs.
* The Government encourages additional business avenues for FPS dealers, such as banking services, retail sales of small LPG cylinders, and general store items.
* Goa has implemented doorstep delivery of foodgrains to reduce transportation costs for FPS dealers.
* A Jan Poshan Kendra pilot project is underway in 5 cities to improve the viability of 90 FPSs while enhancing nutritional outcomes.
Goa FPS Status:
* 8 FPSs in Goa have surrendered their licenses in the last two financial years; only 2 due to financial reasons.
Impact Analysis:
State/UT Governments:
* Impact: Responsible for fixing and ensuring payment of FPS dealer margins, supervising FPS operations, and allowing additional business activities at FPSs. Also, to decide whether to implement the additional measures suggested, such as banking services and retail sales.
* Action Required: Periodically review and adjust FPS dealer margins, ensure timely payment, and explore opportunities to increase FPS viability.
Fair Price Shop Dealers:
* Impact: Affected by the fixed margin rates and the availability of opportunities for additional income through diverse services.
* Action Required: Explore and implement additional business opportunities to enhance financial viability.
Central Government:
* Impact: Provides financial assistance to States/UTs for FPS dealer margins and intra-state movement of foodgrains.
* Action Required: Continue providing assistance and monitor the implementation of measures to improve FPS viability.
Beneficiaries:
* Impact: Access to subsidized foodgrains and potential access to additional services through FPSs.
* Action Required: Utilize available services and provide feedback on the effectiveness of the PDS system.
Key Entities Referenced
Fair Price Shops: Retail outlets licensed under the Public Distribution System (PDS) to distribute subsidized foodgrains and other essential commodities to eligible beneficiaries.
Goa: A state in India, where Fair Price Shops are facing financial distress.
Public Distribution System: A government-sponsored chain of shops entrusted with the responsibility of distributing basic food and non-food commodities to the needy sections of the society at subsidized prices.
National Food Security Act, 2013: An Act of the Parliament of India which aims to provide subsidized food grains to approximately two-thirds of the country's population.
TPDS Control Order, 2015: A regulatory order issued by the Central Government to maintain supply and secure availability and distribution of essential commodities under the Targeted Public Distribution System.
Jan Poshan Kendra: A program initiative to address challenges such as low profit margins, operational losses and declining ration card usage for Fair Price Shops.
India Post Payment Bank: An Indian public sector banking and payment system. Government is encouraging FPS to tie up with IPPB for banking and citizen-centric services.
Food Security Assistance to State Governments Rules, 2015: Rules pertaining to assistance to State Governments in providing food security, including the payment of fair price shop dealers margin.
GOVERN MENT OF INDIA
MINISTRY OF CONSUMER AFFAIRS, FOOD & PUBLIC DISTRIBUTION
DEPARTMENT OF FOOD AND PUBLIC DISTRIBUTION
LOK SABHA
STARRED QUESTION NO. 59
TO BE ANSWERED ON 23RD JULY, 2025
SUPPORT FOR FAIR PRICE SHOPS
*59. SHRI CAPTAIN VIRIATO FERNANDES:
Will the Minister of CONSUMER AFFAIRS, FOOD AND PUBLIC DISTRIBUTION
be pleased to state:
(a) whether the Government is aware of the financially non=viable Fair Price Shops (FPSs) in
Goa with several shops closed and over 400 shops facing financial distress and pending
commission dues of nearly Rs. one crore;
(b) the details of specific measures being taken by the Government to support these FPSs
and ensuring their long-term viability under the Public Distribution System other than Common
Service Centres (CSCs) scheme; and
(c) the manner in which the Government plans to assist in the effective implementation of
initiatives like the 'Compensation to FPS Dealers’ scheme and the Jan Poshan Kendra
programme to address challenges such as low profit margins, operational losses and declining
ration card usage, while ensuring uninterrupted access to subsidised foodgrains for beneficiaries
in Goa?
ANSWER
MINISTER OF CONSUMER AFFAIRS, FOOD & PUBLIC DISTRIBU’TION AND
MINISTRY OF NEW AND REN EWABLE ENERGY
(SHRI PRALHAD JOSHI)
(a) to (c): A statement is laid on the Table of the HouseSTATEMENT REFERRED TO IN REPLY TO PARTS (a) TO (c) OF LOK SABHA
STARRED QUESTION NO. 598 FOR ANSWER ON 23rd JULY, 2025 REGAFJ)ING
' SUPPORT FOR FAIR PRICE SHOPS’
(a) to (c): Targeted Public Distribution System (TPDS) under the National Food Security
Act, 2013 (NFS A) is operated under the joint responsibility of the Central and the State/UT
Governments. The operational responsibility including issuance of licenses to Fair Price
Shops (FPSs), supervision and monitoring of the functioning of Fair Price Shops etc., rest
with the concerned State/UT Government.
As per sub-clause (7) of clause 9 of the TPDS (ControD Order, 2015, the State
Government shall fix an amount as the fair price shop owner’s margin, which shall be
periodically reviewed for ensuring sustained viability of the fair price shop operations.
As per Rule 8 of the Food Security (Assistance to State Governments) Rules, 2015, it
is responsibility of the State Government to ensure the payment of fair price shop dealers’
margin in advance by way of adjusting the same in prices of foodgrains to be paid by fair
price shop dealers, or through other appropriate mechanism. If the price of foodlgrains
payable by fair price shop dealers in any State or Union territory is lower than the fair price
shop dealers’ margin, the State Government shall ensure upfront payment of margin, in full,
to fair price shop dealers. Thus, the Central Government has no role in fixing the actual rate
of fair price shop dealers’ margin or payment thereof to FPS dealers.
The Central Government only provides the assistance to States/UTs for meeting the
expenditure towards intra-State movement & handling of foodgrains and fair price shop
dealers’ margin under the NFSA in accordance with the provisions of Food Security
(Assistance to State Governments) Rules, 20 15 (as amended from time to time) which inter-
alia provides for norms of expenditure and pattern of central sharing. In order to ensure
viability of Fair Price Shops, the norms of FPS Dealers margin was enhanced as per the
details given below:
ECategory of States IComponent of FPS margin Pre-revised :evised norms
Inorms (Rate in I(Rate in rupee per
jrupee per quintal) jquintal) (w .e.f.
I(upto 31 st March, 1.4.2022)
12022)
mara
65 70
IGeneral Category
;PS Dealers Margin 70 90
States/UTs
17 21
t a no 105
Special category
e 143 180
States/UTs
17 26
cSpecial category states includes Sikk ilm, Himachal Pradesh, Jammu & Kashmir,
Ladakh, Uttarakhand, Andaman & Nicobt=„r islands. Lakshadweep and seven north east states.
However, the State Governments are free to nx the actual rates, which can be higher
than the norms specified in the rules. Central assistance will be limited to the rates specified
in the Rules or the actual average rates fbI the State as a whole, at which the expenditure was
actually incurred by the State Government, whichever is lower.
As per sub-clause (9) of Clause 9 of The TPDS (Control) Order, 2015, the State
Government shall allow sale of cornnrodiths other than the foodgrains distributed unlder the
TPDS at the fair price shops to improve the viability of the fair price shop operations.
As per the information received Born State Government of Goa, they have engaged in
making Fair Price Shops (FPSs) in the State $nancially more viable. However, 8 FPSs haI'e
surrendered their license in last two Hnal'leia! years due to various reasons such as death. old
age, health condjtions and only 2 out of 8 FPS 1,iave surrendered due to financial reasons.
It has been the endeavor of the Government to improve the financial viability of Fair
Price Shops (FPSs) by providing additionai buginess avenueg to FPS dealers and enhancing
beneficiary experience through the provision of value-added services at FPS. To improve the
financial vi,8bility ot FPS$, Government of India has requested all State/UT Governments to
take up initiatives through FPSs such as providing banking services through tie-up with
banks/corporate Banking Cowespondenti, banking and citizen-centric services of India Post
Payment Bank (iPP13), Retail selling . of slnal1" (5kg) LPG cylinders, Sale of other
commcidilies/ general store items etc.
In addition, the State Government of Goa has implemented doorstep delivery of
foodgrains initiative to eliminate the burden of tralrsportation of cost of FPS dealers. Under
this initiative, foo(!grains are transported directly to FPS -by authorized logistics providers.
Further, a Jan Pc)shan Kendra pilot .has been undertaken to improve viability of 90
FPSs aeross 5 cities, 'i.e. ' Hyderabad, Ghaziabad, Jaipur, Ahrnedabad & Indore. The
Government of India has undertaken this pilot study to enhance the financial viability of FPS
dealers while focusing on improving nutritional' outcomes of.the beneficiaries.
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