Cash Coupons – A Viable Alternative for Public Distribution System

Cash Coupons – A Viable Alternative?

by Aastha Kapoor, Nishant Saindane and Vijay Ravi
May 24, 2017
1 min

This India Focus Note explores the cash coupon system, which aims to addresses the existing problems in the Public Distribution System (PDS) in India, which are leakages, quality, and convenience.

After introducing the National Food Securities Act in 2013, Government of India mandated states to adopt the same by modifying their Public Distribution Systems (PDS). States had the option of choosing from two alternatives: Biometric Authentication of Physical Uptake (BAPU) and Direct Cash Transfers. The Department of Food & Civil Supplies, Karnataka decided to adopt a modified approach – Food Coupons. Based on its evaluation of this new system MicroSave advised the department to make additional changes to come up with a system called Cash Coupons. The cash coupon system addresses all the existing problems of PDS viz. leakages, quality and convenience. It does so by drawing the best from both BAPU and cash transfers to come with a viable third alternative.