Dalberg study indicates that ONORC can be improved further

Dalberg study indicates that ONORC can be improved further

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published Published on Apr 25, 2022   modified Modified on May 2, 2022

A recently released study, which has been done by Dalberg in collaboration with Kantar, and with support from the Omidyar Network India, brings to light both the supply and demand-side perspectives on the 'One Nation One Ration Card' (ONORC) scheme. Titled 'Fulfilling the promise of One Nation One Ration Card: A frontline perspective from 5 Indian states', the survey for the study was conducted in five states i.e., Andhra Pradesh, Karnataka, Rajasthan, Uttar Pradesh, and Jharkhand. Only these five states were chosen for the study because over 98 percent of beneficiaries’ ration cards have already been seeded with Aadhaar for biometric authentication, and 95 percent of Fair Price Shops (FPS) use an electronic point-of-sale machine (ePoS) for authenticating and recording transactions there. 

It should be noted that after being sanctioned in 2018-19 by the Union Government, the ONORC scheme was implemented from August 2019 onwards. Since a lot of migration is seasonal and circular in nature (and not of permanent type), the ONORC is considered to be one of the best solutions to ensure food security of the footloose/ migrant workers under the National Food Security Act, 2013 (NFSA). Before the ONORC came into being, the ration card holders could access their entitlement only at a Fair Price Shop (FPS) or ration shop, where they were registered. The newly launched ONORC allows a migrant worker to access the food entitlement at any FPS in the country, thanks to an attribute termed as ration portability.     

The ONORC has enabled even split households (i.e., households in which members got separated from one another due to migration) to access their rations in different locations based on Aadhaar authentication without even the need to obtain new or separate ration cards, mentions the latest Dalberg study on ONORC.

Because of the ONORC, the PDS beneficiaries now have greater agency and can avail their rations where they get better service or find it more convenient to access their rations. However, the demand for rations may fluctuate month-to-month as a result of ONORC. The PDS dealers may gain or lose customers under the arrangement. 

For the Dalberg study, a survey of 6,750 PDS beneficiaries was conducted along with a survey of 1,540 PDS dealers. The survey was conducted between 20 August, 2021 and 20 September, 2021. The survey was conducted telephonically with all beneficiaries except women who were widowed, divorced or separated; for them, the researchers conducted the survey in person because it was believed that such vulnerable beneficiaries would be difficult to reach or may be uncomfortable responding by phone. Interviews with the PDS dealers were also conducted in person. Stakeholder interviews with government officials and researchers were also undertaken. The survey for the study has been mainly conducted in the local language most widely spoken in the state where the respondent was located. The findings mainly capture the experience of intra-state migrants, and the sample did not capture an adequate number of responses from interstate migrants, the Dalberg report warns its readers.

Both users and non-users of portability, including migrants and vulnerable populations, were interviewed for the study. The sample included 25 percent migrants (N = 1703) who were likely to be the most impacted by ONORC. On top of that, the sample included 6 percent marginalized women (N = 377) who were widowed, divorced, or separated to understand if they faced any specific challenges.

KEY FINDINGS

The Dalberg report has highlighted the following points:

Ration card holders' experience in the five study states 

• Around 12 percent of households having access to a ration card tried to use PDS portability recently; about one-fifth of migrant households with a ration card tried to use PDS portability recently.

• Roughly 6 percent of all ration card holders who had not used PDS portability are eager to use the same in the future; at least one-fifth of them had not used it, because they were unaware of ration portability.

• Nearly 12 percent of households that tried availing rations using portability faced a transaction failure compared to 9 percent of households overall who experienced failures (for portability and non-portability transactions combined) when trying to collect their rations. 

• About 4 percent of households that tried to access rations under portability could not do so, as compared to 1 percent of households using PDS overall.

Experience of PDS dealers

• About 97 percent of PDS dealers had the knowledge that ration portability was possible; nearly 73 percent knew that interstate ration portability was allowed. 

• Roughly two-third of PDS dealers reported receiving ration card holders not registered to their FPS; almost 28 percent of these PDS dealers were unable to serve at least some portability customers, mainly due to technology failures or because they feared running out of stocks. 

• Around 10 percent of PDS dealers ran out of stock at least once in the three months preceding the survey, often due to demand fluctuation under portability.

• Almost one-third of PDS dealers felt that portability would make their business model unviable, at least some of the time.
 
• Nearly 52 percent of PDS dealers did not use exception handling methods when ePoS-based transactions failed due to biometric authentication or connectivity failure. 
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Some of the issues faced by beneficiary households and the PDS dealers, as identified by the Dalberg study, are given below:  

ONORC beneficiaries

• Although most households with ration cards were aware of portability, some beneficiaries who wanted the benefits of portability did not know it existed.

• Although Aadhaar seeding of ration cards was near universal, a seeding gap still remained in the 5 states surveyed. 

• Updating ration cards (e.g., to add new members or correct important details) was found to be tedious by the beneficiary households.  

• The survey reveals that ration portability has already been used by many beneficiary households.

• Most households that tried getting rations under portability were successful.

• Households that tried availing rations under portability experienced 1.3 times as many transaction failures and 4.0 times as many denials as compared to the rest.

• Technology problems, such as poor connectivity or challenges in biometric authentication, and PDS dealers’ concerns about running out of stocks were the main reasons why households experienced transaction failures under portability, shows the study.

• PDS dealers often felt that if the fingerprint did not work (which happened mostly in case of the elderly), there was no other option left to issue ration. If the mobile phone is registered, then OTP used to be an option for authentication. However, the authentication option via mobile phones has stopped appearing in the ePoS device altogether during the recent months, according to some PDS dealers.

• The reasons cited by PDS dealers for not serving portability customers were: a) Biometric device or authentication failure; b) Poor internet connectivity; c) Electricity outage; d) Stockouts or afraid of running low on stocks; e) Cumbersome process; and f) Backlash from regular customers.  

• Portability uptake among the migrant households was almost two times that of non-migrant households. 

• Migrant households who used portability experienced denials at a rate similar to that for portability users overall.

• The Dalberg study has observed that marginalised women were particularly affected by the difficulties in accessing and updating ration cards.

• A greater share of households with marginalized women wanted to use portability in comparison to other households; many did not know that they could.

PDS dealers

• Most PDS dealers were aware of portability, but many thought that interstate portability was not allowed.

• When transactions failed, almost 50 percent of PDS dealers did not use exception handling mechanisms, often because of information gaps. For portability transactions, only one-time passwords (OTPs), which require Aadhaar linkage, are available for exception handling; most states are yet to define clear rules and guidelines for dealers to follow if authentication fails during portability transactions. For non-portability transactions, other options - including offline mechanisms - may also be available in other states. There is no alternative manual entry process to issue rations if there is no online authentication. If the customer’s fingerprint fails three times, then some PDS dealers try the OTP way of authentication. If the customers do not carry their registered phones or SIM card (which frequently happens in the case of elderly), then the PDS dealers are unable to issue them rations.

• The survey has found that many PDS dealers faced fluctuation in demand because stock availability did not keep up.

• Some PDS dealers have felt that they have earned more commission with more customers due to portability under ONORC. However, they feared that if a portability customer arrives before regular customers, they may not be left with adequate rations to serve the regular customers. It is because they receive stocks once in three months and they cannot request additional stocks for serving all customers.

• Some of the reasons cited by PDS dealers for not using exception handling were: a) Have received instructions from authorities to not use; b) Not stipulated in the rules and guidelines; c) Too cumbersome and time taking; d) Stocks are not accounted online leading to reduced stock delivery; and e) They don't know.

• The reasons cited by PDS dealers for business model being unviable under portability were: a) Regular customers may go to other FPS; b) Don’t have capacity to serve added customers; c) Stocks are not adequate to serve all customers; d) Don’t know; and e) Others. 

• The reasons reported by dealers for running out of stocks were: a) Demand surge under portability; b) Both demand surge due to portability and delays due to gaps in stock reconciliation; c) Delays due to gap in online and offline reconciliation; d) Other reasons; and e) Don’t know.

• The key barriers to accessing portability were: a) When ration card is not seeded with Aadhaar; b) Not having access to an alternate FPS; c) Authentication failure; d) Inadequate stocks with the PDS dealers/ FPS; e) Many who want portability don't have a ration card (almost 77 percent of low-income households that didn’t have a ration card wanted to enroll in PDS); and f) Because of lack of documents, many recently separated or divorced women could not get their ration cards (adding new members was also a challenge)
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The Dalberg study has also compared ONORC rollout among the study states and has made the following observations: 

• Although Andhra Pradesh launched ONORC early and has seen higher uptake compared to other study states, failure rates remained high. 

• For Jharkhand, poor awareness limited the uptake of portability.

• Karnataka had the highest number of PDS dealers who reported receiving a ration card holder wanting to use portability. Its failure rate is similar to that of other states. 

• Rajasthan had relatively low uptake of portability but experienced a high failure rate. More dealers in Rajasthan were aware of portability than in other states.

• Uttar Pradesh had the lowest rate of failure for attempts to collect rations under portability, but accounted for the largest number of households unable to collect rations.

Key recommendations

Some of the key recommendations made by the Dalberg study are: 

• Raise awareness about portability of ration;

• Improve internet connectivity for FPS; 

• Implement exception handling for portability transactions when biometric authentication doesn’t work;

• Ensure that ration cards are issued, updated and seeded, especially for vulnerable groups; and

• Allow flexible stock requisition for PDS dealers.

 

References: 

Fulfilling the promise of One Nation One Ration Card: A frontline perspective from 5 Indian states, Dalberg and Omidyar Network India, please click here, here, and here to access 

National Food Security Act (2003), please click here to access 

Press release: Cabinet approves extension of PMGKAY for another 6 months (April-September, 2022), Cabinet, Press Information Bureau, 26 March, 2022, please click here to access  

One Nation, One Ration Card, Press Information Bureau, Ministry of Consumer Affairs, Food & Public Distribution, 3 November, 2021, please click here to read more   

Press release: ONORC now successfully operational in 34 states, Press Information Bureau, Ministry of Consumer Affairs, Food & Public Distribution, 28 August, 2021, please click here to access  

Press Note: Implementation of 'One Nation, One Ration Card' Scheme, released by Ministry of Consumer Affairs, Food & Public Distribution, Press Information Bureau, dated 20th March, 2020, please click here to access   

One Nation One Ration Card, Nationwide Portability of Ration: Reforms in Public Distribution System, please click here to read more

Press Note: Government all set to implement "One nation-one ration card" scheme throughout India by 30th June, 2020: Union Minister Shri Ram Vilas Paswan, released by Ministry of Consumer Affairs, Food & Public Distribution, 29th June, 2019, Press Information Bureau, please click here to access

Annavitran website, Distribution of Foodgrains through ePoS devices, Department of Food and Public Distribution, Ministry of Consumer Affairs, Food and Public Distribution, please click here to access  

Integrated Management of Public Distribution System (IM-PDS), Department of Food and Public Distribution, Ministry of Consumer Affairs, Food and Public Distribution, please click here to access

'One Nation One Ration Card' a success in 5 states: Study, IANS/ TheHansIndia.com, 7 April, 2022, please click here to access  

One nation one ration card: How many know about it -Vivek Mishra, Down to Earth, 6 April, 2022, please click here to access 

Push the policy needle forward on migrant support -Mukta Naik and Varun Aggarwal, The Hindu, 5 April, 2022, please click here to access 

56 crore ration card portability transactions since launch of ONORC -Dilasha Seth, Livemint.com, 9 February, 2022, please click here to access 

SC Order Towards Making ‘Food For All’ A Reality -Dipa Sinha, OutlookIndia.com, 2 July, 2021, please click here to read more

Coronavirus Lockdown: As Hunger Grows, the Fear of Starvation Is Real -Kabir Agarwal, TheWire.in, 16th April, 2020, please click here to access

‘More than 100mn excluded from PDS as govt uses outdated Census 2011 data’, IndiaSpend, 16th April, 2020, please click here to access 

100 million Indians fall through gaps in food safety net, economists urge rethink on Covid-19 relief, Scroll.in, 15 April, 2020, please click here to access 

Image Courtesy: Fulfilling the promise of One Nation One Ration Card: A frontline perspective from 5 Indian states, Dalberg and Omidyar Network India, please click here to access 



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