🛒 Assistance to State Agencies for Intra-State Movement of Foodgrains and FPS Dealers’ Margin under NFSA
The National Food Security Act (NFSA), 2013 is a landmark legislation by the Government of India that aims to provide food and nutritional security to the people by ensuring access to adequate quantity of quality food at affordable prices. To ensure the effective implementation of NFSA, the Government extends financial assistance to State Governments/UT Administrations under various heads. One such key support is the “Assistance for Intra-State Movement of Foodgrains and Fair Price Shop (FPS) Dealers’ Margin”.
📌 Objective
The purpose of this assistance is to:
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Support state-level transportation (intra-state) of foodgrains from the designated depots to Fair Price Shops (FPS).
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Compensate the Fair Price Shop dealers for distributing foodgrains to the eligible beneficiaries.
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Ensure smooth and efficient distribution of subsidized foodgrains under the Targeted Public Distribution System (TPDS).
🚚 What is Intra-State Movement?
Intra-state movement refers to the transportation of foodgrains within a state — from central stock points or depots (like FCI godowns) to local FPS centers. The State Governments are responsible for this leg of the distribution network under NFSA.
🧾 FPS Dealers’ Margin
FPS (Fair Price Shop) dealers play a vital role in delivering foodgrains to beneficiaries under NFSA. To compensate for their operational costs (such as transportation, handling, storage, rent, etc.), a dealer margin is provided per quintal of foodgrains distributed.
🏛️ Scheme Coverage
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All States and Union Territories implementing NFSA are eligible.
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Covers Priority Households (PHH) and Antyodaya Anna Yojana (AAY) beneficiaries.
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Applicable for rice, wheat, and coarse grains distributed under NFSA.
💰 Financial Assistance Pattern
1. Intra-State Transportation Assistance
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Provided to cover transport, handling, and storage costs from FCI depots to FPS.
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The amount varies state-wise based on geography, logistics cost, and approved rates.
2. FPS Dealer Margin
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Paid per quintal (100 kg) of foodgrains distributed.
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Separate margins for:
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PHH (Priority Households)
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AAY (Antyodaya families)
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Government periodically revises the margin rates to adjust for inflation and operational costs.
🧑💼 Implementing Agencies
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Department of Food and Public Distribution (DFPD), Government of India
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State Food and Civil Supplies Departments
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Food Corporation of India (FCI) for initial grain allocation and storage
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District Supply Officers (DSOs) monitor local distribution and dealer payments
📋 Process Flow
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FCI allocates foodgrains to the State as per NFSA guidelines.
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Foodgrains are lifted from FCI depots by State Agencies.
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States arrange intra-state transportation to FPS.
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FPS dealers distribute grains to beneficiaries using electronic Point of Sale (ePoS) devices.
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Central Government reimburses the State for:
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Transport costs (based on tonnage and distance)
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FPS dealer margins (per quintal distributed)
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📊 Monitoring & Accountability
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Online monitoring systems like Annavitran Portal track grain movement and FPS transactions.
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States are required to submit utilization certificates (UCs) and audit reports.
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Social audits and vigilance committees ensure transparency and reduce diversion/leakages.
🧩 Challenges
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Delayed reimbursement can affect FPS operations.
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Inadequate margins make FPS operation economically unviable in some areas.
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Issues in remote and hilly areas due to high transport costs.
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Lack of digitization in some states causes inefficiency in tracking.
🛠️ Government Initiatives for Improvement
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Use of GPS tracking in trucks carrying foodgrains.
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End-to-end computerization of TPDS.
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Direct transfer of FPS margins into dealer’s bank accounts via DBT (Direct Benefit Transfer).
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Smart ration cards and mobile OTP verification for transparency.
📈 Benefits of the Scheme
| Benefit | Impact |
|---|---|
| Timely foodgrain delivery | Reduced starvation and food insecurity |
| Support to FPS dealers | Better service delivery and reduced leakage |
| Efficient transport | Cost savings and improved logistics |
| Digital monitoring | Transparency and accountability |
🔗 Related Resources
📝 Conclusion
The Assistance to State Agencies for Intra-State Movement of Foodgrains and FPS Dealers' Margin is a critical financial support mechanism under the National Food Security Act. By enabling efficient transport and incentivizing FPS dealers, the scheme plays a foundational role in ensuring food reaches every poor and vulnerable citizen in India. With continuous improvements in digitization and accountability, this support system is helping India move closer to the goal of zero hunger and food security for all.
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