Food Stamps: A Model for India

About 4.5 lakh fair price shops in India sell 10-20 lakh tons of rice and wheat at the subsidized rate per month. Majority of the ration shops are in urban areas, they are hardly ever open and only a lucky few are able to get their ration. Further, the ration card is valid only for the shop specified on the card, thereby making the shops tyrant monopolies. Foodstuff is reported to be of poor quality. One of the innovative proposals in past budgets was to introduce food stamps. Each food stamp specifies the money amount that can be used to purchase approved food items from any regular or approved shops in the market. With technological developments, countries have replaced paper food stamps with smart cards or debit cards, drastically reducing transaction costs, pilferage and corruption.