From the ubiquitous Fair Price Shops (FPSs) across the country, many thousands will double as financial services brokers for the masses, a move that will accelerate the process of financial inclusion and boost digital connectivity in remote areas. The FPS license holders find additional sources of income that serve as an incentive to remain in the trade and also ensure a greater reach of the public distribution system (PDS).
Over 3,000 Common Service Centers (CSCs) currently provide various e-services to citizens, including Aadhaar and PAN card registrations, booking train tickets, music downloads, checking bank balances and accessing eligibility information for various systems for citizens in rural areas.
The Ministry of Electronics and Information Technology (Meity)’s Digital India program plans to increase the number of CSCs to cover nearly 6,000 villages over the next few years. While there are currently up to 8,000 CSCs connected to FPS, the government has a goal of establishing an additional 10,000 such service centers over the next year with the FPS outlets, which are last mile service centers for implementation of the National Food Security Act (NFSA).
A memorandum of understanding exists between the Department of Food and Public Distribution (DFPD) and Meity to transform FPSs into CSCs. The outlets offering both functions are now located in Uttarakhand, Gujarat, Himachal Pradesh, Madhya Pradesh, Jharkhand, Rajasthan and Tamil Nadu.
“We encourage FPS owners to offer a variety of services under the CSC platform, apart from acting as a bank correspondent for the provision of financial services,” Sudhanshu Pandey, secretary of DFPD, told FE.
There are currently 5.34 million FPS in the country, distributing an average of 60-70 million tons of subsidized grain annually under the NFSA to more than 80 million beneficiaries. Official sources said that there are opportunities to generate additional income through FPS as a large number of people visit these outlets to get their monthly grain entitlement.
The Department of Food is currently working on a plan to give the FPS, which are also used as CSCs, a unique color code to distinguish them as delivery points for public services. The ministry, in cooperation with the Department of Financial Services at the Ministry of Finance and the State Bank of India, has also approved a plan that would allow FPS traders to access bank loans under Pradhan Mantri Mudra Yojana, which provide loans of up to Rs 10 lakh to non-corporate, non-agricultural, small and micro-enterprises.
“Having access to mudra loans allows FPS merchants to invest in building infrastructure at the point of sale for selling basic and non-food items, which would increase their income,” Pandey said.
As the FPSs emerge as service delivery points for various services, the Ministry of Food has also notified the Ministry of Communications to expand BharatNet connectivity to around 12,200 FPSs in states facing digital function issues due to poor network connectivity.
Officials said discussions are ongoing to allow FPS dealers to register to act as public data bureaus under the Prime Minister Wi-Fi Access Network Interface (PM-WANI), which would help extend internet services to people in rural areas and expand to remote areas.
As part of the reforms launched to improve targeted PDS, the government has embarked on several measures, including the digitization of ration cards, Aadhar seeding of ration cards, and the installation of Electronic Point of Sale (ePoS) kiosks at FPSs. Currently, over 95% of the 5.34 Lakth FPS across the country have ePoS devices.
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