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Experience with GST holds valuable lessons for One Nation One Ration Card
May, 29th 2020

If done well, One Nation, One Ration Card, could lay the foundation of a truly national and portable benefits system that includes other welfare programmes like LPG subsidy and social pensions.

The economic crisis precipitated by COVID-19 has focussed the country’s attention on inter-state migrants. Millions of Indians in this diverse, complex group have crossed state borders in search of better economic opportunities. The crisis, however, has highlighted their precarious socio-economic condition.

Historically, governments have made several attempts to bridge the gap. A key part of that roadmap is the idea of portable welfare benefits, that is, a citizen should be able to access welfare benefits irrespective of where she is in the country. In the case of food rations, the idea was first mooted under the UPA government by a Nandan Nilekani-led task force in 2011. The current government had committed to a national rollout of One Nation, One Ration Card (ON-ORC) by June 2020, and had initiated pilots in 12 states. While intra-state portability of benefits has seen good initial uptake, inter-state portability has lagged. The finance minister has now announced the deadline of March 2021 to roll out ON-ORC.

To ensure a smooth rollout, we would benefit from reviewing the challenges thus far. First, the fiscal implications: ON-ORC will affect how the financial burden is shared between states. Second, the larger issues of federalism and inter-state coordination: Many states are not convinced about a “one size fits all” regime because they have customised the PDS through higher subsidies, higher entitlement limits, and supply of additional items. Third, the technology aspect: ON-ORC requires a complex technology backbone that brings over 750 million beneficiaries, 5,33,000 ration shops and 54 million tonnes of food-grain annually on a single platform.

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