Union Parliamentary Affairs Minister Kiren Rijiju announced on Wednesday, 27 May 2026 that the Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the continuation of the central scheme for ration transport, handling, and automation in the Public Distribution System, with a Central share outlay of Rs 25,530 crore for the 16th Finance Commission award cycle.

Context

The approved scheme — formally titled the 'Scheme for Assistance in Ration Transport and Handling-Income with Automation in PDS' — is an umbrella Central sector scheme. It provides financial support to states and union territories for the cost of transporting subsidised food grains from central depots to fair price shops, handling charges, and information-technology-driven automation of PDS operations. The Cabinet decision marks its continuation into the next Finance Commission cycle, which begins from 2026.

Rijiju, sharing the Cabinet decision on X, noted that the approval was made 'under the leadership of Hon'ble PM Shri Narendra Modi ji,' framing it as part of the government's ongoing commitment to food-security infrastructure.

Policy Backdrop

India's Public Distribution System operates under the National Food Security Act (NFSA), 2013, which entitles up to 75 per cent of the rural population and 50 per cent of the urban population to subsidised food grains. The sheer scale of this entitlement — covering hundreds of millions of beneficiaries — makes logistics and supply-chain integrity a persistent administrative challenge.

Central support for PDS computerisation dates to the End-to-End Computerisation of Targeted PDS initiative launched in 2012-13, which digitised ration cards, supply-chain tracking, and fair price shop operations. The current umbrella scheme consolidates transport-and-handling assistance with automation support, continuing a policy lineage that successive Finance Commission cycles have renewed to curb diversion and improve last-mile delivery.

The 16th Finance Commission is the constitutional body whose award period now governs the devolution and central assistance framework within which this scheme will operate. The Rs 25,530 crore figure represents the Central government's committed share for the full award period.

Stakeholders and Impact

The primary beneficiaries of the scheme are the crores of NFSA-entitled households across rural and urban India who depend on fair price shops for subsidised food grains. State food and civil supplies departments, which manage day-to-day PDS logistics, stand to receive continued Central funding to cover transport and handling costs that would otherwise strain state budgets.

The automation component is significant for supply-chain transparency. IT-enabled systems — including electronic point-of-sale devices at fair price shops and digitised beneficiary databases — have been central to reducing ghost beneficiaries and ensuring targeted delivery. Continued Central funding sustains the infrastructure underpinning these reforms.

What's Next

Attention will now turn to the release of revised scheme guidelines, state-wise allocation norms, and the integration roadmap with existing digitised PDS platforms. State governments will need to align their food-department plans with the new cycle's disbursement conditions. The scale of the outlay — Rs 25,530 crore as the Central share alone — signals that logistics and automation will remain core pillars of food-security administration through the 16th Finance Commission period, with the government signalling continuity rather than restructuring in its approach to PDS reform.