Blockchain Applications in Bihar’s Public Distribution System

Bihar’s Public Distribution System (PDS) is a cornerstone of food security, delivering subsidized food grains and essential commodities to millions. However, inefficiencies, leakages, and lack of transparency undermine its effectiveness. Inspired by blockchain’s successful applications in land record management and agricultural traceability, this article explores how blockchain can revolutionize Bihar’s PDS by ensuring end-to-end visibility, reducing fraud, and enhancing trust.

Challenges in Bihar’s PDS

Bihar’s PDS faces systemic issues that mirror challenges in land record systems and agricultural supply chains:

• Leakages and Diversion: Subsidized grains are often diverted to the open market, depriving beneficiaries.
• Opaque Supply Chain: Lack of visibility into stock movement fosters mistrust among stakeholders.
• Fraudulent Practices: Bogus ration cards and unauthorized beneficiaries misallocate resources.
• Inefficient Record-Keeping: Manual or semi-digitized systems lead to errors and delays.
• Last-Mile Delivery Issues: Fair Price Shops (FPS) often under-deliver or overcharge due to inadequate monitoring.

These challenges resemble those in India’s land records system, where blockchain has addressed issues like fraudulent transactions and lack of coordination among departments. Similarly, blockchain-based food traceability systems, as seen in global pilots, offer a blueprint for PDS reform.

Blockchain: A Transformative Solution

Blockchain, a decentralized, immutable ledger, ensures secure and transparent transaction records across a network of nodes. Its application in land records (e.g., Andhra Pradesh’s Ethereum-based system) and agricultural supply chains (e.g., Walmart’s Hyperledger Fabric solution) demonstrates its potential to address PDS challenges. Key features include:

• Immutability: Records cannot be altered, preventing fraud.
• Transparency: Stakeholders access real-time data on stock movement.
• Smart Contracts: Automate processes like stock allocation and beneficiary verification.
• Decentralized Network: Eliminates reliance on intermediaries, reducing corruption.
• Traceability: Tracks food from source to consumer, ensuring safety and quality.

Lessons from Land Records and Agricultural Traceability

The Digital India Land Records Modernization Programme (DILRMP) highlighted issues like lack of coordination among departments and fraudulent transactions, which blockchain addresses by connecting nodes (e.g., Land Records, Survey, and Registration Departments) in a trusted ecosystem. Similarly, agricultural traceability systems, such as Walmart’s blockchain solution, track food from farm to shelf, reducing risks like food poisoning by identifying contamination sources quickly [13]. For instance, a retailer can trace mutton to its slaughter date, shipment details, and shelf life, enabling rapid response to safety issues.

In Bihar’s PDS, blockchain can similarly connect stakeholders—Food and Civil Supplies Department, warehouses, FPS, banks, and beneficiaries—to create a transparent supply chain. The framework proposed by Aung and Chang [14] for food traceability, illustrated below, can be adapted for PDS:

This framework emphasizes internal traceability (within entities like warehouses) and external traceability (across the supply chain), ensuring end-to-end visibility.

Proposed Blockchain-Based PDS Framework

Drawing from land records and agricultural traceability models, the following framework outlines a blockchain-based PDS for Bihar:

Step-Wise Process for PDS Transactions

1. Stock Allocation: The Food Department allocates grains to warehouses via a blockchain portal. Nodes (warehouses, FPS) validate the transaction, adding a block to the ledger.
2. Inventory Tracking: Warehouses record stock receipt and dispatch to FPS, with smart contracts ensuring compliance with allocation orders.
3. Beneficiary Authentication: FPS uses Aadhaar-linked digital signatures or biometrics to verify beneficiaries. Transactions are validated and recorded.
4. Distribution: FPS logs quantities distributed, with smart contracts enforcing entitlement limits. Payment transactions (if applicable) are processed via banks.
5. Grievance Redressal: Beneficiaries access the blockchain portal to check entitlements and report issues, with resolutions recorded transparently.
6. Audit and Monitoring: Immutable records enable real-time auditing, ensuring accountability.

Benefits for Bihar’s PDS

• Reduced Leakages: Immutable records prevent diversions, ensuring grains reach beneficiaries.
• Enhanced Transparency: Real-time tracking fosters trust, similar to land title visibility in blockchain systems.
• Fraud Prevention: Digital signatures eliminate bogus ration cards, akin to preventing double sales in land records.
• Rapid Response: Traceability identifies supply chain issues quickly, as seen in food safety systems [11].
• Efficiency: Smart contracts automate processes, reducing manual errors and costs.

Implementation Insights from Global Examples

• Land Records: Andhra Pradesh’s partnership with Chromaway uses Ethereum to store property deeds, reducing fraud and improving transparency. Bihar can adopt a similar Hyperledger Fabric-based system for PDS, ensuring only authorized nodes validate transactions.
• Agricultural Traceability: Walmart’s blockchain tracks food from farm to store, while Agridigital in Australia enables wheat trading [13]. These systems demonstrate how blockchain eliminates intermediaries, allowing direct connections between farmers and retailers, which can be mirrored in PDS to connect warehouses and FPS.

Challenges and Mitigation Strategies

Implementing blockchain in Bihar’s PDS faces hurdles similar to those in land records and agricultural systems:

• Infrastructure: Rural areas may lack reliable internet. Solution: Leverage Digital India infrastructure and deploy offline-capable nodes.
• Training: Stakeholders need digital literacy. Solution: Conduct training programs for FPS owners and beneficiaries.
• Cost: High setup costs for blockchain networks. Solution: Pilot in select districts, partnering with tech providers like IBM or Chromaway.
• Data Migration: Transitioning existing records to blockchain. Solution: Use MIS data from DILRMP as a model for phased migration.

Conclusion

Blockchain technology, proven in land records and agricultural traceability, offers a robust solution to transform Bihar’s PDS. By ensuring transparency, reducing fraud, and enabling end-to-end traceability, blockchain can make Bihar’s food distribution system more equitable and efficient. A pilot implementation, leveraging existing digital infrastructure, could pave the way for a scalable, transparent PDS, ensuring food security for millions.