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Fair Price Shop (FPS)

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Fair Price Shop means a shop which has been licensed to distribute essential commodities by an order issued under section 3 of the Essential Commodities Act, 1955, to the ration card holders under the Targeted Public Distribution System.

The term is defined in Section 2(4) of National Food Security Act, 2013.

It is the responsibility of every State Government to establish institutionalised licensing arrangements for fair price shops in accordance with the relevant provisions of the Public Distribution System (Control) Order, 2001 made under the Essential Commodities Act, 1955, as amended from time to time for efficient operations of the Targeted Public Distribution System.


Under the Targeted Public Distribution System, it is the duty of the State Government to-

(a) take delivery of foodgrains from the designated depots of the Central Government in the State, at the prices specified,

(b) organise intra-State allocations for delivery of the allocated foodgrains through their authorised agencies at the door-step of each fair price shop; and

(c) ensure actual delivery or supply of the foodgrains to the entitled persons at the prices specified


Every local authority, or any other authority or body, as may be authorised by the State Government, can conduct or cause to conduct, periodic social audits on the functioning of fair price shops, Targeted Public Distribution System and other welfare schemes, and may publicise its findings and take necessary action, in such manner as may be prescribed by the State Government.

A preference is given to to public institutions or public bodies such as panchayats, self help groups, cooperative societies etc. in the licensing of fair price shops and for women or their collectives in the management of fair price shops.

The State Government can fix an amount as the fair price shop owner's margin, which may be periodically reviewed for ensuring sustained viability of the fair price shop operations. The State Governments may allow sale of commodities other than the foodgrains distributed under the Targeted Public Distribution System at the fair price shop to improve the viability of the fair price shop operations.

FPS are mandated to make a lot of disclosures such as opening and closing stock, sample quality of grains sold, retail price details etc. Accounts of the actual distribution of foodgrains and the balance stock at the end of the month, at the fair price shop, have to be sent to the designated authority of the State Government with a copy to the local authority.

Out of 5.32 lakh FPSs across the country, about 1.11 lakh FPSs have been automated as on 6 May 2016 by installing ‘Point of Sale’ (Merchant) device to swap the ration card. States/UTs have been asked to opt for any of the two models of Direct Benefit Transfer – Cash transfer of food subsidy into the bank account of beneficiaries or fair price shop (FPS) automation, which involves installation of Point of Sale (PoS) device at FPS, for authentication of beneficiaries and electronic capturing of transactions. The cash transfer of food subsidy is being implemented in 3 UTs namely Chandigarh, Puducherry and partially in Dadra & Nagar Haveli. For remaining areas, States/UTs have been requested to expedite the pace of FPS automation.

e-PDS portal provides vital information on policies related to PDS, information on Central and State schemes, price of PDS commodities, allocation and off-take details, stake holders information, fair price shop details, ration card information etc., Apart from the Centrally provided data, the portal provides links to PDS related websites of the various States to know the PDS related information / ration card holders details etc.


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