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Fair Price Shops on ONDC

  • Context (PIB | TH): As a part of Digital India, Fair Price Shops of Una and Hamirpur districts of HP are the first to onboard Open Network Digital Commerce (ONDC).

Fair Price Shops (FPSs)

  • A FPS is licensed under the Essential Commodities Act, 1955, to distribute essential commodities to ration card holders under the Targeted Public Distribution System (TPDS).
  • The term is defined in the National Food Security Act, 2013 (NFSA 2013).
  • State Governments must establish institutionalised licensing arrangements for FPSs according to provisions of the Public Distribution System (Control) Order, 2001, under the Essential Commodities Act, 1955.
  • Every local authority or any authority designated by the State Government can conduct periodic social audits on FPSs, the TPDS, and other welfare schemes.
  • They may publicise their findings and take prescribed actions.
  • The State Government can fix an amount as the FPS owner’s margin.
  • The State Governments may allow the sale of commodities other than the foodgrains distributed under the TPDS at the FPSs to improve their viability.
  • Accounts of an FPS must be sent to the designated authority of the State Government with a copy to the local authority at the end of the month.

Targeted Public Distribution System (TDPS)

  • Under the TDPS, it is the duty of the State Government to:
    1. Take delivery of foodgrains from Central Government depots in the state at specified prices
    2. Organise intra-state allocations for delivering allocated foodgrains through authorised agencies to the doorstep of each FPS
    3. Ensure actual delivery of food grains to entitled persons at specified prices.

Open Network Digital Commerce (ONDC)

  • ONDC is a first-of-its-kind initiative that aims to democratise digital commerce and reduce the dominance of online retail giants (like Amazon, Walmart-owned Flipkart, etc.).
  • It is an initiative of the Department for Promotion of Industry and Internal Trade (DPIIT) under the Ministry of Commerce and Industry.
  • It is incorporated as a private, non-profit company.
  • It aims to streamline transactions between buyers and sellers, irrespective of the platforms (intermediaries) they are affiliated with.
  • Just like the Unified Payments Interface (UPI) enables smooth money transfers across diverse payment platforms, ONDC enables smooth transactions between buyers and sellers across platforms.

Objectives of ONDC

  • Democratisation & decentralisation of e-commerce
  • Inclusivity and access for sellers
  • Increased choices and independence for consumers
  • Making goods and services cheaper

Significance of FPSS Onboarding ONDC

  • It will provide additional avenues of income generation for FPS dealers by providing:
    • Visibility of FPS dealers in the digital marketplace
    • Access to a larger customer base beyond NFSA beneficiaries
    • Ability to compete on an equal footing with large retailers and e-commerce platforms
  • It will also enhance beneficiary satisfaction.
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