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.

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.