December 31, 2020
December 31, 2020

Sparkling International Journal of Multidisciplinary Research Studies

Volume 3           Issue 4           October – December 2020           Pages 30-43


Dheera K R

Assistant Professor, Department of Commerce and International Business, Central University of Kerala, Periye, Kerala, India.


This conceptual paper aims at identifying the impact of the implementation of e-PoS (electronic Point of Sale) machines in ration shops of Kerala. The public Distribution System caters to the distribution of essential commodities through ration shops. The study ended up with the impacts of implementing epos machines in ration shops. The model constructed gives a picture of elements like prevention of illegal sale of ration products, online mode of transactions, electronic recording of transactions, bill generation, and fingerprint recognition. The study can be considered as a starting point upon which further studies on the implementation of the epos system can be built.

Keywords: digitalization, e-PoS, PDS


In India, the largest system of providing food subsidies is the Public Distribution System, popularly known as PDS.PDS is a programme which is sponsored by the Government of India which focuses on social welfare and anti-poverty measures. The system of PDS as established by the Government of India functions under the Ministry of Consumer Affairs, Food, and Public Distribution. The system also ensures the participation of all State governments of the country. Under PDS, eligible people are supplied with necessary commodities like wheat, sugar, kerosene at subsidized prices. In India, the linkage between development and e-governance is of great significance and is being widely used for policy formulation. But, the application of e-governance in the field of food security has been discussed very little( Masiero,2015).In the State of Kerala, the digitalization of the main national food security program of the Public Distribution System is considered a drastic reform which brought about tremendous changes in its functioning. During the period before 1997, Kerala State enjoyed the prestige of operating one of the best PDS programs in India (Suryanarayana, 2001; Swaminathan, 2002; Suchitra, 2004). The Civil Supplies Department which is functioning under the Food, Civil Supplies, and Consumer Affairs Department of the Kerala Government is entrusted with the main responsibility of Public Distribution. It is also responsible for maintaining market discipline, promoting consumer awareness, and protecting of interest of consumers. The system of PDS is spread over the entire state of Kerala, without any form of differentiation between urban or rural with the main purpose of ensuring equitable distribution of food grains at a fair and low cost to all people especially to the weaker sections of the population (Shaji and John, 2018). In the present scenario, the Department of Food and Civil Supplies of Kerala Government has been battling a variety of issues like misuse of ration allotted to Fair Price Shops by the vendors, corruption, misappropriation of essential commodities by shadows who use fake ration cards (Shaji and  John, 2018). In a bid to bring in more transparency in the state’s PDS, the Civil Supplies Department integrated the E-PoS machine with electronic weighing balances at ration shops. The government has introduced Electronic Point of Sale (E-Pos) machines from January 7, 2018. The most immediate purpose of introducing E-PoS ration card machines in Kerala is to keep track of goods given to each cardholder. With this, people cannot buy rations using other’s ration cards. Presently the details of the remaining stock in the shops are being linked to the new system.

Theoretical Framework

Public Distribution System in India

In the year 1965, Food Corporation of India was created, which led to the formal structuring of the food security system in India. Thus, the food security system in India took the shape of Public Distribution System (PDS) (Masiero, 2015). The FCI is entrusted with the responsibility of ensuring proper functioning of PDS. It makes purchase of essential commodities like rice, wheat, sugar, kerosene, oil from private producers, and then distributes those commodities to eligible people. The FCI connects itself to Fair Price Shops or ration shops for the purpose of distribution of commodities (Masiero, 2015).

Evolution of PDS in India

In India, the Public Distribution System was introduced during the time of II World War. It was mainly a rationing measure meant for dealing with the war time consequences (Bhat, 2018). Before 1960s, the Public Distribution System in India was carried out depending upon imported food grains. After 1960s, our country experienced the situation of shortage of foodgrains. Subsequently, two initiatives were undertaken by the Government of India, ie, the establishment of the Agriculture Prices Commission and Food Corporation of India(FCI). The main objective was to shift from import of foodgrains to procurement of foodgrains domestically and provide for proper storage facility of foodgrains During 1970s, PDS transformed into a universally accepted scheme that focuses on the distribution of foodgrains at subsidized rates. Till 1992, PDS had no specific target and was regarded as a general entitlement scheme meant for all groups of consumers. On June 1992, the Government of India launched Revamped Public Distribution System (RPDS) which strengthened PDS through its far-reaching impact. This system tries to explore remote and areas which were unaccessible composed of underprivileged classes. Subsequently, in June 1997, another initiative was taken by the Government in the form of Targeted Public Distribution System (TPDS), which makes PDS specifically targeted on the poorest section. Further Antyodaya Anna Yojana (AAY), was launched in December 2000 as a step towards making the TPDS more focused on the poorest sections of the BPL population. In September 2013, National Food Security Act (NFSA), 2013, came into effect. The Act largely depends upon TPDS to make the system more justiceable. The PDS reforms later incorporated technology-based solutions to make the system more effective and transparent. Aadhaar enabled Public Distribution System was introduced (AePDS) by linking ration cards and Aadhaar cards and digitalization of ration cards in order to identify the real beneficiaries of ration card facilities. As such, duplicate beneficiaries can be easily located through this linkage. It helps to deal with the issue of leakages. AePDS Portals have been created by the Government of India which provides complete and accurate information about the PDS transactions and all other relevant details. Computerised Fair Price Shops (FPS) were set up by installing Electronic Point of Sale devices in ration shops.

Food Corporation of India

The Government of India is highly particular about agriculture carried out domestically. The Essential Commodities Act was established in the year 1955 with the sole purpose of regulating prices of commodities. The commodity prices are regulated through various ways like government purchases, licenses and permits through which the distribution and movement of essential commodities like cereals, pulses, sugar, jute are limited (OECD,2007). In 1965, Food Corporation of India was established by Government of India. FCI is entrusted with the function of procuring, storing and distributing food grains at national level. Besides, FCI also performs the function of management of grain imports. Agricultural Price Commission was also established in 1965 which sets prices by considering the interest of both producers and consumers (Mallory and  Bailys, 2012).

Revamped Public Distribution System

From the very beginning of July 1991, a lot of debates and discussions were undergone within the government authorities regarding the issue of revamping the Public Distribution System. (Geetha and Suryanarayana, 1993). Till the year 1992, PDS has been a general rationing measure where all the consumers were given equal consideration. Later in 1992, RPDS (Revamped Public Distribution System) was evolved after several revisions under PDS. RPDS has its prime focus on the poorest sections of the society (Ravi and Nair, 2019). Under the scheme of RPDS, 1775 blocks were identified by Government of India which earlier remained unaccessed and accordingly it was decided to issue new ration cards in those unidentified areas. Initially the estimates shows that Revamped PDS nearly covers 16 crore people residing in such unidentified areas. Further, Central Government has extended the programme of RPDS to 671 additional blocks. The functioning of Public Distribution System can be enhanced and made much more effective by the way of revamping and strengthening the system. At the same time the system should be expanded such that it covers entire parts of the country, particularly remote areas (Geetha and Suryanarayana, 1993). RPDS was considered relevant mainly because of three reasons: First of all, reducing or revamping PDS was felt necessary to lower the budgetary deficit of Central Government. Similarly, revamping was targeted to achieve dual objectives of excluding the richer sections of the population who does not actually require food subsidy and reducing budgetary deficit. Finally, such revamping reforms is also viewed as specific programmes which aims at protection of vulnerable sections of the society (Geetha and  Suryanarayana, 1993). Various plans were undertaken for opening new Fair Price Shops and building storage centres in unaccessed areas.

Targeted Public Distribution System

In the initial period of 2000, the Targeted Public Distribution System, which was started in 1997, has made an estimation of 652.03 lakh pertaining to the number of Below Poverty Line (BPL) families. 25 kg per family at 50 per cent of economic cost was the allotment made for the BPL families for each month (Bathla et al. 2015). Targeted Public Distribution System (TPDS) was introduced by revamping the PDS scheme mainly for the purpose of ensuring increased access of food grains to the poor sections, and at the same time attaining nutritional standards and food security. (Bhat, 2018). Meanwhile in 1997, the scheme of Targeted Public Distribution System (TPDS) was launched by Government of India, aiming at improvement in nutritional standards and thus reaching at attainment of food security of poor by way of making available foodgrains at highly subsidized rates (Bhat, 2018). Under TPDS, the foodgrain procurement and management passes through sequential stages as follows:    i. Procurement, ii. Transportation and Storage iii. Allocation iv. Distribution. Initially Central Government is the authority for procuring foodgrains from farmers at Minimum Support Price (MSP). The Central Government is again vested with the power of fixing Minimum Support Price for various agricultural commodities, only after considering the rates as recommended by the Commission for Agricultural Costs and Prices (CACP). The rate so fixed is generally higher than the market price, that the farmers are benefitted in the form of incentive for carrying out higher production and provides a hedge against the expected market risk. The Food Corporation of India (FCI) is the central agency which is entrusted with the responsibility of maintaining stock of grains procured from the farmers at MSP as fixed by Central Government, thereby ensuring food security. FCI is also entrusted with the responsibility of distributing and transporting the grains so procured to the state depots. The procured foodgrains which is stored under the safe custody of FCI is then released under TPDS on monthly basis. The foodgrains maintained as buffer stock can be utilized to meet the emergency situations that may arise out of reasons like unexpected crop failures, or natural disasters and the like. The foodgrains are sold through the Open Market Sale Scheme (OMSS) which helps in stabilization of prices in the market. The foodgrains are procured from farmers at Minimum Support Price (MSP) while the issue price under which the commodities are released is kept much lower under TPDS scheme. The difference between the cost that has been incurred by the centre as part of Minimum Support Price and the issue price at which the foodgrains are sold is represented by food subsidy. The function of transportation of food grains from the state godowns to the fair price shops is performed under the authority of State Government. The Fair Price Shops is where from the beneficiaries can have access to their entitlements on monthly basis, at subsidized prices. Under TPDS network, Fair Price Shops popularly known as ration shops serves as the last mile delivery (Bhat, 2018). The misuse of the essential commodities and mismanagement of the programme was a negative mark on PDS well known. In order to remove the ill-effects of this defame, the government re-launched PDS as the Targeted Public Distribution System (TPDS) in the year 1997. TPDS as its name suggests is targeted towards the population thus dividing it into above and below poverty line categories. The main aim is to reach a target of 60 million families below poverty line with 20 kg grains on monthly basis. It also introduced a dual price system (Kattumuri, 2011). TPDS as a concept seems to move in the right direction through its target towards transition from universal PDS to TPDS. It is designed in such a way that it incorporates all the poor households and aims at raising subsidy per unit and ration quota for them on considerable basis. (Planning Commission, 2005).

Antyodaya Anna Yojana

The Antyodaya Anna Yojana (AAY) scheme was launched in December 2000 in response to the  declaration of prime minister for one crore poorest of the poor households. AAY thinks about  identification of the poorest of the poor families from amongst the BPL families covered under TPDS within the State. (Gupta and Saxena, 2014). The scheme, Antyodaya Anna Yojana (AAY) was implemented in 2000 for the poorest families estimated to be nearly 10 millions (5% of total population). (Bathla et al, 2015). Antyodaya Anna Yojana (AAY; higher entitlement) is backed upon TPDS for the purpose of identification and distribution. (Bathla et al.2015). Individuals falling under the said   priority groups are entitled to an AAY card, and it includes :

  • marginal farmers,
  • slum dwellers
  • rural artisan
  • craftsmen
  • landless agricultural labourers,
  • persons working on daily basis in the informal sector to earn livelihood such as porters, rickshaw pullers
  • destitute, and
  • all primitive tribal households. (Bathla et al. 2015).

National Food Security Act

NFSA, The National Food Security Act, 2013 which is also known as Right to Food Act was passed in September 2013. It was passed as a result of crossfire between various political parties (Bathla et al.2015). The National Food Security Act (NFSA), mainly look in the direction of reducing the leakages. Several changes were made to the system as per the Act. Under the NFSA, the eligible households were categorized into 2 groups namely Priority Households and Antyodaya, and the category of APL is completely abolished. TPDS is the basis for identifying beneficiaries under NFSA (Bhat, 2018).

Aadhaar enabled Public Distribution System (AePDS)

In order to tackle with the issue of leakages in Public Distribution System, Central Government has taken the step towards making linkage between technological intervention and PDS by way of Aadhar-based biometric authentication for ensuring improvement in functioning and also reduction in leakages of the system (Bhat, 2018). Aadhaar enabled Public Distribution System is an attempt made by Government of Kerala under which the Public Distribution System is linked with the unique Aadhaar ID of the beneficiaries. It helps to improve the quality of service provided under Public Distribution System. The real-time transactions under this system helps to monitor the movement of stock and ensures that the ration is distributed to genuine and eligible cardholders. As part of ensuring food security and to bring about transparency in the entire Public Distribution System, the Government of Kerala through its AePDS portal displays information on detailed transactions, FPS stock register, allotment details, beneficiary details, portability details, month and date wise transaction details. People can have access to the information in the portal through internet. The PDS transactions in the AePDS portal as updated on October 2019, provides the numerical information about the PDS System as Total Cards–8626401, Availed Cards–7672421, Portability Cards–1665886, Total Shops–14295 and Active Shops–8684.

Electronic Point of Sale (E-PoS)

Modern businesses constantly look forward for various ways to save money, increase productivity, and thereby increase sales. Here comes the significance of e-PoS system. E-PoS system being a combination of updated technology, efficiency, and reliability paved way for its popularity. E-PoS stands for Electronic Point of Sale. E-PoS serve various uses:

  • Helps to improve the way a business discharges its various functions.
  • Enables to store information and stock securely.
  • Retrieval of information as and when needed without any hindrance of time.
  • Printing of receipts and vouchers for the benefit of customers.
  • It can be linked to any company website or any terminal connected to the business.

E-PoS system comprise of various elements like computer hardware, software, and peripheral devices that perfectly suit to a point of sales environment. This system also uses a variety of devices like barcode scanners, touch screen monitors, and computer keyboards for the purpose of supporting data entry. Keyboards, printers, weighing scales, customer displays, cash draws, and chip and pin are some of the important components of e-PoS system that can be used according to the requirements.

E-PoS Machines at Ration Shops

The ration supply shops in Kerala have arranged E-PoS machines for sales. The E-PoS machines are aimed at bringing transparency in Public Distribution System. As per the new scheme, the cardholder will be correctly identified and the allotted quantity of supply will be distributed. The machine was designed by Vision Tech in Andhra. Its battery is durable for 10 hours, so that the power shortage will not affect the functioning of the machine. Since it works on all SIM cards, network range also does not affect it. Experts have been appointed to resolve technical errors. The biggest advantage is that all information will be known right from the products taken from the godown. The machine has a facility to connect with Aadhar, so that those who do not have Aadhar can buy products with the OTP sent to their registered phone number. In order to make use of the machine, the cardholder should link the mobile phone number with Aadhaar.

Working Mechanism of e-PoS device at ration shops

The real-time transaction of ration products is made through interaction between 3 servers – e-pos server, PDS server, and UIDAI server. For the purpose of conducting biometric authentication of the beneficiaries, the PoS server is being connected to the regional PDS server, which in turn is connected to the UIDAI server. UIDAI stands for Unique Identification Authority of India. It is an agency of Government situated in New Delhi. UIDAI functions as the issuing authority of Aadhaar Unique Identification numbers (UID) as well as cards. This agency is entrusted with the responsibility of monitoring and developing further infrastructure for issuing Aadhaar cards.

The state or regional PDS server is regarded as the repository of digitized ration cards. It contains the ration cards of all the beneficiaries in electronic form and logs in each transaction as generated by the e-PoS server.

Fig. 1 Working mechanism of e-pos machines

On entering the ration card number in the main page displayed first in the e-PoS machine, the PDS server connected to it supplies the member details which include the name and Aadhaar number of the beneficiary. The one whose name has been selected from the member list is required to affix their finger on the scanner of the machine for biometric authentication. The user credential is authenticated through the UIDAI server connected to the PDS server. On successful completion of biometric authentication, the commodity details and its quantity gets displayed on the screen of the e-PoS machine. The required commodities can be selected and click print for bill generation.

The Concept of Digitalization

The term Digitalization refers to the integration of digital technology everywhere in the day-to-day life, which is possible through digitalization of everything that can be digitized. The project, Targeted Efficient Transparent Rationing and Allocation Public Distribution System (TETRAPDS), which was started by the Government of Kerala has its main target towards Computerization of the Public Distribution System for the purpose of ensuring proper functioning of food security system. TETRAPDS which was developed between 2003 and 2005, has its grounds for creating a database meant for the PDS users of Kerala comprising of 6.4 million people, electronically. The system of TETRAPDS which is also commonly known as e-PDS revolves around four modules. (Masiero, 2015). Computerization or integration of digital technology in Kerala PDS occurred in three phases. To start with, in 2001, involved the digitization of data of all beneficiaries of ration registered in a unified database, i.e., PDS database. This led to the increasing inaccessibility of records. The records of any beneficiary can now been accessed and modified if required on request by Taluk Supply Officers. The next phase consisted of the construction of a software that is used by  TSOs mainly for three purposes: initially to ensure smooth operation of a Ration Card Management System, managing allocation of ration supply to ration shops, and also for using an inspection monitoring system to conduct inspections in the ration shops. The third phase which is of great significance involves computerization of the ration shops themselves. Under this phase, a biometric interface has been piloted in ration shops which use Aadhaar as a means of user recognition and authentication. This function of user identification is performed through point-of-sale machines, which is being installed in each ration shops of each and every district, which identify Aadhaar-registered users through their fingerprints. The terms ‘Biometric PDS’ and ’Digital PDS’ are often used interchangeably by the officials and that the initiative taken by the Government of Kerala regarding this measure is significant (Maseiro, 2015).

Prevention of Illegal Sale of Ration Products

The experience of purchasing ration products from ration shops is that of a war. There can be possibility that the ration dealers might steal the product and sell the same to other states. (Jeyanthi et al.2012). The ration shop dealers were continuously criticized for indulging in black marketing through illegal sale of ration products like sugar, rice, kerosene. ‘Leakage’ or ‘Pilferage’ is defined as the difference between the supply of grains (off-take) that is supplied by the Central agencies, namely FCI, to the states and Union Territories (states/UTs) and actual demand(consumption from PDS) as reported by households through NSSO (68th round). (NSSO 2013). Before installation of e-PoS ration card machines, the actual beneficiaries who come to the ration shops did not get the ration items assigned to them. Whenever people came to ration shops for collecting their allotted ration, they were often misleaded by the dealers by telling that there is no stock of goods or its sale has been over. Ration shop owners practiced selling of these ration products to people other than actual beneficiaries who used to buy such products in bulk at higher prices. Receipt of very little commission for selling ration products was the excuse as per most of the shop owners for indulging in such illegal activities. The dealers of most of the Fair Price Shops or Ration shops are indulging in malpractices because they are getting very less salary. (Shafi  and  Munidhanalakshmi, 2014). This is the reason why e-PoS ration card machines are being introduced in Kerala. It enables to keep track on goods given to each cardholder. With the installation of E-PoS machines, as soon as any person gets the ration in the shop, the data is immediately sent to the server and uploaded on the website. The usage of computerized ration cards will help to a great extent to reduce the chance of fraud and misuse of products. (Kumarwad and Kumbhar, 2017). Kerala Government has taken steps for the computerization of PDS in order to fight the rising phenomenon of rice mafia, which negatively affects the beneficiaries of ration products by preventing them from accessing the food items at subsidized rates entitled to them. (Masiero, 2015).

Online Mode

With the installation of e-PoS machines, all transactions shall happen in real-time or in online mode. The e-PoS terminal or any other form of computing devices with connectivity of biometric scanner and printer facility shall access the FPS Automation sales application. As per the request, data will be served from PDS Server using network connectivity. The PDS Server connected to the UIDAI server, in turn, authenticates the beneficiaries. Also, computers are completely automatic which updates the information about ration consumers from time to time and provides information about the entire stock that is available in a PDS outlet, online. (Sharma et al. 2014).

Electronic Recording

The purpose of installing electronic Point-of-Sale (e-PoS) devices at FPSs is authentication of beneficiaries and electronic recording of subsidized food grain distribution to beneficiaries. As compared to earlier practice of manual record-keeping of the transactions, the e-PoS based transactions have the advantage that the FPS dealers are not required to manually make separate/repetitive entries of food grain distribution in registers and ration card of the beneficiaries.

Bill Generation

Under the new system, the E-PoS machine will generate a bill only if the corresponding weight is placed on the weighing balance. This narrows down the scope for the dealer to conduct fraud in quantity.

Fingerprint Recognition

Fingerprint recognition helps to verify the identity possessed by a person and this technology holds up the fact that each and every individual has their unique fingerprints. Fingerprint recognition is a biometric technology on which studies are actively conducted and is heavily made use of. (Ramakrishnan and Ramakrishnan, 2012).

The new scheme provides for correct identification of the cardholder and the quantity of distribution will be matched with the allotted quantity of supply. The consumers will be recognized by crosschecking their fingerprint in Aadhaar using the biometric system in the machine. The Biometric technology is having various advantages when compared to the traditional system of ensuring security. (Kumarwad and  Kumbhar, 2017).

Those who purchase ration will have to give a thumb impression on this machine. The name and details of all the members will be displayed on the screen, when the card number is entered. As the finger is touched on the machine, the ration supply allotted for each card and its price also will be displayed and the bill will be printed. The technology of biometric identification is highly reliable than other token-based methods and authentication methods based on knowledge because it is closely associated with the user and remains permanent.


The implementation of e-PoS machines in ration shops of Kerala made the entire system of Public Distribution more transparent. The ration shops are now made more people-friendly with the installation of e-PoS machines. The authorities expect transparency in the sense that entire information is available right from the time products are taken from the godown till it is distributed to the final beneficiaries. The exact details of remaining stock are also available to the authorities. And, the computerization of ration system provides for paperless transactions which increases security of the system and it also helps to bring about transparency and reduce the possibility of commodities being sold in black market. (Kumarwad and Kumbhar, 2017).

Results and Conclusion

The study comes up with a suitable model that describes the security features of the newly accepted system of Public Distribution in Kerala. (Figure 2)

Fig. 2 Conceptual model depicting the impact of digitalization of ration shops

The digitalization of ration shops has enhanced the security of PDS system by way of conducting the transactions online. Also, the biometric recognition through linking Aadhaar with the ration system ensures the authentication of the beneficiary. Moreover, electronic recording of transactions and bill generation made the system more clear and away from the illegal sale of products. All the said features add to the quality of the service, thus making the system more transparent.


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To cite this article

Dheera K R. (2020). Impact of Implementation of E-Pos Machines in Ration Shops – A Conceptual Framework. Sparkling International Journal of Multidisciplinary Research Studies, 3(4), 30-43.