Prime Minister's expert committee on National Food Security Bill has favoured distribution of subsidised foodgrains through smart card-based public distribution system (PDS) in order to stop the leakages.
"As an alternative to the existing PDS we may switch over to the use of smart cards which simply means that the food subsidy may be directly transferred to the beneficiaries instead of to the owners of PDS stores," the committee headed by PMEAC chairman C Rangarajan said in its report.
The report said that this will finally lead to a system where there are no leakages and distortions of foodgrains and will create incentives for PDS stores to be more efficient.
"... with the biometric identification system, people will have the freedom to migrate to any part of the country without the fear of losing their food rations," it added.
In terms of the fiscal burden, the smart cards will not impose an additional burden and the subsidy may in fact reduce, the report said.
Under the smart card-based PDS, all existing ration cards would be replaced with bio-metric featured smart cards. These smart cards will contain bio-metric features of adult members of the ration card holder families.
Certain states like Chattisgarh, Chandigarh and Haryana has already introduced the smart card-based distribution systems on pilot basis in certain districts.
The government, in the 2008-09 Budget, had announced that Haryana and the Union Territory of Chandigarh will implement the smart card based delivery system.