PDS grain deliveries to halt in Gujarat from June 1 as shopkeepers’ protest over KYC, compensation

Public grain distribution under the Public Distribution System (PDS) in Gujarat is set to face a major disruption starting June 1, as over 17,000 Fair Price Shop (FPS) operators have announced a halt in operations. The protest stems from unresolved issues around Know Your Customer (KYC) procedures and non-payment of compensation to shopkeepers.

At the heart of the standoff is the demand for increased remuneration for FPS operators involved in e-KYC updates—a process which the shopkeepers argue is not their legal responsibility. Despite taking on this task—which they say is the responsibility of the state Supply department—for the past six months, shopkeepers claim they have received only ₹5 per transaction. They are now demanding ₹25 per transaction in light of the effort and time required.

Shopkeepers under the banner of the FPS and Kerosene Dealers Association have also criticized the state supply department for pressuring them to complete the KYC process without adequate support or resources. They warn that unless the department completes 100% of the e-KYC by June 1, they will stop distributing food grains—a move that could impact lakhs of ration cardholders across the state.

“The system is broken,” said one FPS operator. “We’re being forced to stock two months’ worth of grains without space, paid a pittance, and expected to clean up after server failures—all while families go hungry because their fingerprints don’t match.”

The operators also highlighted that the PDS digital infrastructure—including the barcode-enabled ration card system—continues to face frequent server outages. Several families, including those with elderly members and young children, are being denied rations due to biometric mismatches—a result of faulty fingerprint scans or photo errors during the KYC process.

The commission per shop, capped at ₹20,000 per month, is proving to be unsustainable, particularly as not all registered ration cardholders are issued grains every cycle. Shopkeepers argue that unless grain is issued for every registered card, their earnings fall short of covering basic operational costs.

Besides, the supply department insists that shopkeepers purchase a two-month stock of food grains, but smaller shops lack the space to store such large quantities, they said. 

Beyond immediate demands, FPS operators have also raised long-standing grievances. During the COVID-19 pandemic, many shopkeepers died while performing essential services, but the ₹25 lakh ex gratia compensation announced by the government for their families has not been disbursed in most cases.

Shopkeepers say they are prepared to take legal action if their demands are not met and are calling for an immediate resolution to avoid a humanitarian crisis. “If the government doesn’t act, lakhs will go hungry starting June 1,” warned an FPS representative.

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