A recent news report has discussed the methods by which states such as Chattisgarh have attempted to reform the Public Distribution System (PDS).  Chattisgarh has computerised its PDS supply chain and introduced smart cards as part of a slew of measures to plug pilferage and weed out corruption in the system.  In an effort to create a national computerised database for PDS, the Ministry of Consumer Affairs has launched an online National Transparency Portal for the Public Distribution System.  The portal aims to provide end-to-end computerisation of PDS; it is a single platform in the public domain for all PDS related information. The PDS is a centrally sponsored scheme that entitles beneficiaries to subsidised foodgrains every month.  Currently, beneficiaries are divided into the following groups: Below Poverty Line (BPL), Above Poverty Line and Antodaya Anna Yojana.  As such, several challenges have been identified in the implementation of PDS.  Some of them are as follows:

  1. Targeting errors: Separating beneficiaries of the PDS into three categories requires their classification and identification.  Targeting mechanisms, however, have been prone to large inclusion and exclusion errors.  In 2009, an expert group estimated that about 61% of the eligible population was excluded from the BPL list while 25% of non-poor households were included in the BPL list.
  2. Large leakages and diversion of subsidized foodgrain:  Foodgrain is procured by the centre and transported from the central to state godowns.  Last mile delivery from state godowns to the Fair Price Shop (FPS) where beneficiaries can purchase grain with ration cards, is the responsibility of the state government.  Large quantities of foodgrain are leaked and diverted into the open market during this supply chain.

The creation of the e-portal could help track these issues more effectively and increase transparency in the system. The portal contains information relating to FPS and ration cards attached to the FPS.  It is likely that this will help weed out bogus ration cards and improve targeting of subsidies.  The portal also has information on capacity utilization of Food Corporation of India, state storage godowns, and data on central pool stocks.  This helps track storage supplies of grains at each level and aims to prevent leakage of grain. With respect to data on PDS in states, the portal hosts information such as the central orders on monthly allocation of foodgrain to states, state-specific commodity sale prices, lifting position of states, etc. for public view.  All states and union territories will be required to maintain and update the data on the portal. The reforms come at a time when the National Food Security Bill, 2011 is pending in Parliament.  The Bill aims to deliver foodgrain entitlements through Targeted PDS to 75% of the rural and 50% of the urban population.  The Bill is currently under examination by the Standing Committee of Food, Consumer Affairs and Public Distribution.  It proposes reforms to the TPDS, which include the application of information and communication technology, including end-to-end computerisation.  These reforms seek to ensure full transparency of records in the PDS and prevent diversion of foodgrains.  The creation of the e-portal might be a step towards reforming the PDS. For an analysis of the National Food Security Bill, see here.

On June 6, 2022, the Ministry of Electronics and Information Technology released the draft amendments to the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 (IT Rules, 2021) for public feedback.  The IT Rules were notified on February 25, 2021, under the Information Technology Act, 2000 (IT Act).  The Ministry noted that there is a need to amend the Rules to keep up with the challenges and gaps emerging in an expanding digital ecosystem.  In this blog post, we give a brief background to the IT Rules, 2021 and explain the key proposed changes to the Rules.

Background to the IT Rules, 2021

The IT Act exempts intermediaries from liability for user-generated content on their platform provided they meet certain due diligence requirements.  Intermediaries are entities that store or transmit data on behalf of other persons and include telecom and internet service providers, online marketplaces, search engines, and social media sites.  IT Rules specify the due diligence requirements for the intermediaries.  These include: (i) informing users about rules and regulations, privacy policy, and terms and conditions for usage of its services, including types of content which are prohibited, (ii) expeditiously taking down content upon an order from the government or courts, (iii) providing a grievance redressal mechanism to resolve complaints from users about violation of Rules, and (iv) enabling identification of the first originator of the information on its platform under certain conditions.  It also specifies a framework for content regulation of online publishers of news and current affairs and curated audio-visual content.  For an analysis of the IT Rules 2021 please see here.

Key changes proposed to the IT Rules 2021

Key changes proposed by the draft amendments are as follows:

  • Obligations of intermediaries:  The 2021 Rules require the intermediary to “publish” rules and regulations, privacy policy and user agreement for access or usage of its services.   The Rules specify restrictions on the types of content that users are allowed to create, upload, or share.  The Rules require intermediaries to “inform” users about these restrictions.  Proposed amendments seek to expand the obligation on intermediaries to include: (i) “ensuring compliance” with rules and regulations, privacy policy, and user agreement, and (ii) "causing users to not" create, upload, or share prohibited content.
     
  • The proposed amendments also add that intermediaries should take all reasonable measures to ensure accessibility of their services to all users, with a reasonable expectation of due diligence, privacy, and transparency.   Further, intermediaries should respect the constitutional rights of all users.  The Ministry observed that such a change was necessary as several intermediaries have acted in violation of the constitutional rights of citizens.
     
  • Appeal mechanism against decisions of grievance officers:  The 2021 Rules require intermediaries to designate a grievance officer to address complaints regarding violations of the Rules.  The Ministry observed that there have been instances where these officers do not address the grievances satisfactorily or fairly.  A person aggrieved with the decision of the grievance officer needs to approach courts to seek redressal.  Hence, the draft amendments propose an alternative mechanism for such appeals.  A Grievance Appellate Committee will be formed by the central government to hear appeals against the decisions of grievance officers.  The Committee will consist of a chairperson and other members appointed by the central government through a notification.  The Committee is required to dispose of such appeals within 30 days from the date of receipt.  The concerned intermediary must comply with the order passed by the Committee.  Note that the proposed amendments do not restrict users from directly approaching courts.
  • Expeditious removal of prohibited content:  The 2021 Rules require intermediaries to acknowledge complaints regarding violation of Rules within 24 hours, and dispose of complaints within 15 days.  The proposed amendments add that the complaints concerning the removal of prohibited content must be addressed within 72 hours.  The Ministry observed that given the potential for virality of content over internet, a stricter timeline will help in removing prohibited content expeditiously.

Comments on the draft amendments are invited until July 6, 2022.