During the Second World War period, there was acute shortage of food grains and other essential goods. The British government had introduced rationing in 1942. For this purpose a chain of fair price shops was set up across the country. The statutory rationing continued even after independence as her was acute shortage of food grains. After India became self-sufficient in food requirements the statutory rationing was lifted in 1972. However, as a poverty alleviation measure, the Public Distribution System was introduced in 1977.

The PDS supplies essential goods to the low-income groups and the people living below poverty line at a reasonable price through a chain of 4.92 lakh fair price shops. The difference between the open market price and prices in the fair price shops, are borne by the government by giving subsidy. The PDS has become a boon for maintaining adequate standard of living for the lower classes. However, there is need to strengthen administrative machinery, ensure regular supply of the required quantity of essential goods and honesty among the shopkeepers. 

[Please note some details in the textbook were incorrect and incomplete. These have been corrected in the answer.]