Public distribution system signifies a system through which the govt, of a country makes provision to supply essential items like foodgrains, sugar, kerosene, etc. to its people, especially the poor people, in fixed quantity at controlled prices through fair price shops.

There are three main constituents of public distribution system in India :

1. Public Procurement System: In 1988, over 14 million tonnes of foodgrains were procured by the govt, at procurement prices. In 2006, this figure rose to 26.4 million tonnes.

2. Buffer Stock: Black-marketing in the foodgrains can be checked if the govt, has buffer stock of foodgrains and adequate storage facilities. In India, we have many warehouses in the public sector. Important among them are the warehouses of Food Corporation of India. The Corporation has got its warehouses throughout India. It stores agricultural goods and releases stock under public distribution system.

3. Fair-Price Shops: The system of public distribution in India operates fairly successfully through a network of fair-price shops selling foodgrains, sugar, kerosene and soft coke. At present, we are having around 4.37 lakh fair price shops. In 1988, 23 million tonnes of foodgrains and in 2006,26.8 million tonnes of foodgrains were distributed through these fair-price shops.