Just reimbursement is not enough. Most states do not have adequate infrastructure like large storage facilities and market yards which require huge investments. Transportation costs are another factor. Central agencies like the FCI avail of the freight subsidy given by railways for transporting grains. This may not be availed of by the states.
Many states have yet to set up separate procurement agencies.
All these require huge investments which the fund-starved states may not be able to afford. Therefore, the only viable alternative is to introduce procurement and distribution operations at grassroots panchayat levels, which will be cost-effective. The land for storage and market place can be given by the panchayat or the state governments. The distribution of grains and management of PDS will be cost effective as it will not require long distance transportation. This process will also help in easing restrictions on movements of foodgrains and make the entire country as one economic zone.