What the matter is ?
A retired Junior Commissioned Officer (JCO) has, over the past few years, submitted multiple applications and DO letters to the then General Officer Commanding (GOC), Dakshin Bharat Area, highlighting serious operational and systemic issues related to Dakshin Bharat Area Canteens (DBACs) and their Extension Counters (ECs). In the interest of organisational integrity and public accountability, a renewed concern has arisen regarding the persistent misuse of Canteen Smart Cards by unauthorised individuals.
The core issue revolves around the absence of a foolproof verification mechanism at DBACs and their ECs, enabling large-scale misuse of subsidised CSD facilities meant exclusively for entitled personnel and their dependents.
Existing Problem: Misuse of CSD Smart Cards
At present, DBACs lack an automated and reliable system to prevent unauthorised use of CSD Smart Cards. As a result, several cases of illegal possession and sale of subsidised CSD liquor and grocery items have surfaced in recent years.
Notable incidents include:
- December 2024: Illegal possession and sale of CSD liquor near Extension Counter Theni (under DBAC Trichy) were exposed through local TV channels and widely circulated on social media.
- Earlier Incident: Similar illegal sales were reported at Extension Counter Madurai under DBAC Tirunelveli.
- April–June 2025: Multiple cases of illegal possession of CSD liquor, reportedly sourced from Extension Counter Kovilpatti (DBAC Tirunelveli), were detected and seized by the Prohibition Enforcement Wing (PEW) police, with formal cases registered.
In all reported instances, the involvement of canteen employees has been consistently indicated.
Audit Observations by Comptroller and Auditor General (CAG)
The seriousness of the issue is further reinforced by Para 5.2 of the CAG Report No. 38 of 2016 (Performance Audit on Working of Canteen Stores Department). The report documented a racket involving tampered CSD Smart Cards, where Military Intelligence uncovered large-scale fraud, including:
- Recovery of hundreds of smart cards, card readers, and canteen software
- Involvement of serving personnel, ex-servicemen, civilians, and technical staff
- Manipulation of purchase histories and enhancement of cardholder ranks to increase purchase limits
These findings underline systemic vulnerabilities in the existing smart card framework.
Lack of Transaction Transparency
Unlike other government welfare systems, DBACs do not provide automated SMS alerts to registered mobile numbers of cardholders after billing. In contrast, systems such as the Central Government Health Scheme (CGHS) and Tamil Nadu’s Public Distribution System (PDS) send instant SMS notifications confirming transaction details.
The absence of such transparency at DBACs creates ample scope for misuse without the knowledge of the rightful cardholder.
Common Modes of Smart Card Misuse
Several modes of misuse have been identified, including:
- Non-deactivation of Deceased Beneficiaries’ Cards
Smart cards of deceased widows or ex-servicemen often remain active due to lack of recovery and deactivation mechanisms, especially after the abolition of annual renewal and extension of card validity to ten years. - Sharing of Smart Cards
Lending cards to non-entitled friends, relatives, or acquaintances is a common malpractice. - Bulk Purchase and Resale
Large quantities of subsidised goods are procured and resold at higher prices in the open market. - Fraudulent and Fake Card Usage
Stolen or tampered cards are sometimes used with the connivance of canteen staff. - Touts and Middlemen
Middlemen, often aided by long-serving employees, exploit loopholes by using multiple cards to procure and distribute goods illegally.
Learning from Public Distribution System (PDS)
Tamil Nadu’s Public Distribution System, serving over 2.25 crore ration cardholders, successfully operates a biometric-linked billing system using Aadhaar authentication. Biometric verification is mandatory, and every transaction triggers an SMS to the registered mobile number of the beneficiary.
Given that DBACs cater to a far smaller population compared to state PDS networks, the implementation of Aadhaar-linked biometric or iris-scan billing systems is both feasible and practical.
Ineffectiveness of Facial Recognition Devices
Instead of biometric billing integration, facial recognition devices have been installed at some DBAC Extension Counters, including those under DBAC Tirunelveli. However, these devices are not synchronised with billing systems or smart cards. As a result:
- Customers can bypass facial recognition and proceed directly to billing counters
- There is no automated restriction on unauthorised entry or purchase
Consequently, these devices serve little operational purpose and are perceived as a mere formality, resulting in ineffective expenditure.
Ground-Level Observations
On multiple occasions, unauthorised individuals—including local influential persons and government employees without entitlement—were observed purchasing grocery items at Extension Counter Kovilpatti. Despite reporting these incidents to canteen authorities, such practices reportedly continue, particularly during non-peak hours. CCTV footage from 28 October 2025 can serve as corroborative evidence.
Core Recommendation
In view of repeated violations, audit findings, and operational loopholes, it is strongly recommended that competent authorities issue directives to implement Aadhaar-linked biometric or Aadhaar-linked iris scan billing systems at all Dakshin Bharat Area Canteens and their Extension Counters. This measure would significantly curb unauthorised sales and prevent misuse of CSD Smart Cards.
Additional Administrative Suggestions
To strengthen the system further, the following measures are proposed:
- Mandatory biometric or iris authentication before initiating any billing transaction
- Immediate removal of long-serving contractual (ad-hoc) employees who have exceeded prescribed tenure
- Periodic transfer of permanent employees serving more than three years at the same GPC or Extension Counter
- Strict enforcement of contractual employment terms, including removal of personnel engaged beyond the maximum permissible period
- Review of repeated extensions granted to Assistant Directors, as prolonged tenures may contribute to systemic complacency and malpractice
Conclusion
The continued misuse of CSD Smart Cards undermines the very objective of welfare-based subsidised provisioning for defence personnel and their families. Implementing Aadhaar-linked biometric billing, supported by administrative reforms and accountability measures, is essential to restore transparency, prevent fraud, and uphold the credibility of Dakshin Bharat Area Canteens. This is just and just a Proposal submitted by a Retired JCO and the competent authority may consider it as accepted or may think something else at their own discreation.
