4 July 2011 Last updated at 19:01 ET
By Rajini Vaidyanathan
Reporter, India Business Report, Chandigarh, India
WATCH: Critics of the smart card scheme say queues have increased since the card's introduction
Women are waiting in line in one of Chandigarh's slum areas, holding empty shopping bags ready to be filled with rice, wheat and sugar.
As each customer reaches the counter, they hand the shopkeeper a plastic card with their photograph on, then they're asked for something else - their fingerprints.
In order to buy any of the supplies from this government-run ration store, they need to place their fingers on a small credit-card-style machine.
Only once they get a match can their purchase go ahead.
The shoppers here in Chandigarh are part of a project that uses biometric smart cards to deliver food to the city's poorest.
In India, those living below the poverty line (BPL) or on lower incomes, are allowed to buy basic food staples such as rice, sugar and wheat at highly subsidised rates, at government-run Fair Price shops.
In most places, families are given paper "ration books" that record how much food has been purchased and by whom.
But this scheme in Chandigarh is doing away with the old system.
The credit card-sized biometric smart cards contain a 64kb microchip that stores the fingerprints, photograph and other personal details of the head of the family and at least two other members.
It can also store a record of the purchases made by every family - how much they have bought and at what price.
Those behind the scheme believe the technology will do away with fraud, and ensure food reaches the genuine recipients. Under the old paper system where little proof was needed to claim food, people could easily use someone else's card, say officials.
"It means only the person who is holding the smart card will get the food - no-one else can claim the food as theirs" says Bachan Singh, of Chandigarh's food and supplies department, which is administering the scheme.
"Everyone will get the proper quantity of food, at the proper price," he says.
"I like the smart cards a lot," says Usha, a mother of three young children who is waiting to buy food. "I lost my card recently and was able to get another one easily."
Usha works as a domestic maid and earns about 1,500 rupees a month ($33; £21). By that definition hers is a BPL family, and is entitled to up to 35kg of subsidised grains per month.
But Kunti Devi disagrees with Usha's assessment of the scheme. A widow, she earns 2,000 rupees ($44; £28) a month as a cleaner and has reported problems with the new scheme.
"The machine doesn't always read my fingerprints properly, sometimes they tell me to go away and come back later," she says.
"I also have to wait a long time in the queue, before it was much quicker."
One of the biggest challenges officials face is getting people to trust the new technology. Here in this slum area there are no computers or televisions - the idea of doing things electronically is alien to many.
Teething problems are evident in the scheme. During the time we visited, the machine broke down and led to an even longer queue of people waiting in the searing heat for their food. But government officials did turn up promptly to investigate.
Vinay Verma, who deals with the technical aspects of the machines, says some of the problems stem from the fact the vendors themselves are unfamiliar with the machines.
He says failure is often down to human error, such as the cable not being pushed in properly, or the cards not properly inserted.
The city has bold plans to register 200,000 families onto this scheme by September, so far only 5,000 have signed up to the cards.
"The government wants people to give their biometric data and fingerprints, and many people have a fear that this will be used in another way, so they are not coming up in numbers to give their data," says Surendra M Bhanot, from the Consumers Association of Chandigarh.
Mr Bhanot says many of the people the scheme is aimed at are illiterate and fear this biometric information could end up in the hands of the police.
An awareness drive is one way he believes this hurdle can be overcome.
Using this kind of technology to deliver rations is costing the Chandigarh authorities 44 crores and 66 lakhs rupees ($10m; £6.2m). None of this cost is picked up by the cardholder themselves.
The deployment of biometric smart cards to deliver rations is one way the government could meet its bold plans to ensure food rations reach the country's poorest. In its draft food-security bill it guarantees subsidised food grains to at least 90% of rural households and 50% of urban families.
New technology is one way it could deliver this - if the Chandigarh smart-card scheme is seen to be a success, it could be replicated across India.
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