Beginning as a war-time food ration in the colonial era and going on to become India’s principal instrument to fight against hunger, PDS has emerged as India’s largest and arguably the most contentious social welfare program in the country. Having undergone multiple reforms in program delivery and design, the ‘new style’ PDS is finally beginning to deliver tangible benefits in terms of reducing latent hunger, food insecurity, and improved diet diversity. Yet, there is an intensified debate around replacing food transfers with cash transfers because PDS value chain relies upon an interlocked producer–consumer incentive structure which inhibits innovation in program design and therefore potentially limits its effectiveness in improving nutritional security. In this chapter, we argue that key to innovation in PDS is to reframe the food transfer debate as an issue of nutritional security. Improved nutrition as the scope of PDS might allow for greater deliberations upon the composition basket of the PDS, whether (and when) replacing it with cash transfers would be a feasible one.