Ration card is very important and useful for family member’s details, to get gas connection, it acts as address proof for every person etc. Government provides ration card at every rations shops so that every person can purchase materials like oil, grains, kerosene etc. But the system has two drawbacks, first is weight of the material which may be inaccurate due to human mistakes and the other one if not buy the materials at the end of the month, they will sell the goods to other people without any intimation to the government and customers. In this paper, the concept is to replace the manual work in PDS (public distribution system). The ration distribution system is automated by using RFID technology, which is similar to that of the ATM. This automated ration system replaces the conventional ration card system by smart system. In addition, the GSM module is placed in the machine in order to check the correct user access. If the user is authorized user, the next process takes place and the input can be given in the LCD screen. As soon as the input is given, the products are obtained from the automated ration shop and the amount is taken from the bank account of that authorized person. The ATmega16 controller is pre-programmed in such a way to perform the similar operations. In this automated ration shop government controls all transaction that occurs in ration shop. In this process the government is involved and in proposed system the government database is connected with the system via GSM module, which further sends the up-to-date information to the government and the consumer.