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Consumer Subsidies in India: Is Targeting Effective?

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  • Shikha Jha

Abstract

This article analyses the effectiveness of self‐targeting in the Indian public distribution system and shows that implicit targeting leaves considerable scope for improvement. There is a wastage of the associated consumer subsidy in the sense that a substantial amount goes to the non‐targeted population while a part of the deserving population is left out of the scheme for various reasons. Hence, it is worth diverting resources to goods which are better targeted from goods which are poorly targeted. That is, even if targeting cannot be improved, switching of subsidies both between goods and areas can lead to improved distribution of subsidies to the poor.

Suggested Citation

  • Shikha Jha, 1992. "Consumer Subsidies in India: Is Targeting Effective?," Development and Change, International Institute of Social Studies, vol. 23(4), pages 101-128, October.
    • Handle: RePEc:bla:devchg:v:23:y:1992:i:4:p:101-128
    DOI: 10.1111/j.1467-7660.1992.tb00471.x
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    References listed on IDEAS

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    7. Jha, S., 1991. "Consumer Subsidies in India is Targetting Effective?," Papers 64, Indira Gandhi Institute of Development Research-.
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    Cited by:

    1. Zhou, Zhang-Yue & Gandhi, Vasant P., 2000. "Public Food Distribution System and Food Security of the Poor: The Indian and Chinese Experience Compared," 2000 Conference (44th), January 23-25, 2000, Sydney, Australia 123746, Australian Agricultural and Resource Economics Society.
    2. Jos Mooij, 1999. "Food policy in India: the importance of electoral politics in policy implementation," Journal of International Development, John Wiley & Sons, Ltd., vol. 11(4), pages 625-636.
    3. Chung, Kimberly & Haddad, Lawrence James & Ramakrishna, Jayashree & Riely, Frank Z., 1997. "Alternative approaches to locating the food insecure," FCND discussion papers 22, International Food Policy Research Institute (IFPRI).
    4. Zhangyue Zhou & Guanghua Wan, 2006. "The Public Distribution Systems of Foodgrains and Implications for Food Security: A Comparison of the Experiences of India and China," WIDER Working Paper Series RP2006-98, World Institute for Development Economic Research (UNU-WIDER).
    5. David Coady, 2015. "Designing and Evaluating Social Safety Nets: Theory, Evidence, and Policy Conclusions," Working Papers id:7496, eSocialSciences.
    6. Reardon, Thomas & Barrett, Christopher B. & Berdegué, Julio A. & Swinnen, Johan F.M., 2009. "Agrifood Industry Transformation and Small Farmers in Developing Countries," World Development, Elsevier, vol. 37(11), pages 1717-1727, November.
    7. Ruchira Bhattacharya, 2015. "Estimating Poverty Including Social Expenditure: Adequacy and Implications of New Official Methods in the Context of Urban India," Agrarian South: Journal of Political Economy, Centre for Agrarian Research and Education for South, vol. 4(3), pages 394-432, December.
    8. Rai, Marina, 2013. "Targeted or Universal Public Distribution System: A Comparative Study in India," EY International Congress on Economics I (EYC2013), October 24-25, 2013, Ankara, Turkey 256, Ekonomik Yaklasim Association.
    9. Suryanarayana, M. H., 1995. "PDS: beyond implicit subsidy and urban bias -- the Indian experience," Food Policy, Elsevier, vol. 20(4), pages 259-278, August.
    10. T Jayan, 2015. "Performance of Targeted Public Distribution System in Kerala," IEG Working Papers 358, Institute of Economic Growth.

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