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Reforming food subsidy scheme: Estimating the gains from self-targetting in India

  • Bhaskar Dutta

    (Indian Statistical Institute, New Delhi)

  • Bharat Ramaswami

    ()

    (Indian Statistical Institute, New Delhi)

This paper uses the theoretical framework of the theory of tax reform to analyse whether a "small" change in an existing food subsidy program can be welfare-improving and revenue-neutral. It shows how existing econometric methods can be adapted to estimate demand parameters even when household level data exhibit little price variation because the government controls food prices. The methodology developed here is used to estimate welfare changes from shifting a rupee of subsidy on existing commodities to coarse cereals in the Indian public distribution system.

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File URL: http://www.isid.ac.in/~pu/dispapers/dp02-09.pdf
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Paper provided by Indian Statistical Institute, New Delhi, India in its series Indian Statistical Institute, Planning Unit, New Delhi Discussion Papers with number 02-09.

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Length: 30 pages
Date of creation: Sep 2002
Date of revision:
Handle: RePEc:ind:isipdp:02-09
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  1. Ahluwalia, Deepak, 1993. "Public distribution of food in India : Coverage, targeting and leakages," Food Policy, Elsevier, vol. 18(1), pages 33-54, February.
  2. Lipton, Michael & Ravallion, Martin, 1995. "Poverty and policy," Handbook of Development Economics, in: Hollis Chenery & T.N. Srinivasan (ed.), Handbook of Development Economics, edition 1, volume 3, chapter 41, pages 2551-2657 Elsevier.
  3. Besley, Timothy & Kanbur, Ravi, 1990. "The principles of targeting," Policy Research Working Paper Series 385, The World Bank.
  4. Alderman, Harold & Lindert, Kathy, 1998. "The Potential and Limitations of Self-Targeted Food Subsidies," World Bank Research Observer, World Bank Group, vol. 13(2), pages 213-29, August.
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