IDEAS home Printed from https://ideas.repec.org/p/pas/asarcc/2011-16.html
   My bibliography  Save this paper

Food Subsidy, Income Transfer and the Poor: A Comparative Analysis of the Public Distribution System in India's States

Author

Listed:
  • Raghbendra Jha
  • Raghav Gaiha
  • Manoj K. Pandey
  • Nidhi Kaicker

Abstract

The Targeted Public Distribution System (TPDS) — the largest food subsidy programme in India — has been a dismal failure in targeting the poor. The present paper examines its performance in three Indian states — Andhra Pradesh, Maharashtra and Rajasthan, based on primary data collected for this study. As real income transfers through food price subsidies are a tiny fraction of expenditure per person under this scheme, a contribution of the present study is to model determinants of real income transfers through subsidised wheat, rice and sugar. The analysis throws new light on how income transfers vary with economic status of a household, inequality in the distribution of land in a village, amount of food price subsidy, transaction costs of buying from 'fair price shops' (FPS), and supply shortages. The policy implications of these results are profound. Desperate measures such as a universal food subsidy enshrined in a proposed National Food Security Act are rejected on the grounds that the enormous leakages and wastage under the present TPDS would only get worse. Assertions that a universal food subsidy is the only option consistent with the right to food are rejected as mistaken, as the latter could be interpreted as a right to a right, or, more specifically, as a right to sensible livelihood expansion and price stabilisation policies.

Suggested Citation

  • Raghbendra Jha & Raghav Gaiha & Manoj K. Pandey & Nidhi Kaicker, 2011. "Food Subsidy, Income Transfer and the Poor: A Comparative Analysis of the Public Distribution System in India's States," ASARC Working Papers 2011-16, The Australian National University, Australia South Asia Research Centre.
  • Handle: RePEc:pas:asarcc:2011-16
    as

    Download full text from publisher

    File URL: https://crawford.anu.edu.au/acde/asarc/pdf/papers/2011/WP2011_16.pdf
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Kochar, Anjini, 2005. "Can Targeted Food Programs Improve Nutrition? An Empirical Analysis of India's Public Distribution System," Economic Development and Cultural Change, University of Chicago Press, vol. 54(1), pages 203-235, October.
    2. Atkinson, A B, 1987. "On the Measurement of Poverty," Econometrica, Econometric Society, vol. 55(4), pages 749-764, July.
    3. Reetika Khera, 2011. "India's Public Distribution System: Utilisation and Impact," Journal of Development Studies, Taylor & Francis Journals, vol. 47(7), pages 1038-1060.
    4. Karami, Ayatollah & Esmaeili, Abdoulkarim & Najafi, Bahadin, 2012. "Assessing effects of alternative food subsidy reform in Iran," Journal of Policy Modeling, Elsevier, vol. 34(5), pages 788-799.
    5. Strauss, John & Thomas, Duncan, 1995. "Human resources: Empirical modeling of household and family decisions," Handbook of Development Economics,in: Hollis Chenery & T.N. Srinivasan (ed.), Handbook of Development Economics, edition 1, volume 3, chapter 34, pages 1883-2023 Elsevier.
    6. Saleth, R. Maria & Dinar, Ariel, 2009. "The Impact of Multiple Policy Interventions on Food Security," Journal of Policy Modeling, Elsevier, vol. 31(6), pages 923-938, November.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Maitra, Chandana & Rao, D.S. Prasada, 2015. "Poverty–Food Security Nexus: Evidence from a Survey of Urban Slum Dwellers in Kolkata," World Development, Elsevier, vol. 72(C), pages 308-325.
    2. Marga Peeters & Ronald Albers, 2013. "Food Prices, Government Subsidies and Fiscal Balances in South Mediterranean Countries," Development Policy Review, Overseas Development Institute, vol. 31(3), pages 273-290, May.
    3. Kishore, Avinash & Chakrabarti, Suman, 2015. "Is more inclusive more effective? The “new-style†public distribution system in India:," IFPRI discussion papers 1421, International Food Policy Research Institute (IFPRI).
    4. Masiero, Silvia, 2015. "Redesigning the Indian Food Security System through E-Governance: The Case of Kerala," World Development, Elsevier, vol. 67(C), pages 126-137.
    5. repec:bla:worlde:v:40:y:2017:i:8:p:1547-1568 is not listed on IDEAS
    6. Kishore, Avinash & Chakrabarti, Suman, 2015. "Is more inclusive more effective? The ‘New Style’ public distribution system in India," Food Policy, Elsevier, vol. 55(C), pages 117-130.
    7. Chakrabarti, Suman & Kishore, Avinash & Roy, Devesh, 2016. "Effectiveness of food subsidies in raising healthy food consumption: Public distribution of pulses in India:," IFPRI discussion papers 1523, International Food Policy Research Institute (IFPRI).
    8. repec:eee:jpolmo:v:39:y:2017:i:5:p:827-842 is not listed on IDEAS
    9. repec:eee:jpolmo:v:40:y:2018:i:2:p:265-283 is not listed on IDEAS
    10. Anderson, Kym & Strutt, Anna, 2014. "Food security policy options for China: Lessons from other countries," Food Policy, Elsevier, vol. 49(P1), pages 50-58.
    11. Bhagowalia, Priya & Chandna, Arjita, 2016. "Food Subsidies and Nutritional Status: Evidence from ICRISAT Data," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235760, Agricultural and Applied Economics Association.
    12. Das, Mousumi & Sharma, Ajay & Babu, Suresh Chandra, 2017. "Pathways from agriculture to nutrition in India: Implications for sustainable development goals," IFPRI discussion papers 1649, International Food Policy Research Institute (IFPRI).

    More about this item

    Keywords

    Targeted Public Distribution System; Food subsidy; Targeting Errors;

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pas:asarcc:2011-16. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Raghbendra Jha). General contact details of provider: http://edirc.repec.org/data/asanuau.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.