Essays on public distribution system in rural India

Abstract

The discourse on India s food policy is at a critical juncture. National Food Security Act 2013 has been passed in the Indian Parliament under which the Public Distribution System (PDS) is set to enlarge its coverage to 75 and 50 percent of the rural and urban areas respectively. Prior to this, some of the state governments had already started reforming their PDS by investing in improved delivery and monitoring mechanisms. PDS is one of the largest scheme of its kind food assistance program in the world with a network of 4.9 lakhs FPS serving 228 million households throughout the country. It forms an important social safety by providing supplemental food assistance to the households at highly subsidized prices. For a country like India, with a high level of poverty and malnutrition, the merit of such social security schemes cannot be undermined. Still, PDS has been amongst the most debated government program in India. It has been found to be ineffectiveness in reaching the poor, leakages are high, there is rampant corruption and involves huge fiscal costs. According to an estimate by Jha and Ramaswami (2010), only 10 percent of the total subsidy through PDS reaches the poor. 43 percent of the subsidy goes away as illegal diversion of grains, 28 percent are the excess costs and 19 percent of it is transferred to the non-poor. Recent evidences though suggest a turn-around in the performance of PDS with a reduction in leakages and greater consumption of grains from the PDS (Khera, 2011; Himanshu and Sen, 2011). Varying degrees of improvement across states, what implication it has for nutrition and open market demand are some of the related questions which remain to be answered. This dissertation aims to address these three issues for rural India- i) What have been the recent trends in the consumption of grains from PDS and their state-wise performance; ii) the impact of PDS on the consumption of calories, protein and fat and iii) the effect of PDS on open market demand for foodgrains. newlineThe first chapter of this