Is the PDS Already a Cash Transfer? Rethinking India's Food Subsidy Policies

Sujata Balasubramanian ()
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Sujata Balasubramanian: Division of Social Science, Hong Kong University of Science and Technology

No 2015-16, HKUST IEMS Working Paper Series from HKUST Institute for Emerging Market Studies

Abstract: Critics argue that India’s mismanaged Public Distribution System (PDS), which sells subsidized cereals to poor families, should be replaced by cash transfers. Others fear cash may be misused. Using National Sample Survey data, this paper demonstrates that families treat additional PDS subsidies wholly as a source of cash - exactly like a cash transfer. More worryingly, cereal consumption has not increased, despite higher real subsidies. Moreover, neither the PDS nor cash transfers are likely to raise total food expenditure in poor families. Finally, therefore, the paper explores how higher food consumption and other objectives of PDS subsidies may be achieved

Keywords: public distribution system; food subsidies; cash transfers; India (search for similar items in EconPapers)
JEL-codes: D61 H23 H53 H71 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2015-03, Revised 2015-03
New Economics Papers: this item is included in nep-agr and nep-dev
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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