Consumer Subsidies in India: Is Targeting Effective?

Shikha Jha

Development and Change, 1992, vol. 23, issue 4, 101-128

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.

Date: 1992
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