Public distribution of food grains in India

Abstract

The present research was undertaken to understand in the Indian context, the ole assigned to the Public Distribution System (PDS) and, the effectiveness of its performance in the past to define its conceptual role under alternative conditions and to evolve alternative approaches for more effective PDS implementation to satisfy the main objective of protecting the economically vulnerable section of population. A brief review of past agricultural policies revealed that the conflicting interests of the long and short term policies have aggravated India’s food problem. Specifically in the case of PDS, there was a lack of conceptual clarity, mainly because, given the very short term orientation with which the policies were formulated, the whole system was geared to combat the crisis after another crisis, In the Indian context, it was found that even during the years of abundant PDS supplies, the economically vulnerable section could not be protected from erosion in food grains consumption. The problem of erosion worsened because, on the one hand, real income of the vulnerable section was declining and on the other, the supply of coarse grains was shrinking, on per capita basis, in view of the gravity of the erosion problem whereby level of consumption was going down from already a precariously low level, it is suggested that the PDS should take upon itself the task of protecting the vulnerable section and guarantee against any further erosion in the present level of consumption. To meet the above objective, two broad approaches are identified: i) The Government ensures sufficient levels of foodgrains supply, though imports if necessary, to maintain stable prices, and ii) a statutory protective umbrella extended to the most vulnerable class. The requirements for the first approach are estimated through an econometric model developed in the study, and the same for the second approach are worked out for different levels of population coverage and different levels of consumption. The estimates of the requirements suggest that PDS operations should be at a level substantially higher than in the past. In view of the administrative difficulties that would arise in increasing the level of PDS operations, a ‘comprise’ approach is recommended, which incorporates the extension of the statutory rationing scheme for the urban areas. It is also argued that the subsidy under statutory rationing should be made available to the vulnerable section only, implying a discriminatory pricing policy. However, it is argued that this approach can only marginally improve the situation, and in the coming years that Government would have to make a choice from the two broad approaches suggested earlier.