Welfare effect of public distribution system in India
2005
Jatiya, V.K. (Ehime Univ., Matsuyama (Japan)) | Hosokawa, T.
India is a country which has the second largest population in the world, of which about 26% (1999-2000) are still living below the poverty line (BPL) despite India's ample, natural resources, food self-reliancy and consistent economic growth. Recently, the government of India (GOI) has implemented an effective public distribution system (PDS), augmented with a targeted public distribution system (TPDS), to lift its population living below the poverty line to a level above the poverty line (APL). In the present study, we analyzed large scale data comprising estimates of the incidence of poverty in India (1973-2000). Data related to PDS/TPDS (1990-2003) from GOI sources has also been analyzed to understand the trend of the poverty reduction gradient (PRG) with respect to the population growth gradient (PGG). Our results demonstrated that PDS has been playing a significant role in curbing poverty, i.e., PRG was reduced from -0.72 to -0.48 (1973-1994) in coincidence with a steep population growth gradient (PGG) from +11.18 to +16.71 for the same period. We found that TPDS played an important role in reducing poverty at a rapid rate by bringing down PRG from -0.48 to -1.65 (1994-2000). This facilitated income transfers to BPL and APL consumers by providing them with subsidized foodgrains. However, we feel that some measures are still required to upgrade the present PDS in order to enhance its efficacy in India.
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