The National Food Security Act primarily focuses on providing food security via expansion of Public Distribution System. This move could lead to income effect or the substitution effect, which effect prevails remains an empirical question.

Income Effect: For certain households, being able to buy cheap cereals will free up money to purchase other foods such as milk, fruits, eggs, meat etc.

Substitution Effect: For the other households, having other dominating consumption needs, money saved by purchasing subsidized cereals would be devoted to those needs and would be diverted from food expenditure.

Tit-bits:

According to the Global Nutrition Report 2017, India is facing a serious burden of undernutrition, which shows that more than half the women of reproductive age in the country suffer from anaemia.

Public Distribution System

PDS in India is perhaps the largest distribution network of its type in the world. It is an Indian food Security System for the poor people established by the Government of India under the Ministry of Consumer Affairs, Food and Public Distribution. While the Central government is responsible for procurement, storage, transportation and bulk allocation of food grains, the State governments hold the responsibility for distributing the same to the consumer through the established network of Fair Price Shops. Major commodities distributed include wheat, rice, sugar and kerosene.

The PDS was envisaged as a means of dealing with nutritional deficiency. It was launched as a universal programme in the context of food shortages during the early years after Independence. Since it was widely criticised for its urban bias, it was subsequently streamlined through the launch of Targeted PDS (TDPS) in June 1997, which aimed at providing very poor families access to food grains at reasonably low costs.

Coverage of TDPS

PDS cards are ubiquitous with households that do not own any card declining from 19% to 14% of the total households between 2004-05 and 2011-12. Although BPL and AAY card holders come from the poorer sections of the society, this concordance is not perfect. The use of the consumption-based poverty line cut-off suggested by the Tendulkar Comiittee indicates that only 29% of the BPL cardholders are poor while 71% are not poor. In contrast, about 13% of the APL cardholders are poor while 87% are not poor. Thus, many non-poor have BPL cards while some of the por are excluded from the ownership of BPL cards.

Targeting Efficiency

While Exclusion Errors in PDS targeting have declined, inclusion errors have increased. However, both the errors remain high. This change could be attributed to a decrease in the poverty levels as well as a slight increase in the number of cards being distributed to the whole population.

Role of Below Poverty Line and Antyodaya Anna Yojana subsidies in Shaping Food Expenditure

Application of the Propensity Score Matching (PSM) techniques show that at any given income level, households with BPL/AAY cards are more likely to buy cereals from PDS shops than those with APL cards. Rising incomes lead to greater dietary diversification for households without BPL cards than the matched households with BPL cards.

National Food Security Act, 2013

The National Food Security Act (NFSA) was enacted by the Government in the year 2013 to provide food and nutritional security in human life cycle approach, by ensuring access to adequate quantity of quality food at affordable prices to people to live a life with dignity.

The Act inter alia entitles upto 75% of rural population and upto 50% of the urban population for receiving subsidized foodgrains under TDPS, thus covering about 2/3rd of the population.

Eligible household comprise of priority households and AAY households. Persons belonging to priority households are entitled to receive 5kg of foodgrains per person per month at subsidized prices. AAY households, which constitute the poorest of the poor, would continue to receive 35 kg food grains per household per month

The PDS needs to be effectively monitored and there is a need to explore the possibility of introducing innovative ideas such as smart cards, food credit/debit cards, food stamps and decentralised procurement, to eliminate hunger and make food available to the poor wherever they may be in a cost effective manner.