Sei sulla pagina 1di 20

Journal of Asian and African Studies

http://jas.sagepub.com

Targeting the Poor orPoor Targeting: A Case for Strengthening the Public
Distribution System of India
Rahul Prahlad Mane
Journal of Asian and African Studies 2006; 41; 299
DOI: 10.1177/0021909606065788
The online version of this article can be found at:
http://jas.sagepub.com/cgi/content/abstract/41/4/299

Published by:
http://www.sagepublications.com

Additional services and information for Journal of Asian and African Studies can be found at:
Email Alerts: http://jas.sagepub.com/cgi/alerts
Subscriptions: http://jas.sagepub.com/subscriptions
Reprints: http://www.sagepub.com/journalsReprints.nav
Permissions: http://www.sagepub.co.uk/journalsPermissions.nav
Citations http://jas.sagepub.com/cgi/content/refs/41/4/299

Downloaded from http://jas.sagepub.com by RAVI BABU BUNGA on October 22, 2009

Targeting the Poor or


Poor Targeting
A Case for Strengthening
the Public Distribution
System of India

Journal of Asian and African Studies


Copyright 2006
SAGE Publications
www.sagepublications.com
(London, Thousand Oaks,
and New Delhi)
Vol 41(4): 299317
DOI: 10.1177/0021909606065788

Rahul Prahlad Mane


Institute of Social Studies, The Hague, The Netherlands

Abstract
As part of the structural adjustment programme the Government of India, in
1997, introduced the Targeted Public Distribution System (TPDS) with the
objective of targeting the food subsidies to the poor and reducing fiscal deficit.
While the universal Public Distribution System (PDS) had several limitations, the
Targeted PDS has only worsened the problem of adequate access to food for the
poor. This article examines the limitations of income targeting based on the
official poverty line under the TPDS. The article argues that the TPDS has
worked counter-productively to the policy objective of reaching the poor. As per
the National Sample Survey (19992000) and the National Family Health Survey
(19989), a significant proportion of the poor and food insecure suffer from
severe malnutrition and calorific deprivation. With a large section of the
population falling out of the TPDS the article suggests policy alternatives to
ensure better access to food for the poor and vulnerable.
Keywords food security India public distribution system policy poor
poverty schedule caste schedule tribe targeting

Introduction
A country is truly food secure only when it is able to provide adequate food to
all its citizens as matter of right, without inflicting any humiliation on the poor
(Parikh, 1998). Ensuring sustainable access to food1 for all households has been
one of the most formidable challenges faced by India since independence. While
there has been vast improvement in the production and procurement of foodgrains, institutional arrangements of reaching this food at affordable prices to
the poor has been a matter of policy concern. In terms of food grain production
India displayed impressive growth in the 1990s. Food grain procurement leapt
from an average of 20 million tonnes per year in 19917 to 25 million tonnes in

Downloaded from http://jas.sagepub.com by RAVI BABU BUNGA on October 22, 2009

300

Journal of Asian and African Studies 41(4)

1998, 30 million tonnes in 1999, 35 million tonnes in 2000 and 40 million tonnes
in 2001. By 2002, the Food Corporation of India2 (FCI) had accumulated buffer
stocks of almost 70 million tonnes of food grains3 (Dreze, 2003b). The public
distribution system (PDS) was initiated as an instrument of transferring food
subsidy with an approach that was universal4 in principle. This however was
ineffective in reaching the poor, and even during the regime of the so-called
universal PDS, in 1992 India had the second highest rate of undernourishment
in the world (Dreze, 2003b). Of all children under the age of three, 52 per cent
were underweight and 20 per cent were severely underweight. Among adults
the prevalence of undernourishment was estimated at around 50 per cent
(Muller and Patel, 2004). The PDS suffered from several limitations, for
example, problems of leakage, inclusion of the non-poor, corruption at different
levels, high administrative costs, poor monitoring systems, lack of accountability
and inactive beneficiary participation. In an effort to accommodate the two
major criticisms of the universal PDS that (1) the PDS failed to reach the poor;
and (2) the universal PDS was too expensive (Muller and Patel, 2004), the
Government of India in the year 1997, introduced the Targeted5 Public Distribution System (TPDS) as part of its structural adjustment programme.
Objective
The purpose of shifting to a targeted policy was to target the subsidies to the
poor and reduce fiscal deficit. The objectives of this article are: (1) to examine
if the TPDS has facilitated adequate access to food for the poor; (2) to identify
limitations of income targeting in a country where incomes are not directly
observed and highlight problems arising due to poor targeting of the public
distribution system; and (3) to explore alternatives for expanding the scope of
targeting to facilitate sustainable access to food for the poor and food insecure.
Hypothesis and Research Question
The targeted public distribution system has been implemented in the past seven
years. The research hypothesis is that while the universal PDS was plagued with
several problems, the TPDS has only further marginalized the poor. Poor targeting has negatively influenced their access to food making them severely vulnerable to chronic hunger. The research question therefore is: does the TPDS
facilitate adequate access to food for the poor?
Methodology
The article analyses the role of TPDS in improving access to food for the poor
and food insecure; it reviews available literature and analyses the empirical data
of two previous studies on the issue of targeting the PDS; it examines problems

Downloaded from http://jas.sagepub.com by RAVI BABU BUNGA on October 22, 2009

Mane: Targeting the Poor or Poor Targeting

301

of income targeting and discusses possible alternatives vis-a-vis the TPDS;


finally it suggests policy interventions for strengthening the targeted PDS.
The Public Distribution in India An Overview
The Public Distribution System (PDS) in India is a state-administered food
subsidy programme. Historically, the objectives6 of the PDS have been: maintaining price stability, raising the welfare of the poor (by providing access to
basic foods at reasonable prices to the vulnerable population), rationing during
situations of scarcity, and keeping a check on private trade. The PDS was set up
following the Bengal famine in 1943 and was launched in its present form in the
early 1960s. The PDS has been an official instrument for reaching the poor
section of society with the objective of improving household food security.
Eligible households are provided a ration card that entitles them to buy select
food items through a network of fair price shops. Rice, wheat and other select
food items are made available through the PDS, which has a network of over
450,000 retail outlets nationwide (Farrington and Saxena, 2002).
The PDS is operated under the joint responsibility of the Central and State
governments, with the former responsible for procurement, storage, transportation and bulk allocation of foodgrains. The state governments in turn are responsible for distributing these foodgrains to consumers through a network of Fair
Price Shops including the supervision and monitoring of the functioning of these
shops. The PDS is partly implemented through the Food Corporation of India
(FCI), which was set up in 1965 as part of the Agricultural Prices Commission.
Commodities are procured primarily through the Food Corporation of India,
which operates a vast network of warehouses and distribution centres, but also
operates through private agents. Until 1997 households both in urban and rural
areas with a registered residential address were entitled to subsidized food
grains. As part of economic reforms7 in 1997 the government introduced the
Targeted PDS (TPDS).
Policy Change The Targeted PDS
For developing economies in the context of limited resources an important way
of reducing fiscal deficit is by cutting subsidies and targeting them exclusively to
the poor. In India the shift in policy was made to target the subsidy to households living below the official poverty line8 (Table 1).
The Targeted PDS (TPDS) required that states undertake surveys to identify
Below Poverty Line (BPL) and Above Poverty Line (APL) families, using
absolute income lines issued by the Planning Commission based on official
poverty lines in 19934. As per the Ministry of Consumer Affairs and Public
Food Distribution (Government of India, 1997), States (were) required to
formulate and implement fool proof arrangements12 for identification of the

Downloaded from http://jas.sagepub.com by RAVI BABU BUNGA on October 22, 2009

302

Journal of Asian and African Studies 41(4)


Table 1
Salient features of targeted PDS and universal PDS

Eligibility

Subsidy

Quantity

Off-take of
Commodities

Targeted PDS

Universal PDS

Households were categorized as Below


Poverty Line (BPL) and Above Poverty
Line (APL).
Initially differential subsidy for BPL and
APL families i.e. dual-price system for
BPL and APL.9
Initially, in the TPDS, each BPL family was
entitled to only 10 kg of grains per month.
This was raised to 20 kg per month in 2001
and to 3510 kg per month from March 2002
for both BPL and APL families.
Change in centre-state control in respect of
allocations, as the size of the BPL
population and the entitlements for the
BPL population are decided by the central
government.

No income category. All citizens were


eligible.
All households with a ration card were
equally eligible for subsidized food.
The quantity of the foodgrains was based
on the household size.11

Entitlements were the same for all


eligible households.

poor for delivery of foodgrains and for its distribution in a transparent and
accountable manner through the fair price shops. In doing so, says the
Committee of Food subsidies that thrust, should be to include the really poor
and vulnerable sections. In addition, other qualitative criteria were also
adopted such as household occupation, land operated or owned, housing
conditions, number of earners, and possession of various types of durables such
as TV, refrigerators, motor cycles, tractors and so on. However, the surveys have
missed out many poor families (Srivastava, 2004).
In addition, several practical administrative problems exist in implementing
this definition of poverty as there are no regular official estimates of the actual
income of households. As the CAG13 Report No 3 of 2000 (HLC,14 2002):

No survey undertaken in 18 out of 31 States and Union Territories for


identification of BPL families.
In States that had completed the identification survey ration cards have not
been provided to many BPL households.
According to the ORG15-MARG survey (conducted for the CAG), 18 per
cent of BPL households did not have ration cards.
The performance of TPDS was poor in states with larger BPL population.

A study of the TPDS in Uttar Pradesh by the World Bank based on the UPBihar Survey of Living Conditions conducted in 19978, found that 56 per cent
of households in the lowest quintile and 63 per cent of households in the next
quintile did not get BPL cards.16
Comparing the data17 from the National Sample Survey (NSS) 55th round
(for 19992000) as well as from the NSS 50th round (for 19934), the High Level

Downloaded from http://jas.sagepub.com by RAVI BABU BUNGA on October 22, 2009

303

Mane: Targeting the Poor or Poor Targeting


Table 2
Per capita purchases in States under the TPDS
Rural areas

Urban areas

Monthly per capita purchase of PDS rice and wheat


amounted to 4.58 kg in Kerala,18 followed by 3.3 kg
in Tamil Nadu.19
In several states including Assam, Bihar, Gujarat,
Madhya Pradesh, Rajasthan, Uttar Pradesh and
West Bengal, per capita monthly purchase from the
PDS was less than 1 kg a month.

Monthly per capita purchase of grain from the


PDS was highest in urban Jammu and Kashmir
at 5 kg followed by Kerala at 4 kg.
Average monthly purchase was less than 1 kg a
month in Assam, Bihar, Gujarat, Madhya
Pradesh, Maharashtra, Rajasthan, U.P and West
Bengal.

Source: HLC (2002).

Committee Report (HLC, 2002) points out to the problem of lower per capita
purchases (Table 2) both in urban and rural areas under the TPDS.
Another noticeable fact is that under the TPDS prices20 drastically increased
both for the BPL and the APL families from 1997 to 2000 (see Figures 1 and 2).
In the period from June 1997 to April 2000 wheat prices available to APL
families increased by 50 per cent while the prices for rice increased by 45 per
cent. In the case of BPL families the prices for rice increased by 40 per cent and
those of wheat increased by 45 per cent after 1999.
According to CAG (2000), the monthly household income transfer due to
public distribution system (PDS)21 was less than Rs. 30, except in the
North-Eastern states. Even after introduction of the TPDS, average income
Figure 1
Central issue price for rice for BPL and APL households (19972002)
1200

1000

800

600

400

200
06/01/1997

12/01/1997

01/29/1999

04/01/2000

07/25/2000

07/12/2001

04/01/2002

Rice for BPL families


Rice for APL families

Source: Department of Agriculture and Cooperation (2003).

Downloaded from http://jas.sagepub.com by RAVI BABU BUNGA on October 22, 2009

07/01/2002

304

Journal of Asian and African Studies 41(4)


Figure 2
Central issue price for wheat for BPL and APL households (19972002)
1000
900
800
700
600
500
400
300
200
100
06/01/1997

12/01/1997

01/29/1999

04/01/2000

07/25/2000

07/12/2001

04/01/2002

07/01/2002

Wheat for BPL families


Wheat for APL families

Source: Department of Agriculture and Cooperation (2003).

transferred per household per month for BPL population was between Rs. 22
to Rs. 46 across different states.22
Further, while the procurement of foodgrains increased by 117 per cent (from
19.6 to 42.7) between 1991 and 2001, public distribution of foodgrains dropped
drastically by 37 per cent (from 20.8 to 13.2) during the same period (Table 3),
indicating that significant households were excluded from the system.
One of the objectives of the TPDS was to reduce subsidies. In 20012, out of
the total food subsidy only 25.7 per cent was targeted towards BPL and 2.3 per
cent towards APL households, while the subsidy towards carrying cost23 alone
was 66.5 per cent. We have seen that prices of both rice and wheat went up
significantly, implying that the net subsidy to the poor was reduced due to poor
targeting and rise in prices. However, the total subsidies (Table 4) increased
by 76 per cent in real terms and by 52 per cent as a percentage of the total
government expenditure from 19967 and to 20023.
This ballooning of total subsidy24 is on account of the sharp rise in stocks, and
the accompanying rise in carrying costs. It is evident that the introduction of the
TPDS has not reduced food subsidy.
Nutritional Status and Incidence of Hunger
This section of the article analyses the nutritional status in the country because
nutritional estimates can help in conceptualizing the overall wellbeing of the
population and in assessing the level of food security at household level. Here,

Downloaded from http://jas.sagepub.com by RAVI BABU BUNGA on October 22, 2009

305

Mane: Targeting the Poor or Poor Targeting

Table 3
Net availability, procurement and public distribution of foodgrains (in million tonnes)
Year

Population
(millions)

Net production Net availability


of foodgrains
of foodgrains
Procurement

Public
distribution

1951
1961
1971
1981
1991
2001

363.2
442.4
551.3
688.5
851.7
1033.3

48.1
72.0
94.9
113.4
154.3
171.4

8.0
4.0
7.8
13*
20.8
13.2

52.4
75.7
94.3
114.3
158.6
156.2

3.8
0.5
8.9
13.0
19.6
42.7

*Includes quantities released under the Food for Work Programme.


Source: Directorate of Economics and Statistics, Ministry of Agriculture (2001).

Table 4
Food subsidy of the central government
Year

Amount (Rs.Crore)

As % of total govt expenditure

19901
19912
19923
19934
19945
19956
19967
19978
19989
19992000
20001
20012
20023

2450
2850
2785
5537
4509
4960
5166
7500
8700
9200
12125
17612
21200

2.33
2.56
2.27
3.90
2.80
2.78
2.46
3.23
3.11
3.03
3.61
4.89
5.17

Source: Planning Commission (2002).

the aim is not to suggest a causal impact between poorly Targeted PDS and inadequate nutritional status of the population in general. Nutritional estimates
indicate the enormity of the problem and suggest that if implementation of
TPDS is adequately streamlined it could make a positive impact on the
nutritional status of the poor in particular in the long run. The National Family
Health Survey 19989 reports that, half of all Indian children are undernourished, and about half of all adult women suffer from anemia, the burden of
undernourishment is distributed very unequally across the population whereby
the condition of women, children, and tribals is particularly alarming (Right to
Food Campaign, 2003). As per the NSS data25 on nutritional intake in India
there has been a long-term decline in per capita calorie consumption on average.
In 19992000 in rural areas the mean daily calorie intake was 2000 while as per
norms it should be 2400 (Chandrasekhar and Ghosh, 2000). There is a lot of
regional variation in average calorie intake, and calorie deprivation (Table 5)
has increased significantly from 1983 to 2000.

Downloaded from http://jas.sagepub.com by RAVI BABU BUNGA on October 22, 2009

306

Journal of Asian and African Studies 41(4)


Table 5
Calorie deprivation, by State, 1983 and 1999/2000
Average calorie intake per
capita per day (Kcal)

% consuming less than


2400 Kcal per day

States

1983

1999/2000

1983

1999/2000

Andhra Pradesh
Bihar
Gujarat
Haryana
Himachal Pradesh
Jammu and Kashmir
Karnataka
Kerala
Madhya Pradesh
Maharashtra
Orissa
Punjab
Rajasthan
Tamil Nadu
Uttar Pradesh
West Bengal

2204
2189
2113
2554
2636
2569
2260
1884
2323
2144
2103
2677
2433
1861
2399
2027

2021
2121
1986
2455
2454
2631
2028
1982
2062
2012
2119
2381
2425
1826
2327
2095

68.5
67.6
72.6
54.1
44.5
44.5
64.0
81.5
62.5
73.1
70.9
46.2
54.2
80.6
58.4
76.0

80.7
74.9
80.5
55.1
56.5
39.7
78.9
81.2
78.4
83.3
74.6
62.8
56.7
86.5
64.5
75.6

Source: Meenakshi and Vishwanathan (2003).26

The worst affected are the poorest of the poor the labour households.
Households both from farm and non-farm labour form the largest chunk of
occupation class suffering from hunger, both seasonal and chronic. It is important to note that a large segment of labour households is constituted by the
backward castes27 (Table 6) and these social classes suffer most from hunger,
both in rural and urban India (Sagar, 2003).
There are several estimates about malnutrition and starvation in India.
The FAO in its report The State of Food Insecurity in the World (2003) (available at http://www.fao.org/documents/show_cdr.asp?url_file=/docrep/006/j0083e/
j0083e00.htm) has estimated that the number of hungry people in India
increased by 19 million from 19972001. Gill et al. (2003) estimate that hunger
tends to be chronic rather than acute, with 233 million (19982000) undernourished in calorific and micronutrient terms (against 215 million in 19902),
with particular problems among women, adolescent girls and under-fives while
undernourishment is severe among Scheduled Castes. In yet another study
(Saxena, 2002) explains:
Malnutrition is widespread, with 207 million people in 19968 unable to access
enough food to meet basic nutritional needs, over 50% of children below five
years are underweight, with girls suffering particularly badly, and anaemia
prevalent among almost 50% of women in the age group of 2049 years.

Downloaded from http://jas.sagepub.com by RAVI BABU BUNGA on October 22, 2009

307

Mane: Targeting the Poor or Poor Targeting

Table 6
Percentage of hungry households among different social groups all India 19992000
Rural

Urban

Type of hunger

Type of hunger

Social groups

Seasonal

Chronic

Total

Seasonal

Chronic

Total

ST
SC
OBC
Others
All

5.2
3.9
1.7
1.8
2.6

0.8
1.1
0.4
0.8
0.7

6.0
5.0
2.1
2.6
3.3

2.6
1.4
0.6
0.3
0.6

1.8
0.6
0.3
0.2
0.3

4.4
2.0
0.9
0.5
0.9

Source: Chand (2004).28

All these estimates refer to one single fact: that hunger29 and malnutrition are
prevalent on a mass scale in India, and there are still areas in the country where
deaths by starvation30 occur every year.
Poor Targeting Exclusion Errors!
In the context of limited public resources targeting is often presented as a means
of giving more to the poor. The overall impact of a programme depends both
on the number of poor households covered and the level of benefits they receive
(Coady et al., 2003). Let us now review the findings of two independent research
studies to understand the errors of targeting in two States of India. Dutta and
Ramaswami31 (2001) have compared two States,32 Andhra Pradesh which has a
greater outreach of PDS (57 per cent households) and Maharashtra33 where
PDS has a limited outreach (33 per cent households).
It is evident (Table 7) that T2 errors of wrong exclusion are very high in
Maharashtra, 49.9 per cent in the rural sector and 51.34 per cent in the urban
sector, indicating that errors of exclusion tend to be higher in a narrowly
targeted programme like the one in Maharashtra to a near universal programme
as in the case of Andhra Pradesh.34
The second study by Swaminathan and Mishra (2001) refers to the dangers
of narrow targeting. This study was conducted in Maharashtra first in 1995 and
later in 2000 before and after the introduction of the TPDS. This study attests
the fact (Table 8) that with the policy shift from universal to TPDS and the
introduction of income-based targeting errors of wrong exclusion increased
substantially.
There are large welfare costs linked with wrong exclusion of the poor. For
the poor and the food insecure exclusion errors would translate into malnutrition and starvation it could well become a matter of survival.35

Downloaded from http://jas.sagepub.com by RAVI BABU BUNGA on October 22, 2009

308

Journal of Asian and African Studies 41(4)


Table 7
Errors of targeting in Andhra Pradesh and Maharashtra
Andhra Pradesh

Maharashtra

Type of error

Rural

Urban

Combined

Rural

Urban

Combined

T2 (inclusion)
T1 (exclusion)

22.35
20.42

4.29
36.40

14.35
22.29

11.30
49.90

4.12
51.34

6.92
49.61

Source: Dutta and Ramaswami (2001).

Table 8
Errors of targeting in Maharashtra
Type of error

Universal PDS (1995)

Targeted PDS (2000)

T2 (inclusion)
T1 (exclusion)

14.6
36.7

6.1
42.6

Source: Swaminathan and Mishra (2001).

Identifying the Poor and Food Insecure Poverty Lines?


The Targeted PDS in India makes a distinction between households that are
above and below the poverty line. While the incidence of poverty36 declined in
percentage terms from 38.86 in 19878 to 35.97 in 1993437 and to 26.1038 per
cent in 19992000, in absolute numbers it increased from 307 million in 19878
to 320.4 million in 19934 and decreased to 260 million in 19992000 (Table 9).
Households that earn income from farm and non-farm casual work or selfemployment most often face fluctuations in income over time their incomes
are often irregular, seasonal and unrecorded. The poor suffer a loss of income39
when rains fail because not only do they lose employment opportunity but food
prices also increase. In a country where more than 70 per cent of the population
living in rural areas is exposed to similar vulnerability, even when proxy income
indicators are used to determine poverty40 they fail to capture real poverty. A
Table 9
Poverty ratio and number of persons below poverty line
19878

19934

19992000

Category

Incidence of No. of poor


poverty (%) (in million)

Incidence of No. of poor


poverty (%) (in million)

Incidence of No. of poor


poverty (%) (in million)

Rural
Urban
All India

39.10
38.20
38.86

37.23
32.28
35.97

27.09
23.62
26.30

231.88
75.17
307.05

244.0.3
76.34
320.37

Source: Pradhan et al. (2002).

Downloaded from http://jas.sagepub.com by RAVI BABU BUNGA on October 22, 2009

193.24
67.01
260.21

Mane: Targeting the Poor or Poor Targeting

309

study conducted by Ravi Srivastava on the Impact of TPDS41 in Uttar Pradesh


states that the selection of beneficiaries was not transparent and the basis for
selection was too complicated for the local officials to administer (Planning
Commission, 2001).
If the official poverty line is compared with nutritional estimates it appears
that a large size of the food insecure population remains untargeted. According to the NSS data 70 per cent or more of the total population consumed less
than 2100 calories in all available years since 19934 (HLC, 2002). Alternatively
if food share is taken as an indicator then NSS data for 19992000 on consumption expenditure show that the food share was over 60 per cent for the lower 80
per cent of rural households and lower 40 per cent of urban households (HLC,
2002). This implies that the proportion of persons suffering deprivations in food
and nutrition is higher than those below the poverty line, indicating that targeting of food with reference to poverty lines can be counter-productive. Besides
totally disregarding people living on the threshold of poverty line, income
targeting is likely to exclude a large part of the nutritionally vulnerable population, thus denying access to subsidized food to those who need it the most.
Targeting on the basis of income appears inappropriate because it does not
effectively distinguish the food insecure from the food secure. In the context of
food security income targeting appears unsuitable also because it deals with
contingencies that cannot be perfectly foreseen. Alternative targeting mechanisms are discussed later in the article.
Problems with the Delivery Mechanism
One of the assumptions while introducing targeting is that with an appropriate
targeting mechanism in place the existing delivery mechanism will be able to
effectively reach out to the poor. However, besides the problem of identification
of the poor and the food insecure, poor targeting mechanism and exclusion of
large numbers of the poor the TPDS also suffers from chronic delivery and
management shortcomings, for example, inadequate systems of distribution,
storage and procurement. Many of these problems arise from systemic corruption prevalent in the delivery channels responsible for operating the PDS. A
former Central Vigilance Commissioner (Vittal, 2002) supports his assertion
that in India corruption is anti poor by stating that 31 per cent of the food
grains and 36% of the sugar meant for the (PDS), which is designed to provide
food security to the people below the poverty line, gets diverted to the black
market (Jenkins and Goetz, 2002). According to a study conducted by Tata
Economic Consultancy Services in 2000, about one-third of the TPDS supplies
for example, 31 per cent of rice and 36 per cent of wheat were diverted and did
not reach the intended beneficiaries (HLC, 2002). The illegal diversion of PDS
commodities to the open market results in chronic shortages for consumers who
rely on subsidized rations. Though strict guidelines regarding official vigilance

Downloaded from http://jas.sagepub.com by RAVI BABU BUNGA on October 22, 2009

310

Journal of Asian and African Studies 41(4)

committees do exist, in practice they are largely ineffective.42 Greater involvement by civil society organizations (Jenkins and Goetz, 2002) in monitoring the
PDSs activities could be a potential solution (Srinivas and Abdul Thaha, 2004).
Policy Interventions for Strengthening the TPDS
Indias nutrition problem thus is not lack of foodgrains at the national level but
a lack of adequate access to food at the household level (Shariff and Mallick,
1999). The various issues discussed in this article suggest that there is a need to
reform the Targeted PDS (TPDS). The public distribution system (PDS) has
several problems and limitations the biggest one is its inadequacy in relation
to the scale of hunger and vulnerability in India. The problem of poor targeting
is of high priority given the scale of malnutrition and chronic hunger that exists
in India. There is a need to identify effective and efficient ways of providing food
to those who need it. Minimizing the errors of wrong exclusion should be
critical to future reform process. The TPDS could be redesigned to impact the
poor in a positive manner (Figure 3).
Figure 3
Issue/concern

Policy intervention

Identification of poor

and food insecure

The first and the foremost issue is the appropriate


identification of the poor and food insecure where poverty
lines are ineffective. In the context of food security it is
crucial to identify those vulnerable to income shifts and the
food insecure.

Identification surveys should include other indicators besides


family income i.e. household size, number of days on which
the earning members are gainfully employed, pattern of cash
flow in the household, debt liability, body-mass index,
anthropometric data, nutritional data, previous history of
anemia or any other diseases, whether all children in the
family including girls attend school, access to clean drinking
water, incidence of malnutrition and starvation, availability
of a dwelling unit with basic amenities etc. Such surveys
should be conducted by professional agencies, academic
institutions or NGOs/ CBOs.43

This process of identification of should be made participatory


by involving members from the local-self governments,
community groups, women s collectives, neighborhood
groups, village committees, NGOs/CBOs, representatives of
the socially marginalized groups.

Downloaded from http://jas.sagepub.com by RAVI BABU BUNGA on October 22, 2009

Mane: Targeting the Poor or Poor Targeting

311

Figure 3 (Continued)
Targeting mechanism

It is understandable that in any targeting programme, some


problems of imperfect targeting will always exist. However, it
is equally important not to have large exclusion errors. These
errors could be minimized by introducing appropriate
targeting mechanisms which will not exclude the poor and
the food insecure.

To minimize the errors of wrong exclusion it may be


appropriate if geographical targeting or self-targeting or a
combination of both are introduced e.g. in a large country
like India geographical44 targeting can be very effective if
used at the Taluka/Tehsil or Block level, where local level
information could be generated by the local bodies and
NGOs/CBOs and targeting45 of food subsidies could be
efficiently managed.

Another alternative could be the use of self-targeting46 where


a balance between the dual objectives of protecting the
nutritional status and purchasing power of the poor could be
maintained by providing local staples47 i.e. by making
available less refined foodgrains which would demotivate the
better-off from purchasing such grains. The advantage of
self-targeting is it reduces administrative cost significantly.

In self-targeting the problem would be that the [AQ2] is


unable to procure local staples nationally. This could be
resolved if the processes of procurement, storage and
distribution are decentralized and done at the district level
whereby physical handling of foodgrains purchase, storage
and distribution could be managed by the local body. This will
reduce the large quantum of subsidy which goes towards the
carrying cost, which could be targeted towards the poor and
food insecure.

Delivery mechanism

Targeting could be effective not only if appropriate targeting


mechanisms are adopted but also if the delivery mechanism is
streamlined. Subsidies can effectively reach the poor if the
issues involved in procuring, monitoring and distribution are
adequately resolved. This process can be facilitated by
involving local representatives in the process of monitoring
and distribution which in a way will impact targeting.
Proactive participation of NGOs48 and Citizens groups49 in
the supervision and monitoring of the PDSs can be very
effective. This would help in curtailing corruption and
maladministration at the local level.

Downloaded from http://jas.sagepub.com by RAVI BABU BUNGA on October 22, 2009

312

Journal of Asian and African Studies 41(4)

Conclusion
The need for targeting is motivated by the intention of maximizing the benefits
of the subsidy to the poor and making efficient use of available resources. In
reality, where targeting is inappropriate and poorly designed, the shift from a
near universal scheme to a targeted one can leave the poor worse off than
before. The rationale for adopting a targeted approach in delivering food
subsides in India is to target the subsidies to the poor but it is evident that
benefits meant for the poor often end up being poor benefits (Sen, 1995). In
some ways the PDS would be meaningful only if the system translates the
macro-level self-sufficiency in food grains . . . into micro-level self-sufficiency.50
In the era of structural adjustment it is virtually impossible for the government
to revert to universal public distribution system (PDS) but if subsidy has to
really reach the poor then income targeting is certainly not an effective alternative. This could be achieved not just by introducing appropriate targeting mechanism but by integrating it with improved monitoring and sustainable delivery
mechanism facilitated by proactive local-level participation. As long as all
these issues remain unresolved and the beneficiary community is seen as a
homogenous entity (targets) waiting desperately for a State benefits, access to
food shall be a distant dream for the millions of malnourished and hungry.
Notes
This policy paper was written when the author was at the ISS, The Hague, The Netherlands for a
Post-graduate Diploma programme in Effective Social Policies for Human Development. Views
expressed in this contribution are of the author, and do not in any way represent the views of either
HUDCO or ISS.
1. Food Security is a State in which at all times, there is enough food in the system. People have
both physical and economic access to food. Food that . . . has required nutrition and there is
no institutional sanction against accessing the available food [authors emphasis] (Mukherjee,
2004).
2. The FCI had two main roles in Indias food security policy: (1) increase domestic production
to achieve food self-sufficiency; and (2) keep buffer stock inventories in case of failing harvests
(Muller and Patel, 2004).
3. One expert has in a lighter vein estimated that if all the sacks of grain were laid up in a row,
this would stretch more than one million kilometers, taking us to the moon and back (Dreze
quoted by Sen, 2003).
4. The PDS was only universal in principal, it was never universal in practice.
5. The need for Targeted Public Distribution System (TPDS) was also felt because the PDS as it
existed in most parts of India failed to serve the population below the poverty line, had an
urban bias, and had negligible coverage in States with the highest concentration of the rural
poor and lacked transparency and accountability.
6. As per the High Level Committee Report (HLC, 2002), headed by Professor Abhijit Sen.
7. The government in 1992 had introduced the Revamped PDS (RPDS). The RPDS relied on
geographical targeting, being introduced with universal coverage in only 1775 blocks in poor
areas mainly tribal and hilly, drought prone and remotely located areas.

Downloaded from http://jas.sagepub.com by RAVI BABU BUNGA on October 22, 2009

Mane: Targeting the Poor or Poor Targeting

313

8. A consensus was drawn at the Food Ministers conference held in August 1996, to work out
the population below the poverty line under the TPDS by adopting the methodology used by
the Expert Group on Estimation of Proportion of the Number of Poor set up by the Planning
Commission.
9. In the Union Budget of 20001, it was announced that APL prices would have no subsidy,
therefore, prices would be equal to economic costs of the Food Corporation of India (FCI) and
the BPL prices would be set at 50 per cent of the economic costs.
10. PDS was not intended to provide full family requirement, however in the case of the food
insecure and vulnerable this could be a limitation because the present quantity is far lower
than the requirements suggested by the Indian Council of Medical Research wherein a person
requires about 11 kg of cereals per month, implying a minimum requirement of 55 kg per
family for a household with five members.
11. Though not in all states.
12. For details see http://fcamin.nic.in/tpds.htm.
13. Comtroller and Auditor General of India.
14. The High Level Committee was chaired by Abhijit Sen. Other members included R. Radhakrishna, Madhura Swaminathan, A. Mohandas Moses, S.N. Kaul, K.M. Sahni, Sanjay Kaul.
15. ORG is a research agency based in India.
16. Kriesel and Zaidi (1999) as quoted in HLC (2002).
17. Data on the quantity and value of rice and wheat purchased from the PDS by persons in different monthly per capita expenditure (mpce) groups.
18. In Kerala an average 185,000 tonnes of foodgrains were sold per month but after the TPDS
the off-take of rice reduced by almost 75 per cent ranging from 40,00050,000 tonnes per
month. Earnings per fair price shop fell from Rs. 3711 before March 2000 to Rs. 1493 in 2001.
As a result 250 to 350 fair price shops have become non-functioning out of a total of 14,261
fair price shops in the State in 2002 (HLC, 2003).
19. Both Kerala and Tamil Nadu had the highest per capita purchase of grain from the former
PDS (excluding the north-eastern region).
20. Wheat and rice are issued by the Central Government at uniform Central Issue Prices (CIPs)
to the States/Union Territories for distribution under TPDS. Two different sets of CIPs have
been fixed for APL and BPL families under TPDS. The end retail price of foodgrains for
supplying under the PDS is fixed by the States/Union Territories after taking into account
margins for wholesalers/retailers, transportation charges, levies, local taxes and so on.
21. For 19929, the estimated cost of transferring one rupee of income to BPL households under
the PDS was as high as Rs. 6.68 (Srivastava, 2003).
22. It was less than Rs. 7 in Punjab (HLC, 2002).
23. Carrying costs include transportation, storage and so on.
24. The subsidy on buffer stocks has risen rapidly from 1998 onwards. In 19989, the subsidy on
buffer stocks was 18 per cent of the total food subsidy; this ratio went up to 35 per cent in
20001. In 20012, the subsidy on buffer stocks exceeded, for the first time ever (HLC Report,
2002).
25. Calculations by Chandrasekhar and Ghosh (2003).
26. As quoted in Chakraborty (2005).
27. For similar studies on the impact of PDS on Schedule Castes and Schedule Tribes see Lee et al.
(2002).
28. As quoted in Vidya Sagar (2003).
29. Interestingly in 2001 millions of tonnes of rotting grain were thrown into the sea, while starvation deaths were reported in several States (Muller and Patel, 2004).
30. See http://www.righttofoodindia.org for details.

Downloaded from http://jas.sagepub.com by RAVI BABU BUNGA on October 22, 2009

314

Journal of Asian and African Studies 41(4)

31. Using the National Sample Survey household consumption data for 19934, they compared
the utilization of the PDS in Andhra Pradesh and Maharashtra. While estimating targeting
errors the study also does not take into account that section of the population who for some
reason or the other does not buy wheat or rice from any source.
32. The study points out that the geographical coverage of PDS retail outlets in Andhra Pradesh
was almost universal whereas the coverage in Maharashtra was not so.
33. In Maharashtra about 30 per cent of the poor (defined as the bottom 40 per cent) are excluded
from the PDS because of incomplete coverage.
34. However, at 23 per cent the exclusion errors are fairly large even in Andhra Pradesh, which
implies that there was several problems with the delivery mechanism, which are later discussed
in the article.
35. On the other hand the costs of wrong inclusion only have financial implications.
36. Poverty in India is officially measured in terms of monthly per capita expenditure of Rs. 49 in
rural areas and Rs. 57 in urban areas at 19737 all-India prices, which could then buy an
energy consumption of 2400 calories/day in rural areas and 2100/day in urban. Official statistics suggest that 26.1 per cent of the population in 19992000 fell below this poverty line, but
more realistic estimates put this at around 30 per cent (Deaton and Drze, 2002).
37. Comparable estimates of Planning Commission of India, GoI.
38. Strictly not comparable because of changes in the methodology of data collection.
39. Parikh (1998) analyses that even a booming domestic economy can aggravate hunger of some
poor people if their incomes do not rise as rapidly as increases in food prices because the
incomes of others in the economy rise even faster.
40. It is worthwhile to note that in Kerala only 25 per cent of population has been identified as
BPL by the Planning Commission while the Kerala government has identified 42 per cent of
households as BPL (HLC, 2002). In Orissa the State government has estimated that in 1997,
66 per cent of the population was below poverty line (BPL) while the Planning Commission
estimated this to be around 48.6 per cent (Sridhar, 2000).
41. As quoted in Planning Commission (2001).
42. A planning commission study concluded about the vigilance committees in Bihar: membership of vigilance committees are seen as positions where money can be made and (t)he
procedure to appoint them is highly politicized, and mostly clients of MLAs (Members of the
state Legislative Assembly) are appointed (Jenkins and Goetz, 2002).
43. And not by government officials.
44. For a detailed discussion on geographical targeting at district level see Jha and Srinivasan (2002).
45. The danger with geographical targeting could be that it may leave out poor people in rich areas.
However, this would have a lesser impact if geographical targeting is done at Taluka/Tehsil or
block level. Also geographically targeting reduces a lot of administration costs.
46. For the costs and benefits of self-targeting see Dutta and Ramaswami (2002) and Alderman
and Lindert (1998). For experiments on self-targeting of food subsides in Tunisia see Tuck and
Lindert (1996).
47. This could be viable in rural areas were local staples like jowar, bajara, shorgum, millet are
preferred over rice or wheat.
48. An alternative approach to PDS adopted by the Deccan Development Society, Andhra
Pradesh provides interesting insights into peoples participation. For details see Srinivas and
Thaha (2004).
49. Efforts made by the Mumbai-based Rationing Kruti Samiti (or Action Committee on
Rationing) in this direction are laudable (Jenkins and Goetz, 2002).
50. Report of the Standing Committee of Parliament, Ministry of Consumer Affairs, Food and
Public Distribution (2003).

Downloaded from http://jas.sagepub.com by RAVI BABU BUNGA on October 22, 2009

Mane: Targeting the Poor or Poor Targeting

315

References
Alderman, H. and K. Lindert (1998) The Potential and Limitations of Self-targeted
Food Subsidies, The World Bank Research Observer 13.
Chakraborty, D. (2005) Food Security in India: Policy Challenges and Responses,
Chatham House, The Royal Institute of International Affairs. Available at:
http://www.chathamhouse.org.uk/pdf/research/asia/India%20food%20security.pdf
Chandrashekar, C.P. and J. Ghosh (2000) Public Food Stocks: The Mess and the Wasted
Opportunity, Macroscan, 8 August.
Coady, D., M. Grosh and J. Hoddinott (2003) Targeting Outcomes Redux, International
Food Policy Research Institute.
Deaton, A. and Jean Dreze (2002) Poverty and Inequality in India: A Re-examination,
Economic and Political Weekly, 7 September.
Department of Agriculture and Cooperation (2002) Ministry of Agriculture, Government of India.
Department of Agriculture and Cooperation (2003) Ministry of Agriculture, Government of India.
Directorate of Economics and Statistics (2001) Ministry of Agriculture, Government of
India.
Dreze, J. (2003a) Food Security: Beating Around the Bush. Available at:
http://www.right tofoodindia.org/data/jeanhumanscape.pdf
Dreze, J. (2003b) Hunger Amidst Plenty. Available at: http://www.indiatogether.org/
2003/dec/pov-foodsec.htm
Dutta, B. and B. Ramaswami (2001) Targeting and Efficiency in the Public Distribution
System: Case of Andhra Pradesh and Maharashtra, Economic and Political Weekly,
5 May.
Dutta, B. and B. Ramaswami (2002) Reforming Food Subsidy Schemes: Estimating the
Gains from Self-targeting in India, Discussion Paper in economics. Delhi: Indian
Statistical Institute, Planning Unit.
Farrington, J. and N.C. Saxena (2002) Food Security in India, as Annex 1 of Working
Paper 231, Food Security and the Millennium Development Goal on Hunger in
Asia. Available at: http://www.odi.org.uk/publications/working_papers/wp231/wp231_
annex1_India.pdf
Ghosh, J. (2003) The Missing Grain, Frontline 20(21): 1124.
Gill, G.L., J. Farrington, E. Anderson, C. Luttrell, T. Conway, N.C. Saxena and R. Slater
(2003) Food Security and the Millennium Development Goal on Hunger in Asia,
ODI Working Paper No. 231. Available at: http://www.odi.org.uk/publications/
working_papers/wp231.pdf
Government of India (1997) Ministry of Consumers Affairs, Food and Public Distribution. Targeted Public Distribution System (TPDS). Available at: http://fcamin.
nic.in/civil_ind.htm
HLC (2002) High Level Committee Report, Ministry of Consumers Affairs, Food and
Public Distribution, Government of India. Available at: http://fcamin.nic.in/hlc_
contents.htm

Downloaded from http://jas.sagepub.com by RAVI BABU BUNGA on October 22, 2009

316

Journal of Asian and African Studies 41(4)

Jenkins, R. and A.M. Goetz (2002) Civil Society Engagement and Indias Public Distribution System: Lessons from the Rationing Kruti Samiti in Mumbai, paper presented
at Making Services Work for Poor People, World Development Report (WDR)
2003/04 workshop held at Eynsham Hall, Oxford, 45 November.
Jha, S. and P.V. Srinivasan (2002) Targeting Food Subsidies, in S.K. Prabhu and K.
Sudarshan (eds) Reforming Indias Social Sector- Poverty, Nutrition, Health and
Gender. Social Science Press.
Lee, J. and S. Thorat (2002) Dalits and the Right to Food: Discrimination and Exclusion
in Food Related Government Programmes. New Delhi: Indian Institute of Dalit
Studies.
Mukherjee, A. (2004) Hunger Theory, Perspectives and Reality. Ashgate.
Muller, A.R. and R. Patel (2004) Shining India? Economic Liberalization and Rural
Poverty in the 1990s, Policy Brief No. 10, Food First, Institute for Food and Development Policy.
Parikh, K. (1998) Food Security: Individual and National, in I.J. Ahluwalia and I.M.D.
Little (eds) Indias Economic Reforms & Development. Oxford: Oxford University
Press.
Planning Commission (2001) Report of the Working Group on PDS and Food Security
for the Tenth Five Year Plan 20027, Government of India.
Planning Commission (2002) Excess Food Stocks, Procurement and Food Policy,
Working Paper No5/2002-PC. Available at: http://planningcommission.nic.in/reports/
wrkpapers/wp_pds.pdf
Pradhan, B.K., P.K. Roy and M.R. Saluja (2002) Assessment of Poverty Reduction
Policies and Programmes in India, paper presented at Assessment of Poverty Reduction Policies, organized by INSEA and IDRC under Micro Impacts of Macroeconomic Adjustment Policies (MIMAP) Project, Rabat, Morocco, 2831 January.
Ramaswami, B. (2001) Efficiency and Equity of Food Market Interventions, Economic
and Political Weekly, 23 March.
Right To Food Campaign (2003) Living with Hunger: A Public Hearing on the Right to
Food. Available at: http://www.geocities.com/righttofood/data/sourcebk.doc
Sagar, V. (2003) Food Security in India, paper presented at the 6th ADRF General
Meeting, Bangkok, Thailand.
Saxena, N.C. (2002) Food Assistance Programmes and Their Role in Alleviating Poverty
and Hunger in India. Available at: http://www.righttofoodindia.org/data/nc-food
hunger.doc
Sen, A. (1995) The Political Economy of Targeting, in van de Walle and Nead (eds)
Public Spending and the Poor, Theory and Evidence. Baltimore, MD: Johns Hopkins
University Press, A World Bank Book.
Sen, A. (2003) Hunger in India. Available at: http://www.righttofoodindia.org/data/
amartya.pdf
Shariff, A. and A.C. Mallick (1999) Dynamics of Food Intake and Nutrition by Expenditure Class in India, Economic and Political Weekly, 3 July.
Sridhar, V. (2000) PDS Failures, Frontline 17(11).

Downloaded from http://jas.sagepub.com by RAVI BABU BUNGA on October 22, 2009

Mane: Targeting the Poor or Poor Targeting

317

Srinivas, C.H. and S. Abdul Thaha (2004) A Study on Alternative Public Distribution
System, A Novel Initiative of Deccan Development Society, Global Research and
Consultancy Services Hyderabad, study commissioned by Deccan Development
Society. Available at: http://www.ddsindia.com/PDF/dds_pds%20text.pdf
Srivastava, P. (2004) Poverty Targeting in Asia: Country Experience of India, ADB
Institute Discussion Paper No. 5, February.
Swaminathan, M. and N. Misra (2001) Errors of Targeting: Public Distribution of Food
in a Maharashtra Village, Economic and Political Weekly, 30 June.
Tuck, L. and K. Lindert (1996) From Universal Food Subsidies to Self-targeted
Program: A Case Study in Tunisian Reform, World Bank Discussion Paper No. 351.
Washington, DC: The World Bank.
Vittal, N. (2002) Corruption in Public Life: Steps to Improve Indias Image, public
address, Mumbai, 14 February. Available at: http://cvc.nic.in/vscvc/cvcspeeches/
sp5feb02.pdf

Rahul Prahlad Mane is Appraisal Officer (Community Development) with the


Housing and Urban Development Corporation Ltd, New Delhi. He holds postgraduate qualifications from the Tata Institute of Social Sciences, Mumbai, and
Institute of Social Studies, The Hague, The Netherlands. He has over nine years
experience of working on various development themes in India viz; early childhood education, human development report, community health, housing microfinance and capacity-building programmes.
Address: D6/6056/5, Vasant Kunj, New Delhi, 110070, India (rahulmane07@
rediffmail.com)

Downloaded from http://jas.sagepub.com by RAVI BABU BUNGA on October 22, 2009