Food price subsidy under public distribution system in Andhra Pradesh, Maharashtra and Rajasthan

Abstract

The present paper uses primary household level data collected in 2007-08 for the rural sector of three Indian states, Andhra Pradesh (AP), Maharashtra and Rajasthan, to evaluate the impact of the Targeted Public Distribution System (TPDS) in these three states. The paper presents a basic profile of the TPDS in these states and then goes on to assess the difference between subsidized TPDS price and market price for rice, wheat sugar and kerosene at the village level by per capita expenditure class and then conducts stochastic dominance comparisons across non-participants and participants in the three states. It examines various other characteristics of the experience with TPDS in these states including waiting times for different types of card holders, the distribution of the shares of expenditure on food items brought from TPDS among TPDS households and the distribution of the real income transferred through TPDS. The paper finally reports on a Tobit analysis of the quantity of food items such as wheat, rice and sugar demanded by households through the TPDS.