Public Distribution System in Tamil Nadu: Implications for Household Consumption

Abstract

Food and nutrition insecurity is a reality for a large number of people in India. Social safety nets to ensure food security of the poor and vulnerable become important in such a scenario. The Public Distribution System (PDS) in India is an example of one such safety measure. PDS distributes essential cereals such as rice and wheat as well as sugar and kerosene to people at subsidised prices through a network of fair price shops (FPS), popularly referred to as ration shops. This paper explores the role of the Public Distribution System (PDS) on consumption and household savings, across different sections of population, in rural and urban Tamil Nadu. Using National Sample Survey Organisation (NSSO) data for the year 2011-12 as well as data from a primary study conducted in 2015, the paper demonstrates a significant, positive contribution of PDS to cereal/calorie consumption and savings across all sections of the population in Tamil Nadu. In this, the importance of PDS is found to be much higher among the poorer sections of the population compared to the rest in both rural and urban areas of Tamil Nadu. The findings are important in the current context where direct food transfer programmes, such as the PDS, are seen to be less effective compared to cash transfers.