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Figure 1 Framework of the methodology followed in calculating PDS grain leakages First- any literature on the PDS leakage warrants the study of both- the exclusion errors (where based on consumer expenditure levels, actual BPL families are issued APL cards and sometimes are devoid of any cards, thus excluding them from getting the benefits under the system) and the inclusion errors (where based on expenditure levels, people who should have been categorised as APL are issued BPL cards). However, in the paper, we limit the estimation of grain leakage to the

Figure 1 Framework of the methodology followed in calculating PDS grain leakages First- any literature on the PDS leakage warrants the study of both- the exclusion errors (where based on consumer expenditure levels, actual BPL families are issued APL cards and sometimes are devoid of any cards, thus excluding them from getting the benefits under the system) and the inclusion errors (where based on expenditure levels, people who should have been categorised as APL are issued BPL cards). However, in the paper, we limit the estimation of grain leakage to the

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Source: Authors' caculation based on data from Food Bulletin and NSSO (68th round) Figure 2: State/UTs wise Percentage Leakages of grains from PDS (2011-12
Source: Authors' caculation based on data from Food Bulletin and NSSO (68th round) Figure 2: State/UTs wise Percentage Leakages of grains from PDS (2011-12
Source: Authors' caculation based on data from Food Bulletin and NSSO (68th round)
Source: Authors' caculation based on data from Food Bulletin and NSSO (68th round)
‘igure 4 State/UTs wise Poverty percentages (2011-1:
‘igure 4 State/UTs wise Poverty percentages (2011-1:
Figure 5 Relative shares (%) of Selected states in India's poor (2011-12 Source: Authors' caculation based on data from Planning Commission (2011-12)
Figure 5 Relative shares (%) of Selected states in India's poor (2011-12 Source: Authors' caculation based on data from Planning Commission (2011-12)
So, one can deduce that the major beneficiaries of PDS are people from those states that hav smaller number of poor. In a way, it helps more the better offs than the real poor of the country. hi fact, reading together of two state-wise series of poverty and leakage buttressed our statemen above. Upon reading the state-wise series of relative shares of each state in the national leakag and the national poor, we found the two series to have a strong positive correlation of 0.89, whicl implies that the percent contribution to leakage increased with states where greater percent o India’s poor resided. In particular, we found that 5 states which are home to close to 60% of India’: poor accounted for close to 50% of the total grain leakage in the country in the year 2011-12. poor accounted for close to 50% of the total grain leakage in the country in the year 2011-12. Therefore, it is not just the inefficiency of PDS (in terms of high leakages), but its existence is also questioned on equity grounds. If one has to pour more grains under NFSA in this TPDS, it is important to fix it first or better still- find an alternative mechanism that can help the poor more and plug these large leakages. (Gulati and Saini, 2014)
So, one can deduce that the major beneficiaries of PDS are people from those states that hav smaller number of poor. In a way, it helps more the better offs than the real poor of the country. hi fact, reading together of two state-wise series of poverty and leakage buttressed our statemen above. Upon reading the state-wise series of relative shares of each state in the national leakag and the national poor, we found the two series to have a strong positive correlation of 0.89, whicl implies that the percent contribution to leakage increased with states where greater percent o India’s poor resided. In particular, we found that 5 states which are home to close to 60% of India’: poor accounted for close to 50% of the total grain leakage in the country in the year 2011-12. poor accounted for close to 50% of the total grain leakage in the country in the year 2011-12. Therefore, it is not just the inefficiency of PDS (in terms of high leakages), but its existence is also questioned on equity grounds. If one has to pour more grains under NFSA in this TPDS, it is important to fix it first or better still- find an alternative mechanism that can help the poor more and plug these large leakages. (Gulati and Saini, 2014)
Ex. For Andhra, urban areas consume 1.99 kgs of rice from PDS and rural areas consume 3.5 kgs from PDS. Census 2011 says that 33.4% of the Andhra population is urban and remaining is rural. Using this percentage break-up as weights, we calculate the total state number (1.99*0.334+3.5*0.666). This means that in the state of Andhra, per capita monthly PDS rice consumption is 3 kgs.
Ex. For Andhra, urban areas consume 1.99 kgs of rice from PDS and rural areas consume 3.5 kgs from PDS. Census 2011 says that 33.4% of the Andhra population is urban and remaining is rural. Using this percentage break-up as weights, we calculate the total state number (1.99*0.334+3.5*0.666). This means that in the state of Andhra, per capita monthly PDS rice consumption is 3 kgs.
Source: NSSO
Source: NSSO
Source: Authors’ Calculations
Source: Authors’ Calculations
Base Case: Calculating Effective subsidy (INR/k): Present system of TPDS under NFSA for 51.9 mntns
Base Case: Calculating Effective subsidy (INR/k): Present system of TPDS under NFSA for 51.9 mntns
b. For 3 million tonnes of tide-over allocation given to 20 states under NFSA
b. For 3 million tonnes of tide-over allocation given to 20 states under NFSA
Thus, the savings to the exchequer in each case would be as follows:
Thus, the savings to the exchequer in each case would be as follows:
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