The document discusses research analyzing National Sample Survey (NSS) data from 1999-2000 to 2009-2010 on the impact of India's Public Distribution System (PDS) on cereal consumption among poor households. The key findings are: 1) PDS subsidies provided to poor households have increased in quantity and real value over time, but remain infra-marginal (less than 27% of total cereal consumption). 2) Despite larger PDS subsidies, total cereal consumption has declined or remained unchanged among the bottom four household expenditure deciles in both rural and urban areas. 3) Neither reformed PDS nor cash transfers are likely to increase cereal consumption or total food expenditure among poor households based on the data analysis.

1. Is the PDS
Already a Cash
Transfer?
Rethinking India’s
Food Subsidy
Policies

2. Is the PDS already a Cash Transfer? Rethinking India’s food subsidy
policies**
Sujata Balasubramanian
**This presentation is based on a forthcoming article at the Journal of Development Studies
Academic Seminar Series, HKUST Institute for Emerging Market Studies (IEMS)
2nd
March, 2015
2

3. Introduction
The debate about the PDS versus Cash Transfers
3

4. What is the PDS?
› Nation-wide network for distribution and
sale of subsidized foodgrains – rice, wheat
› From 1997, subsidies targeted at poor
› Households classified as
‘Antyodaya’ (AAY); ‘Below Poverty
Line’ (BPL) or ‘Above Poverty Line’ (APL)
› But targeting problematic - very high
inclusion & exclusion errors
4

5. Estimates of corruption and
inefficiency
› 55 percent of grain may be illegally
diverted (Jha and Ramaswami, 2010).
› Indian Planning Commission: costs of
corruption, inefficiency may be 70 per
cent (Kapur et al., 2008)
› Only about 10 percent of total subsidy
reaches the poor (Jha and Ramaswami,
2010)
5

6. PDS versus Cash Transfers
› Critics: PDS should be scrapped; poor
households would receive much higher
percentage of subsidy if government
gave them cash (Kapur et al., 2008;
Kotwal et al., 2011; Svedberg, 2012).
› PDS can be successfully reformed, given
political will - Chattisgarh state (Dreze
and Khera, 2011; Khera, 2011; Puri, 2012).
6

7. Misuse of cash?
› Potential for wasteful spending not large,
especially if transfers made to women
(Kapur et al., 2008; Kotwal et al., 2011).
› Females are strongly against shift to cash
because they fear money may be
misused (Ghosh, 2011; Puri, 2012).
› ‘Right to Food Campaign’ – concerned
about high malnutrition; lobbying for
continuation and expansion of PDS
7

8. Key findings using NSS data:
1999-’00 to 2009-’10
› Poor households treat additional PDS
subsidies entirely as a source of cash.
› PDS has not raised cereal consumption in
poor families, in spite of larger quantities
of grain and higher real subsidies.
› Neither reformed PDS nor switch to cash
transfers likely to raise either cereal
consumption or total food expenditure in
poor households.
8

9. Background
• Economic theory versus empirical studies on the
food versus cash debate
• PDS subsidies and cereal consumption in India
9

10. Why food rations or food
subsidies to poor families?
› Cash may be spent on goods and
services other than food; so governments
prefer food stamps or food rations
› BUT if quantity of rations or value of food
stamps is infra-marginal (less than planned
food consumption); households can
simply reduce market purchases of food
to offset government transfers
10

11. Economic theory versus the
“cash-out puzzle”
› Theory: if transfers infra-marginal, families
will spend same total amount on food
whether they receive cash or food
stamps/transfers (Southworth, 1945).
› US studies: much higher marginal
propensity to consume food out of food
stamps than increases in cash income,
though stamps infra-marginal for 85- 95 %
of households (Breunig et. al., 2001).
11

12. Substitution and/or income
effects of PDS
› PDS is form of in-kind food assistance
› Economic theory prediction: PDS will
create both substitution and income
effects if quantities of grain provided are
extra-marginal; if infra-marginal will only
create income effects
› Empirical studies: even if infra-marginal,
PDS may help to increase cereal
consumption more than equivalent cash
12

13. Previous work on impact of
PDS
› Kochar (2005): 2-3 year period, not all
states and only rural poor. Concludes PDS
had marginal effect on calorie intake
because it provided insufficient grain
› Svedberg (2012): 2004-05 cross-sectional
comparison of total cereal consumption
in BPL/AAY households with other poor
households. But both sets of households
got PDS subsidies; BPL/AAY are poorer
13

14. Falling cereal consumption:
PDS not considered
› Declines in average, poor (Radhakrishna,
2005; Rao, 2005; Kumar et al., 2007)
› Declines in poorest rural quartile from 1983
to 2004-2005 (Deaton and Dreze, 2009)
› Cause: reduction in physical labour (Rao,
2005; Deaton and Dreze, 2009); changes
in tastes (Sen, 2005; Kumar et al., 2007).
› Rise in relative price of cereals (Mittal,
2007); fall in real incomes (Patnaik, 2010)
14

15. Analysis of NSS data from
1999-2000 to 2009-2010
• Has the PDS raised cereal consumption in poor
households?
• Are the PDS or cash transfers likely to raise total
food expenditure in poor households?
15

16. Some preliminary issues
› Serious problems with BPL/AAY/APL
classification; so analysis is of ‘poor
households’ - bottom four income
(expenditure) deciles as per NSS data
› Quantities of grain provided by PDS to
poor families are infra-marginal: do not
exceed 27 percent of total household
consumption of cereals, in any year for
bottom four deciles (rural and urban)
16

17. Verifying conditions for rise
in cereal consumption
› PDS has actually provided larger quantity
of foodgrains to poor households
› PDS has provided larger real transfers
(transfer depends on difference between
PDS prices and open-market prices too)
› Market price of cereals has not risen
relative to food price index and general
price index
› Real income has not fallen
17

18. Explanatory Notes to data
› Monthly Per-Capita Expenditure (MPCE):
NSS reports categorize households into
different classes based on MPCE
› Price Indices: Consumer Price Index for
Agricultural Labourers (CPIAL) and
Consumer Price Index for Industrial
Workers (CPIIW)
› Cereals – only rice & wheat from PDS
› ‘Unit Value’ cereal prices
18

19. Table 1: Income transfer due to PDS; cereal prices and cereal consumption (RURAL)
First MPCE Decile Class: Bottom 10% Second MPCE Decile Class:10-20%
1999-2000 2004-2005 2009-2010
Percent change
from 1999-00
to 2009-10 1999-2000 2004-2005 2009-2010
Percent change
from 1999-00
to 2009-10
1. Quantity of PDS Rice + Wheat purchases in kgs 1.02 1.53 2.76 172.12 0.89 1.31 2.20 147.19
2. PDS Rice + Wheat kgs as percentage of Total Cereal kgs 9.70 14.72 26.88 177.10 7.65 11.53 20.45 167.43
3. Nominal Income Transfer from PDS (Rs p.c. per month) 4.68 5.37 28.11 500.72 4.03 5.30 22.28 452.35
4. Real Income Transfer from PDS in 1999-2000 Rupees 4.68 4.84 16.34 249.25 4.03 4.78 12.95 221.13
5. Real Income transfer from PDS in market kgs of cereals 0.58 0.70 2.14 269.61 0.48 0.65 1.65 242.79
6. Index of Market price of cereals with base 1999-2000=100 100 96 163 62.53 100 97 161 61.14
7. CPIAL General price index with base 1999-2000=100 100 111 172 72.00 100 111 172 72.00
8. CPIAL Food price index with base 1999-2000=100 100 107 172 72.00 100 107 172 72.00
9. Real MPCE at 1999-2000 prices 216.40 229.50 235.23 8.70 278.69 295.50 305.81 9.73
10. Total cereal consumption in kgs – PDS & all other sources 10.47 10.38 10.28 -1.80 11.64 11.33 10.76 -7.57
Third MPCE Decile Class:20-30% Fourth MPCE Decile Class: 30-40%
1999-2000 2004-2005 2009-2010
Percent change
from 1999-00
to 2009-10 1999-2000 2004-2005 2009-2010
Percent change
from 1999-00
to 2009-10
1. Quantity of PDS Rice + Wheat purchases in kgs 0.96 1.28 2.15 123.65 0.96 1.22 1.97 104.69
2. PDS Rice + Wheat kgs as percentage of Total Cereal kgs 7.82 10.96 19.41 148.09 7.64 10.20 17.31 126.41
3. Nominal Income Transfer from PDS (Rs p.c. per month) 4.31 5.19 22.58 424.20 4.16 4.95 21.39 413.59
4. Real Income Transfer from PDS in 1999-2000 Rupees 4.31 4.68 13.13 204.77 4.16 4.46 12.43 198.60
5. Real Income transfer from PDS in market kgs of cereals 0.51 0.63 1.65 222.67 0.48 0.59 1.53 216.42
6. Index of Market price of cereals with base 1999-2000=100 100 98 162 62.46 100 97 162 62.31
7. CPIAL General price index with base 1999-2000=100 100 111 172 72.00 100 111 172 72.00
8. CPIAL Food price index with base 1999-2000=100 100 107 172 72.00 100 107 172 72.00
9. Real MPCE at 1999-2000 prices 321.04 339.58 352.98 9.95 360.83 383.10 396.49 9.88
10. Total cereal consumption in kgs – PDS & all other sources 12.27 11.70 11.06 -9.85 12.56 11.98 11.36 -9.59
Notes: 1. Figures relate to monthly per-capita consumption and expenditure per household. 2. All values are in Indian rupees. 3. MPCE figures are based on the Mixed Recall
Period (MRP) method for all 3 years.
Source: Author's calculations from various NSS and CPIAL Reports; see Appendix 1 for detailed list
19

20. Table 1a: Impact of PDS transfers on cereal consumption (RURAL)
First MPCE Decile Class: Bottom10% Second MPCE Decile Class:10-20%
1999-2000 2004-2005 2009-2010
Percent change
from1999-00
to 2009-10 1999-2000 2004-2005 2009-2010
Percent change
from1999-00
to 2009-10
1. Quantityof PDS Rice + Wheat purchases in kgs 1.02 1.53 2.76 172.12 0.89 1.31 2.20 147.19
2. Real Income Transfer fromPDS in 1999-2000 Rupees 4.68 4.84 16.34 249.25 4.03 4.78 12.95 221.13
3. Real Income transfer from PDS in market kgs of cereals 0.58 0.70 2.14 269.61 0.48 0.65 1.65 242.79
4. Total cereal consumption in kgs – PDS & all other sources 10.47 10.38 10.28 -1.80 11.64 11.33 10.76 -7.57
Third MPCE Decile Class:20-30% Fourth MPCE Decile Class: 30-40%
1999-2000 2004-2005 2009-2010
Percent change
from1999-00
to 2009-10 1999-2000 2004-2005 2009-2010
Percent change
from1999-00
to 2009-10
1. Quantityof PDS Rice + Wheat purchases in kgs 0.96 1.28 2.15 123.65 0.96 1.22 1.97 104.69
2. Real Income Transfer from PDS in 1999-2000 Rupees 4.31 4.68 13.13 204.77 4.16 4.46 12.43 198.60
3. Real Income transfer fromPDS in market kgs of cereals 0.51 0.63 1.65 222.67 0.48 0.59 1.53 216.42
4. Total cereal consumption in kgs – PDS & all other sources 12.27 11.70 11.06 -9.85 12.56 11.98 11.36 -9.59
Notes: 1. Figures relate to monthlyper-capita consumption and expenditure per household. 2. All values are in Indian rupees.
Source: Author's calculations from various NSS and CPIAL Reports; see Appendix 1 for detailed list

21. Table 1b: Changes in relative prices and real incomes (RURAL)
First MPCE Decile Class: Bottom10% Second MPCE Decile Class:10-20%
1999-2000 2004-2005 2009-2010
Percent change
from1999-00
to 2009-10 1999-2000 2004-2005 2009-2010
Percent change
from1999-00
to 2009-10
1. Index of Market price of cereals with base 1999-2000=100 100 96 163 62.53 100 97 161 61.14
2. CPIAL General price index with base 1999-2000=100 100 111 172 72.00 100 111 172 72.00
3. CPIAL Food price index with base 1999-2000=100 100 107 172 72.00 100 107 172 72.00
4. Real MPCE at 1999-2000 prices 216.40 229.50 235.23 8.70 278.69 295.50 305.81 9.73
Third MPCE Decile Class:20-30% Fourth MPCE Decile Class: 30-40%
1999-2000 2004-2005 2009-2010
Percent change
from1999-00
to 2009-10 1999-2000 2004-2005 2009-2010
Percent change
from1999-00
to 2009-10
1. Index of Market price of cereals with base 1999-2000=100 100 98 162 62.46 100 97 162 62.31
2. CPIAL General price index with base 1999-2000=100 100 111 172 72.00 100 111 172 72.00
3. CPIAL Food price index with base 1999-2000=100 100 107 172 72.00 100 107 172 72.00
4. Real MPCE at 1999-2000 prices 321.04 339.58 352.98 9.95 360.83 383.10 396.49 9.88
Notes: 1. All values are in Indianrupees. 2. MPCE figures are based on the Mixed Recall Period (MRP) method for all 3 years.
Source: Author's calculations from various NSS and CPIAL Reports; see Appendix 1 for detailed list

22. Table 2: Income transfer due to PDS; cereal prices and cereal consumption (URBAN)
First MPCE Decile Class: Bottom 10% Second MPCE Decile Class:10-20%
1999-2000 2004-2005 2009-2010
Percent change
from 1999-00
to 2009-10 1999-2000 2004-2005 2009-2010
Percent change
from 1999-00
to 2009-10
1. Quantity of PDS Rice + Wheat purchases in kgs 0.91 1.28 2.08 128.35 1.11 1.16 1.76 58.92
2. PDS Rice + Wheat kgs as percentage of Total Cereal kgs 9.51 13.30 22.56 137.20 10.83 11.54 18.46 70.48
3. Nominal Income Transfer from PDS (Rs p.c. per month) 3.75 5.87 22.65 504.43 4.12 5.96 21.69 425.79
4. Real Income Transfer from PDS in 1999-2000 Rupees 3.75 4.85 12.58 235.79 4.12 4.93 12.05 192.10
5. Real Income transfer from PDS in market kgs of cereals 0.43 0.66 1.56 266.49 0.44 0.63 1.38 210.06
6. Index of Market price of cereals with base 1999-2000=100 100 101 165 64.92 100 102 170 69.57
7. CPIIW General price index with base 1999-2000=100 100 121 180 80.00 100 121 180 80.00
8. CPIIW Food price index with base 1999-2000=100 100 113 185 85.00 100 113 185 85.00
9. Real MPCE at 1999-2000 prices 291.45 298.29 308.17 5.74 389.14 399.22 425.41 9.32
10. Total cereal consumption in kgs – PDS & all other sources 9.57 9.65 9.21 -3.73 10.25 10.09 9.56 -6.78
Third MPCE Decile Class:20-30% Fourth MPCE Decile Class: 30-40%
1999-2000 2004-2005 2009-2010
Percent change
from 1999-00
to 2009-10 1999-2000 2004-2005 2009-2010
Percent change
from 1999-00
to 2009-10
1. Quantity of PDS Rice + Wheat purchases in kgs 1.20 1.04 1.72 43.50 1.14 1.01 1.50 31.93
2. PDS Rice + Wheat kgs as percentage of Total Cereal kgs 11.16 10.14 18.03 61.55 10.74 9.98 15.56 44.83
3. Nominal Income Transfer from PDS (Rs p.c. per month) 5.57 5.90 23.83 328.05 4.55 6.19 21.88 380.51
4. Real Income Transfer from PDS in 1999-2000 Rupees 5.57 4.88 13.24 137.80 4.55 5.11 12.16 166.95
5. Real Income transfer from PDS in market kgs of cereals 0.58 0.60 1.40 143.38 0.46 0.59 1.26 173.20
6. Index of Market price of cereals with base 1999-2000=100 100 103 176 75.87 100 106 176 75.88
7. CPIIW General price index with base 1999-2000=100 100 121 180 80.00 100 121 180 80.00
8. CPIIW Food price index with base 1999-2000=100 100 113 185 85.00 100 113 185 85.00
9. Real MPCE at 1999-2000 prices 463.92 482.84 512.82 10.54 537.22 565.77 604.53 12.53
10. Total cereal consumption in kgs – PDS & all other sources 10.75 10.24 9.55 -11.17 10.61 10.12 9.67 -8.91
Notes: 1. Figures relate to monthly per-capita consumption and expenditure per household. 2. All values are in Indian rupees. 3. MPCE figures are based on the Mixed Recall
Period (MRP) method for all 3 years.
Source: Author's calculations from various NSS and CPIIW Reports; see Appendix 1 for detailed list
22

23. Table 2a: Impact of PDS transfers on cereal consumption (URBAN)
First MPCE Decile Class: Bottom10% Second MPCE Decile Class:10-20%
1999-2000 2004-2005 2009-2010
Percent change
from1999-00
to 2009-10 1999-2000 2004-2005 2009-2010
Percent change
from1999-00
to 2009-10
1. Quantityof PDS Rice + Wheat purchases in kgs 0.91 1.28 2.08 128.35 1.11 1.16 1.76 58.92
2. Real Income Transfer fromPDS in 1999-2000 Rupees 3.75 4.85 12.58 235.79 4.12 4.93 12.05 192.10
3. Real Income transfer fromPDS in market kgs of cereals 0.43 0.66 1.56 266.49 0.44 0.63 1.38 210.06
4. Total cereal consumption in kgs – PDS & all other sources 9.57 9.65 9.21 -3.73 10.25 10.09 9.56 -6.78
Third MPCE Decile Class:20-30% Fourth MPCE Decile Class: 30-40%
1999-2000 2004-2005 2009-2010
Percent change
from1999-00
to 2009-10 1999-2000 2004-2005 2009-2010
Percent change
from1999-00
to 2009-10
1. Quantityof PDS Rice + Wheat purchases in kgs 1.20 1.04 1.72 43.50 1.14 1.01 1.50 31.93
2. Real Income Transfer fromPDS in 1999-2000 Rupees 5.57 4.88 13.24 137.80 4.55 5.11 12.16 166.95
3. Real Income transfer fromPDS in market kgs of cereals 0.58 0.60 1.40 143.38 0.46 0.59 1.26 173.20
4. Total cereal consumption in kgs – PDS & all other sources 10.75 10.24 9.55 -11.17 10.61 10.12 9.67 -8.91
Notes: 1. Figures relate to monthlyper-capita consumption and expenditure per household. 2. All values are in Indian rupees.
Source: Author's calculations from various NSS and CPIAL Reports; see Appendix 1 for detailed list

24. Table 2b: Changes in relative prices and real incomes (URBAN)
First MPCE Decile Class: Bottom10% Second MPCE Decile Class:10-20%
1999-2000 2004-2005 2009-2010
Percent change
from1999-00
to 2009-10 1999-2000 2004-2005 2009-2010
Percent change
from1999-00
to 2009-10
1. Index of Market price of cereals with base 1999-2000=100 100 101 165 64.92 100 102 170 69.57
2. CPIIW General price index with base 1999-2000=100 100 121 180 80.00 100 121 180 80.00
3. CPIIW Food price index with base 1999-2000=100 100 113 185 85.00 100 113 185 85.00
4. Real MPCE at 1999-2000 prices 291.45 298.29 308.17 5.74 389.14 399.22 425.41 9.32
Third MPCE Decile Class:20-30% Fourth MPCE Decile Class: 30-40%
1999-2000 2004-2005 2009-2010
Percent change
from1999-00
to 2009-10 1999-2000 2004-2005 2009-2010
Percent change
from1999-00
to 2009-10
1. Index of Market price of cereals with base 1999-2000=100 100 103 176 75.87 100 106 176 75.88
2. CPIIW General price index with base 1999-2000=100 100 121 180 80.00 100 121 180 80.00
3. CPIIW Food price index with base 1999-2000=100 100 113 185 85.00 100 113 185 85.00
4. Real MPCE at 1999-2000 prices 463.92 482.84 512.82 10.54 537.22 565.77 604.53 12.53
Notes: 1. All values are in Indianrupees. 2. MPCE figures are based on the Mixed Recall Period (MRP) method for all 3 years.
Source: Author's calculations from various NSS and CPIAL Reports; see Appendix 1 for detailed list

25. Conclusions
› Poor families have not used higher PDS
subsidies to raise cereal consumption;
used as cash to buy other goods/services
› Even a cash transfer should have raised
cereal consumption – income effects
› Neither reformed PDS nor a switch to cash
transfers will increase cereal consumption
› Next : does PDS improve nutrition through
spending on foods other than cereals?
25

26. Has total food expenditure
risen with PDS subsidies?
› If PDS acts like cash transfer, what percent
of income increases spent on food?
› Tastes may change, but malnutrition still
very high: “anthropometric indicators of
nutrition in India, for both adults and
children, are among the worst in the
world’ (Deaton and Dreze, 2009)
› In 75% of poor households, real food
expenditure has fallen 1999-00 to 2009-10
26

27. Table 3: Trends in Food and Non-food expenditure (RURAL)
First MPCE Decile Class: Bottom 10% Second MPCE Decile Class:10-20%
Percent change Percent change
1999-2000 2004-2005 2009-2010 since 1999-2000 1999-2000 2004-2005 2009-2010 since 1999-2000
1. Real MPCE at 1999-2000 prices 216.40 229.50 235.23 8.70 278.69 295.50 305.81 9.73
2. Real Food expenditure at 1999-2000 prices 145.10 143.48 144.71 -0.27 183.96 183.93 184.80 0.46
3. Real Food expenditure as percentage of real MPCE at
1999-2000 prices 67.05 62.52 61.52 -8.25 66.01 62.25 60.43 -8.45
4. Real Non-Food expenditure at 1999-2000 prices 71.31 91.19 90.52 26.95 94.73 118.19 121.01 27.74
5. CPIAL General price index with base 1999-2000=100 100 111 172 72.00 100 111 172 72.00
6. CPIAL Food price index with base 1999-2000=100 100 107 172 72.00 100 107 172 72.00
7. Calories (Kcal) consumed per-capita per day 1496 1476 1531 2.34 1733 1679 1703 -1.73
Third MPCE Decile Class: 20-30% Fourth MPCE Decile Class: 30-40%
Percent change Percent change
1999-2000 2004-2005 2009-2010 since 1999-2000 1999-2000 2004-2005 2009-2010 since 1999-2000
1. Real MPCE at 1999-2000 prices 321.04 339.58 352.98 9.95 360.83 383.10 396.49 9.88
2. Real Food expenditure at 1999-2000 prices 208.03 207.30 210.35 1.12 233.49 231.87 233.30 -0.08
3. Real Food expenditure as percentage of real MPCE at
1999-2000 prices 64.80 61.05 59.59 -8.03 64.71 60.52 58.84 -9.07
4. Real Non-Food expenditure at 1999-2000 prices 113.00 139.75 142.62 26.21 127.34 159.59 163.20 28.16
5. CPIAL General price index with base 1999-2000=100 100 111 172 72.00 100 111 172 72.00
6. CPIAL Food price index with base 1999-2000=100 100 107 172 72.00 100 107 172 72.00
7. Calories (Kcal) consumed per-capita per day 1868 1800 1798 -3.75 1957 1885 1908 -2.50
Notes: 1. All figures refer to monthly per-capita expenditure per household in Indian rupees; except calories consumed which are per-capita per day. 2. All expenditure figures
are based on the Mixed Recall Period (MRP) method for all 3 years. 3. All nominal expenditure has been converted into real terms using the CPIAL General price index as
deflator; except for Food expenditure which is deflated by the CPIAL Food price index.
Source: Author's calculations from various NSS and CPIAL Reports; see Appendix 1 for detailed list
27

28. Table 3a: Changes in Real Food and Non-food expenditure (RURAL)
First MPCE Decile Class: Bottom10% Second MPCE Decile Class:10-20%
Percent change Percent change
1999-2000 2004-2005 2009-2010 since 1999-2000 1999-2000 2004-2005 2009-2010 since 1999-2000
1. Real MPCE at 1999-2000 prices 216.40 229.50 235.23 8.70 278.69 295.50 305.81 9.73
2. Real Food expenditure at 1999-2000 prices 145.10 143.48 144.71 -0.27 183.96 183.93 184.80 0.46
3. Real Non-Food expenditure at 1999-2000 prices 71.31 91.19 90.52 26.95 94.73 118.19 121.01 27.74
Third MPCE Decile Class: 20-30% Fourth MPCE Decile Class: 30-40%
Percent change Percent change
1999-2000 2004-2005 2009-2010 since 1999-2000 1999-2000 2004-2005 2009-2010 since 1999-2000
1. Real MPCE at 1999-2000 prices 321.04 339.58 352.98 9.95 360.83 383.10 396.49 9.88
2. Real Food expenditure at 1999-2000 prices 208.03 207.30 210.35 1.12 233.49 231.87 233.30 -0.08
3. Real Non-Food expenditure at 1999-2000 prices 113.00 139.75 142.62 26.21 127.34 159.59 163.20 28.16
Notes: 1. All figures refer to monthly per-capita expenditure per household in Indian rupees. 2. All nominal expenditure has been converted into real terms using the CPIAL
General price index as deflator; except for Food expenditure which is deflated bythe CPIAL Food price index.
Source: Author's calculations from various NSS and CPIAL Reports; see Appendix 1 for detailed list

29. Table 4: Trends in Food and Non-food expenditure (URBAN)
First MPCE Decile Class: Bottom 10% Second MPCE Decile Class:10-20%
Percent change Percent change
1999-2000 2004-2005 2009-2010 since 1999-2000 1999-2000 2004-2005 2009-2010 since 1999-2000
1. Real MPCE at 1999-2000 prices 291.45 298.29 308.17 5.74 389.14 399.22 425.41 9.32
2. Real Food expenditure at 1999-2000 prices 186.67 183.05 174.58 -6.48 240.41 234.49 228.72 -4.86
3. Real Food expenditure as percentage of real MPCE at
1999-2000 prices 64.05 61.37 56.65 -11.55 61.78 58.74 53.76 -12.97
4. Real Non-Food expenditure at 1999-2000 prices 104.79 127.34 128.74 22.85 148.73 180.24 190.33 27.97
5. CPIIW General price index with base 1999-2000=100 100 121 180 80.00 100 121 180 80.00
6. CPIIW Food price index with base 1999-2000=100 100 113 185 85.00 100 113 185 85.00
7. Calories (Kcal) consumed per-capita per day 1526 1511 1544 1.18 1729 1687 1681 -2.78
Third MPCE Decile Class: 20-30% Fourth MPCE Decile Class: 30-40%
Percent change Percent change
1999-2000 2004-2005 2009-2010 since 1999-2000 1999-2000 2004-2005 2009-2010 since 1999-2000
1. Real MPCE at 1999-2000 prices 463.92 482.84 512.82 10.54 537.22 565.77 604.53 12.53
2. Real Food expenditure at 1999-2000 prices 278.31 270.39 262.75 -5.59 309.06 306.52 298.34 -3.47
3. Real Food expenditure as percentage of real MPCE at
1999-2000 prices 59.99 56.00 51.24 -14.59 57.53 54.18 49.35 -14.22
4. Real Non-Food expenditure at 1999-2000 prices 185.62 230.33 242.77 30.79 228.16 279.51 297.91 30.57
5. CPIIW General price index with base 1999-2000=100 100 121 180 80.00 100 121 180 80.00
6. CPIIW Food price index with base 1999-2000=100 100 113 185 85.00 100 113 185 85.00
7. Calories (Kcal) consumed per-capita per day 1912 1833 1749 -8.53 1968 1856 1831 -6.96
Notes: 1. All figures refer to monthly per-capita expenditure per household in Indian rupees; except calories consumed which are per-capita per day. 2. All expenditure figures
are based on the Mixed Recall Period (MRP) method for all 3 years. 3. All nominal expenditure has been converted into real terms using the CPIIW General price index as
deflator; except for Food expenditure which is deflated by the CPIIW Food price index.
Source: Author's calculations from various NSS and CPIIW reports; see Appendix 1 for detailed list
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30. Table 4a: Changes in Real Food and Non-food expenditure (URBAN)
First MPCE Decile Class: Bottom10% Second MPCE Decile Class:10-20%
Percent change Percent change
1999-2000 2004-2005 2009-2010 since 1999-2000 1999-2000 2004-2005 2009-2010 since 1999-2000
1. Real MPCE at 1999-2000 prices 291.45 298.29 308.17 5.74 389.14 399.22 425.41 9.32
2. Real Food expenditure at 1999-2000 prices 186.67 183.05 174.58 -6.48 240.41 234.49 228.72 -4.86
3. Real Non-Food expenditure at 1999-2000 prices 104.79 127.34 128.74 22.85 148.73 180.24 190.33 27.97
Third MPCE Decile Class: 20-30% Fourth MPCE Decile Class: 30-40%
Percent change Percent change
1999-2000 2004-2005 2009-2010 since 1999-2000 1999-2000 2004-2005 2009-2010 since 1999-2000
1. Real MPCE at 1999-2000 prices 463.92 482.84 512.82 10.54 537.22 565.77 604.53 12.53
2. Real Food expenditure at 1999-2000 prices 278.31 270.39 262.75 -5.59 309.06 306.52 298.34 -3.47
3. Real Non-Food expenditure at 1999-2000 prices 185.62 230.33 242.77 30.79 228.16 279.51 297.91 30.57
Notes: 1. All figures refer to monthly per-capita expenditure per household in Indian rupees. 2. All nominal expenditure has been converted into real terms using the CPIIW
General price index as deflator; except for Food expenditure which is deflated bythe CPIIW Food price index.
Source: Author's calculations from various NSS and CPIIW reports; see Appendix 1 for detailed list

31. Reforming the PDS
› What are the objectives of the PDS?
› Three main roles:
i. to act as price-stabilization and
distribution mechanism for foodgrains
ii. to provide safety net for poor families
iii. to increase food consumption, improve
nutrition in poor families.
› No additionality with regard to nutrition
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32. Thank you!
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