Food Subsidies and Nutritional Status: Evidence from ICRISAT Data

This paper attempts to assess if provision of subsidized food via India’s largest safety net, the Targeted Public Distribution System (TPDS), has improved calorie availability in dry land areas of India. Changes in relative prices may increase calorie intakes from the subsidized commodities, or induce a substitution away from inexpensive and calorie rich foods to more expensive foods. We use ICRISAT data from 2010-2012 to examine the impact of rice & wheat subsidies on calorie availability and compare it with equivalent increases in income from any other source. Our results suggest that food subsidies have a modest but positive impact on calorie intakes of households, but these differ by income group. Due to the subsidy, households increase calories from both subsidized and expensive sources of calories viz. meat, sugar and oils. Crop production affects calorie availability. We also find that that the in-kind transfer seems to be less effective than equivalent increases in incom