UPSC EDITORIAL ANALYSIS : The PDS impact on household expenditure

Source: The Hindu

• Prelims: Current events of national and national and international importance(NFSA, PDS, NITI Ayog etc)

• Mains GS Paper III: Issues related to poverty and hunger, institutions and bodies constituted for the protection of vulnerable sections of society etc

ARTICLE HIGHLIGHTS

• Upto 75% of the rural population and 50% of the urban population are eligible for subsidized food grains under the National Food Security Act (NFSA), 2013.

INSIGHTS ON THE ISSUE

Context

Public distribution system (PDS):

• It is an Indian food Security System established under the Ministry of Consumer Affairs, Food, and Public Distribution.

• PDS evolved as a system of management of scarcity through distribution of food grains at affordable prices.

• PDS is operated under the joint responsibility of the Central and the State Governments

National Food Security Act (NFSA), 2013:

• Objective: To provide for food and nutritional security in the human life cycle approach Ensuring access to adequate quantities of quality food at affordable prices to people to live a life with dignity.

• To provide for food and nutritional security in the human life cycle approach

• Ensuring access to adequate quantities of quality food at affordable prices to people to live a life with dignity.

• Coverage: 75% of the rural population and upto 50% of the urban population for receiving subsidized foodgrains under Targeted Public Distribution System (TPDS).

• Eligibility: Priority Households to be covered under TPDS, according to guidelines by the State government. Households covered under existing Antyodaya Anna Yojana.

• Priority Households to be covered under TPDS, according to guidelines by the State government.

• Households covered under existing Antyodaya Anna Yojana.

Provisions:

• 5 Kgs of foodgrains per person per month at 3/2/1 per Kg for rice/wheat/coarse grains.

• The existing AAY household will continue to receive 35 Kgs of foodgrains per household per month.

• Meal and maternity benefit of not less than 6,000 to pregnant women and lactating mothers during pregnancy and six months after the child birth.

• Meals for children upto 14 years of age.

• Food security allowance to beneficiaries in case of non-supply of entitled foodgrains or meals.

• Setting up of grievance redressal mechanisms at the district and state level.

Household Consumption Expenditure Survey (HCES):2022-23:

• HCES:2022-23 canvassed information on food and non-food items received by households free of cost through various social welfare programmes.

• The report was published by the National Sample Survey Office (NSSO).

• The objective of the survey is not to provide precise estimates of the proportion of households receiving benefits under every scheme.

• Survey estimates of coverage of a programme will be lower than that suggested by the administrative data.

• Advantage of the survey data: It allows us to examine the characteristics of households that report benefits from the programmes.

Challenges:

• Unless detailed information is sought on the nature of an ailment or disease in the case of health shocks Waiver of fees or reimbursement in school or college, imputing the value of free medical services and education services received by the households is not possible.

• Waiver of fees or reimbursement in school or college, imputing the value of free medical services and education services received by the households is not possible.

• In the case of education and health, the NSSO conducts separate surveys where detailed information is canvassed on out-of-pocket expenditure and free services that are available by a household.

• Insurance products are treated as an investment and not consumption.

• The relevant information is sought as part of the All India Debt & Investment Survey, and not as part of the HCES.

NSSO value figures of selected food and non-food items(which were received free):

• This allows us to compute two metrics.: Monthly Per Capita Consumption Expenditure (MPCE) of a household, which is the ratio of monthly consumption expenditure to household size. Value of household consumption in a month considering the imputed value of free food and non-food items, i.e., ‘MPCE with imputation’.

• Monthly Per Capita Consumption Expenditure (MPCE) of a household, which is the ratio of monthly consumption expenditure to household size.

• Value of household consumption in a month considering the imputed value of free food and non-food items, i.e., ‘MPCE with imputation’.

NSSO report:

• It suggested two sets of values for each State and by sector (rural, urban) for imputation of food and non-food items received free of cost — model unit price and the 25th percentile unit price.

• Imputation has been done using the modal price only for items received free.

• The operative word is free and not subsidized. No imputation is done for the purchase of food items from the PDS at nominal regulated prices.

• No imputation is done for the purchase of food items from the PDS at nominal regulated prices.

• The main item that a large proportion of households received free was foodgrains from the PDS.

• At The All-India level: In rural and urban India, about 94% and 95%, respectively, of the value of imputed items is attributable to food items.

• The imputed value for food is ₹82 and ₹59 in rural and urban areas, respectively.

• The report has the average value of MPCE among those in the bottom 5% of distribution by the MPCE, 5-10, 10-20, 30-40, 40-50, 50-60, 70-80, 80-90, 90-95 and top 5% of distribution. Each interval is called a fractile class.

• Each interval is called a fractile class.

• The average MPCE of the bottom 5% of MPCE distribution is ₹1,373 in rural and ₹2,001 in urban. The MPCE of 5% of Indians is less than this cut off.

• The MPCE of 5% of Indians is less than this cut off.

• 20% of those in this fractile class, or about 1% of India’s rural population is actually in the next fractile class, i.e., 5%-10%. Similar patterns are observed till the sixth fractile class.

• Similar patterns are observed till the sixth fractile class.

Steps taken by Government for food security:

• Paramparagat Krishi Vikas Yojana(which promotes organic farming)

• Pradhan Mantri Krishi Sinchayee Yojana(which focuses on more crops per drop for improved water use)

• Soil Health Management(fosters Integrated Nutrient Management under the National Mission for Sustainable Agriculture)

• Pradhan Mantri Garib Kalyan Anna Yojana (PMGKY

• Pradhan Mantri Poshan Shakti Nirman Yojana (PM POSHAN Scheme)

• Take-home rations

• Integrated Child Development Services (ICDS)

• Digitisation and measures such as rice fortification, better health, and sanitation.

Way Forward

• Depending on their use case, researchers can impute the modal value for calculations for purchases from the PDS at the subsidized rate. It will increase the average MPCE with imputation.

• It will increase the average MPCE with imputation.

• A limited imputation exercise establishes that in-kind social transfers help increase the value of consumption of poorer households.

• consider whether one needs to estimate the number of poor households based on the expenditure or based on the total value of consumption which includes the value of free items consumed. In kind social transfers have implications for the well-being of households that are at the bottom end of consumption or income distribution.

• In kind social transfers have implications for the well-being of households that are at the bottom end of consumption or income distribution.

QUESTION FOR PRACTICE

• How has the emphasis on certain crops brought about changes in cropping patterns in the recent past? Elaborate the emphasis on millets production and consumption.(UPSC 2018) (200 WORDS, 10 MARKS)

Editorial Analysis – 13 July 2024 [PDF]