Public Distribution System (PDS)

India's Public Distribution System (PDS) has long been a cornerstone of food security, ensuring access to subsidised cereals for millions of people. However, a recent Crisil study using the ‘Thali Index’ has exposed a stark reality: food deprivation remains widespread, particularly in rural areas, despite the large-scale support offered by PDS. The study reveals that up to 50% of rural Indians and 20% of urban Indians cannot afford even two balanced meals a day, indicating that food deprivation extends far beyond what is captured by income-based poverty measures.

This finding contrasts with reports from the World Bank's 2024 Poverty and Equity Brief, which states that extreme poverty in India has dramatically decreased from 16.2% in 2011-12 to 2.3% in 2022-23. Yet, even with this reduction in income poverty, food insecurity remains pervasive.

The Thali Index: Unveiling Hidden Food Deprivation

The ‘Thali Index’ offers a new perspective by measuring food deprivation based on whether households can afford a basic, balanced meal (the thali) comprising rice, dal, roti, vegetables, curd, and salad. This approach highlights the nutritional gaps that are often missed in conventional poverty measures, which focus solely on calories or income. The Thali Index underscores that many families, despite seemingly low official poverty levels, cannot afford two balanced meals per day.

Key Issues in the Current PDS System

While the PDS has made strides in ensuring calorie security, especially for cereals, it has significant limitations when it comes to ensuring nutritional security:

1. Cereal-Centric Focus:

   • The PDS primarily distributes rice and wheat, which are calorie-rich but protein-poor, neglecting other key nutrients such as protein, vitamins, and minerals.

   • Pulses, often the only affordable source of protein for poor households, are not adequately subsidised, leaving a major nutritional gap.

2. Nutritional Inequity:

   • The poorest 5% of rural households consume only half the amount of pulses as the wealthiest 5%, indicating a severe nutritional imbalance.

   • In rural India, top 10% of consumers receive up to 88% of the subsidies allocated to the poorest 5%, showcasing leakage and misallocation within the system.

3. Fiscal and Operational Inefficiencies:

   • The extension of free food grain under the National Food Security Act (NFSA) to 80 crore people has led to over-allocation, with many of these households already consuming adequate cereals.

   • This misalignment wastes public funds, increases the cost for procurement, storage, and distribution for the Food Corporation of India (FCI).

Challenges in Implementing Nutrition-Sensitive Reforms in PDS

While the need to shift to a nutrition-sensitive PDS is clear, several challenges complicate its implementation:

1. Accurate Targeting of Beneficiaries:

   • It is difficult to identify households that consume below the "two thalis a day" norm, risking exclusion of the poorest or inclusion of better-off households in the program.

2. Political Sensitivity:

   • The PDS system is politically sensitive. Reducing subsidies on cereals, even for wealthier groups, may provoke backlash from middle-class and better-off families who benefit from the system.

3. Logistical Hurdles:

   • Pulses are more challenging to procure and distribute than rice or wheat, due to price volatility and smaller production volumes.

   • Expanding pulse inclusion would require significant investments in procurement, storage, and distribution infrastructure.

4. Fiscal Sustainability:

   • Expanding subsidies for pulses while maintaining support for cereals could strain the food subsidy bill, risking unsustainable fiscal burdens.

5. Corruption and Misallocation:

   • Subsidised food items are often diverted to open markets, and expanding the basket to include pulses may increase black-marketing and corruption.

6. Administrative Capacity:

   • A shift towards a nutrition-sensitive PDS requires better data systems, digital tracking, and strong monitoring to prevent inefficiency and ensure benefits reach the needy.

Proposed Reforms for a Nutrition-Sensitive PDS

1. Define a Minimum Balanced Diet:

   • Establish a "minimum balanced diet" standard (e.g., two thalis per day) that includes cereals, pulses, vegetables, and dairy.

   • The basket should be region-specific, accounting for local dietary patterns and costs.

2. Target Subsidies Based on Need:

   • Use the latest Household Consumption Expenditure Survey (HCES) data to identify households that fall below the nutritional norm.

   • Provide full PDS benefits to these households and gradually reduce or eliminate subsidies for those who exceed the norm.

3. Expand Pulse Inclusion:

   • Increase distribution of pulses (such as tur, moong, and chana) through the PDS, focusing on low-income households.

   • Link pulse procurement with Minimum Support Price (MSP) and buffer stocking mechanisms to stabilise prices.

4. Reduce Excess Cereal Allocation:

   • Trim cereal quotas where consumption has already met desired levels.

   • Use the savings to expand the food basket to include nutrient-rich foods like pulses and vegetables.

5. Pilot Programs and Gradual Scaling:

   • Implement state-wise pilot programs to test the impacts of a nutrition-sensitive PDS before a nationwide rollout.

   • Monitor the effects on nutrition, fiscal costs, and supply chains.

6. Leverage Technology for Better Targeting:

   • Use digital ration cards, Aadhaar linkage, and real-time data to improve transparency and reduce leakages.

   • Promote nutrition literacy to encourage the uptake of a more diverse diet.

7. Integrate with Existing Nutrition Schemes:

   • Align the PDS with other initiatives like Poshan Abhiyaan, Mid-Day Meal schemes, and Integrated Child Development Scheme (ICDS) to maximise impact.

Poverty Committees in India: Evolution of the Poverty Line Based on Consumption

India has seen a long evolution in defining and calculating poverty. Over the years, various committees and expert groups have proposed methods to quantify poverty based on consumption levels. These approaches have ranged from focusing on caloric intake to a more holistic view of nutritional needs and non-food consumption.

1. Working Group (1962)

• Objective: The Working Group was one of the first attempts to quantify the poverty line in India.

• Poverty Line: The group quantified the poverty line based on minimum food and non-food needs.

• Amount:

  • Rural Areas: Rs 20 per capita per month (1960-61 prices).

  • Urban Areas: Rs 25 per capita per month (1960-61 prices).

• Key Feature: It divided the poverty line into rural and urban categories, marking the first time such a distinction was made.

2. VM Dandekar & N. Rath (1971)

• Objective: This committee focused on caloric intake as the basis for poverty estimation.

• Poverty Line: It derived the poverty line based on the expenditure required to meet a daily intake of 2,250 kcal per capita.

• Key Feature: This was a calorie-based approach that reflected the basic energy requirements for a person to live.

3. Y.K. Alagh (1979)

• Objective: This committee built upon earlier caloric-based measures but introduced a refined estimation.

• Poverty Line: The poverty line was based on per capita consumption required to meet basic calorie needs.

  • Rural Areas: 2,400 kcal/day.

  • Urban Areas: 2,100 kcal/day.

  • The corresponding monetary values at 1973-74 prices were:

    • Rural: Rs 49.09 per month.

    • Urban: Rs 56.64 per month.

• Key Feature: The committee continued to use caloric needs as a key determinant but adjusted for rural and urban distinctions.

4. Lakdawala Expert Group (1993)

• Objective: This group refined the poverty line methodology by recognizing regional price differences.

• Poverty Line:

  • It retained the Alagh Committee's poverty lines at the national level but introduced state-specific poverty lines.

  • This adjustment took into account regional price variations, ensuring that the poverty line more accurately reflected local living conditions.

• Key Feature: The introduction of state-specific poverty lines was a significant step toward recognizing the diversity in cost of living across India.

5. Tendulkar Expert Group (2009)

• Objective: This committee aimed to create a more inclusive and nationally consistent poverty line framework.

• Poverty Line:

  • The committee recommended a single all-India urban poverty line basket to derive state-level poverty lines for both rural and urban areas.

  • It shifted the focus from a purely calorie-based approach to a broader focus on nutritional outcomes and recommended that poverty lines reflect both food and non-food items.

• Key Feature: This shift marked a major change in the approach to defining poverty. It moved away from the sole focus on calories and towards a multidimensional approach.

6. Rangarajan Committee (2014)

• Objective: This committee was set up to revisit the poverty line and refine earlier methodologies, especially in light of changing consumption patterns.

• Poverty Line:

  • The committee reintroduced separate rural and urban poverty lines.

  • The consumption basket included both food and non-food items, reflecting a more comprehensive understanding of poverty.

  • Poverty Line (Monthly Per Capita Expenditure):

    • Urban Areas: Rs 1,407.

    • Rural Areas: Rs 972.

• Key Feature: While the committee recommended more holistic poverty measures, the government did not officially adopt the report.

Key Trends and Shifts in Poverty Measurement

1. From Calories to Nutrition: Over time, the focus shifted from calorie-based poverty lines to incorporating broader nutritional outcomes. The Tendulkar Committee (2009) and the Rangarajan Committee (2014) were key proponents of moving beyond simple calorie consumption.

2. Regional Disparities: The Lakdawala Expert Group and the Rangarajan Committee highlighted the importance of state-specific poverty lines, acknowledging that the cost of living varies significantly across India.

3. Inclusion of Non-Food Items: The later committees, especially the Rangarajan Committee, incorporated non-food items into the consumption basket, recognizing that poverty is not just about food security but also about access to other essentials like housing, healthcare, and education.

4. Political and Policy Impact: While the reports provided vital inputs into India’s poverty estimation methodology, the implementation and adoption of the recommendations have often been influenced by political considerations. The Rangarajan Committee's report was notably not adopted, reflecting the challenges of aligning policy with evolving definitions of poverty.

Conclusion: The Path to Equitable and Nutritious Food Access

A reformed PDS that focuses on nutritional equity is essential for bridging India's hidden hunger gap. By prioritising targeted subsidies, reducing over-allocation of cereals, and expanding access to nutrient-rich foods, India can move closer to ensuring that all its citizens have access to a balanced and nutritious diet. The success of these reforms will depend on careful targeting, fiscal discipline, and efficient implementation backed by robust data systems. The future of India's food security lies not just in distributing calories but in promoting nutrition that sustains both health and dignity