ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Reforming or Replacing the Public Distribution System with Cash Transfers?

The targeted public distribution system, intended to provide subsidised food to poor households, is the largest welfare programme in India, with a budget corresponding to about 1% of the net national product. Several studies have found the system to be inefficient and costly in assisting the poor. This paper analyses the case for, and against, replacing a reformed version of this system with a targeted and differentiated cash transfer scheme. Such a scheme could cover about two-thirds of households, and make far larger transfers to the poorest compared to the actual subsidy embedded in the current system, eliminating the risk of large exclusion errors. Further, the overall budget can be held at the present outlay level. It is argued that most of the objections to such a transfer scheme can be circumvented at the design stage.

Estimates of Child Malnutrition in India

This article analyses the comparability of the estimates of child malnutrition emanating from the National Family Health Surveys and the National Nutrition Monitoring Bureau. The issue has been highlighted by Deaton and Drèze (EPW, 14 February 2009). They find it puzzling that according to the NFHS, the prevalence of child malnutrition as measured by weight for age was almost unaltered between 1998-99 and 2005-06, while NNMB estimates suggest a substantial decline. This article undertakes a more detailed assessment of these two sets of estimates and finds that once the comparison is confined to comparable units, the difference is largely eliminated.
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