Quality of Public Distribution System-Why It Matters

Quality of Public Distribution System Why It Matters Pulapre Balakrishnan Bharat Ramaswami This paper argues that price formation in foodgrains markets cannot be fully understood without reference to consumer switches between the open market and the public distribution system (PDS) induced by quality differences. This is an important aspect of the food economy, for an evaluation of state intervention must consider not only the welfare of its targeted beneficiaries but also the welfare of households without access to the PDS but who may nevertheless be affected if the working of the PDS has a bearing on the open market.