The case for state intervention.

Author:Swaminathan, Madhura

In India, the problems of chronic hunger and malnutrition persist on a massive scale. The prevalence of malnutrition is one of the highest in the world, higher than in some very poor countries of sub-Saharan Africa. According to the 2007 Progress for children Statistical Review by the United Nations Children's Fund, (1) the proportion of underweight children below the age of five-an indication of malnutrition-was 28 per cent in sub-Saharan Africa and 42 per cent in South Asia (43 per cent in India). The Report on State of Food insecurity in the World 2006, (2) by the Food and Agriculture Organization of the United Nations, confirms that no country comes close to India in terms of the sheer number of people living in chronic hunger.*

According to findings from the 2005/06 National Family Health Survey, (3) 45.9 per cent of children below the age of three were underweight or malnourished in terms of the standard weight-for-age criterion. The corresponding proportion in 1998/99 was 46.7 per cent. Over the last seven years, any change in this key indicator of child malnutrition has been negligible. Furthermore, the prevalence of anaemia (reduced oxygen-carrying capacity of red blood cells) has increased from 52 per cent in 1998/99 to 56 per cent in 2005/06 among women aged 15 to 49, a condition that affects 58 per cent of pregnant women. Anaemia has also risen among children aged 6 to 36 months: 74 per cent were anaemic in 1998/99 and 79 per cent in 2005/06. Data from the National Nutrition Monitoring Bureau indicated that 48.5 per cent of adults had a body mass index below the norm in 1993/94. These indicators suggest that approximately one half of the Indian population is malnourished today. The rate of decline in the absolute number of malnourished persons has been very slow, slower that the rate agreed upon at the 1996 World Food Summit in Rome. India has fallen short of meeting the Millennium Development Goals targets it set for itself.

These fins are a reflection not only of India's present, but also its future. The failure of national policy in this regard affects this generation-as malnourished children are unlikely to reach their full human potential-as well as the next generation, since anaemic and ma, nourished young girls are more likely to become mothers who will in turn give birth to underweight babies.

By the end of July 2008, the situation has probably worsened, given the rapid increase in pries of basic food items. The overall inflation rate is now at a 13-month high, close to 12 per cent, but price increases for certain food items, including rice, certain pulses, vegetables, fruits, tea and edible oils, have been even higher. In New Delhi, for example, retails prices rose 20 per cent for rice, 20 per cent for groundnut oil, 21 per cent for mustard oil and 10.5 per cent for yellow lentils between May 2007/08. According to a study by the National Sample Survey Organization, a central government body, the current high food and fuel prices are likely to push 5 per cent of the Indian population to the brink of starvation. (4)

This paper deals with the major policy interventions in India aimed at enhancing food security. My focus is on policies that concern final consumers at the household and individual levels, and not those dealing with producers. The biggest food-based intervention in India is the system of public distribution of food, a programme that aims to provide access to cheap food for households throughout the country. Two other major programmes with a food component are the Midday Meal, which provides noon meals to children in primary schools, and the Integrated Child Development Scheme or ICS, which provides supplementary nutrition to young children and pregnant and nursing mothers. In 2006/07, some 31.6 million tonnes of food grain (rice and wheat) were provided through the public distribution system (PDS), and all other food-based welfare schemes received 5.1 million tonnes. (5), (6)


In their path-breaking book, Hunger and Public Action, and the accompanying volumes of the World institute for Development Economics Research of the United Nations University series, Jean Dreze and Amartya sen make a clear distinction between "the problem of chronic hunger (involving sustained nutritional deprivation on a persistent basis) and that of famine (involving acute starvation and a sharp increase in mortality)". (7) Through case studies of several countries, the book discusses the differences in strategies and policies required to deal with the two sets of problems. (8) In the case of India, there is plenty of evidence, starting from the colonial period, on the nature of government interventions during famines, the last of which--the Great Bengal famine occurring under colonial rule in 1943--resulted in an estimated 3 million deaths. (9) Dreze and Sen argue convincingly that post-independence India has dealt effectively with periods of food shortages, droughts and other food crises in a way that prevents a famine situation. However, 1 contend that the country has failed to ensure adequate access to food for all its people.


The Public Distribution System (PDS) in India is a food-rationing mechanism that entitles households to specified quantities of selected commodities at government subsidized prices. A network of fair-price shops sells the commodities. In most parts of the country, up to 1997, the PDS was universal, and all rural and urban households with a registered residential address were entitled to rations. Eligible households were given a ration card that entitled them to buy fixed rations of selected commodities. The exact entitlement (quantity, range of commodities and prices) varies across India. In 2006, there were almost half a million fair-price shops in the country. Private agents and cooperatives ran these shops and a few were State-owned. There were a total of 222.2 million families with ration cards in India and on average one fair-price shop served 454 ration cards.

Public distribution was first started in 1939 as a wartime rationing measure. The British Government introduced it in Bombay and later extended it to six other cities and a few other regions. The drought and food shortages of the mid-sixties highlighted the need for strengthening and continuing with a system of food distribution, and the PDS was made a universal scheme in the 1970s. Thus, from its inception as a rationing scheme in big cities during the Second World War, the PDS was converted into a universal programme for the provision of cheap food and became a component of the strategy to reduce poverty.

Historically, the objectives of the food distribution system (10) have been to maintain price stability increase the welfare facilities for the poor by providing access to basic foods at reasonable prices, food rationing during situations of scarcity, and keep a check on private trade (11) for fear of speculators and black marketers. It is clear that some of these objectives are less important today than in the past. While rationing is not very relevant today, maintaining price stability is crucial in the post-liberalization period (1990s and more so the 2000s), when private traders have been given a freer hand and international price fluctuations can more easily affect domestic prices. In the context of widespread malnutrition and inflation in food prices, access to basic food at reasonable prices remains an important policy intervention.

There have been four phases, broadly speaking, in the history of the public distribution system in India. (11) The first was from its origin to I960, a period when the system was expanded to other cities, during which time distribution through the PDS was generally dependent on imports of food grain. The second phase, from 1960/78, was one that saw major organizational changes. Specifically, in response to the food crisis of the mid-1960s, the government took a holistic approach to food security and set up the Agricultural Prices Commission and the Food Corporation of India (FCI) in order to strengthen domestic procurement and storage. The third phase, from 1978/91, was marked by large-scale expansion of the PDS, supported by domestic procurement and stocks. The fourth, from 1991 to the present, is one in which the policy of universal PDS has been replaced by a targeted policy in line with the objectives of economic liberalization. Thus, over the entire period, the PDS grew from a rationing scheme in selected cities to a national universal programme of food distribution and then to a policy targeted at the poor.


In 1997, following the advice given in an influential World Bank document, (12) the Government of India introduced the Targeted PDS (TPDS) in order to curtail the food subsidy. (13) The policy targeted households based on an income criterion to demarcate "poor" and "non-poor" households. TPDS differs from earlier variants of the public distribution system in certain key respects.

Targeting: The most distinctive feature of TPDS in relation to previous policy in India is the introduction of targeting, specifically the division of the entire population into below-poverty-line and above-poverty-line categories, as determined by the Planning Commission of India, a central government think-tank. The two groups are treated differently in terms of quantities and prices. With this, the government initiated a policy of narrow targeting of households living on Incomes below the official poverty line.

Dual (multiple) prices: The second distinguishing feature is that the PDS now has dual prices for below-poverty-line and above-poverty-line consumers. A third price, introduced in 2001, is for beneficiaries of the Antyodaya scheme--for the "poorest of the poor"--in which food grain is distributed with an...

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