Impact of Universal PDS on Nutritional Intake in Odisha
Source: Flickr, Dietmut Teijgeman-Hansen

Odisha’s Kalahandi-Balangir Koraput region (KBK), which covers 8 of Odisha’s 30 districts, suffers from one of the highest rates of poverty and undernutrition rates in India. A recent paper in Food Policy investigates the effect of reform in India’s Public Distribution System (PDS) in the KBK region on nutritional intake and diet quality.

India’s PDS is an important policy instrument for addressing undernutrition, particularly among the poor.  However, the effectiveness of the PDS has been debated, especially given targeting errors (its ability to reach the poor) and its escalating costs. To overcome these concerns, numerous reforms have been proposed and are undergoing trials in recent years. These include, among others, trials focused on making the PDS universal (through making subsidized grains accessible to all) and replacing the subsidization of goods with a Direct Benefit Transfer system.

In 2008, Odisha’s state government made the PDS universal in Odisha’s KBK region (where all households are entitled to receive subsidized goods). This is in contrast to the normal functioning of the PDS which is targeted to the poorest households. This reform was undertaken as the KBK region is one of the poorest and most undernourished regions in India and a universal PDS was seen as a potential effective avenue for improving nutrition and diets. In this context, this study investigates the impact of this reform on the diet and nutrition of households in KBK.

The study is based on data from two rounds of nationally-representative consumer expenditure surveys carried out by the National Sample Survey Organization in 2004–05 and 2011–12, containing 3819 and 2973 rural households respectively. The 2004–05 data acts as a baseline while the information from 2011–12 survey captures the post-intervention outcomes. This data includes household information on the quantity of a range of food consumed and non-food items and the expenditure incurred. Quantity and expenditure information on the items consumed from the PDS including rice, wheat, sugar and kerosene are collected as a part of the surveys. These surveys also contain information on the monthly per-capita expenditure as well as other socio-economic characteristics of the households.  This data includes households in the KBK region (where the universal PDS was implemented) and the rest of Odisha (which still had the targeted PDS). This allowed the study to implement a difference in difference approach whereby it could compare/estimate the nutritional effect of a universal PDS in the KBK region to a targeted PDS in Odisha.

Using the descriptive statistics between 2004 and 2012, the study shows that the number of households receiving subsidies from the PDS in the 8 KBK districts increased from 3 million to 5.5 million and that average household consumption of rice from the PDS in these districts has increased from 8.9 kg to 20 kg per month. During this time period, macronutrient consumption (calorie, protein and fat) increased by 32 percent between 2004–05 and 2011–12.

The estimation results, comparing a universal PDS with a targeted PDS, found that the implementation of a universal PDS is directly responsible for: an 8 percent increase in the intake of calories, an 8 percent increase in the intake of protein and a 10 percent increase in the intake of fats.   Overall, the study finds that the universal PDS has improved nutrient intake and diets in the KBK region and achieved higher rates as compared to the rest of Odisha. Regarding the consumption of particular products, the study finds a greater consumption of calories from pulses, animal proteins, fruits and vegetables and edible oils. There has been a 42 percent increase in the calories from pulses in the diet, 27 percent in the case of calories from eggs, fish and meat, 33 percent from vegetables and fruits and 27 percent from edible oils. No increase in the consumption of dairy products was found.

In conclusion, the study highlights a number of implications based on these findings and questions whether a universal PDS would achieve similar results in other areas of India. The paper highlights that its findings support existing evidence from other states, such as Tamil Nadu and Himachal Pradesh where expanded PDS coverage has improved nutrition and that a consumer food subsidy goes a long way in ensuring a minimum consumption of calories. However, the study highlights that based upon these results, while a universal PDS improves nutrition and diets, it does not necessarily support an argument for implementing a universal PDS across India. This is because the KBK region is amongst the poorest and most nutrient deficient households in the country, as such a universal PDS is unlikely to have the same results in other (richer) states that have better nutrition indicators. This is partly because the PDS focuses on the distribution and consumption of cereals and expanding this may not incentivize the consumption of more nutritious foods in richer states. In this regard, further research is needed into the potential of expanding PDS entitlements, especially regarding including more nutritious foods in the ambit of the PDS.

The full paper can be accessed here

By: Bas Paris

Photo credit:Flickr, Dietmut Teijgeman-Hansen