TY  - JOUR
A1  - Kozicka, Marta
A1  - Weber, Regine
A1  - Kalkuhl, Matthias
T1  - Cash vs. in-kind transfers
BT  - the role of self-targeting in reforming the Indian food subsidy program
JF  - Food Security
N2  - Historically, India has relied on subsidizing staple food as a major instrument in improving food security. Recently, however, cash transfers have entered the debate as an alternative, as they are associated with lower market distortions, leakages and fiscal costs. This study contributes to this debate by analyzing India’s Targeted Public Distribution System (TPDS). Our main objective was to explain the under-purchase, or low take-up, from the TPDS, which is typically attributed to ‘leakage’, i.e. the diversion of food grains from eligible consumers. We provide an alternative solution based on self-targeting; while poorer households increase their consumption from the TPDS, wealthier households restrain from consuming subsidized commodities. Using a large household dataset, we estimated that such a voluntary opt-out system, based on income, would save a minimum of 6.5% of grains released through the TPDS. Besides these demand-driven aspects, our analysis indicates that poor regions perform better at lowering the diversion of grains and that large targeting errors exist among female-led households. Finally, we find substantial regional price differences that would benefit the poor and rural population under a uniform cash-transfer system that does not correct for regional price levels.
KW  - Food security
KW  - Policies
KW  - India
KW  - Targeted public distribution system
KW  - Self-targeting
KW  - Cash transfers
Y1  - 2019
U6  - https://doi.org/10.1007/s12571-019-00942-x
SN  - 1876-4517
SN  - 1876-4525
VL  - 11
IS  - 4
SP  - 915
EP  - 927
PB  - Springer
CY  - New York
ER  -