Five charts that explain the turnaround in India’s food distribution system

In its latest Global Hunger Index report released last month, the International Food Policy Research Institute (IFPRI) published new statistics on India’s child malnutrition rates, which showed a dramatic decline in the proportion of underweight children. The statistics, based on a survey conducted by the ministry of women and child development and the United Nations Children’s Fund (Unicef) in 2013, showed that the proportion of underweight children had fallen 12.8 percentage points since 2005 to 30.7%.

To be sure, details about the survey are still not known, as Udit Misra pointed out in a Mint blog post. Nonetheless, the aggregate results of the survey point to the first signs of progress in India’s battle against malnutrition after years of stasis.

The IFPRI report identified improvements in India’s food distribution system as a major contributor to the turnaround in malnutrition rates. India’s public distribution system (PDS), which provides subsidized food grains to a large section of the country’s poor, has always been held up as a classic example of inefficient state intervention.

But there are signs that the PDS is reviving. Although still leaky, the extent of leakage has declined over the past decade even as the coverage has expanded. The PDS seems to be reaching the neediest sections of the society more effectively thanks to expanded coverage and PDS reforms by states such as Chhattisgarh, Madhya Pradesh and Bihar.

In rural India, the average price paid by the poorest decile for each unit of cereals was 82% of the price paid by the richest decile in 1993-94. In 2011-12, the average price paid by the poorest decile for each unit of cereals was only 64% of the price paid by the richest decile. Thanks to an improved PDS, the rural poor have been more effectively insulated against cereal inflation. The trends in urban India are broadly similar.

Differences in prices paid for cereals by different income classes could partly be explained by the different quality of cereals consumed. There is little evidence of the quality differential increasing between 1993-94 and 2011-12. If anything, the proportion of income spent on coarser grains has declined over time even for the lowest income deciles. The relatively lower food prices paid by the lower income classes are most likely owing to the fact that they access PDS food grains much more than the rich. It is worth noting that in terms of the quantity of cereals consumed, there is hardly any difference between the rich and the poor.

In rural India, the per capita cereal consumption of the poorest decile was 89% of the per capita consumption of the richest decile in 2011-12. In urban India, the per capita cereal consumption of the poorest decile was 107% of the per capita consumption of the richest decile. Both these proportions have also gone up with time. In 1993-94, the per capita cereal consumption of the poorest decile was 68% of the richest decile in rural India, and 92% of the richest decile in urban India.

The poorest income classes are consuming more cereals and at a lesser price compared with the rich today. Despite its problems, the PDS is far more effective now than it was earlier.