The presentation was part of the Food Security in India: the Interactions of Climate Change, Economics, Politics and Trade workshop, organized by IFPRI-CUTS on March 11 in New Delhi, India. The project seeks to explore a model for analyzing food security in India through the interactions of climate change, economics, politics and trade.

1. NFSA and food security
Reetika Khera,Reetika Khera,
IIT Delhi

2. Five common misconceptions about
NFSA
1 “D ’t d thi f t iti ” b t it d1. “Doesn’t do anything for nutrition”: but it does
include maternity entitlements & ICDS
2 “These schemes don’t work” Recent evidence2. “These schemes don’t work”: Recent evidence
shows a revival
3 “It is anti farmer”: a large part of food subsidy3. It is anti‐farmer : a large part of food subsidy
goes to farmer as support prices!
4 “it is unaffordable”: It is approx 1% of GDP4. it is unaffordable : It is approx 1% of GDP
5. “Grain requirements are too high”: NFSA
requires same level of procurement as seen inrequires same level of procurement as seen in
past few years

3. Revival: Evidence and ExplanationsRevival: Evidence and Explanations
id f i l• Evidence of PDS revival
– Zero purchase households has declined
– Leakages have declined
– Poverty impact is substantialy p
• Time to junk the Planning Commission (2005)
report! See Himanshu and Sen (2013)
instead!

4. Corruption control: some evidenceCorruption control: some evidence
Diversion of PDS grain in selected states (2004-5, 2009-10 and 2011-12)
85.2
90.0
100.0
Diversion of PDS grain in selected states (2004 5, 2009 10 and 2011 12)
76.3
70.0
80.0
51.8
46.3
42.4
40 0
50.0
60.0
30.2
19.9
20 0
30.0
40.0
10.4 10.2
0.0
10.0
20.0
0.0
JH OR Chh
Source: Calculated from Monthly foodgrains bulletin and National Sample Survey data from 2004-5 and 2009-10.

5. Bihar Chhattisgarh
Proportion of BPL households who did not get any
foodgrains from the PDS in the last 3 months (%)
35 0
foodgrains from the PDS in the last 3 months (%)
Proportion of BPL respondents who said that they
‘normally’ get their full PDS entitlements (%)
18 97
Proportion of BPL respondents who agree with the
entries in their ration cards (%)
25 94
Proportion of BPL households who skipped meals 70 17Proportion of BPL households who skipped meals
in the last three months (%)
70 17
Proportion of BPL households who would support 54 2
the PDS being replaced with equivalent cash
transfers (%)
‘Poverty-gap index’ of rural poverty 2009–10bPoverty gap index of rural poverty, 2009 10
(%)
Without implicit subsidy
14.4
13.8
16.3
9.9
With implicit subsidy
Percentage reduction
13.8
4
9.9
39
Drèze and Khera (2013), Rural Poverty and the PDS, Economic and Political Weekly

6. Explanations for the revivalExplanations for the revival
d id f• Demand side factors
– Expanded coverage, reduction in price,
diversification
• Supply side factorspp y
– Computerization, management of shops, official
commissions, door‐step delivery, regularity and p y g y
predictability
• See Khera (2011) for more

7. NFSA: Implementation Challenges (1)NFSA: Implementation Challenges (1)
• Identification of households
– Criteria
• Inclusion vs. Exclusion approach (e.g., Odisha,
Chhattisgarh)
• 1997 or 2002 BPL lists (e.g., Rajasthan)
– Procedure:Procedure:
• SECC data based survey or self‐declaration
• New cards vs old cardsNew cards vs. old cards

8. NFSA: Implementation Challenges (2)NFSA: Implementation Challenges (2)
• Entitlements: Per capita or per household?
– Per capita: Better for larger families, definition of
“household”household
– Per household: Clarity of entitlements, hassles
and harassment , disruptive transition?

9. NFSA: Implementation Challenges (3)NFSA: Implementation Challenges (3)
• Integration with UID: Claims
– Corruption control: Yes, it’s a problem, but how p , p ,
much can UID help?
– Inclusion: Massive exclusion but what is theInclusion: Massive exclusion, but what is the
source of exclusion?
Portability: Desirable but is UID necessary to– Portability: Desirable, but is UID necessary to
achieve it? No.

10. Leakages Inclusion and PortabilityLeakages, Inclusion and Portability
• Leakages: Technology? Yes. UID? No.
– Computerization alone helps a lotp p
• Inclusion: Duplicates/ghosts are a problem,
but exaggeratedbut exaggerated.
– Mis‐classification, UID can do nothing
• Portability: Requires fixing supply chain
management CORE PDS in Chhattisgarhmanagement. CORE PDS in Chhattisgarh