13 July 2024 : The Hindu Editorial Analysis
1. The PDS impact on household expenditure
(Source – The Hindu, International Edition – Page No. – 6)
| Topic: GS2 – Governance – Government Policies |
| Context |
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Introduction to Public Distribution System (PDS) and National Food Security Act (NFSA)
- The Public Distribution System (PDS) in India, under the National Food Security Act (NFSA) 2013, aims to ensure food security by providing subsidised food grains.
- Up to 75% of rural and 50% of urban populations are eligible for subsidised food grains, freeing resources for other essential items like vegetables, milk, and protein-rich foods.
Impact of PDS on Household Expenditure
- Empirical Inquiry: The HCES: 2022-23 provides data on how households allocate resources when receiving free food items from the PDS.
- Diversification of Consumption: It investigates whether households indeed diversify spending on items beyond food grains, such as vegetables, pulses, and proteins.
Representativeness and Survey Methodology
- Coverage Estimation: The survey estimates coverage of PDS benefits, highlighting inclusion and exclusion errors—where ineligible households consume PDS items and eligible ones do not, respectively.
- Data Availability: Detailed information on household benefits from social welfare programs is outlined in the NSSO report, aiding analysis of program impact.
Imputation of Free Items in HCES: 2022-23
- Value Imputation: For the first time, NSSO imputed values of free food and non-food items received by households to enhance accuracy in estimating household consumption.
- Metrics: It calculates Monthly Per Capita Consumption Expenditure (MPCE) and MPCE with imputed values, reflecting actual consumption including free items.
Details on Imputation Methodology
- Unit Prices: NSSO used modal unit prices for imputing values of free items received by households, excluding purchases from PDS at nominal prices.
- Impact on Consumption Value: Majority of imputed value (94% rural, 95% urban) is attributed to food items, influencing overall household consumption values.
Distributional Insights from HCES: 2022-23
- Fractile Classes: The survey categorises households into fractile classes based on Monthly Per Capita Consumption Expenditure (MPCE), highlighting economic disparities and distribution patterns.
- Income Distribution: For instance, households in the bottom 5% of MPCE distribution have significantly lower average MPCE (₹1,373 rural, ₹2,001 urban), influencing poverty estimates.
Implications for Poverty Estimation
- Poverty Line Considerations: Debate persists on defining poverty lines based on expenditure or total consumption values (including free items).
- Social Transfers: In-kind transfers like PDS aid in enhancing consumption and well-being of economically disadvantaged households.
Conclusion and Policy Considerations
- The HCES: 2022-23 underscores the critical role of PDS in improving food security and potentially enhancing overall household welfare.
- It calls for nuanced poverty estimation discussions based on comprehensive consumption data, reflecting the impact of social welfare programs.
| PYQ: ‘Despite implementation of various programmes for eradication of poverty by the government in India, poverty is still existing.’ Explain by giving reasons. (150 words/10m) (UPSC CSE (M) GS-1 2018) |
| Practice Question: Discuss the significance of the Household Consumption Expenditure Survey (HCES): 2022-23 in assessing the impact of India’s Public Distribution System (PDS) on household welfare and poverty estimation. (250 Words /15 marks) |
