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Taking the ‘Pulse’ of the Public Distribution System
Courtsey: Shruti Cyriac (2015)
Suman Chakrabarti, Avinash Kishore and Devesh Roy
Pulse consumption is declining in India
0
10
20
30
40
50
60
70
0
2
4
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10
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1983 1988 1993 1999 2004 2009 2011
Rs/
kg
kg/p
ers
on
/ye
ar
BPL Households APL Households Pulse Price (Rs/kg)
25
30
35
40
45
50
55
60
65
70
75
2004-05 2009-10 2011-2012
Pulse Prices (Rs/kg)
Arhar Chana Moong Masur Udad
The difference in prices between the cheapest pulse and the more expensive ones has increase significantly over the last 10 years.
Chickpea Pigeonpea Mungbean Blackgram Lentil
Chickpea -0.92 0.07 0.02 0.02 -0.19
Pigeonpea 0.06 -0.86 0.05 0.04 -0.28
Mungbean -0.08 -0.097 -1.05 -0.03 -0.04
Blackgram -0.06 -0.08 -0.04 -1.02 0.19
Lentil 0.025 0.05 0.01 0.02 -1.10
But it doesn’t help, because you cannot make sambhar with chana daal
Elasticity of substitution between pulses is quite low
Pulses in PDS • PDS subsidizes rice and wheat only
• Discourages dietary diversity (Desai,
2014; Jha,) • Demand to diversify the PDS basket
• Rapid rise in price of key pulses
• Low cross-elasticity of substitution • Pressure to make pulses more affordable
Who does what in PDS?
Pulses Andhra Pradesh Himachal Pradesh Punjab Tamil Nadu
Arhar 1kg/family @
Rs.30/kg
N/A N/A 1 kg/family
@Rs.30/kg
Udad Dal N/A 1kg/family @ Rs. 34.99/kg Chana Dal, Moong whole
& Urd whole at the scale
of 0.5 kg per member to a
maximum of 2.5 kg per
family @ Rs. 20.00 per kg.
1kg/family @Rs.
30/kg
Chana Dal N/A 1kg/family/month @ Rs.
25/kg to all cardholders
N/A
Moong N/A 1kg/family with>=5
members @ Rs. 49.99/kg N/A
Did consumption of pulses increase due to inclusion in
PDS? By how much?
Data
• NSSO Consumption Expenditure Survey (CES): thick rounds • Collects data on total quantity and expenditure on 8 pulses
• Pulses were introduced in PDS between 61st & 66th rounds in all 4 states • We use data from earlier rounds (50th & 55th) to test for parallel trends
• NSSO CES does not collect data separately on pulse sources from PDS • We see only weighted average price of PDS and market purchases
The effect of Pulse subsidy is traceable in NSSO data
Price (Rs./kg) of Pulses that were subsidized in 2009-10 (66th round)
Pulse Andhra
Pradesh
Himachal Punajb Tamil Nadu Rest of India
Arhar 74.53 60.84 74.38
Udad 33.4 60.9 56.60 60.91
Chana dal 28.8 40.68 50.60
Moong 70 76 70.6
(1) (2)
OLS (without controls) OLS (with HH controls)
Post treatment year 2009/10 -0.381*** -0.521***
(-5.1) (-7.7)
States that provided pulse subsidy
through PDS
0.109 0.087
(0.3) (0.3)
Difference in differences estimator 0.296* 0.214*
(2.6) (2.7)
Constant 3.596*** 2.325***
(14.3) (8.6)
R2 0.003 0.067
N 225499 225499
Impact of PDS Subsidy on Pulse Consumption
VARIABLES Pulse (kg/hh/month)
Himachal Pradesh 0.383***
Punjab 0.133*
Andhra Pradesh 0.210***
Tamil Nadu 0.456***
Constant -0.391
Observations 225,233
R-squared 0.288
Biggest impact in Tamil Nadu and Himachal Pradesh; Smaller effects in Andhra Pradesh and Punjab
(1) (2)
Poor HHs (kg/hh/month) Non-poor HHs (kg/hh/month)
Post treatment year 2009/10 -0.591*** -0.694***
States that provided pulse subsidy through
PDS
0.088 0.170
Difference in differences estimator for
2009/10
0.064 0.334*
Constant 1.634*** 2.594***
R2 0.054 0.061
N 78497 56072
Surprisingly, PDS subsidy on pulses does not lead to a significant increase in consumption of pulses for the poorest households
Variables
(1) (2)
Total protein
consumed
(gm/hh/month)
Protein from pulses
(gm/hh/month)
Post treatment year 2009/10 -44.751*** -98.181***
States that provided pulse subsidy through
PDS
-44.185* 6.383
Difference in differences estimator for
2009/10 10.410 50.086*
Constant 87.894*** 74.776
R2 0.433 0.202
N 225499 225499
Though consumption of pulse protein increases, total protein consumption does not change significantly
20 rupees in pulse subsidy leads to increase in pulse consumption by 300gm/household/month
VARIABLES
(1)
Pulse (kg/hh/month)
posttreatment -0.436***
Impact_per_rupee_subsidy_entitlement 0.0153***
Constant 3.580***
Observations 225,233
R-squared 0.288
To sum up…
• Provision of 1 kg subsidized pulses leads to increase in household consumption of pulse by about 135-450 gms
• What happens to the other 550-870 gms?
• 3 possibilities • Only some households buy PDS pulse while our estimate is an average over all
households—compliers and non-compliers • Households reduce market purchase of pulses when it becomes available from PDS and • Some of the PDS pulse is diverted to the black market
• NSSO-CES is a repeated cross-section • We cannot check relative importance of these mechanisms in this data
ICRISAT-VDSA
• Panel data with HH consumption module • Monthly data on household consumption of different food items—by source
• Pulse purchase data by 600 households from 4 villages in Maharashtra and 2 villages of Andhra Pradesh for years 2006 and 2008 • Including data on quantity of tur dal purchased from PDS
• None of the households in either state received subsidized pulses in 2006
• Households in AP start getting subsidy on Tur dal in 2008
• An average household in AP got 10 kg of subsidized Tur dal in 2008
With cheaper pulse in PDS, HHs reduce market purchase and use of other pulses
(1) (2) (4) (5)
VARIABLES Tur_total(PDS+Mkt) Tur_market dalotherthantur totaldal
Impact of 10kg pulse
in PDS
6.222*** -3.841*** -2.370*** 2.904***
Constant 11.72*** 11.73*** 10.61*** 33.94***
Observations 1,266 1,266 1,266 1,266
R-squared 0.150 0.087 0.391 0.289
Number of
Households
685 685 685 685
Lagta nahin yun daal galegi… • Infra-marginal transfers will not change
consumption patterns significantly • Works like cash transfer, not nutrition intervention
• Cost of achieving nutritional goals through prices subsidy can be high • Increasing protein intake by 1gm/day = Rs.
300/capita/year
• Not enough pulse to subsidize significant quantities • 1kg/family/month = 300 gms/family/month = 0.12 gm
protein/person/day
• Instead of subsidizing consumers; focus on increasing production & productivity
Thank You!
