PDS has flaws, but cheap canteens are not a solution
Leaving aside the safety net, the jury is out on the political dividends from expanding the nodes of food subsidy
Food subsidy in India has moved along the value chain. While the Public Distribution System (PDS) has remained a pillar for providing subsidised food, the latest pier is about prepared food. From farm to fork has now become from anywhere to a café. Amma canteen, the avant-garde route of food subsidy started by J Jayalalithaa is now seen as the beacon for providing cheap food and state after state have joined the race. Odisha has a scheme called Aahaar, Madhya Pradesh has Deendayal Rasoi and forthcoming in Uttar Pradesh is Annapurna Bhojnalaya. Recently, Congress vice president Rahul Gandhi announced the launch of Indira canteens across Bengaluru for poor labourers and migrants.
Where does this subsidy contest go from here? Leaving aside the safety net element, the jury is out on the political dividends from expanding the nodes of food subsidy. In the subsidy race, benchmarking can be a bane for the low performers. How many remember the improvements in PDS over and above poster boys such as Chhattisgarh and Tamil Nadu? Moreover, the economics of these schemes are still not clear. The PDS has remained the holy grail despite widespread and endemic prob- lems. Also, the costs of these schemes can spiral out of control. Are these substitutes or complements to the PDS? What happens if the system moves towards a direct benefit transfer? A first order policy question is: With the mushrooming of these food canteens as a parallel system, will it stifle the evolving changes across states to strengthen the PDS or experiment with new delivery mechanisms? In our research, surveys in Odisha have showed the suppressive role of schemes such as Aaahar towards the PDS. Beneficiaries in Odisha seemed apathetic towards the suboptimal rice being given in the PDS.
Also, as the subsidy moves along the value chain, it is pertinent to assess what it means for the elaborate procurement system of grains feeding the PDS? The canteen programmes will scale up because of the money and time it saves, and it is convenient. How this system is provided for and the implications it has for back-end are critical issues to address. Will the system distort the production choices more towards cereals? Will food safety and nutrition be preserved particularly in cases where institutions are weak? The records on the mid-day meal scheme in terms of these attributes have been far from encouraging. The big-ticket question is: Do we need yet another scheme while we are struggling to fix the long-serving ones like the PDS? Do we need another food subsidy pulley or grease the existing one well?