Agriculture Reference
In-Depth Information
The numbers suggest that self-targeted programs are more cost effective than
the universal or administratively targeted programs. In particular, the cost of
transferring 1 rupee's worth of benefits is the lowest for Integrated Child De-
velopment Services (1.44) followed by Maharashtra Employment Guarantee
(1.85) and Sampoorna Jawahar Rozgar Yojana (2.85), respectively. The univer-
sal food subsidy programs of PDS and the Andhra Pradesh Rice Scheme appear
to be the least cost-effective programs. Therefore, to increase efficiency, delink-
ing SSNs should include a gradual move from PDS, which accounts for 65 per-
cent of total public food distribution, to more targeted programs and public works
programs, some of which are cash-based (such as the Employment Guarantee
Scheme). This procedure will lower the need for public procurement and stock
that can result from reforming price policy, such as revising the support price.
However, the eventual goal should be to move toward cash-based SSN pro-
grams, which, given the level of technological know-how of the country, ap-
pears increasingly feasible. The state of Andhra Pradesh introduced such a
program during 1998-99 for PDS rice and kerosene. Under the scheme, the pro-
gram beneficiary has to be physically present with a photo identification card to
obtain food coupons. Early evaluation suggests that the program has been
successful in reducing diversions, if not eliminating them entirely (Dev et al.
2004). However, despite this success, there has not been any initiative to scale
up such programs. The common arguments against such programs are that
coupons can be counterfeited, easily misappropriated, and mistargeted. The first
TABLE 3.8
Costs of income transfer in various social safety net programs,
1999-2000
Cost of
transferring 1 Rs
to the poor
Total
program costs
Perfect
Programs
(Rs billions)
Actual
targeting
Public Distribution Systems
a
73.16
6.68
1.52
Andhra Pradesh Rice Scheme
10.63
6.46
1.59
Jawahar Gram Samridhi Yojana
(public works)
b
1.18
2.28
—
Maharashtra Employment Guarantee
1.85
—
Integrated Child Development Services
8.8
1.44
—
SOURCE
: Dev et al. (2004).
NOTE
: — indicates not available.
a
Because of the unavailability of state-level data, total spending on Public Distribution Systems rep-
resents only the subsidies by the central government. This implies that the estimates of income-
transfer costs would have been larger if the state subsidies had been added.
b
Transformed version of the former Jawahar Rozgar Yojana program.
