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Food Subsidy in India: Its Components, Trends, Causes and Reforms for Public Policy

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  • Sharma, Vijay Paul
  • Alagh, Munish

Abstract

Food prices play an important role in the well-being of the poor and poverty reduction in developing countries. Therefore, there are government interventions in foodgrains markets in one form or another for several decades, starting during the Second World War. Government interventions can be either through direct participation as a provider or as a buyer (procurer) of foodgrains, or indirect participation in markets through taxes, subsidies, regulations, etc. The main objectives of these interventions are to ensure remunerative prices to the farmers in order to increase foodgrains production, improve access to food for economically vulnerable people, and stabilise foodgrains prices and availability in the country. This paper is an attempt to address some of the issues related to food subsidy in India. It deals with the components, magnitude and trends in food subsidy. It examines the main sources of food subsidy and factors affecting subsidy and discusses the policy options for containing food subsidy and draws out emerging issues for policy reforms.

Suggested Citation

  • Sharma, Vijay Paul & Alagh, Munish, 2013. "Food Subsidy in India: Its Components, Trends, Causes and Reforms for Public Policy," Indian Journal of Agricultural Economics, Indian Society of Agricultural Economics, vol. 68(2), pages 1-27.
    • Handle: RePEc:ags:inijae:206331
    DOI: 10.22004/ag.econ.206331
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    References listed on IDEAS

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    1. Tarozzi, Alessandro, 2005. "The Indian Public Distribution System as provider of food security: Evidence from child nutrition in Andhra Pradesh," European Economic Review, Elsevier, vol. 49(5), pages 1305-1330, July.
    2. Sharma, Vijay Paul, 2012. "Food Subsidy in India: Trends, Causes and Policy Reform Options," IIMA Working Papers WP2012-08-02, Indian Institute of Management Ahmedabad, Research and Publication Department.
    3. Pinstrup-Andersen, Per, 1985. "Food Prices and the Poor in Developing Countries," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 12(1-2), pages 69-81.
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    Cited by:

    1. Gupta, Sargam, 2024. "Inefficient shocks and optimal monetary policy," Economic Modelling, Elsevier, vol. 135(C).
    2. Ginn, William & Pourroy, Marc, 2022. "The contribution of food subsidy policy to monetary policy in India," Economic Modelling, Elsevier, vol. 113(C).
    3. Shome, Swaha & Lalvani, Mala, 2017. "India’s Burgeoning Food Subsidies: How Much can we Blame the Food Corporation of India?," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 70(3), pages 353-390.
    4. Debnath, Deepayan & Babu, Suresh & Ghosh, Parijat & Helmar, Michael, 2018. "The impact of India’s food security policy on domestic and international rice market," Journal of Policy Modeling, Elsevier, vol. 40(2), pages 265-283.
    5. William Ginn & Marc Pourroy, 2022. "The Contribution of Food Subsidy Policy to Monetary Policy in India," Working Papers hal-02944209, HAL.
    6. Debnath, Deepayan & Babu, Suresh Chandra & Ghosh, Parijat & Helmer, Michael, 2017. "Impact of India’s National Food Security Act on domestic and international rice markets," IFPRI discussion papers 1635, International Food Policy Research Institute (IFPRI).
    7. Biswal, Arun Kumar & Jenamani, Mamata & Kumar, Sri Krishna, 2020. "The impact of RFID adoption on donor subsidy through for-profit and not-for-profit newsvendor: Implications for Indian Public Distribution system," Socio-Economic Planning Sciences, Elsevier, vol. 69(C).

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    Keywords

    Food Security and Poverty;

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