Income Poor or Calorie Poor? Who should get the Subsidy?

Poverty-nutrition linkage remains somewhat puzzling for India because trends in calorie poverty and income poverty have been moving in opposite directions in the Indian economy for the past few decades. Given the above, this paper explores the question whether income poverty increases the risk of calorie poverty in cross section context, using data from a random survey of 500 slum households of Kolkata in 2010-11. Calorie poverty is estimated using household specific calorie norm accounting for age, gender and activity status of household members. To address the issue of causality in cross section data, appropriate empirical models such as simultaneous probit and Bayesan propensity score matching are used. Results indicate, an income poor household is at greater risk of being calorie poor. However, there is lack of one-to-one correspondence between the two groups of households. Additionally, transitional households just above the poverty line exhibit very different calorie behaviour. Findings imply, subsidies offered to income poor households should ameliorate calorie poverty. Moreover, subsidies should be directed to income poor rather than calorie poor households. Additionally, nutrition policy should have different prescription for transitional households immediately above the poverty line.