Should India Try Food Coupon Approach in the Public Distribution System?

One of the most difficult challenges facing the Indian state has been the inability to deliver resources to where needs exist. Thousands go hunger while food grains rot in storage facilities, enrolment rates are dismally low in Government schools even after education has become a fundamental right, medical facilities for rural population are lacking even while Government invests in providing affordable primary health care. As Pratap Bahnu Mehta observes, “there is little in the citizens’ experience of the Indian state that leads them to believe that the state will be a credible provider of social services.” Thus the launch of another central sector scheme (CSS) does not create much enthusiasm among the citizens. It is expected that much like existing schemes, the new ventures will be stymied in clientelism, patronage and corruption. However, in a marked departure to the prevailing approach, the UPA is considering a phased move to direct cash transfers in public distribution system (PDS). Can this approach change the way in how government spending impacts social welfare?

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