Food Price Subsidy under Public Distribution System in Andhra Pradesh, Maharashtra and Rajasthan

The present paper uses primary household level data collected in 2007-08 for the rural sector of three
Indian states, Andhra Pradesh (AP), Maharashtra and Rajasthan, to evaluate the impact of the
Targeted Public Distribution System (TPDS) in these three states. The paper presents a basic profile
of the TPDS in these states and then goes on to assess the difference between subsidized TPDS price
and market price for rice, wheat sugar and kerosene at the village level by per capita expenditure class
and then conducts stochastic dominance comparisons across non-participants and participants in the
three states. It examines various other characteristics of the experience with TPDS in these states
including waiting times for different types of card holders, the distribution of the shares of
expenditure on food items brought from TPDS among TPDS households and the distribution of the
real income transferred through TPDS. The paper finally reports on a Tobit analysis of the quantity of
food items such as wheat, rice and sugar demanded by households through the TPDS.