Universal PDS: efficiency and equity dimensions

India being home to the largest number of poor and malnourished population in the world, the tabling of National Food Security Bill has renewed the public pressure for universalization of PDS in India. In this regard, Tamil Nadu's model of universal PDS has been cited for its success in providing comprehensive food security. We conducted a survey in Coimbatore-Tiruppur region of Tamil Nadu to assess the merits and demerits of universal system. The survey covering 154 households seeks to understand the utilization of the PDS by the poor and the non-poor households, if there is voluntary exclusion of better-off sections of the population from the system and the reasons behind them. It is found that there is low drop-out of non-poor households from the universal system.
This is because around 25 percent of all households who are eligible for any PDS commodity reported selling one of the commodities or feeding them to livestock. Also, the entitlements of the poor to subsidized commodities are reduced in uniform universal system. Based on the survey experience, this study puts forward an analytical framework to analyse the resource use efficiency and redistribution achieved in the food distribution system of India. Based on the theoretical framework and the observations from the survey, we make further recommendations in designing an optimal PDS model.