This paper, in two parts, reports an evaluation
of existing in-kind food transfers. Part I outlines the dimensions
involved, in terms of reach, transfer content and physical leakages, and
deals with the impact of these transfers on poverty as officially
measured. Part II reports the impact of these
transfers on calorie
intakes and also discusses some issues regarding the financial cost of
these transfers. Contrary to the view that food self-sufficiency and
income growth have reduced the need for direct food interventions, the
paper reports a significant increase in contribution of in-kind
transfers to both poverty reduction and nutrition. Moreover, much of
this increased impact is attributable to improved public distribution
system efficiency. The first part, presented here, was motivated by some
issues that arose in the context of the Tendulkar method of estimating
poverty as regards its treatment of food prices. This method treats food
prices differently from the earlier Lakdawala method and is sensitive
to treatment of in-kind food transfers. The paper suggests a
decomposition method that modifies the Tendulkar poverty lines and
distinguishes between household out-of-pocket expenditures and transfers
received from the PDS and mid-day meals. The poverty reducing impact of
these food transfers is found to have increased over time and is more
pronounced in the case of distribution-sensitive measures of poverty.
