Public Distribution System in India
Child undernutrition delays cognitive development, productivity and earnings in adult life and contributes to intergenerational transmission of poverty.
Globally, an estimated 150 million children under five are stunted, with India accounting for a staggering 30% of the total.
Within India, more than one-third (36%) of young children are stunted, highlighting the severity of the challenge.
Food transfers and subsidies are among the most widely implemented social protection measures worldwide, reaching approximately 1.5 billion people (World Bank, 2018).
The PDS programme provides highly subsidised rations of staple food to the poor through a network of over 500,000 fair price shops, making it one of the world’s largest social transfer programmes of any kind.
The PDS accounted for 60% of India’s social assistance budget in 2019-20, costing about Rs. 1.8 trillion (US$26 billion).
PDS expansions from NFSA prevented approximately 1.8 million children from being stunted.
National Food Security Act, 2013 (NFSA) standardised entitlement quantities and prices, mandating the provision of 5 kilograms (kg) of staple grains per person per month at a price of no more than Rs. 3/kg for rice and Rs. 2/kg for wheat (NFSA, 2013).
Before NFSA, states had discretion over the prices and quantities they offered to PDS beneficiaries.
After the Act, all states had to comply with a new national minimum mandate.
This provision generated three key sources of variation: (i) State-level variation: States with less generous pre-NFSA policies had to expand their food transfers more substantially to align with the new minimum mandate, while states already in compliance did not. (ii) Within-state variation by household size adjustments: The shift from per-household to per-individual entitlements benefitted larger families. (iii) Eligibility differences: Households with ration cards experienced substantial gains, while non-eligible households serve as an internal ‘control’ group (not subject to intervention).
Effects of NFSA: Reduction in stunting: NFSA reforms significantly reduced stunting among children aged 0-5 years. For instance, the average PDS expansion led to a 7.2 percentage point reduction in stunting prevalence. These effects were most pronounced in children aged 0-2 years, a critical window during which a child’s development is highly sensitive to nutritional intake.
Improved dietary diversity: reduced out-of-pocket spending on staple foods, which frees up household food budgets for higher-quality, nutrient-dense foods
Increased labour incomes: PDS transfers increased daily wages and total wage income, improving the welfare of poor households who are typically net labour suppliers.
Resilience against climate shocks: The effect of PDS transfers on child stunting was particularly large during years with low rainfall.
