Real Consumption Levels and the Public Distribution System in India

Abstract

The policy of allocation of food grains under rationing has been very ad hoc in India with allocation being fixed on a 'historical basis'. This paper uses four sets of pooled equations for predicting stable levels of per capita consumption of rice and wheat in physical terms in rural and urban India. Food grain demand is estimated for all the States in India. The own-price, cross price and income elasticities of demand are estimated. The model shows a high level of predictive efficiency.

Keywords: market integration, food security

JEL Classification: O53, Q11, Q18