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Title: Price subsidies versus income transfers
Authors: Chander, Parkash
Jindal School of Government and Public Policy
Keywords: National Food Security
Price Subsidy
Direct Income Transfer
Welfare Schemes
Issue Date: 31-Dec-2014
Publisher: Sameeksha Trust
Citation: Chander, Parkash. (2014). Price subsidies versus income transfers. Economic and Political Weekly, Vol 49 No 14: 104-108
Abstract: The impact of the price subsidy under the National Food Security Act on consumption of cereals, and, therefore, welfare, will be different from that of an unconditional direct income transfer equal to the cost of the price subsidy only if the price subsidy is regressive among the set of people covered. This note argues that restricting the subsidy to an inferior good such as coarse grains alone may work better from both the fi scal and equity points of view. It recommends raising the entitlement for coarse grains to 7 kg a person per month, but keeping it unchanged for wheat and rice at 5 kg a person per month.
Description: Scopus Index
ISSN: 2349-8846
Appears in Collections:JGU Research Publications

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