Can Food Coupons Be A Good Idea?

Sharing is caring!

Since food security is no longer a concern in today’s “globalized” society due to the PDS’s failure, the decision between “rationing” and “food coupons” ultimately signals a shift from that to nutritional security. The diminished access of the population’s most vulnerable segments to wholesome food and other necessities in today’s “liberalized” marketplaces only threatens the latter. Food coupons are the ideal approach to implement privatization since they transfer procurement, storage, and distribution responsibilities to the private sector and infuse efficiency and economy into the targeted food coupon system. “Privatization” is also the country’s catchphrase.

To address access and supply concerns during World War II, the British government implemented “food rationing,” which was later replaced by PDS, which underwent structural evolution with the only purpose of ensuring food security and reducing poverty, to become Revamped PDS and Targeted PDS. The TPDS, however, had the same fundamental issues as its forerunners. The mandarins in charge of this metamorphosis were forced to look at the worldwide experience and see more coupon codes in addressing concerns of access as well as food security because all of their presumptions remained a “mirage.”

The United States’ “Food Stamps Program,” which has been in place since 1964, has withstood the ups and downs of the socioeconomic and politico-legal upheavals that have taken place throughout that time and has validated the goals of its backers. It also embraced technology, switching from a paper voucher system to a “Electronic Benefit Transfer” (EBT) format for more effective and economical implementation.

If implemented, the food stamps program might also benefit from merging the government of India’s dual aims (of lowering under/unemployment and boosting access to nutritional needs) in one go. Food coupons would prove to be a blessing in disguise for policy makers to sustain the rapid economic growth with equitable development given the failure of the TPDS to achieve its goals and increasing expenditure on food subsidy and employment guarantee programmes, due to its capacity for expanded reach.

By delivering foodgrains at reduced costs, India’s long-established public distribution system (PDS) has significantly helped disadvantaged households achieve their aim of food security. It has recently been subjected to critical review, and numerous administrative concerns have been identified. As stated in the plan documents, the PDS system requires creative solutions to achieve food security while being cost-effective. Gains in consumer welfare and a decrease in transaction costs would be the two main benefits of the adoption of food vouchers.

Food vouchers may increase the household income of low-income families. The population’s consumption pattern is rapidly changing, and this will enable the poorer consumers to diversify their diets to enhance both utility benefits and nutritional status. A list of multiple grocery stores where food coupons can be redeemed would ensure competition and keep a lid on supply and quality. It will give the poor access to a safety net for food and give them the freedom to choose their own consumption package.

The cost of distributing food subsidies through ration stores is quite high and has multiplied 10 times over the past ten years. According to estimates, it costs Rs 6.68 to transfer one rupee to the poor through PDS, with administrative costs making up 85% of the whole cost.

Food coupons would make it easier for consumers to receive the full value of the subsidy. Direct payment to the grocery store would eliminate the transaction costs, administrative expenses associated with managing the massive inventories, distribution expenses, and costs associated with managing availability at ration shops. Although there might be some management and control issues to prevent the growth of a rival trading market for coupons, the logistics of transfer would be simpler. Additionally, because the food coupons would be distributed by the state governments, the selected grocery stores need to have faith in the system for it to function more readily and effectively. This idea might be made easier with the aid of decentralization and the participation of organizations like panchayats. The primary function of FCI could be to supply an emergency buffer stock for national security.

Sharing is caring!

Leave a Reply