Is Rising Food Subsidy Attributed to Poor Food Management? An Empirical Evidence from India

Abstract

In India, the government subsidy, in particular, food subsidy has increased by manifold in the recent years. The present study aims at identifying factors affecting food subsidies in India. Based on the available little literature the probable factors mainly pertaining to food management have been chosen and a model has been developed for empirical investigation.  The model specifies a linear functional relationship food subsidy as dependent variable and factors of food management as explanatory variables. A linear regression model has been estimated to identify to what extent food management factors such as minimum support price, food procurement volume, food distribution costs, buffer carrying costs and off-take quantity of foodgrains affect food subsidy. The results attribute to poor food management for rising food subsidy. Among the explanatory factors minimum support price and off-take quantity have significant impact on the budgetary subsidy. The results have certain policy implications and recommended for targeted distribution and rational pricing policies for food grains.

Keywords: Food subsidy, food management, India