Price subsidies versus income transfers

Chander, Parkash (2014) Price subsidies versus income transfers. Economic and Political Weekly, 49 (14). pp. 104-108. ISSN 00129976

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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.

Item Type: Article
Keywords: National Food Security | Price Subsidy | Direct Income Transfer | Welfare Schemes
Subjects: Social Sciences and humanities > Economics, Econometrics and Finance > Economics
JGU School/Centre: Jindal School of Government and Public Policy
Depositing User: Amees Mohammad
Date Deposited: 24 Feb 2022 06:57
Last Modified: 24 Feb 2022 06:57
Official URL:


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