Poverty, Undernutrition and Vulnerability in Rural India : Public Works Versus Food Subsidy

This paper analyses the effects of access to Rural Public Works (RPW) and the Public Distribution System (PDS), a public food subsidy programme, on consumption poverty, vulnerability and undernutrition in India drawing, on the large household datasets constructed with National Sample Survey (NSS) data, 50th round in 1993-1994 and 61st round in 2004-2005. The treatment effects model and propensity score matching (PSM) model are used to take account of the sample selection bias in evaluating the effects of RPW or PDS on poverty. We found significant and negative effects of household participation in RPW and food for work programmes on poverty, undernutrition (e.g. protein) and vulnerability in 1993 and 2004. Indeed, poverty and undernutrition were significantly higher for households with access to PDS than for those without, although PDS had significant effects in terms of reducing vulnerability of households in 1993 and 2004. We also applied the pseudo panel model, which confirmed that PDS decreased vulnerability based on 80 percent of the poverty threshold. However, state-wise results of the treatment effects model show considerable diversity of policy effects among different states