Cash transfers versus food subsidies during COVID-19: dietary practices of rural women in Bihar, India

ABSTRACT

This study examines the coverage and effect of cash transfers and food subsidies in India during the COVID-19 pandemic. It is based on a primary survey of rural women in the state of Bihar – an underdeveloped state with poor public delivery systems – undertaken in January–March and September–November 2020. Although the coverage of cash transfers was wider than that of food subsidies, respondents receiving cereals and pulses under the Public Distribution System reported a lower probability of suffering from food insecurity vis-à-vis cash subsidies. The study suggests that food subsidies may be more effective when supply chains break down.

KEYWORDS:

• COVID-19
• food security
• safety nets
• food subsidy
• cash transfer
• India

Acknowledgement

The paper borrows from Husain, Z., S. Ghosh, and M. Dutta (2021) Herself and her children: How worse off are they? “Impact of COVID-19 in rural Bihar”, Report No. COVID-19-20092-IND-1, International Growth Centre: London (https://www.theigc.org/wp-content/uploads/2021/07/Dutta-et-al-February-2021-Final-report.pdf). We give thanks fo the technical assistance provided by Agnij Sur and Sampurna Kundu. We are also grateful to the insightful comments and suggestions by the reviewers that greatly improved the paper. The usual disclaimer applies.

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1 Environmental disasters have caused an estimated economic loss of USD 1.5 trillion (Food and Agriculture Organization of the United Nations 2017). Studies also indicate that natural disasters affect 18 per cent of the population in small island developing states (SIDS) and 6 per cent of non-SIDS countries (Food and Agriculture Organization of the United Nations 2017).

2 Food security implies that “all people, at all times, (should) have physical and economic access to sufficient, safe and nutritious food that meets their dietary needs and food preferences for an active and healthy life” (World Food Summit 1996).

3 Since poor households tend to spend over 40% of household income on food (Panikkassery 2020), this exception is not relevant.

4 The PDS provides subsidised cereals, pulses, sugar, and oil to ration card holders, comprising about two-thirds of the population.

5 The Jan Dhan Yojana seeks to increase access to financial services (namely, basic savings and deposit accounts), remittance, credit, insurance, and pensions, in an affordable manner.

6 The Pradhan Mantri Ujjwala Yojana provides subsidised cylinders of cooking gas to eligible households.

7 The Indian government allocated $23.2 billion under the Pradhan Mantri Garib Kalyan Yojana to provide financial assistance to households affected by the pandemic.

8 JEEViKA is a World Bank-aided Bihar Rural Livelihoods Project whose objective was the social and economic empowerment of the rural poor through self-help groups in Bihar. It was introduced in 2007. A Health and Nutrition Strategy component was subsequently introduced in 2016, to improve the dietary practices of women of reproductive age and their children, to build awareness about such practices through monthly meetings.

9 Under the mid-day meal, eligible children are provided take-home rations or cooked food. During COVID-19, however, many state governments, including Bihar, shifted to cash transfers.

10 The eight food groups are cereals and potatoes, pulses and nuts, eggs, fish and meat, milk and dairy products, fruits that are yellow or orange inside, green leafy vegetables, and other fruits and vegetables.

11 A village-level clustering strategy was employed when estimating these models.

12 We had used the education of respondents, but hypogamy and isogamy are the norm in Bihar. So a more educated woman implies that the husband, too, is likely to be more educated.

13 In India, the Hindu community is divided into four social groups based on castes. The so-called (in the official parlance of the central and state governments of India) “Scheduled Castes” (sic) (SC), “Scheduled Tribes” (sic) (ST), and “Other Backward Classes” (sic) (OBC) are socially and economically marginalised groups. These categories are recognised by the Constitution of India and the Ministry of Social Justice and Empowerment, Government of India maintains a list of sub-castes that are members of SC, ST, and OBC communities to facilitate affirmative action targeting them.

14 The asset tercile groups had been formed based on data on 2,250 respondents from the baseline survey.

15 The study reports that households receiving cash exhibited greater dietary diversity, but consumed fewer calories per person per day than food recipients.

16 While the lockdown resulted in a mean loss in household income of about 70 per cent, cash transfers were only about 46 per cent of household income on an average (Gentilini 2022).

17 Column (3): Food transfers report the proportion of households who have received assistance in the form of food transfer (they may also have additionally received cash transfer). It is also true for column (4): Cash transfers. Therefore, the row figures will not sum to 100, as the group receiving both food and cash assistance is counted twice.

Additional information

Funding

The study was funded by The International Growth Centre, UK [grant number IND_20092].

Notes on contributors

Zakir Husain

Zakir Husain is a Professor in the Economics Department, Presidency University, Kolkata. He works on education, health, and gender.

Saswata Ghosh

Saswata Ghosh is an Associate Professor at the Institute of Development Studies Kolkata (IDSK). He was Visiting Fellow at the Asia Research Centre of London School of Economics (LSE) and Bangladesh Institute of Development Studies (BIDS). His areas of interest include religious demography; fertility, family planning and son preference; family demography; field survey methods; demographic estimations; and econometric methods.

Mousumi Dutta

Mousumi Dutta is a Professor in the Economics Department, Presidency University. Her research interests are in environment, health, and gender issues.