This article attempts to resolve the puzzle of public distribution system leakages using the latest available data. Leakages remain high, but there is clear evidence of improvement in recent years, especially in states — including Bihar — that have undertaken bold PDS reforms. The main source of leakages is the "above the poverty line" quota, which is due to be phased out under the National Food Security Act.
Jean Drèze (jean@econdse.org) is Visiting Professor at the Department of Economics, Ranchi University and Reetika Khera (reetika. khera@gmail.com) teaches at IIT Delhi.
We are grateful to Saloni Chopra and Jessica Pudussery for research assistance and insightful comments, to Sonalde Desai for special tabulations of India Human Development Survey data, and to Chandrasen Kumar and the Department of Food and Public Distribution (particularly Deepak Kumar, Nilambuj Sharan and Ashish Kumar Saini) for helpful clarifications on official data.
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