1.8. Universal vs. Targeted Debate

1. A universal scheme will create an unnecessary burden over the exchequer, as this will have huge inclusion error because those who do not need the security, such as rich people, will get automatically included in it. But, at the same time a universal PDS will remove the

exclusion error seen in targeted schemes due to misidentification of beneficiaries, rampant corruption, leakages and diversion in the PDS, etc. Some critics are of view that a more inclusion error, but less or no exclusion error is more favourable condition for the success of PDS. Also, rich people can be persuaded to give up their subsidy, as successfully done in LPG.

2. A high procurement of food grain will have to be done for a Universal PDS. This will increase the price of wheat and rice in open markets. In case of drought, or inefficient rainfall, will the government be able to import such quantities of highly subsidized food grains?

3. A targeted PDS approach can limit the operations of both market forces and the bureaucracy.

4. India is home to a large number of migrants, non-citizens etc. A targeted PDS excludes these people as they do not have required documents for ration card. A universal PDS will bring them under the fold of food security. But both budget and grains are limited. Universal schemes implemented in North Africa suggests that it involves unnecessary high costs and no significant benefits to the poor.

5. Universal programs lack the element of ‘affirmative action’.