Food subsidy

  Recently India's public stock holding and PDS came under fire in WTO

Arguments against food subsidy

• It artificially inflate consumer prices and promote wastage of money, e.g., food subsidy is India's second largest subsidy.
• It distorts demand and supply and weans farmers away from market signals,e.g., high prices for fruits and vegetables.
• It promotes resource inefficiency,e.g., ground water depletion and free electricity
• It creates powerful social interest groups, e.g., MKSS 

Arguments for food subsidy

• Unique socioeconomic conditions of India,e.g., Jajmani system, large population, largest number of poor
• Subsidy have incentivized to increase production, e.g., from net importer to second largest producer of grains
• Climate dependence of agriculture and vagaries of monsoon
• History reveals lot of examples where demand-supply mismatch occurs,e.g., natural calamities, pandemics, hyper inflation, war etc.

 India needs a PDS due to it's unique historical, socioeconomic and geographical circumstances.