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Urban Rationing in Bangladesh in Mid-1980s: The Distribution of its Benefits

Nuimuddin Chowdhury
The Bangladesh Development Studies
Vol. 15, No. 4 (December 1987), pp. 53-84
Stable URL: http://www.jstor.org/stable/40795297
Page Count: 32
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Urban Rationing in Bangladesh in Mid-1980s: The Distribution of its Benefits
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Abstract

This paper first examines the income distributional impact of urban rationing in Bangladesh. It is shown that in 1973/74— a year with practically full participation in urban rationing by all eligible households— Gini coefficient of expenditure in with-rationing situation is 0.274, as compared with 0.30 in the without-rationing situation. In the main, it examines Statutory Rationing (SR)— an increasingly diminutive but still quite important element with Public Foodgrain Distribution System (PFDS)— in distributional terms. The typical household that legitimately receives foodgrain out of SR is established as a nonpoor household. Rationing for the urban rich appears to serve well as the motto of SR. The poorest of households in two SR cities, viz. Dhaka and Khulna are essentially cut out from the orbit of SR. Explanation for this are to be sought in (i) the official ban on fresh issue of SR cards in SR cities after 1974, except to Government officials on transfers thereto— thereby counting out lakhs of poor households that streamed into these cities during the decade following 1974 and (ii) in that three of the SR cities, namely Dhaka, Chittagong and Khulna have been the cutting edge of proliferation of economic well-bing of middle and upper-class households since the mid-1970' s— financed mostly on public expense. An unchanged eligibility regime in SR has resulted in an overwhelming majority of urban households who had settled in these cities by 1974 being eligible beneficiaries of SR foodgrains in 1987 without deserving at all the food subsidies while millions suffered malnutrition in villages due to lack of food.

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