In striving for "efficiency' by means of narrow targeting, households that should be entitled to basic food security through the PDS have been left out. During periods of high inflation in food prices, governments must provide a basic minimum quantity of food grain and other food items at low prices through public distribution systems to low-income, food-insecure, and vulnerable populations. In India, the ostensible purpose of the Targeted Public Distribution System (TPDS) was to take food to the poor; in practice, it has resulted in the large-scale exclusion of the poor and food-insecure from the public food system. Recent evidence from a report titled Public Distribution System and Other Sources of Household Consumption 2004-2005 (GOI, 2007), which presents data from the 61st Round of the National Sample Survey (NSS), establishes that targeting has led to high rates of exclusion of needy households from the Public Distribution System (PDS) and a clear deterioration of coverage in States like Kerala where the universal PDS was most effective. Let me illustrate with evidence from rural India. The Targeted PDS was begun in 1996. In March 2000, the prices of grain for above-poverty-line (APL) cardholders were hiked and the gap between prices for below-poverty-line (BPL) and APL households widened. In many States, APL prices of grain were close to market prices and, as a result, households with APL cards stopped buying grain from the PDS. The Antyodaya programme introduced a new category, the "poorest of the poor', for whom rice and wheat are available at even lower prices than for BPL households. In the present situation, a person who belongs to a household that has neither a BPL nor an Antyodaya card is effectively excluded from the PDS. The recent report of the National Sample Survey gives us an insight into the magnitude and nature of this exclusion from the PDS. At the all-India level, 70.5 per cent of rural households either possessed no card or held an APL card. Since households with APL cards are effectively excluded from the PDS, the majority of rural households in India are excluded from the PDS. To take some State-level examples, in Bihar, 82 per cent of households held an APL card or no card; the corresponding proportion was 87.7 per cent in Assam, 83.5 per cent in Uttar Pradesh, 83.2 per cent in Himachal Pradesh, 81.5 per cent in Rajasthan, and 74.3 per cent in Uttaranchal. In Kerala, the State where the universal PDS was most effective, 70 per cent of households now have been excluded from the PDS. The magnitude of exclusion was also high in the States of the North East (for example, in Nagaland, 90 per cent of households are reported to have no ration cards) but this may reflect poor quality data. The only two States where a simple majority of households were not excluded and did possess a BPL or Antyodaya card were Andhra Pradesh (56.5 per cent), and Karnataka (51.7 per cent). Tamil Nadu is an honourable exception. Although 68.9 per cent of households have APL cards (and 11 per cent have no ration cards), there is a uniform price and allocation for APL and BPL cardholders. In practice, there is a system of universal PDS in Tamil Nadu. The NSS Report also allows us to classify