there was almost a doubling in the number of beneficiaries as well as in the program budget (Government of India 2000). By 1999-2000, the budgetary allocation for the program was around $170 million. This is a substantial budgetary outlay, even if not large in per capita terms. It will increase rapidly in the near future, as the government aims to cover all administrative blocks.<sup>7</sup> It is perhaps the largest program of the kind in the world.

The combination of economic growth, agricultural surpluses, and a slew of programs aimed at increasing access to food might be expected to yield more than a modest decline in child malnutrition. To begin to unravel this puzzle, we examine the functioning of the ICDS program, which seeks to directly provide nutritional supplementation to children in need. Given the importance of the program’s objectives and the size of the budget, it is important to assess whether it is effective in its main objective of enhancing child nutritional status.

One of the crucial determinants of program success is program placement: whether the ICDS centers are allocated to the areas with the highest level of malnutrition. Despite the importance of this problem, there has been little formal analysis of program placement. The effectiveness of program placement is therefore the main focus of our analysis.

Program efficacy depends also on how well it is implemented once it is in place. This is more difficult to evaluate formally, due to a lack of prospective data on recipients and non-recipients of the program. Several studies have sought nevertheless to evaluate program impact, but most compare outcomes between areas where the program is present and those where it is not ⎯ without controlling for differences in the characteristics of the children, households and villages that could bias the estimates of program effect.<sup>8</sup> We use a more rigorous methodology to ensure that the children in the “treatment” and “control” villages are matched along a wide range of dimensions, but conclusive impact evaluation depends on collecting panel data.

We begin by summarizing findings on the success of nutrition supplementation programs elsewhere, and information from studies monitoring the implementation of the ICDS program. We then (1) examine trends in child malnutrition in different socio-economic groups, (2) analyze whether the ICDS program placement is consistent with its goals of reducing child malnutrition, and (3) evaluate its impact on child anthropometric outcomes as best possible given the available data. The analysis is based on the National Family Health Surveys (NFHS) 1992-93 and 1998-99, which have information on child anthropometry as well as much information on the child, the mother, the household, and the village: including whether an ICDS program was in place in the village.

We find that a major reason why the ICDS program has had little apparent impact on aggregate child nutrition levels is that it is regressively distributed across states: states

> 7 Government of India, 2000. Estimates vary: according to Greiner and Pyle (2000:19) in 1998-99, the Central Government expenditure on ICDS was about $230 million.

> 8 Amongst the national level studies, see NIPCCD 1992, and Deolalikar 2004.

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