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The targeted public distribution system (TPDS) of India—world’s largest food safety-net program—has a reputation for poor targeting, rampant corruption and low impact. Five states of India modified TPDS by reducing targeting, lowering grain prices to Rs.1–3 per kg and tightening its administration. This paper assesses the impact of changes in the TPDS on household food consumption using data from a repeated cross-section of Indian households from five rounds of representative consumption surveys between 1993–1994 and 2009–2010. We use the Difference-in-Difference (DID) method to identify the policy impact, first on consumption of food-grains, and second, on food expenditure. We find that modifications in TPDS led not only to an increase in the purchase of subsidized grains from fair-price shops, but also to diversification of the food basket of poor households. We also find evidence for reduction in the …