Difficult to digest

Tuesday 31 January 2012

After much debate, the Cabinet cleared the food security bill. Will it really ensure food for every Indian?


THE Lokpal Bill debate may have ended in a fiasco but 2011 ended on a positive note for the Congress-led UPA government on another count. Its pet project, the National Food Security Bill (NFSB), was cleared by the Union Cabinet and introduced in Parliament. The bill seeks to address widespread hunger in the country through food support programmes and provides eligible beneficiaries the legal right to receive foodgrains at subsidised prices.

While the clearance is being seen as a positive move towards food security for all, the bill has come under severe criticism for being too expensive for the economy. Critics say it kills the spirit of universal public distribution system (PDS), which entitles every citizen subsidised food.

Who’s got the money?

Finance minister Pranab Mukherjee in his Budget speech (2011-12) said the proposed allocation for the social sector, including NFSB, is Rs 1,60,887 crore. About Rs 79,800 crore would be spent on food subsidy under the bill, according to Union Minister of State for Food and Public Distribution K V Thomas, who introduced the bill in the Lok Sabha (see box ‘Food security bill says...’). The present outlay is Rs 65,000 crore.

The additional financial requirement of the bill is a big challenge, says Ashok Gulati, chairperson of the Commission for Agricultural Costs and Prices. “If one counts other parts of the bill to get things moving through the existing channel of PDS, NFSB may touch anywhere between Rs 1,25,000 crore to Rs 1,50,000 crore,” he adds.


Food security bill says ...

  • Population to be divided into two categories: priority and general households. Priority households to get 7 kg of foodgrains per person per month, while general households will get a minimum of 3 kg
  • Free meals during pregnancy and six months after child birth through local anganwadis, Rs 1,000 as maternity benefit for six months
  • Children from six months to six years to get free nutritional meals from anganwadis, while children from six to 14 years to get free meals under mid-day meal scheme
  • Reforms in PDS like introduction of Aadhar number for confirming beneficiaries, computerisation of fair price shops
  • Grievance redressal mechanism system through call centres, helplines and food commissions both at the Central and state levels

But Biraj Patnaik, principal advisor to the Supreme Court commissioners on the right to food, rubbishes the claims. “Many economists in recent days have cited exaggerated figures. The implication on the food subsidy because of PDS will not be more than Rs 25,000 crore,” he says.

The figure of Rs 95,000 crore or Rs 1 lakh crore floating in the market is the total outlay, which includes mid-day meals and maternity benefits, Patnaik adds. “The government is already spending this much to run these programmes. In any case, India has the dubious distinction of being one of the lowest spenders on the social sector,” he adds.

The beneficiaries are ...

Raising a red flag against the bill, Tamil Nadu chief minister J Jayalalithaa sent a stern letter to prime minister Manmohan Singh on December 20, saying NFSB restricts distribution of subsidised grains to a fixed per cent of population. For several years Tamil Nadu has followed the Universal PDS, which has become a success story. The system adopted under the bill is targeted PDS. Jayalalithaa says, “The proposed classification of target groups into ‘priority’ and ‘general’ households will invite sharp criticism and furious opposition from everybody concerned.” Since the state is already providing free rice, along with subsidised pulses and fortified atta to every resident, the government cannot withdraw it from people, she adds.

Development economist Reetika Khera says categorisation of households into “general” and “priority” is continuation of the trend of APL and BPL, only with new names. The bill covers only 75 per cent of the rural population. Of this also, only 46 per cent, that is the priority households will get 7 kg foodgrain per person per month. “Why should the remaining 29 per cent (general households) get only 3 kg?” asks Khera.

In case of the urban population, the bill covers 50 per cent. Only 28 per cent would be categorised as priority households; the rest 22 per cent will be general households. The parameters for deciding priority and general households are not clear, Khera says. The bill makes it clear that the Central government’s subsidy for targeted schemes will remain unchanged: the share of the pie going to the poor will remain the same, though each state’s slice may change, Khera concludes.

The bill has irked governments of other states like Uttar Pradesh and Himachal Pradesh. One of the reasons for their opposition is that the majority of powers and decisions related to NFSB are vested with the Centre. The states have been made responsible just for the implementation in accordance with the guidelines. The decision on the parameters that decide beneficiaries also lies with the Centre.

Thriving thefts

The operational rollout of foodgrains under the bill is a big challenge, considering millions of tonnes of rice and wheat are rotting in the open. Leakages during procurement, stocking and distribution and fake ration cards are also a challenge. The government scrapped over 2.8 crore bogus ration cards between July 2006 and August 2011.

But Patnaik is confident that the introduction of the Aadhar number would help plug in the leakages. “The biometric system like fingerprints that checks and ensures an individual’s identity would help to delete all fake beneficiaries,” he says. States like Madhya Pradesh have started introducing technology reforms in their PDS. It is working on a new PDS scheme wherein all those entitled to a ration card will first have to get the Aadhar number and then they are issued a bar-coded ration card and tamper-proof coupons that entitle them to their allotted food quota. The coupons are issued by the vendor appointed for a certain area and have elaborate features to ensure that they are not duplicated or misused.

Will it kill the farmer?

The bill seeks to guarantee the right to food to over 60 per cent of India’s population. To cover this population, the food grain supply would have to be increased from the current 526 million tonnes per year. The agriculture ministry has asked for additional funds to boost crop production. It estimates the government would require about Rs 1,10,600 crore to procure additional 20 to 25 million tonnes of foodgrains, says Gulati. The bill also talks about revitalising agriculture. It suggests reforms like increase in investments, including research, and micro and minor irrigation.

But the farmer is at the bottom of the heap. The bill says the subsidised price of foodgrains for general household will not exceed 50 per cent of the MSP (minimum support price) for wheat, rice and coarse grains. MSP is decided by the Centre and is the price at which foodgrains are purchased by the government from the farmers. But farmers are not satisfied with MSP as it does not cover input costs of farming. Connecting PDS prices with MSP will be a setback for the farmer. “The government will try to keep PDS prices low which means increase in MSP, too, would be marginal, which would leave farmers bitter,” says a senior official in the agriculture ministry on the condition of anonymity.

Critics are hoping the Parliamentary Standing Committee will take into account all shortcomings in the report they present to Parliament, which will then decide its fate.

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  • Where is the accountability

    Where is the accountability on the side of the beneficiaries. People can't treat the government like slippers (We use them only when needed and throw when not needed). There should be something in return from the public to be eligible for subsidy that deplete national resources. As of now the being in power is the only return the ppl heading the govt seem to recognise. A subsidy that is not time bound and does not define the specific purpose should be unconstitutional. There is nothing called free lunch. While the govt should actively pursue effective PDS systems to reach real beneficiaries, it should, at the same time, make citizens more responsible about consumption related subsidies. After all this comes at the cost of scarce resources required to build social infrastructure. It' similar to the 'goose that lays golden eggs' story. Subsidised food grains should not lead to decrease in productivity. The monetary costs of such food subsidy, in most states, ironically, is met by selling liquor. The beneficiaries of subsidy should show some productivity that should be measured in quantitative method for able-bodied persons. There should be other penalties in the system that prevent public from taking government machinery for granted. I'll give a simple example of bringing about cultural responsibility. Imagine IT standard deduction is not allowed for those who do not vote or exercise Sec. 49-O. Imagine all PDS shops are only run by woman SHGs. Imagine coupons to buy liquor is issued only through PDS (and that too only in the presence of one' wife after a particular qty). I know this is wishful thinking.. I took the effort to post a comment only to register my strong opposition to irrational logic behind any subsidy to meet ideologies of a few ppl in power. Subsidy is like distributing underwear. It caters to the very dignity of an individual in need. In India, we have lost meaning to respect the systems that cater to the have-nots, and we abuse the powers the constitution provide us, and we abuse the word subsidy. India, as a country, is in its 20s. Set it free and let it find its own way, like a father would do to a son who just completed his formal education. We can even say the country is married to a bad choice, the wife being 'Foreign Investment'.

    Posted by: Anonymous | 7 years ago | Reply
  • Food Security Bill tried to

    Food Security Bill tried to put different activities carried out under different ministries. As a prelude the powers were taken out from the states and put under central government -- monopolizing. The only new things in this bill are ration cards are issued on the name of elder women in the family and secondly inclusion of coarse cereals under PDS. But in the coarse cereal case there is no clause to make people to buy them like if you purchage so many kgs of coarse cereals only rice & wheat will be given. With this, it is far away from the nutrition security. Let me give an example, people by rice from PDS at Rs. 1 or 2 in Hyderabad, they sell them to businessmen at Rs. 14 or so. The businessmen recycle the rice after policing them. So, this system harming farmers both directly and indirectly. Instead if the government pays in cash instead ration, the farmer is going to get benefitted. In Andhra Pradesh farmers declared crop holiday basically because he has no storage facility and thus he has to part his produce to businessmen at far below the MSP price. Farmers are not getting the benefit of exporting rice but benefit goes to businessmen. Under PDS and under MSP, farmers are not getting benefit but politicians-businessmen nexus are getting benefited. In the last budget finance minister stated that the fertilizer subsidy will be given to farmers directly but MPs from Andhra Pradesh approached the committee stating that the subsidy must be given to retailers and not to farmers as most of the retail outlets are in their hands on some family members names or benamy names. Here also farmer lost the battle.

    Dr. S. Jeevananda Reddy

    Posted by: Anonymous | 7 years ago | Reply
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