FOOD OR VOTE SECURITY BILL???

The National Food Security Bill, 2013 passed by the parliament was signed into law by the president on September 12, 2013 gives right to subsidised food grain to 67 percent of India's 1.2 billion people of which 75 percent will be rural beneficiaries and 50 percent urban beneficiaries and it also provides penalty for non-compliance by public servants. Pregnant women, lactating mothers, and certain categories of children are eligible for daily free meals. The bill was highly controversial, and despite introduction into Parliament in December 2011 was passed only in late August 2013, after initially being promulgated as a presidential ordinance on 5^th July.

The intent of the National Food Security Bill is spelled out in the Lok Sabha committee report, The National Food Security Bill, 2011, Twenty Seventh Report, which states, "Food security means availability of sufficient food grains to meet the domestic demand as well as access, at the individual level, to adequate quantities of food at affordable prices." The report adds, "The proposed legislation marks a paradigm shift in addressing the problem of food security – from the current welfare approach to a right based approach. About two thirds of the population will be entitled to receive subsidized food grains under Targeted Public Distribution System." The Food Security Bill guarantees 5 kg of rice, wheat and coarse cereals per month per individual at a fixed price of Rs 3, 2, 1, respectively, to nearly 67% of the population.

The government estimates suggest that food security will cost Rs 1,24,723 crore per year. But that is just one estimate. Andy Mukherjee, a columnist with Reuters, puts the cost at around $25 billion. The Commission for Agricultural Costs and Prices(CACP) of the Ministry of Agriculture in a research paper titled National Food Security Bill – Challenges and Options puts the cost of the food security scheme over a three year period at Rs 6,82,163 crore. During the first year the cost to the government has been estimated at Rs 2,41,263 crore. Economist Surjit Bhalla in a column in The Indian Express put the cost of the bill at Rs 3,14,000 crore or around 3% of the gross domestic product (GDP).

This will likely create the world’s largest welfare scheme. It has caused much hand wringing amongst political pundits, economists and the media, asking if India, already suffering from a budget deficit and struggling with a slowing economy and a depreciating currency, can afford this extra burden. India already provides subsidized food to a certain section of its population. The new bill will expand that coverage at a cost of about 1.35% of the GDP. It stars next year in April and that means it will not impact the fiscal deficit target for this year.

The weakest point of the right to food security is that it will use the extremely “leaky” public distribution system to distribute food grains. As Jagdish Bhagwati and Arvind Panagariya write in India’s Tryst With Destiny – Debunking Myths That Undermine Progress and Addressing New Challenges “A recent study by Jha and Ramaswami estimates that in 2004-05, 70 per cent of the poor received no grain through the pubic distribution system while 70 per cent of those who did receive it were non-poor. They also estimate that as much as 55 per cent of the grain supplied through the public distribution system leaked out along the distribution chain, with only 45 per cent actually sold to beneficiaries through fair-price shops. The share of food subsidy received by the poor turned out to be astonishingly low 10.5 per cent.”

The Indian Ministry of Agriculture's Commission on Agricultural Costs and Prices warned that enactment of the Bill could be expected to "induce severe imbalance in the production of oilseeds and pulses, will create demand pressures, which will inevitably spillover to market prices of food grains. Furthermore, the higher food subsidy burden on the budget will raise the fiscal deficit, exacerbating macro level inflationary pressures." The Commission argued further that the Bill would restrict private initiative in agriculture, reduce competition in the marketplace due to government domination of the grain market, shift money from investments in agriculture to subsidies, and continue focus on cereals production when shifts in consumer demand patterns indicate a need to focus more on protein, fruits and vegetables.

Criticism of the National Food Security Bill includes accusations of both political motivation and fiscal irresponsibility. One senior opposition politician, Murli Manohar Joshi, went so far as to describe the bill as a measure for "vote security" (for the ruling government coalition) rather than food security. Another political figure, Mulayam Singh Yadav, declared, "It is clearly being brought for elections. Why didn’t you bring this bill earlier when poor people were dying because of hunger? Every election, you bring up a measure. There is nothing for the poor."

To conclude, the basic point is that food security will turn out to be a fairly expensive proposition for India. But then Sonia Gandhi believes in it and so do other parties which have voted for it. With this Congress has firmly gone back to the garibi hatao politics of Indira Gandhi. And that is not surprising given the huge influence Indira Gandhi has had on Sonia. A lot of critics of this bill say that this is a last ditch attempt by Sonia Gandhi-led Congress to buy votes in national elections due next year. Maybe so, but if along the way a few hundred million starving poor get some food to eat, is that really so bad?