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Is India Biting Off More Than It Can Chew with its New Food Security Bill?

India's new food security bill, which will heavily subsidise basic food for about two-thirds of the population, is sparking questions throughout the country over the wisdom of such an expensive ordinance.

The National Food Security Bill was introduced in the lower house Lok Sabha of the Indian parliament on December 22, 2011. Since then, an elaborate debate on its merits and implications have ensued. However, despite the considerable time spent on these discussions, the parliament failed to arrive at a consensus. At this juncture, on July 5, 2013 the incumbent UPA government bypassed the legislature and put the National Food Security Ordinance 2013 into effect.

The National Food Security Ordinance is a measure intended to benefit the Indian citizens in general. It hopes to do so by legally entitling roughly 67 percent of the Indian population to five kilograms of food grains per month at a highly subsidized rate. The price of rice, wheat and coarse grains has been prescribed to be three Indian rupees (0.051 US dollars), two rupees (0.03 US dollars) and one rupee (0.02 US dollars) per kilogram respectively.

A customer in Mumbai, India inspects food grains before making his purchase

A customer in Mumbai, India inspects food grains before making his purchase. Image by Prasad Kholkute (CC-BY-SA 2.0)

The ordinance is now in effect. Yet, a significant number of citizens as well as their representatives in parliament have their own doubts about it. Apart from the opposition decrying the government's step of taking the ordinance route to the Food Bill, various questions and concerns are being voiced about the ordinance's practicality, cost, and long term sustainability.

In an interview to Diva Arora of Infochange India, renowned political and social activist Aruna Roy, who has also been a member of the prime minister's National Advisory Council, clearly emphasized the need for having a national food security act. She explained the reasons for its necessity and also its viability:

“…being a welfare state, the Indian government has in the past, and should continue to play in the future, a definitive role in treating its citizens as legitimate entitlement holders, and not as passive beneficiaries. The government's vision for the poor should be seen in congruence with ensuring their access to provisions imperative for a dignified life, and not through the prism of doles.

This must be true especially in times of prosperity, so that safety nets can be ensured for all, for posterity. The rationale behind this legislation is to the right of a life with dignity and to remove hunger.

Apart from the humanitarian aspect, there are many benefits in investing in the nutrition of the population which may not always be able to be captured in quantitative terms. The economic climate is ripe for such programmes given our growing GDP, growth in public revenue, increase in procurement, growing (and wasted) food stocks and significant improvements in PDS in many states.”

In the same interview, she does, however, go on to point out a few flaws with the ordinance, pertaining to the process of identifying the beneficiaries of this scheme:

 “Indeed, the identification of the poor to be subsidised is genuinely problematic. The earlier system of automatic exclusion at least had a criterion of identification. In the current proposed differentiations of general, priority and excluded households, there is an extremely confusing and complicated criterion. It is impractical and impossible to implement. People will have no clarity on which category they belong to and what their respective entitlements are – this will lead to an opaque system and to the exclusion of many people.”

Given the perceived lacunae in the ordinance, especially in the area of implementation, trenchant criticism has been mounting on the union government from various quarters. A section of netizens too have voiced their scepticism.  For example, Tejinder Narang wrote on his blog:

“Food ministers/ Chief Ministers of Congress ruled states/ and other official spokesmen have declared that there is “no problem” in rolling out the scheme politically and financially. The rule of thumb is that when Governments say “no problem”, apprehend that there is a “serious problem”. Sure there is “no problem” in promise being made at the time of elections. But there could be “serious problems” for the successive Governments to perform at huge national cost to all.

A key reason for general food inaccessibility is the inability to store all the produce safely. In a Slideshare presentation titled ‘Rotting Of Food Grains', KD030303 made a compelling point about the abysmal state of food storage in the country. In the absence of better storage capability, the government's plan to increase food procurement as well as to curtail its export is likely to directly increase the incidence of such losses. The efforts of the government should be therefore be directed towards building storage capacity to match the levels of agricultural production in the country.

The underlying issue here is the need to evaluate the benefits of government subsidies in general. This sentiment is echoed in the following tweets as well:

Blogger Sonali Ranade (@sonaliranade) had the following comment regarding subsidies:

Well-known Indian blogger Nitin Pai (@acorn) also tweeted his views about subsidies in general and their economic impact:

Subsidies will dent any nation’s economy. As observed in the past, subsidies on fuel, fertilizers, and electricity have already cost the exchequer heavily. The record budget deficit of the country is doing no good to the spiraling cost of living. It remains to be seen how the government can afford such a large scale subsidy scheme. Perhaps it is time we remind ourselves of the saying – “Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime.”

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