Join InsideIIM GOLD
Webinars & Workshops
Compare B-Schools
Free CAT Course
Take Free Mock Tests
Upskill With AltUni
CAT Study Planner
We are a nation of 'billions'. A billion people, a billion views, a billion thoughts, and a billion contradictions. When there are that many zeros in your existence, as a nation you aren't left with many options. In better words, you are a country that has to carve its path of progress amidst several constraints; the frameworks and policies that you design are a carefully managed series of tradeoffs between social welfare and economic progress. When the leading lady of our country, Mrs. Gandhi, urged all political parties in the august house to pass the Food Security Bill unanimously, she knew that each of her words have to struggle against a million criticisms and muffled insecurities rising across the nation. But thshe also knew, that '...we have to do it.' because we hardly have options. A country ranking 65 among 79 nations on Global Hunger Index, half of its children under 5 suffer from chronic malnutrition while on the other hand 17,546 tonnes of food grains was wasted in FCI gowdowns due to insufficient storage between 2009 and 2012. From this side of the world the FSA seems a magical solution to the hunger issues of the nation, but another perspective waits to be inspected before framing any conclusions. Prima facie, by the sheer timing of the bill and the urgency that UPA portrayed through the life of the bill would make even the simplest of men, suspect some foul-play. Is it a Déjà vu, reminding us of 2009, when MNREGA helped UPA gain a second term in the Lok Sabha elections, Is UPA looking forward to using food security bill as a weapon for clearing its way to a consecutive third term? The answers are not far from an obvious 'Yes' for anyone who has witnessed how Indian Political System functions.
The debate on the FSB has many layers to it, Vote Bank Politics vs. Welfare, Short term solution vs. Long term sustainability, Good Politics vs. Bad Economics, Financial Viability vs. Right of the Poor, the multi-faceted nature of the issue makes it difficult to classify it as black or white. Moreover, it isn't the first time that such a large scale public welfare distribution policy is being implemented in the nation, the five decades old Public Distribution System already exists to serve the nutritional needs of the poor and hungry. The system is though known to be highly inefficient; with more than half the food siphoned off and sold in the open market for higher prices. This gives a classic precedence of a failed policy functioning for years, depriving the poor of their rights. But some states like Chattisgarh, Jharkhand, Bihar etc., have witnessed a departure from the general corrupt ways and have shown a ray of hope; cleansing the PDS by use of information technology, automated systems to ensure minimum human intervention. Amidst a scenario of such vast contradictions predicting the success or failure of such a policy is impossible, at the most one can look into various perspectives, both positive and negative and weigh them to estimate the impacts.
India is home to about 25 percent of the world's hungry poor, a bill promising to give legal right of subsidized food to two-thirds of the country's 1.2 billion population should be a welcome move. However the passage of the bill was followed by a steep fall in the rupee and a 3% fall in benchmark indices. According to government estimates, it will spend over ₹ 1.25 lakh crore (1.2 % of the GDP) annually to supply 62 million tonnes of food-grains like rice, wheat or coarse cereals to poor in the country. While this might not be huge jump to the ₹ 1.09 lakh crore (0.8% of the GDP) that it was spending prior to the Food Security bill. Analysts point out that the stated expenditure of ₹ 1.25 lakh crore annually in NFSB is only the tip of the iceberg. Additional expenditure is needed for the envisaged administrative set up, enhancement of food grain production, creation of storage facilities etc. The total bill for implementation of the Bill may touch an expenditure of 1.5 lakh crore. Noted economist and writer Dr.Surjit S. Bhalla in a scathing attack on the bill writes "The food security bill, if implemented honestly, will cost 3 per cent of the GDP in its very first year." He also goes on to question the government's estimate that the bill's cost would only amount to 11% of the revenues.
The timing of the bill, believed by many to be Sonia Gandhi's dream project has also been under question. Senior BJP leader MurliManohar Joshi termed it as the “Vote Security Bill” that was “more of laws that would not fill up bellies of even poor”. The political calculations behind the bill are far too clear for anyone to miss. With the rise in Narendra Modi's stardom for which the congress party has no match, wooing the lowest strata of the populace which has for long been the party's vote bank with such populist measures makes political sense. The party would hope that the food security scheme will work for UPA 2 in the same way the farm loan waiver and NREGA worked for UPA 1 in 2004.
Then there are question marks over the constitutional validity of the bill. Mamta Banerjee claims that the bill infringes on the federal structure of the constitution. Food security, she points out is a state subject. A national bill can only paint the broad contours but it will have to be up the states to watch out for good practices. States like Tamil Nadu, which already have a well-functioning food distribution system, will be forced to realign it based on the Food security bill. Even the who's who of India's corporate world have openly come out in criticism of the bill. "It has been done with an eye on the polls. What I would have preferred is a focus on reforms, building infrastructure and clearing supply-side bottlenecks. That is the need of the hour in my view," said Harsh Mariwala, Chairman and Managing Director, Marico. There is also a concern about leakages in such a massive scheme. Past experiences in MNREGA have shown that it the government lacks both the skill and the will to counter such a menace. Also, the government intends to use the infamous Public Distribution System for delivering subsidies to the poor. Unfortunately the Food Security remains largely silent on this important aspect.