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Millennium Post

Food security or vote security

The passage of the National Food Security Bill (NFSB) 2013 by Lok Sabha on 27 August needs to be passed by Rajya Sabha to become an Act after President’s assent to it. The NFSB was
introduced in the Lok Sabha on 22 December 2011 and since then an elaborate debate on its merits and implications have ensued. The Bill is reportedly designed to legally entitling roughly
67 per cent of the country’s population to five kilograms of food grains per month at a highly subsidised rate.

The Bill has been variously criticised for low food entitlements, inadequate attention to nutrition, too much discretion to state governments in
identifying beneficiaries, a poor grievance redressal mechanism and providing scope for substituting the Public Distribution System (PDS) with cash transfers. No one knows what impact it will have – economic, political, and social.

Cost of Implementation
There are varied estimates as to how much implementing the food security will cost. The government estimates suggest that food security will cost Rs 1,24,723 crore per year. Andy Mukherjee puts the cost at around $25 billion. And even this is inadequate, according to a paper by the Commission on Agricultural Costs and Prices, which puts the cost at Rs 2.41 lakh crore in the first year of implementation. Over three years, it says, the outlay will be Rs 6.82 lakh crore, including the Rs 1.1 lakh crore required for upscaling food production. Economist Surjit Bhall has put the cost of the bill at Rs 3,14,000 crore or around three per cent of the Gross Domestic Product (GDP), while Ashok Kotwal and others have challenged
Bhalla’s calculations. The chain of dangerously high expenditures set off by Food Bill will see costs rising, growth slowing further, serious job losses, and belt-tightening on all fronts.

Mixed Reactions

The NFSB has evoked mixed reactions. The industry is raising concerns about the effect this massive subsidy will have on the country’s economy.  CII president Kris Gopalakrishnan laments that ‘such a large outlay at this point in time will definitely have a negative impact on the fiscal deficit. Many observes feel that the Bill fails to address the problem of malnutrition, especially among the children. The DMK chief has supported the Bill whereas Samajwadi Party chief Mulayam Singh Yadav has contended that the bill was being brought with an eye on elections. An editorial in a leading English daily, has dubbed it as a law riddled with problems.   

While the Bill seeks to provide the legal right to subsidised food grain to 67 per cent of the population it creates a problem of identifying beneficiaries.  Another contentious issue is that the Bill envisages a cost sharing between the Centre and the states where the states will bear the cost for nutritional support, transport and delivery of food grains and creating and maintaining storage facilities. These are all good provisions but they place a significant burden on the states. With regard to implementation it is unclear if the Centre can require the states to allocate funds without encroaching on the powers of state legislative assemblies. If a state does not have the funds for implementation or the state assembly chooses not to allocate, it could seriously affect the working of the Bill.

Some experts believe that the government needs to strengthen the back-end infrastructure before implementing the food security bill in the country. However, critics have said the plan merely expands a wasteful and inefficient public distribution system at a time when public finances are under huge stress, as global and local investors lose faith in India’s potential to grow fast in the immediate future.

The food security bill is a favourite project of Sonia Gandhi, who led the Congress party to victory in the last two elections of 2004 and 2009, on the back of populist programmes such as a rural jobs plan and a multibillion-pound farmer loan waiver passed just before the general election in 2009.
The UPA has suffered from a series of corruption scandals, bitter internal feuding and its apparent inability to tackle the deep economic and social challenges facing India. The UPA reaped good electoral dividends at the 2009 hustings and whether the NFSB will prove an even bigger game-changer in the forthcoming 2014 elections is yet to be seen. The BJP has dubbed the bill as ‘vote security bill’.   

The UPA chairman, Sonia Gandhi’s assertion that it is not a question of whether we have the means and there is need for creating the means, in fact, holds the key to success of this bill.
Its successful implementation and utilisation for the
benefit of the target beneficiaries holds key for those desirous of taking political mileage out of it. Otherwise it will prove another political gimmick ending in fiasco and may prove a Waterloo for the UPA/Congress.
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