Last month the Congress party’s much publicised and politically significant initiative, the National Food Security Act, 2013 was promulgated. This invited criticism from opposition parties who called the move ‘constitutionally deficient’ as an ordinance was brought days before Parliament is scheduled to meet. Though the government is within its right to bring an ordinance, it has in this case manufactured consent for its food security programme outside Parliament with unseemly hurry as the monsoon session is set to commence from 5 August.
The interesting aspect here is that to justify the unusual push to the food security programme, precedence was given to consent of activists rather than taking the legislative route. The National Advisory Council (NAC) which has a significant number of activists as its members, played the pivotal role in drafting the food bill. The government in its rush to implement one of is most significant programme, has this time tried to seek legitimacy on the act from the activists.
While the government has side stepped Parliament, it must be remembered that this was the same UPA government, which during the Lok Pal movement in 2011, had criticised the civil society for demanding act making outside the parliament. As it suited then, it had advocated for strengthening parliamentary institutions.
Since the National Food Security Act has been promulgated using the unusual route, the debate has digressed from the broad contours of the food programme to the methodology used in the promulgation of the act. Though the act, guarantees 5 kg of rice, wheat and coarse cereals per month per person at a fixed price of Rs 3, 2 and 1 respectively, it is the architecture of the food programme that needs to be analysed closely.
One of the major problems has been the identification of the poor and the act also fails to tackle this problem. According to the act, the ‘priority’ and Antyodaya households, identified under the programme, would account for 75 per cent of the rural population and 50 per cent the urban population, thus covering about 18 crore households. The act states that the percentage coverage under the targeted Public Distribution System (PDS) in rural and urban areas will be determined by the union government but identification of eligible households will be left to the state governments, who may frame their own criterion or use the socio-economic caste census (SECC).
In the past there have been implementation errors in identifying the poor and according to National Sample Survery (NSS) data for 2004-5, half of the poorest households did not have a BPL card. Problems like what criteria should be used to identify poor households and surveyors not visiting the household have come up in the past and the act has failed to address these issues. Though the act has mentioned that 75 per cent of rural population and 50 per cent of urban population will be covered in the Food Security Act, what will be percentage criteria for the state governments has not been taken into account.
The act also does not mention the exclusion criteria for households as it is there in the Chhattisgarh Food Security Act. In the Chhattisgarh Food Security Act, all households in which any member is an income tax payee or households which hold more than four hectares of irrigated land or have a pucca house whose carpet area is more than one thousand square feet have been kept out of the Food Security Act. The lack of clarity in deciding which household to include in the National Food Security Act and which to keep out is visible in this act. Though the act has legally bound the government to provide food grains to the poor, it has not created any new entitlement and in fact has lagged behind a few states.
The other problem that has been raised by many critics is the central government impinging on the federal structure of the country. Though the act will cover about 67 per cent of the population, there are states like Chhattisgarh, Tamil Nadu and Kerela which cover a larger population and have been giving subsidised food at a lower price. Experts argue that there is a need to set uniform criteria across the country, because if one limits the subsidy then additional burden will have to be borne by the respective state governments, who are already doling out much larger benefits. The Chhattisgarh government, however, has stated that the additional cost required to provide food grains to the beneficiaries in the state will be borne by the state government.
The other much debated aspect of the National Food Security Act has been the financial implications of this act. The Central government has already stated that the estimated cost of implementation of this scheme is Rs 1.24 lakh crore, which is less than 1 percent of the Gross Domestic Product (GDP) of India and this implies an increased expenditure of less than Rs 25,000 crore on the entire law.
These figures, however, have been disputed by some experts who state that the act will cost 3 per cent of GDP in the very first year. According to a discussion paper, National Food Security Bill: Challenges & Options, which was prepared by the Commission for Agricultural Costs and Prices (CACP) in 2009-10 out of the 42 million tonnes meant for BPL 40 per cent was lost due to the leakages that occur in the PDS.
The paper then further estimates that the financial cost of the Food Security Act will be around Rs 6.82 lakh crore over the next three years, which is about two and a half times the provision in the budget.
However, the counterpoint to the financial implications is stated by Dipa Sinha in a paper in Economic and Political Weekly. Sinha argues that the current food subsidy is around Rs 90,000 crore and with an average subsidy of Rs 20 per kg, the food bill will cost about Rs 1,24,000 crore (for 62 mn tonnes), which is around 1.2% of the GDP. Citing the economic survey of 2013, the author states that over the last 10 years the food subsidy has hovered around 1% of GDP. On the other hand, the percentage of households accessing food-grains from the PDS has gone up from 28% in 2004-05 to 39% in 2009-10 and 44% by 2011-12 despite the expenditure remaining constant at less than 1% of GDP. While bringing out a food security programme is indeed a positive step towards erasing hunger and malnourishment from the country, there is need for restructuring the PDS in order to see that the real beneficiaries are not left out of this programme.
A large part of the food subsidy is wasted due to leakages, transport and storage of food stocks and if one can improve upon the functioning of PDS, it will be easier to produce, procure, storage and distribute the food grains. The other aspects which can be debated in the coming monsoon session over the National Food Security Act are the replacement of private PDS dealers by panchayats as it has happened in Chhattisgarh, also increased commissions of the PDS dealers is one issue that can be looked into.