No country for hungry men

Why should a going government be in such a tearing hurry to push a controversial food security act over the head of Parliament by promulgating an ordinance? It is a serious matter concerning the stomachs of 800 million Indians. The bill must be debated in threadbare in the both houses or in a joint session of Parliament before adopting it. Or, else, the President should apply his power to reject and send back the ordinance proposal to the government. The election-bound Congress-led UPA government’s floor majority is suspect. And, the possibility of an early Lok Sabha poll in November-end can’t be written off as yet, despite the repeated claims by the Congress leadership that it will complete its full term until April, next year. The ordinance may or may not salvage the current government’s public image as corrupt and incompetent, but it must not be allowed to be used as a political tool to fool the public.

 The nation needs food security. There is no doubt and no two opinions about it. However, the key question is this: is the government capable of implementing such an act under the existing economic conditions and administrative setup? If not, the pre-matured act could spell a disaster for the next government and the country even if it is led by Congress. There are several issues and concerns. Therefore, it needs a full-scale debate in Parliament and passed through majority consent for the government to take the responsibility of fulfilling the long pending demand of the common man.

 Simply put, the proposed food security bill aims to provide legal right over subsidized food grain to nearly 67 per cent of the country’s population. The bill is a product of a promise the ruling Congress party made in it its 2009 Lok Sabha election manifesto. It proposes to do away with priority and general classification of beneficiaries and pledges to provide uniform allocation of 5 kgs of food grains to an individual citizen every month at the rate of Rs 3 per kg of rice, Rs 2 per kg of wheat and Rs 1 per kg of cereals. 

 The food security programme is linked to Aadhar (unique identification card scheme). Initially estimated, the programme will cover about 800 million people – 75 per cent of the rural population and 50 per cent of the poor in urban India. It will run is in addition to the Antodaya Anna Yojana which supplies 35 kgs of  foodgrains per month per family to 2.43 crore poorest of poor families. To meet the requirements of the current programme, the government will have to procure an estimated 61.23 million tonnes of food grains annually, which is likely to cost the exchequer some Rs 1,24,724 crore under 2011-12 prices.

 In fact, to properly implement the food security programme under the proposed bill, the total cost to the exchequer would be much more, in excess of Rs. 2,00,000 crore, in a single year. In the events of substantial crop failure due to drought, flood, pest attack, etc., the financial burden on the government to execute the programme will be simply astronomical. The present government is short of funds to meet its commitment to clear even existing fertilizer subsidies in time. Where will it get such large sums from to meet the expenditure to operate the food security programme?

 According to an ICRA study, the 2012-13 budget under estimated the fertiliser subsidy component at Rs. 60,000 crore. The rating agency says the subsidy component may have exceeded Rs. 90,000 crore. The arrears of subsidy may be cleared only by the next government in 2014-15, putting the fertiliser industry under severe financial stress. Fertiliser prices are going up. India’s domestic food programme substantially depends on fertilizer availability. India, one of the world’s biggest fertiliser consumers, is forced to import around 40 per cent of its fertilser ingredients. What food security is the government talking about with scarce fertiliser and its severe import dependence? The government is unable to bear the pressure of the existing fuel, fertiliser and food subsidies. Its growing fiscal deficit is posing a threat to the country’s economic stability.

 An efficient running of the food security programme will call for a massive overhaul of the present public distribution system (PDS), which has failed to deliver despite being in existence for over five decades. Now, the government will have a much more daunting task to put in place a large and complex foodgrains procurement machinery, modern storage facility and distribution network to make the programme a success. Procurement prices may have to be substantially raised to lift over 60 million tonnes of additional foodgrains from the market at the risk of causing further food inflation for the rest 33 per cent middle-class consumers.

 If anything, the PDS has become a glaring example of mismanagement and wastage of scarce public resources. The PDS along with its minimum support price for cereals has inflated both procurement prices and grain stocks. The price of food grains in the country is soaring despite excess stocks while the targeted groups remain neglected. There is a genuine concern that the food security programme too may degenerate into the same way as the present PDS system has with attended corruption and administrative malpractices. The high-cost food security programme may become another hotbed of corruption. The billed expenditure does not include the government spending on the infrastructure need to administer the programme, comprising investment in storage, transportation, personnel and processing.

 It is another matter that the purpose of such a gigantic programme without emphasis on improving nutrition levels is meaningless. An unintended outcome of the programme make the non-cereal based food extremely expensive and out of the common man’s reach.

 Under the circumstances, it will be highly unfortunate if such an important legal entitlement of the common man as ‘food security’ becomes a pre-election political agenda of the ruling party and brought in through an ordinance without even debating on its sustainability. IPA