In his Budget speech, finance minister Pranab Mukherjee declared: “I am happy to announce that the work on National Food Security Act has begun in right earnest.”
But his food security project is a poor way to deliver food to India’s neediest, as the foodgrain will pass through the department of food and public distribution. That delivery system often results in leakages—as political cronies literally siphon off grain along the way.
Further, food subsidies distort local markets as intermediaries often sell subsidized food along the way well below market prices.
Finally, no one knows how best to allocate food resources than the poor receiving the benefits; the government should not, therefore, give subsidized grain when the needy may want to purchase, for example, vegetables. If Mukherjee actually wanted to get food to the poor, he could push for a food stamp or voucher system—where the poor have a say in what goods they’d like to purchase. Now that would be inclusive development.