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Food bill: NAC asserts itself

Food bill: NAC asserts itself
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First Published: Sun, Jul 11 2010. 10 42 PM IST
Updated: Sun, Jul 11 2010. 10 42 PM IST
Few things have been as contentious between the Congress-led coalition and the Congress party as the contours of the proposed Food Security Act.
Later this week, a crucial facet of this debate, extending the scope to the entire population instead of only those living below the poverty line (BPL), is likely to be settled at the meeting of the National Advisory Council (NAC) scheduled for 14 July.
The battle lines of the debate have already been drawn. Providing universal food security was an electoral pledge made by the Congress before the 2009 polls, which it won handsomely. However, the initial draft of the Bill put out by the United Progressive Alliance (UPA) maintained, in view of the fiscal constraints, that this would be restricted to those living below the poverty line.
Predictably, Congress president Sonia Gandhi and also now chairperson of NAC—the conscience keeper of the UPA —rejected the Bill in this form, forcing the government to set up an empowered group of ministers (eGoM). The eGoM in turn asked the Planning Commission to rework the contours of the draft Bill.
The new draft Bill seeks to bridge the political ground by accepting in principle the concept of universalization, but, however has dug its heels in by arguing that it should be based on differential pricing—one for BPL families and another for above the poverty line (APL) segments of the population—and a cap of 25kg per household (while several state governments are already providing 35kg). It also proposes to index prices of foodgrains distributed through the public distribution system (PDS), both for the poor and those living, to the minimum support price (MSP)—the floor price offered to farmers after harvest—and determine entitlement on a per capita basis.
It has also proposed, with a view to avoiding leakages, the PDS should shift towards a smart-card-based system that ties in with Aadhaar, the government’s programme to provide a unique identity to all residents. It is their argument that since the identity is based on biometric verification, it would eliminate the problem of bogus cards. Whether Aadhaar can be a fix or not is not clear, but the fact is that while the official estimate of BPL households is 65.2 million, state governments have issued as many as 112 million BPL cards.
Though the new draft Bill is a step forward, a compromise on the contours of the Food Security Act is not apparent. It is still in the nature of a polemic. In the last one week, two opeds, one in The Indian Express on 7 July and another the following day in The Hindu captured this divide. The Indian Express piece was written by T. Nandakumar, former secretary in the ministry of agriculture, and the one in The Hindu was by Jean Drèze, a key member of NAC.
Nandakumar, in what is evidently a strong defence of the establishment view, argued that consumer subsidy of universalization on the exchequer could add up to Rs120,000 crore —three times of what the government has set aside for its marquee rural employment guarantee scheme. Saying that universal PDS was not “feasible”, the former bureaucrat, maintains that there would be leakages “and the squeezing of private trade could adversely affect farmers’ incomes and agricultural growth.”
In a rejoinder as it were, Drèze, makes out a politically compelling case for universalization even while underlining the risks of “exclusion” errors while pursuing targeting—through differential pricing and Aadhaar—as proposed in the new draft Bill. “Every family will have food assured in the house, month to month. Gone will be the days of cold hearths and empty stomachs. For those at risk of hunger, the PDS will be a lifeline.”
After this, it is a no-brainer as to which way NAC will go. But, at the same time, there is a line in Drèze’s piece which suggests that the resistance from the government is serious. This is apparent when he concedes that there are “resource constraints”, but then very cleverly suggests that the programme should, like the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), be restricted only to the poorest 200 districts initially. However, if the programme is successful, it is very unlikely that the government will be able to contain it at this level. And by then, closer to the next general election, NAC, particularly its political leadership, will be less amenable.
To be sure there is still some way to go before the idea of food security can be implemented. This is because, operationally, it is linked to the BPL census that will conclude only by next March. At the same time, the government is yet to arrive at a final consensus on the contours of the Food Security Act. It is likely though that by the end of the year the draft legislation should be ready to be introduced in Parliament—where it is unlikely to face any serious opposition.
Once in place, it would put India in enviable territory. After having already provided employment as an entitlement in rural India, followed up with a right to education, it would be very impressive if it managed to provide universal food security. In a country burdened by nearly 500 million poor, this is an idea whose time has come.
Anil Padmanabhan is a deputy managing editor of Mint and writes every week on the intersection of politics and economics. Comments are welcome at capitalcalculus@livemint.com
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First Published: Sun, Jul 11 2010. 10 42 PM IST