The National Food Security Bill is back on the drawing board. The National Advisory Council headed by Congress party president Sonia Gandhi has just been announced, though it is yet to be formally constituted with members. But it was a signal enough for the empowered group of ministers to figure out that the proposal in its present form would not muster approval.
It is now obvious that there is a disconnect between the executive arm of the United Progressive Alliance (UPA) and the political leadership on the very meaning of what constitutes a food security Bill. This might sound strange in a country where almost 40% of the population in rural areas is malnourished and an almost equal percentage of the population is poor by the standard measure of consumption poverty.
Three issues seem to be the bone of contention: who should get it, how much and at what price. In fact, the answer to all these is fairly obvious, but it seems as though there is no political will to accept the reality.
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On the issue of who should be eligible, there are two ways of looking at it. First is the argument put forward by activist groups as well as the Left parties that the scope should be universal entitlement. However, there does not seem to be any indication that the government will accept universal entitlement for food security. The question of how many poor in the country arises only after that.
But even for this, there aren’t too many areas of debate, though the government is seeking to project that it has to choose from a variety of estimates. In reality, the choice boils down to either accepting the existing poverty estimates or going with those included in the Tendulkar committee report. But this choice is really a Hobson’s choice considering the low credibility that the existing poverty estimates enjoy with academics, policymakers as well as politicians.
But more importantly, even if the government does accept the Tendulkar committee poverty estimates, the number of beneficiaries are unlikely to increase dramatically; in fact, they will remain more or less the same. That will be because the present number of beneficiaries that are entitled for BPL, or below the poverty line, status is based on the old 1993-94 poverty estimates, which is 36% of the population plus an additional 10% margin.
On the other hand, accepting the Tendulkar committee’s poverty estimates will mean that the percentage of population eligible will be 37%, plus the usual 10% margin. In effect, it implies only a marginal increase of 1% of the population.
In terms of financial implication, the acceptance of Tendulkar committee recommendations will have a negligible impact on the food subsidy bill. But even with universalization, the costs are not beyond the means.
This is because of two reasons: First, even if the Bill proposes universal entitlement, it will not mean that every household will get its food from the public distribution system (PDS).
Some evidence of this is available from the 1993-94 consumption expenditure survey of the National Sample Survey Organisation, which shows that less than one in four households purchased foodgrains from the PDS. For all items, including kerosene and sugar, only 75% of the population ever purchased anything from the PDS. This percentage would be much lower after almost two decades.
Second, assuming this trend is sustained and the government does indeed guarantee universal entitlement, then the additional outgo on the food subsidy would be Rs25,000 crore (the 2010-11 Budget pegs it at Rs55,578 crore).
Fortunately, there seems to be some convergence on how much to give. Given the fact that 35kg per person is the accepted practice, there is no reason to reduce it to less than that.
Finally, the issue of pricing does not leave much choice given the political commitment made by the Congress party in its manifesto.
In effect, there is really no cause for debate. But whatever be the contours of the Bill, the real issue that needs to be thrashed out is the delivery mechanism. Unfortunately, the issue of revamping the PDS has not got the attention that it deserves despite the fact that this will be crucial to operationalizing the entitlement.
On reforming the PDS, the two crucial issues are the correct identification of the beneficiaries, that may not be required if the principle of universalization is accepted. Not only will this take care of the biggest source of corruption in the PDS, it will also reduce political involvement at the local level.
The second component includes the revamp of the procurement and distribution of foodgrains across states, including local procurement to the extent possible. Plus, there is a whole range of innovations which are possible with new technologies such as unique identity cards, biometrics and so on. But is it possible? Certainly, if one looks at the success achieved in Kerala and Tamil Nadu.
If delivery is ignored, it will be yet another instance of waste of public money. But more importantly, it will be a loss of opportunity to do something for the poor and hungry of the country.
Himanshu is an assistant professor at Jawaharlal Nehru University and a visiting fellow at Centre de Sciences Humaines, New Delhi. Farm Truths takes a fortnightly look at issues in agriculture.
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