The federal cabinet has approved the draft National Food Security Bill. It seeks to provide subsidized food grains to over half of India's 1.2 billion population. The bill is likely to be presented to parliament in the next few days and would be referred to standing committee. The food security bill promises 75 percent of rural population and 50 percent of urban households, the right to 7 kg food grains per person, at Rs.3 per kg for rice, Rs.2 per kg for wheat and Rs.1 per kg for coarse grains to the priority beneficiaries. The general category will be provided at least three kilograms of food grains per person per month at half the minimum selling price.The bill will also provide rations or cooked meals to children under 14 years of age, destitutes including women and persons on the margins of society. It is the pet project of the Sonia Gandhi-led National Advisory Council and was part of the Congress manifesto for the 2009 general election.The bill provides for cost-sharing to pacify the states, which will implement the law. The states have also objected over the authority to decide on the criteria to identify the beneficiaries.A three-tier grievance redressal mechanism at district, state and national level is also part of the legislation.Agriculture Minister Sharad Pawar had expressed concern that food subsidy, currently at Rs.63,000 crore ($12 billion), may go up to Rs.1.2 lakh crore ($23 billion) if the bill is implemented. Rising fertilizer prices and the Minimum Support Price (MSP) of the grains was another concern. Sources said managing the fianances would not be a problem but procurement would have to be improved. It is estimated that against the current procurement levels of 54 millions tons, the requirement may go up to 62 million tons. Government food grain stocks in August 2011 were 61.27 million tons.
Benefit for Women and Children
About 2.25 crore pregnant women and lactating mothers are expected to benefit from the legislation that proposes to give Rs 1,000 per month for six months as maternity benefit. Maternity benefits that are available only in 52 districts will be extended across the country. All this is commendable but there is need for caution since the economy is showing signs of sluggishness. The budget deficit will need to be watched. Finding the money to fund the ambitious scheme would also be no mean task. With procurement of food grains required to rise from the current 54 million tons to 62 million tons, the Union government would be up against a major challenge especially in years of drought.
Aiming to empower women, the Bill also proposes that the ration card will be issued to the eldest female member of the family. The proposed Bill also holds great promises for children. Children in the lower and upper primary classes would be entitled to mid-day meals as per the prescribed nutritional norms.
The federal budget for 2011-12 had provided for Rs 55,586 crore for food subsidy. But while revised estimates are that the food subsidy bill this year will be around Rs 63,000 crore, the new law would require more food grains and a lot more money to implement.
Fears have been expressed that the new Bill, as and when enacted, will fuel both shortages and inflation. The fears are not misplaced because in August this year, the food grain stock with the government was 61.27 million tons, short of what will be required to implement the scheme. The annual procurement of food grains by the government stands at 54 million tonnes and will have to be raised to at least 62 million tons, if the scheme is to be implemented.
Antyodaya Anna Yojana
Agriculture Minister Sharad Pawar had warned that the government should be prepared for two successive years of drought before the scheme is rolled out.
The scheme was also opposed by several states, which apprehend food scarcity and higher food inflation as and when the Bill becomes the law. They had also objected to the discrepancy between the proposed central scheme and the existing Antyodaya Anna Yojana (AAA) under which the poor are entitled to 35 kg rice at Rs 2 per kg. The Centre sought to go round the issue by raising the entitlement of everyone to 35 kg under the new, legal entitlement.
Other View
The proposed law aims to benefit 65 per cent of the population, which makes little sense unless the United Progressive Alliance (UPA) Government, by implication, is admitting that the vast majority, or two-thirds of the people of India, cannot survive without heavily subsidized food. Since that is not the case, it remains inexplicable as to why such a large number of beneficiaries are being targeted. While it makes sense to protect the poorest of the poor from hunger and malnutrition, it is absurd to extend the same benefit to those who can do without heavily subsidized food.
Moreover, there are three related aspects, apart from enhanced and ill-affordable subsidy, which merit comment. First, the demand for food grains will result in a shift in agricultural patterns across the country with farmers focusing entirely on rice and wheat. This is bound to cause a shortfall in pulses and cash crops. To meet that shortage, Government will have to resort to imports which, in turn, will fuel prices. Second, a scheme of this nature can be implemented only if there is a flawless storage and distribution system — since neither exists, implementation is bound to suffer. Third, the main problem with the NAC-conceived cockamamie schemes is that they are premised on the one-size-fits-all logic. There may be States which would rather spend the money on projects that can fetch long-term benefits and sustainable economic security for the poor.
Benefit for Women and Children
About 2.25 crore pregnant women and lactating mothers are expected to benefit from the legislation that proposes to give Rs 1,000 per month for six months as maternity benefit. Maternity benefits that are available only in 52 districts will be extended across the country. All this is commendable but there is need for caution since the economy is showing signs of sluggishness. The budget deficit will need to be watched. Finding the money to fund the ambitious scheme would also be no mean task. With procurement of food grains required to rise from the current 54 million tons to 62 million tons, the Union government would be up against a major challenge especially in years of drought.
Aiming to empower women, the Bill also proposes that the ration card will be issued to the eldest female member of the family. The proposed Bill also holds great promises for children. Children in the lower and upper primary classes would be entitled to mid-day meals as per the prescribed nutritional norms.
The federal budget for 2011-12 had provided for Rs 55,586 crore for food subsidy. But while revised estimates are that the food subsidy bill this year will be around Rs 63,000 crore, the new law would require more food grains and a lot more money to implement.
Fears have been expressed that the new Bill, as and when enacted, will fuel both shortages and inflation. The fears are not misplaced because in August this year, the food grain stock with the government was 61.27 million tons, short of what will be required to implement the scheme. The annual procurement of food grains by the government stands at 54 million tonnes and will have to be raised to at least 62 million tons, if the scheme is to be implemented.
Antyodaya Anna Yojana
Agriculture Minister Sharad Pawar had warned that the government should be prepared for two successive years of drought before the scheme is rolled out.
The scheme was also opposed by several states, which apprehend food scarcity and higher food inflation as and when the Bill becomes the law. They had also objected to the discrepancy between the proposed central scheme and the existing Antyodaya Anna Yojana (AAA) under which the poor are entitled to 35 kg rice at Rs 2 per kg. The Centre sought to go round the issue by raising the entitlement of everyone to 35 kg under the new, legal entitlement.
Other View
The proposed law aims to benefit 65 per cent of the population, which makes little sense unless the United Progressive Alliance (UPA) Government, by implication, is admitting that the vast majority, or two-thirds of the people of India, cannot survive without heavily subsidized food. Since that is not the case, it remains inexplicable as to why such a large number of beneficiaries are being targeted. While it makes sense to protect the poorest of the poor from hunger and malnutrition, it is absurd to extend the same benefit to those who can do without heavily subsidized food.
Moreover, there are three related aspects, apart from enhanced and ill-affordable subsidy, which merit comment. First, the demand for food grains will result in a shift in agricultural patterns across the country with farmers focusing entirely on rice and wheat. This is bound to cause a shortfall in pulses and cash crops. To meet that shortage, Government will have to resort to imports which, in turn, will fuel prices. Second, a scheme of this nature can be implemented only if there is a flawless storage and distribution system — since neither exists, implementation is bound to suffer. Third, the main problem with the NAC-conceived cockamamie schemes is that they are premised on the one-size-fits-all logic. There may be States which would rather spend the money on projects that can fetch long-term benefits and sustainable economic security for the poor.
