Government’s Policy of Doles Makes India Progressive or Regressive?

Government’s Policy of Doles Makes India Progressive or Regressive?

                                                                                      Dr. Keshab Chandra Mandal

                                                             

Introduction

Last September the National Food Security Bill (NFSB) was passed by both houses of Parliament and it is now an Act, which proposes to cover 67 % of Indian citizenry comprising 75 per cent of the rural population and 50 per cent of urban population with an entitlement of 5 kg per person per month of food grains at issue prices of Rs. 2 & 3 per kg for wheat and rice respectively. The AAY (Antyodaya Anna Yojana) households will continue to receive an additional 10 kg of food grains per household to protect their existing allocation. In the last few decades the print and electronic media highlighted some incidents of dire poverty, malnutrition and death from hunger in some poor and backward states. As a result, a strong movement was initiated in India by the left political parties, academicians and non-government organizations. It is this pressure that culminated in the drafting of the National Food Security Bill – 2011, which was eventually passed by Parliament on 12 September last year and became known as Food Security Act, 2013.

Background

The United Nations Food and Agriculture Organization (FAO) estimates that in 2003-2005, India was home to more than 225 million undernourished people, which constitutes 21 per cent of the national population (FAO, 2011). The Global Hunger Index (a compilation of population undernourishment, child malnutrition, and child mortality) also describes the hunger situation and food insecurity in India as “alarming”. Further, according to the World Bank (2006), “The rural areas of some Indian states (such as Bihar and Orissa) possess levels of poverty and food insecurity comparable to the poorest nations in Sub-Saharan Africa, whilst others (such as Punjab and Kerala) are similar to middle-income nations” (Anu Rammohan, “Food Security in India and the Food Security Bill,” in Yojana, Ministry of Information and Broadcasting, Government of India, New Delhi, December, 2013, Vol. 57. P. 35).

This Act reminds us the stories of Bolsa Famila in Brazil and Progressa in Mexico. Brazil was in fact the first country in the world to legislate a right to food i.e. Bolsa Famila. In 2010 the right to food was added to the Brazilian Constitution through an Amendment. Thus, it provided a permanent legal basis for interventions such as the Zero Hunger Program. Following the policies taken by these two South American countries some Indian social scientists, development theorists and others prescribe for such an Act in India to be adopted without considering the socio-economic and cultural differences between those countries and ours. If we look at some of the parameters of these countries, we will find a huge gap. In 2009 the gender related development indexes of Mexico and Brazil were 53 and 75 respectively, while India stood at the 134^th position (Human Development Report, 2009). Mexico and Brazil spend 11.0 and 7.0 per cent of their GDP in health, but India spends only 3.4 per cent in health sector (Human Development Report, 2009). Literacy rate in Mexico is 94.4 and this rate in Brazil is 89.8 per cent, while Indian literacy rate was only 74 percent (census 2011) and about 220 million children in the age group of 6 to 14 were out of school (Kurukshetra, Ministry of Rural Development, Vol. 60, September, 2012, p. inside cover).

Provisions and Implications of the Act

The National Food Security Act (NFSA) expands the coverage from 44 per cent of the population under the TPDS (Targeted Public Distribution System) to 67 per cent while reducing the subsidized amount from 7 kg to 5 kg per person for all except the very poor (beneficiaries of Antyodaya). Dr. Raghuram Rajan, the Governor of Reserve Bank of India estimates the cost due to the said Act which will be 0.5 per cent of GDP. Prachi Mishra in a recent article in Yojana (December, 2013) points out the implications of the NFSA. She writes: “… The Food Security Act (FSA) is likely to be significant. The food subsidy cost of implementing the FSA is estimated at Rs. 124,502 crores for the fiscal year 2013-14. The cost is estimated to increase to Rs.140,192 and Rs.157,701 crores in 2014-15 and 2015-16 respectively” (Prachi Mishra, “Food Security Act (FSA) – Fiscal Implications: 2013-14 to 2015-16,” in Yojana, Ministry of Information and Broadcasting, Government of India, New Delhi, December, 2013, Vol. 57. P. 8).

Beside the above, there are other costs associated with the implementation of the Act. The other expenditures are costs to be incurred for the identification of beneficiaries, for strengthening the existing capacity of Food and Civil Supplies Corporations, establishment of institutionalized licensing for Fair Price Shops (FPS), setting up of vigilance committees to monitor the implementation, periodic audits of FPS, food security allowance to be paid in case of non-supply to entitled persons, funds to state governments to be provided by the Central Government in case of food grains etc. The total incremental fiscal cost of implementing the FSA over and above the existing TPDS is estimated for 2013-14 at Rs. 44,711 crores. “The estimated total incremental fiscal cost for 2014-15 and 2015-16 are estimated at Rs.47,392 and Rs.50,591 crores respectively” (Prachi Mishra, “Food Security Act (FSA) – Fiscal Implications: 2013-14 to 2015-16,” in Yojana, Ministry of Information and Broadcasting, Government of India, New Delhi, December, 2013, Vol. 57. P. 10). The FSA targets about 900 million persons, each of whom will get Rs. 50 per month.

Critical Estimate

It is often complained that the benefits of subsidy do not actually reach to the targeted beneficiaries. Some academicians like Kotwal et al raise question regarding the Act and advocate for cash transfer through one of their articles in Yojana (Ashok Kotwal, Milinda Murugkar, Bharat Ramaswami, “Some Reflections on the National Food Security Act,” in Yojana, Ministry of Information and Broadcasting, Government of India, New Delhi, December, 2013, Vol. 57. P. 26). They write: “What is pertinent is the opportunity cost of these resources. For example, what if this 0.5 per cent of GDP were used as investment in education or health care? Would that not do a lot more good than wasting resources on PDS that is known to be a leaky bucket?” Similarly, Kriti S. Parikh (Kriti S. Parikh, “Food Security Bill – Would it Wipe Out Hunger and Malnutrition?” in Yojana, Ministry of Information and Broadcasting, Government of India, New Delhi, December, 2013, Vol. 57. P. 21) puts forward his views in this regard saying that, “I have argued for many years for use of smart cards or food coupons, which was endorsed by Economic Survey 2009-10. A person can go to any shop and buy designated food item at market price paying part of the cost through smart card or food coupons. The trader can exchange the coupons for money at any bank. These coupons would eliminate the diversion of PDS grains by traders. In fact, it will eliminate the PDS itself. It would, however, involve the problem of printing and distributing the coupons to the poor, who will have to be identified.” The author considers that, “This will eliminate the problems of having to procure and distribute more than 50 million tonnes of food grains every year as also the problem of diversion” (ibid. p. 21).

Conclusion and Recommendations

Are these suggestions and prescriptions relevant in Indian context where about 33 crore people are illiterate? What is about those 20 per cent areas where there is no electricity? Was not the erstwhile PDS system turned into a den of corruption? Is there enough infrastructure for implementation of this Act? Is there any full proof controlling mechanism? Have the Governments’ – both the Union and states – education system made the Indian politicians and bureaucrats honest, impartial and independent? Hence, is not the said Act wastage of public money? More than one hundred Central Schemes are prevalent in India now. Were those not enough for Indian poor and unprivileged? Besides, some existing programs like Mid-Day Meal and Right to Education are merely wasting public money on the one hand and making crores of Indian children as “living idiots” and dumb on the other.

My question is why the Government does not set up committees and commissions and identify problems existing in Mid-Day Meal program, Right to Education and National Food Security Act? Some of the provisions need immediate review. Can the suggestions of spending more money in Education and health not be implemented? The answer is a big “No”. The Government will not spend more money in education, because it will make people knowledgeable and wise and it might throw a challenge to the existing political bosses. Most of the Indian political leaders are semi-literate, lowly knowledgeable, and inadequately accomplished and unfortunately they run the government and formulate laws for the entire population. This is the tragedy of this country. Also this is the only reason why the political players try heart and soul to keep most of the poor people as poor and do not intend to give them scope to be educated and empowered to keep their chairs safe and continue their domination. Interestingly majority of these political players belong to erstwhile zamindar families, or rich families and come from upper castes.

Indian corruption is well-known in the world. The malpractice is random. The existing PDS is in crisis. Does the Union Government not aware of all these maladies? Are we not making Indian people lazy, work-averse and malingerer and shirker? Where is moral education? Where is discipline in Government schools and colleges now-a-day? Where is the balance of teacher-student ratio in schools and colleges? So don’t do politics with the life and career of our young generation. Please stop politics of distributing doles, and make our young generation diligent and innovative. Try to improve the capability of the students and people in general. Give importance on creating permanent assets. Teach the youths to be self-reliant and let them build capacity to be independent. Try to utilize the human resources into future assets of our country. Give importance on agriculture through use of technology and improved fertilizer. Cottage industries might be encouraged in rural areas through Self Help Groups for creating assets. Also big multinational companies, indigenous industries and manufacturing industries must be set up to accommodate lakhs of students passing out from educational institutions. Spend more on social welfare i.e. on education and health. Develop infrastructure. Remove corruption from politics and administration and please don’t play with fire. Do not make the boys and girls paralytic and lazy. Do not make my brothers and sisters, sons and daughters as dumb and idiotic. Remember, this may come back as boomerang in future. Too much deprivation and domination by the corrupt and unwise political leaders to the poor and low or uneducated mass will not and can not go on for long.