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The Cabinet recently passed the food security bill. But does it only make politically correct noises?
The Food Security Bill (FSB), which had been in the works since UPA took office for the second time in 2009, finally received the nod from the cabinet in March. But, contrary to expectations, it was panned by many sections of the press. An editorial in The Indian Express implied that the bill had a fundamental flaw, while the one in Mint explained why it will not work. The bill received adverse reactions from the aam admi too, as was evident by the comments readers of the Financial Press left on the website.
But the FSB is not an idea that the government came up with overnight. It’s been debated over several years and across several platforms. Then why is India’s biggest social welfare policy measure facing such flak?
THE ORIGIN OF THE CAMPAIGN
Meanwhile, the UPA’s first stint had achieved two very important results that propelled the right to food campaigners to push forward their agenda: The government had passed the National Rural Employment Guarantee Act (now the MGNREGA) and ensured that India grew at over 9 percent for successive years. With the country riding at such a high, the activists had asked the UPA a simple question when it took over the second time in 2009: How can India be among the world’s fastest growing economies and yet have hunger and malnutrition levels worse than that of Sub-Saharan Africa?
It turned out to be a potent argument and, despite much dilly-dallying, the UPA approved the bill in March.
WHY SO SERIOUS?
The fiscal deficit is also a major concern and if India further slips on its promised 5.2 percent growth rate in FY14, the credit rating agencies could downgrade the country’s investment climate to “junk” status. If that happens, corporate India would find it harder, and costlier, to raise loans for investment.
“The government has passed it [the FSB] with great reluctance and obviously corporate India is not very happy,” says Biraj Patnaik, a senior campaigner for the right to food. Reason: The bill is likely to cost the government Rs 1.25 lakh crore each year.
But this entire amount is not new expenditure for the government. India is already spending close to Rs 1.16 lakh crore on schemes that are listed as “entitlements” under the FSB. For instance, food subsidy (Rs 85,000 crore), mid-day meal (Rs 13,215 crore), Integrated Child Development Scheme (Rs 17,700 crore) and maternity entitlements (Rs 450 crore).
So, the additional expenditure is around Rs 8,635 crore, an increase of 0.09 percent of the GDP. But its impact on fiscal deficit is an old issue that had largely been overcome when the growth was good. Opposition against the FSB now came from different quarters.
Hunger vs Malnutrition
“For nutrition, you need to focus on children and women. The FSB does take a step ahead in that direction, though it could have done more on those fronts,” says Reetika Khera, professor at IIT-Delhi.
The other area of concern is increased government involvement when it comes to procuring grains from the market. The fear is that the FSB will significantly raise the amount of foodgrain procured from the market and distort agriculture prices in the process. “The government procures just under one-third of the total production. The bulk of foodgrain trade is in the private sector and it will remain there. This is because the current allocation for the food schemes covered by the bill is about 56 MT [million tonne] of grain; this will increase to approximately 62 MT—an increase of just four MT,” says Khera.
Food Over Facts
[The FSB comes up for debate when the Budget session of the Parliament is re-convened on April 22.]
More Forbes India stories
READ MORE ON Food Security Bill, Right to Food, People’s Union for Civil Liberties, Malnutrition, Food subsidy, Mid-day meal, Integrated Child Development Scheme, Maternity entitlements
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