The Lok Sabha has passed the Food Security Bill. Sonia Gandhi claims it will save the needy from hunger and malnutrition. The BJP claims she is merely buying votes in the coming general election. Critics claim the Bill will strain the exchequer unbearably.
Wrong, wrong and wrong again. This farcical exercise will not improve food security; will not ensure electoral victory for the UPA; and will be an affordable folly.
NSSO surveys show that the proportion of hungry people fell from 15.3% in 1983 to 2% in 2004. By now, it is probably 1%. So, forget the notion that hungry Indians are crying out for cheap grain. No, per-capita consumption of cereals has fallen steadily in all income groups, including the poorest. They are shifting to superior foods: proteins, milk and tea.
Schemes a Dime a Dozen
Besides, the NDA launched the Antyodaya programme for the very poorest back in 2000, providing wheat at 2 and rice at 3 per kg. The Bill simply repeats the dose – nothing new at all for the poorest.
While Indian hunger is very low, malnutrition is extensive. Arvind Panagariya and Jagdish Bhagwati\’s book India\’s Tryst with Destiny reveals that WHO norms for malnutrition, widely cited by other economists like Amartya Sen, are laughably faulty. The last National Family Health Survey showed that, by WHO norms, 15% of even Indian elite children were stunted! Kerala\’s life expectancy is 74 years and infant mortality is 12 per-thousand births. Senegal, Africa, has life expectancy of 61 years and infant mortality of 51 per-thousand births. Yet, according to WHO norms, 25% of Kerala\’s children are stunted against only 20% in Senegal. Ridiculous! Indians are just shorter than Africans, not more \”stunted\”.
Malnutrition versus Hunger
However, Indians do indeed suffer from very high levels of anaemia, even among the richest, one-third. Pregnant mothers and children suffer from protein shortages. If drinking water is unclean and bacterial, people cannot absorb additional calories even if fed more food. Clearly, better nutrition requires clean drinking water more than cheap cereals. It also needs additional protein, iron and vitamins. These could be supplied through ultra-cheap soybean flour fortified with iron and vitamins. But solving malnutrition this way will not get many votes. Sonia Gandhi would rather seek more votes through a subsidy covering two-thirds of all voters. Hence the Bill.
The BJP condemns the Bill as a pre-election gimmick. But it will surely fail. Many states already provide cereals more cheaply than the Bill. Tamil Nadu provides 20 kg of free rice to poor families. Other southern states provide rice at 1 per kg. Chhattisgarh, Madhya Pradesh and Rajasthan are going to have state elections, and all three now offer wheat or rice at 1 per kg.
So, in several states, the additional subsidy of the Bill will not mean cheaper food for consumers, simply less subsidy at the state level. Chief ministers will get the credit for cheap cereals, not New Delhi.
The Bill may mean cheaper cereals in some states, like Bihar, Jharkhand and Uttar Pradesh. But the Public Distribution System (PDS) is in terrible shape in these states. To the extent the PDS improves, the chief ministers will get the credit.
This was exemplified in the 2009 general election, when the UPA claimed that NREGA had created new jobs at higher wages. But in the poorest rural states where NREGA was supposed to have the most impact – Bihar, Chhattisgarh, Odisha, Madhya Pradesh and Uttar Pradesh – the Congress won only 20% of the seats. A big New Delhi scheme simply did not translate into votes for the Congress. The same will be true of the Bill.
Penny Wise, Pound Foolish
Finally, is it affordable? The government says it will cost an extra 25,000 crore per year. Economist Prachi Mishra suggested it could be 50,000 crore per year. Other estimates go up to 3% of GDP, but look very exaggerated. Please note, even as the Centre\’s food subsidy goes up, the subsidy borne by several state governments will go down correspondingly. Taking central and state subsidies together, the additional outgo will be quite modest.
An additional net outgo of, say, 25,000 crore will be only 0.25% of GDP. This will not be fatal for the fiscal deficit, which has been hit far more by oil under-recoveries. However, it is silly for the government to procure wheat at 13 per kg from a farmer, spend 10 per kg on inefficient movement and storage, and sell it to the same farmer at 2 per kg. Why not just give the farmer cash instead?
Forget all rhetoric about the Bill being a path breaker. Advocates say people now have a legal right to food. Really? So everybody turned back by a ration shop is going to register a police case? And the courts will hear all these cases though they don\’t have the time to deal with murder and rape in less than 10 years? Fantasy!
Any attempt at legal enforcement of this right will overload a system already collapsing under the weight of older obligations. Such overloading leads only to cynicism and corruption, not Utopias.
