National Food Security bill – End to hunger or bag full of new problems?

You cannot feed the hungry on statistics - David Lloyd George

Ever since the National Food Security bill has become a law in 2013 and the growth rate of India has slowed down from 9% in FY06 to FY11 to 5% in FY13, there were several questions over the implementation of it. There have been several estimates that have been made by statisticians. Slower growth also means steep fall in tax revenues. The fiscal deficit is also 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.

India is already spending close to Rs 1.16 lakh crore on schemes that are listed as “entitlements” under the Food Security bill. 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 through this bill will impact fiscal deficit it is an old issue that had largely been ignored when the growth was good. The other area of concern is procurement of grains from the market. It is expected that there will be significant increase in the amount of foodgrain procured from the market and distort agriculture prices in the process

Nomura had also predicted that the scale of India’s food entitlement programme has the capacity to send global food grain prices soaring in a year when the monsoon is deficient and India has to import grains.  For India, to balance its exporters, consumption of food grain, (of rice, sugar and wheat), and commitment to the poor of this country requires continuous increase in farm productivity. This means increased investment in irrigation, and creating efficient supply chains. India’s food grain production reduced from 259.29 million tonne in 2011-12 to 250 million tonne in 2012-13 because of poor rains. 

The most controversial aspect of the food security law is the restructuring of the public distribution system to cover an unprecedented 67 per cent of the population, most of them in the poorer states. For decades, food grain, mainly rice and wheat, have been distributed at subsidised prices according to the type of ration card people possess —AAY, BPL and APL. The bulk of food subsidies are meant for BPL households but the process of targeting these has always been contentious and unreliable. Surveys show that a substantial number, about 50 per cent, does not possess the prized BPL card.

Having considered all of the above aspects, let's list down some of the key pros ans cons associated with the bill.

Pros:

• 'Right to food' becomes a legal right.
• It helps to empower women, as the eldest woman will be the head of the family.
• Nutritious food will be given to pregnant and lactating mothers. This will lead to healthier families

Cons:

• These food grains will be distributed through the already existing PDS (Public Distribution System) which has many loopholes such as leakages of food grains, corruption etc.
• The cost of this bill Rs.1.24 lakh crore will be a burden for the government, and may lead to fiscal deficit.
• As most of the food grains will be procured by Govt, exports will reduced, which is a big threat to the economy.
• Farmers have to sell their food grains for procurement prices rather than market prices. It will be loss for farmers.

The only thing that we can hope for is that the National Food Security bill deliver best with no severe impact on the economy and let the hungry people of the country get adequate food.