Whose Bill?

Food security bill is a good attempt by the government to ensure food and nutritional security to all. The bill is designed to extend subsidized food to pregnant women and children under the age of 16. The bill will ensure the security to almost 67% of population at the subsidized rate of Rs. 1-3. The eligible population will get 5 kg in total of rice, wheat, pearl millet and sorghum per month. Rice @ Rs. 3/kg, Wheat @ Rs. 2/kg and coarse cereals @ Re 1/kg. Being a nationwide project it will cost from 0.8% to 1.1% of GDP. The government says it will provide 62 million tonnes of food a year under the bill and the size of the subsidy is estimated around $24 billion. Now the population is increasing geometrically, value of currency is declining, inflation is increasing so the operating cost will also increase. These all means more expense on subsidy annually. Down the line viability of this project seems under the banner of question mark.

Not only the budget part its implementation part has also got issue. How to target beneficiaries? 

The bill says that states will provide the list of the poor but they have no such records. The government has constituted various committees to look at measures of poverty but they come up with different numbers. Moreover as per planning commission report there are only 29.8% of population  poor (based on 2010 population fig.) than from where this 67% came from??? 

The operation of the bill is yet to be decided. The government is mulling over Public Distribution System for delivering the subsidies to the poor.  The PDS has not been that efficient and almost 50-51% of grains to be distributed are lost as leakage. Although all PDS do not adhere to the data. 

The other option for Govt. is using direct cash transfers, what they have been doing in case of LPG. This is the case when they will give cash payments to be used for food directly into people’s bank accounts. Now it is not possible to believe that the poor will honestly invest those sums on food. Also the price what Govt. will decide may be different than what the actual market price would be. 

How the bill results will unfold is another mystery yet to experience. The very low prices of the subsidized food will distort the market and farmers who can’t sell to the government-assured program will lose out on the open market because prices will be forced down. 

No doubt that the bill will provide security to the mass. It will have positive impact on the poor who are not getting the foods. A healthy population can be capitalize for better growth and chances are there that India may emerge as biggest economy. But this all can happen only when the Govt can feed the needy population and that too in a balanced way. The bill is still in doubt as few points still need to be addressed. To mention few –

According to data, in India, on average, a person spent as much as 53% of total expenditure on food requirements. With relentless food inflation this percentage would be far higher now. In comparison with other countries, Americans, on average, spend 9.3% of their income on food, in Italy a family on average spends 25.7%, in Japan 19.1%, in France 16.3%, in the United Kingdom 11.5%. So the bill seems to help the population. But the other assumption is that it will make a small part of segment non productive. The first example comes out from the MNREGA scheme, where people gets Rs 100 per day and in most of the cases without doing desired work. This has hampered the agricultural work base to great extent. They ask for the wages which most of the time a farmer is unable to pay. So, they are directly and indirectly increasing the inflation. Now the Govt. want to go a step further and stop all pretense of getting any work done and hand out food for free with money they get from people who work 10 hours or more a day and are fleeced with taxes.

So instead of giving the food for free Govt. should look onto generating the employment opportunities in a constructive way. Even the mass they are covering is not justifiable till date. The bill could be boon to the poorest of poor, but a bane to the one who is just poor because he is not intended to put the effort to earn their bread. So, at large this bill seems being charged from the productive section and doing little or almost nil for non-productive part. So, is it a good bill to promote or need some rectification? After all whose bill is this?