Cause for indigestion

Sep 03 2013, 02:50 IST
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SummaryThe seriously-flawed legislation could destabilise the countrys finances, promote corruption and disrupt agricultural production

During the debate on the Food Security Bill (FSB) in the Lok Sabha on August 26, 2013, Congress president Sonia Gandhi observed it is time to send out a big message that India can take the responsibility of ensuring food security of all Indians. She added, the question is not whether we have the resources to implement the food Bill; we have to mobilise resources anyhow. She also acknowledged leakages in the PDS and asked the states to strengthen it.

Gandhis observation would appeal to almost all Indians with the promise of subsidised access to food in adequate quantities (though 5 kg a month per person is hotly contested) to all. Thus, even those with the lowest income imaginable would feel hugely enthused and loudly acclaim the governments benevolence that comes with the proposed legislation.

Hidden in it is an admission that most Indians have been kept in a state of acute poverty and deprivation for decades; why would the government promise to supply food at prices almost close to zero? Nearly 67% of Indias population or almost 800 million are deemed to be so vulnerable that the government has to give them coarse cereal/wheat/rice at R1/2/3 a kg.

This is reminiscent of rulers in the past who denied the ruled, or shall we say the oppressed, benefits of development for generations, keeping them in abject poverty and then turned up once in a blue moon to distribute doles, get accolades and justify their continuation in power!

The assurance of supplying food at the aforementioned prices is for a period of 3 years only. Thereafter, prices will be linked to MSP which would be several times higher. Is the government pre-supposing that those millions would no longer be vulnerable? Is it waiting for something miraculous to happen? The complementary statement on resources is no less bewildering. Where is the money the meet the bills?

The Commission for Agricultural Costs and Prices has estimated that the cost of implementing FSB over a 3-year period will be R6,80,000 crore or R2,27,000 crore per annum as against a provision of R 90,000 crore for FY14. After netting the throw-forward from the previous year, money available would be only R60,000 crore, just about 1/4th of the requirement.

In the FY14 budget, the government had committed to maintain fiscal deficit at 4.8% of the GDP. Thus, any additional allocation over R90,000 crore will result in slippages, crossing the FMs

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