The Food Security Bill might be a vote clincher, but not a great economic move.
The bill went through after a marathon session which ended late in the day. It had to be seen through. For, it was Congress president Sonia Gandhi’s pet project, and she must have worked herself to absolute fatigue, because after her impassioned speech (she rarely makes on the floor of the house) and before the bill could be finally voted, she fell ill and was rushed to hospital.
For the Congress government, now ruling at New Delhi as the head of a coalition, the bill seemed like one last chance to restore voter confidence in a nation which will soon go to the polls.
The Congress, terribly tainted by one scam after another in recent months, seemed – like a sinking man — to be clutching on to the last straw. The food bill, that is!
The main opposition, Bharatiya Janata Party, would have opposed the bill, but the Hindu nationalist organisation did not risk being seen as anti-poor, given the fact that it is hoping to come to power after the elections.
The bill might be a vote clincher, but not a great economic move, certainly not in the current dismal financial scenario which India finds itself in. One writer says that this can be the biggest mistake the country has committed in its 66 years of independence.
The food scheme – which guarantees 5 kg of rice, wheat and coarse cereals every month for every individual whose income is below a certain level at a fixed price of Rs3, 2, 1, respectively – will make India poorer by Rs 1,24,723 crores every year. But the cost could be much higher, aver some experts.
Noted economist Surjit Bhalla said the bill would cost Rs3, 14,000 crores or around 3% of the gross domestic product. This is huge if we look at the total government receipts in a year.
What is even more worrying is that after all this spending, will the subsidised food really end the nation’s hunger, as Sonia Gandhi has been stressing. And will the cereals actually reach the starving or underfed millions?
Cash compensation scheme
For decades, we have seen how India’s public distribution system, which ensures foodgrains at inexpensive rates for the economically weaker sections, has been misused.
The relatively well-off segments of the population have palmed off this food, and corrupt practices among the administrative staff and politicians have led to the cereals being diverted elsewhere where attractive margins are made.
Something similar can happen with the food bill.
This is one reason why some have been advocating a cash compensation scheme instead of doling out foodgrains. The beneficiaries would then have the freedom to buy what they want to with the money. The money itself will go directly into the hands of the needy.
Yes, there is always this fear that the money can be squandered on drugs and cheap liquor.
The Economist has another take on this whole business of food security bill. It says: It would be better to deal with pitifully bad nutrition than plain hunger. Walk around any north Indian village where grain seems adequate, and stick-thin people offer evidence of how few nutrients are being absorbed. Roughly half of all children under five are malnourished. Save the Children, a British charity, said in June that over 60 million children, aged five or younger, are stunted. The consequences can be grim: damage to young brains, a reduced capacity to learn, even death.
“Yet helping children requires more than a supply of base calories. A lack of protein or vitamins in diet, dirty water, neglect of girls, lack of education on hygiene and ill-nourished mothers who get pregnant too often: all contribute to the problem. Arvind Virmani, a prominent economist, argues that cleaning up water supplies, especially by building sewage systems, would do far more good against malnutrition than doling out more grain”.
But then who cares. If the 800 million people get unbelievably cheap grains in this era of runaway prices in India, they would probably sell their votes for a bellyful feeling.
At least this is what the Congress presumes is the path to parliament – all over again.
Gautaman Bhaskaran is India Editor of FMT, and Chennai-based author, columnist and movie critic. He may be emailed at[email protected]