The Cabinet has approved the Food Security Bill 2013 that aims to provide subsidised food to nearly 75 per cent of the rural and 50 per cent of the urban population and door step delivery of foodgrains under the targeted public distribution system (TPDS).
The Bill is criticised on issues pertaining to procurement, storage, transportation, distribution and pricing of foodgrains covered under the scheme. Other concerns are related to high leakages, inefficient distribution and identification of the genuinely poor.
Globally, the term food security originated in the mid-1970s and, as defined by the Food and Agriculture Organisation, implies a level of food supply that can ensure availability and access to food.
In contrast, in India, the PDS, operational since 1939 and introduced in Mumbai to ensure equitable distribution of foodgrains and at affordable prices, now boasts of more than five lakh fair price outlets. Under the existing PDS, foodgrains distribution has increased from 8 million tonnes in 1951 to 48 million tonnes in 2011 while procurement has increased from 4 to 65 million tonnes (
In 2011, procurement amounted to more than 30 per cent of production while distribution accounted for nearly one-quarter of foodgrain’s availability.
Along with PDS, there already are a large number of existing schemes like Annapurna, and other national schemes with similar objectives. Therefore, it is not clear as to who would be the incremental beneficiaries sought to be covered under the Food Security Bill.
Rural versus urban market
First, a few more facts. The food subsidy is already high at nearly one per cent of GDP.
The cost implications of the proposed Food Security Bill are prohibitive — about 1.5 per cent of GDP, but if peripheral costs are considered, it could be higher still. Second, it may not be accurate to assume that a large population, especially rural, is suffering from pangs of mass hunger.
According to market research, over the last decade, rural GDP in India has increased almost 30 per cent faster than urban GDP.
Over the last three years, this market has shot ahead of the urban market even in terms of lifestyle buying (mobile phones, television sets, and two wheeler) — $69 billion as against the urban market of $55 billion. In recent years, 70 per cent of new manufacturing jobs are coming from rural areas. Some states such as Punjab had experimented with highly subsidised power and the results were not encouraging.
In India, the tax and subsidy is turning into a confusing web. On the one hand, the Government increasingly taxes the population, aggressively reduces fuel subsidy and, on the other, makes provisions for more food subsidies.
According to National Sample Survey Organisation (NSSO), the proportion of expenditure on food is declining both in rural and urban areas while that on education, conveyance and medical is rising.
Finally, the country continues to witness over-crowded shopping malls and restaurant in major cities, reflecting higher incomes and more job opportunities.
Identifying the hungry
So, there may be a need to evaluate the segments of the incremental population to be covered by the Food Security Bill and undertake a survey of tax payers whose money will be used for providing such food security. This exercise is feasible given the Internet penetration, and support of on-line voting services available with most media channels. Once the mood of the general public is gauged, such schemes in a democracy can be justified and successfully pursued.
You don’t need an armoured tank to kill a mosquito but the Bill seems to be attempting to serve free food to residents of Connaught Place, because some hungry people have been discovered in the area. Global lessons can be drawn from experience with instruments like food coupons, direct cash transfers, as well as pioneering food security system of Belo Horizonte (BH), and, Bolsa Familia (BF) of Brazil.
Better delivery
In an election year, populist schemes are understandable, but it will be wrong to assume that food delivery under the Bill will be achieved with military precision. Rather, the need is to simply improve the delivery mechanism by enhancing the role of local authorities, who have domain knowledge of the local area, and will be able to identify the genuinely needy — a crucial benefit of bottom-up approach.
Therefore, an effective recourse would be to use the existing infrastructure and probably extend the mid-day meal to the targeted sections of society.
Also, with the help of local authorities, food preparation points, railway catering services, mobile vans, panchayat bhavans/public health centres/village community centres or even local temples could be used as focal points to feed the newly identified hungry.
Finally, the Government should explore education and job security, which will not only ensure food with dignity, but help lower government deficit.
(The author is RBI Chair Professor of Economics, IIM Bangalore.)