India's ambitious Food Security Bill is up for review. The Congress government is pushing a new plan, which will provide really cheap food to more than 63% of the country. The scheme, if passed, will cover 75% of the rural population and 50% of urban.
The bill, however, faces opposition from politicians and academics. Critics say that the decision will hurt the economy but it is still being advanced by the Congress to secure votes in the upcoming state elections.
Currently, India is one of the lowest spenders on the social sector in proportion to its GDP. The International Food Policy Research Institute, which published the World Hunger Index, estimates that 42% of the world's underweight children live in India. In this index, India ranks 67 out of 84 countries.
On the proposed bill, there is concern that the amount spent on subsidizing the food will be a big expense for the government--more than $19 billion annually. But the bill supporters argue that India is already spending close to $13 billion a year on anti-malnutrition programs including free meals for children and providing for pregnant women. They say that only $ 5.4 billion annually is additional and so not a huge expense. Then, the critics counter that the infrastructure cost for setting up the new scheme especially delivering food grains to people will be very costly--perhaps even 2-3 times higher than what is being spent now.
There is scepticism about the government's ability to deliver food grains under a new plan since the existing Public Distribution System (PDS), which provides rice and wheat at less than half a cent per kg, is filled with leakages. Food grain provided through the PDS is also of poor quality. Jayati Ghosh, a leading economist in India, advised that the government should focus on strengthening the existing distribution system.
Critics also say that the new scheme will not increase the number of beneficiaries but it will only redistribute food to a more targeted group of people. This may leave out some of the needy. For example, experts estimate that nearly 50% of the urban population and 25% of the rural households will be left out this scheme.
The scheme further divides the targeted groups into priority and general. In case of priority groups or people living Below Poverty Line, the monthly quota is 7 kg of rice or wheat per person. The general group gets about 3 kgs per person.
J. Jayalalitha, chief minister of Tamil Nadu, has said that her state already distributes subsidized food grain to everyone. She argues that this scheme, which targets people below poverty line, will in effect leave out a chunk of people in her state including urban poor.
There is also disagreement over who can be categorized as a beneficiary and who are the most poor in the country. Several methodologies have been suggested by different government-appointed panels but none of the recommendations have clicked.
Farmers, too, are concerned that the bill will hurt their incomes. Presently, the government procures food grains for public distribution from farmers directly. For this, every year, the government fixes a minimum support price that it pays to them. Farmers fear that the cost of public distribution will increase because of this new bill forcing the government to spend less on the procurement side. The farmers are already complaining that the government's minimum support price does not adequately cover their farming costs.
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