India’s food security act: Myths and reality

Source: Al Jazeera

The reforms promoted by Prime Minister Singh do not go far enough to help food production and the hungry.

The debate on the Food Security Act is based on myths on both sides. The government is propagating the myth that it is the largest anti-poverty and anti-hunger programme ever introduced anywhere in the world. The programme is being heralded as Sonia Gandhi’s dream project, and billed as a miracle solution to the agrarian and food crises.

On the other hand, economic pundits are blaming the Food Security Act for the falling rupee and the economic emergency.

The pundits have it wrong, because they are treating the spin as reality.

The spin is that the scheme is all new, and therefore, by implication, it is a new burden of trillions of rupees and billions of dollars of food subsidies. The reality is that it is deja vu all over again. As Food Minister KV Thomas clarified, all the food security act does is bundle existing schemes for public feeding and presents it as one big new scheme introduced through a new law. According to Thomas, the additional financial burden is only about $2bn.

More money to feed less people

It is not even the largest scheme in terms of coverage. In fact the universal PDS, the Public Distribution System, that we had until 1991 had 100 percent coverage. And it cost us less. The cost of the universal PDS was $4.5bn. It was dismantled by Manmohan Singh under pressure from the World Bank and IMF during the 1991 structural adjustments dubbed the New Economic Reforms, on grounds that a targeted PDS would reduce the subsidy burden. The PDS became the targeted PDS (TPDS), and fewer people were served. However, the cost of the subsidy went up to more than $12bn instead of coming down.

There were two reasons for the increased cost to feed fewer people. One reason was the huge administrative cost of identifying, issuing, and managing the various ration cards – which also became a source for political favours and corruption. Another reason was the trimming of a universal PDS to a TPDS created a huge gap between market prices and ration prices. On the one hand this increased the quantum of subsidies by removing the price control function of a Universal PDS system and the erosion of the price control mechanisms of the essential commodities act. On the other hand, the polarisation between the market prices and the ration shop prices also promoted leakages from the PDS system.

That is why the Right to Food movement and many political parties have been calling for a Universal Public Food System, to reduce both the cost burden and the corruption.

The prime minister keeps repeating that he will continue with “reforms”.

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