After the rural job guarantee programme, the government is now focusing on an ambitious National Food Security Act aimed at drawing more people into the food security net. It has made a strong pitch for providing 35 kg of cereal at Rs 3 per kg every month to the poor of this country.
The government is earnest to fulfill the party’s poll promise of enacting such a law, and has even provided the broad outlines of the proposed legislation. The rural job scheme and the information Act were conceived and piloted by the National Advisory Council (NAC).The Draft Right to Food (Guarantee of Safety and Security) Act enshrines freedom from hunger and malnutrition as a fundamental right.
It “provides for and asserts the physical, economic and social right of all citizens to have access to safe and nutritious food, consistent with an adequate diet necessary to lead an active and healthy life with dignity”.
The Union Cabinet has approved the Draft National Food Security Bill. It seeks to provide subsidized food grains to over half of India’s 1.2 billion population. The bill was presented to parliament and has been referred to standing committee.
Highlights of the Bill:
a. The food security bill promises 75 percent of rural population and 50 percent of urban households, the right to 7 kg food grains per person, at Rs.3 per kg for rice, Rs.2 per kg for wheat and Rs.1 per kg for coarse grains to the priority beneficiaries.
b. The general category will be provided at least three kilograms of food grains per person per month at half the minimum selling price.
c. The bill will also provide rations or cooked meals to children under 14 years of age, destitute including women and persons on the margins of society.
d. The bill provides for cost-sharing to pacify the states, which will implement the law. The states have also objected over the authority to decide on the criteria to identify the beneficiaries.
e. A three-tier grievance redressal mechanism at district, state and national level is also part of the legislation.
f. The Bill provides for women above 18 years to be considered the head of the beneficiary household for purpose of issue of ration cards. There shall be social audit of the functioning of ration shops.
g. The entitlements would cost the government about Rs. 94,973 crore per annum, as against the existing food subsidy bill estimated at Rs. 67,310 crore. The food grains required to be procured to meet the obligations under the Bill is estimated at about 65 million tonnes, up from the average 50 to 55 million tonnes at present.
The Government had expressed concern that food subsidy, currently at Rs.63, 000 crore ($12 billion), may go up to Rs.1.2 lakh crore ($ 23 billion) if the bill is implemented. Rising fertilizer prices and the Minimum Support Price (MSP) of the grains was another concern.
Managing the finances would not be a problem but procurement would have to be improved. It is estimated that against the current procurement levels of 54 millions tons, the requirement may go up to 62 million tons.
Benefit for Women and Children:
About 2.25 crore pregnant women and lactating mothers are expected to benefit from the legislation that proposes to give Rs. 1,000 per month for six months as maternity benefit. Maternity benefits that are available only in 52 districts will be extended across the country. All this is commendable but there is need for caution since the economy is showing signs of sluggishness.
The budget deficit will need to be watched. Finding the money to fund the ambitious scheme would also be no mean task. With procurement of food grains required to rise from the current 54 million tons to 62 million tons, the Union government would be up against a major challenge especially in years of drought.
Aiming to empower women, the Bill also proposes that the ration card will be issued to the eldest female member of the family. The proposed Bill also holds great promises for children. Children in the lower and upper primary classes would be entitled to mid-day meals as per the prescribed nutritional norms.
The union budget for 2011-12 had provided for Rs 55,586 crore for food subsidy. But while revised estimates are that the food subsidy bill this year will be around Rs. 63,000 crore, the new law would require more food grains and a lot more money to implement.
Fears have been expressed that the new Bill, as and when enacted, will fuel both shortages and inflation. The fears are not misplaced because in August this year, the food grain stock with the government was 61.27 million tons, short of what will be required to implement the scheme.
The annual procurement of food grains by the government stands at 54 million tonnes and will have to be raised to at least 62 million tons, if the scheme is to be implemented.
The draft law explains ways to implement the scheme and prescribes penalties for flawed delivery. While the state has to ensure uninterrupted supply of food-grain through the Public Distribution System (PDS), vigil on distribution will be through quarterly meetings between shop owners and representatives of local bodies who will be involved in the selection of the shop owner.
States will have to fully computerise their PDS within two years of the law and they “shall provide a toll-free number and a website where consumers can register their complaints. All complaints shall be addressed within 39 days of receipt and records of the same shall be made available in the public domain, including the Internet,” says the draft.
A commissioner will be appointed in each state to monitor the scheme, suggest changes in it, investigate scarcities, and award penalties to public servants for failures. The penalties could be a fine of gross salary of one month up to five years for negligence, or imprisonment of six months to five years in case of “deaths or serious morbidity”.
The Manmohan Singh government is to earmark over Rs 50,000 crore for the right to food programme. Though details of the programme’s rollout are yet to be firmed up, the government does not foresee any major hurdles in implementing the scheme. Government sources say the Bill could come up during the winter session of Parliament.
Keeping in mind substantial layoffs in select sectors, in the wake of the global economic crisis, the government is expected to expand the scope of the programme to include sectors such as textiles as well as large sections of agricultural labour impacted by volatilities in the food sector.
Under the public distribution system, the BPL category excludes large sections of the poor, including 52% of agricultural labour households. At present, food stocks with the government are upward of 50 million tonnes, more than twice the storage capacity of the Food Corporation of India, on the back of high rice procurement (30.65 million tonnes) and a record wheat buy (over 24.7 million tonnes).
The need for subsidised food-grain for a wider section of people is also reflected in increased off-take. While the off-take in the Antyodaya system is around 90%, showing people’s desperate need for cheap food-grain, the off-take for BPL families increased from 7.367 million tonnes to 22.845 million tonnes in 2005-06, out of an allocation of 27.32 million tonnes.
As far as above the poverty line (APL) families is concerned, the off-take is much lower, not because people do not need the grain but because for several years there was not much difference in the APL price and the market price.
For the first time, the onus of identification and, more crucially, delivery of grain to consumers could be pinned on panchayats in rural areas and local governments in urban areas, entailing never-before accountability on records of allocation and off-take of grain.
A seamless marriage of current realities and provisions in the proposed legislation would also mean smoothing out existing wrinkles in food-grain availability and accessibility.
There are three essential components of this proposal that need to be fleshed out. And these revolve around the issues of what and how much to give, at what prices and to whom.
a. There is less ambiguity on the first issue of what and how much. The present entitlement for the Antyodaya Anna Yojana (AAY) is 35kg of food-grains per poor household. The Congress party manifesto, however, promises only 25kg per month, way below the minimum nutritional norms. Secondly, the present BPL (below poverty line) or AAY entitlements are only for food-grains (rice and wheat) and do not provide for any other nutritional requirements such as pulses, an essential source of protein. For a nutritionally secure strategy, it is imperative that a minimum 5kg of pulses be added to the basket.
b. The second key issue is at what price. While the manifesto of the Congress party promises rice or wheat at Rs3 per kg, this is no better than the existing entitlement of the AAY. It is, in fact, higher than existing price of food-grains available to the BPL population in as many as eight major states of the country-Andhra Pradesh, Chhattisgarh, Gujarat, Karnataka, Kerala, Orissa, Tamil Nadu and West Bengal. These states account for 35% of the rural population. With Madhya Pradesh promising to follow suit, at least 40% of the rural population already enjoys food at Rs 3 per kg or less.
c. However, the third issue is the most crucial, which it is the number of beneficiaries that will be covered by the proposed food security Act. The promise made by the Congress party in its manifesto limits the entitlement to only BPL families. It is here that there is a lack of consensus between the states and the Union government. Going by the present methodology, the government estimates that 65 million households are BPL households and makes the food-grain allocations to states based on this. This number may go down to less than 60 million if the 2004-05 estimates from the Planning Commission are taken as the basis instead of the 1993-94 poverty figures that form the basis of the current estimates.
Against this, the total number of households that have been issued either a BPL or AAY card by state governments is 106.7 million. The state governments are currently doing this by providing additional subsidies from their own budgets.
In Andhra Pradesh, Tamil Nadu and Karnataka, for instance, it is almost universal, with around 80% of the population covered under the subsidized food scheme. Any attempt to restrict the number of beneficiaries to the present official poverty estimates (which are known to be flawed) will, therefore, lead to a reduction in the number of beneficiaries to almost half the existing number. Further, an Act should at least guarantee as much as is already being given.
While the estimate of poverty is one issue of contention, how to identify the beneficiaries for effective targeting is also unresolved. The problems with both these are well known and have been officially acknowledged with two expert committees working on resolving these.
The first committee headed by Suresh Tendulkar has been set up to examine the issue of estimation of poverty used by the Planning Commission and the second led by N.C. Saxena has been set up by the ministry of rural development to identify a suitable procedure for identification of BPL households. Both these committees are due to submit their report.
Providing subsidized grains is only one aspect of a food security Act. Such an Act should also address other issues such as malnutrition, especially among children and women, and social vulnerabilities due to barriers of age, caste, gender and disability.
Existing schemes such as the Mid-Day Meal Scheme or the Anganwadi programme for children under six, adolescent girls, pregnant and lactating mothers should also be brought into the ambit of the Act with strengthened universal entitlements. Such an Act has the potential to ensure that no person in the country sleeps hungry, and this must be realized.
The proposed law aims to benefit 65 per cent of the population, which makes little sense unless the United Progressive Alliance (UPA) Government, by implication, is admitting that the vast majority, or two-thirds of the people of India, cannot survive without heavily subsidized food.
Since that is not the case, it remains inexplicable as to why such a large number of beneficiaries are being targeted. While it makes sense to protect the poorest of the poor from hunger and malnutrition, it is absurd to extend the same benefit to those who can do without heavily subsidized food.
Moreover, there are three related aspects, apart from enhanced and ill-affordable subsidy, which merit comment. First, the demand for food grains will result in a shift in agricultural patterns across the country with farmers focusing entirely on rice and wheat. This is bound to cause a shortfall in pulses and cash crops.
To meet that shortage, Government will have to resort to imports which, in turn, will fuel prices. Second, a scheme of this nature can be implemented only if there is a flawless storage and distribution system since neither exists, implementation is bound to suffer.
Third, the main problem with the NAC- conceived cockamamie schemes is that they are premised on the one-size-fits-all logic. There may be States which would rather spend the money on projects that can fetch long-term benefits and sustainable economic security for the poor.
Growth in Hunger:
At the same time, it is most important to answer the questions being raised by those opposing NFSB. Today, development is only understood in the narrow terrain of economic growth and Indian policy makers seem to be infatuated by GDP numbers and their growth.
They have not stepped beyond their narrow, familiar paradigm and taken an interest in improving general living standards. How can Indian polity accept such a growth trend wherein 70 per cent of the total GDP is directly under the control of 8 per cent of India’s elite?
Growth is important, because it helps create a conducive environment for the welfare of people. We cannot, however, accept a growth trajectory that curtails opportunities for the common people and allows grabbing of common resources for short-term gains.
While India’s economy has been growing at a pace of 6 to 9 per cent in the past 12 years, under-nutrition among children has decreased by a trifling 1 per cent between 1998-99 and 2006. Should we accept a ‘mere token 0.1 per cent decline in childhood hunger per year?
We also need to be honest in accepting the fact that the under-fed cannot contribute to the country, even if provided with opportunities because of lack of capabilities. We will have to build an environment of empowerment with nutritional security. Otherwise, how can one expect that the hungry would go to the industries, set up with huge public resources and subsidies, and start working as labour or engineer?
The growth story has a flip side as well. The present level of malnutrition results in 2 to 3 per cent decline in GDP. It delays education, triggers learning disabilities and affects the overall physical and cognitive development of children right from the conception stage.
Every year, we lose 1.3 million children who do not celebrate their fifth birthday and die of under-nutrition and lack of healthcare. Now as the developed world, which has enjoyed the highest level of affluence, is being devastated by a debilitating economic crisis and citizens their protest the prevalent economic policies, it is time for India to decide whether peoples’ well-being should be its priority, or just creating a tiny island of opulence for a handful of people.
It is believed that the Bill, in its present form, is not adequately endowed with a vision to address the very structural causes of food and nutritional insecurity in the country. Three basic issues are at hand.
First, NFSB dwells on targeting beneficiaries, as against providing universal access, and re-invoking the contentious below poverty line (BPL)-above poverty line (APL) battle-lines by seeking to classify the population into “priority” and “non-priority” households.
The intended benefits will be given to people based on these categories. It is a well-known fact that successive governments have failed to identify the poor, and as a result, the majority of our population continues to live with hunger.
Two, the Bill provides for a supply of 7 kg per month subsidised food grains per person in “priority” households, whereas the monthly requirement of a person is 14 kg. Third, the proposed entitlements do not deal with the problem of nutritional insecurity.
In India, people have suffered undernourishment mostly due to protein and fat deficiency. Hence, to cope with the problem, the government should have added pulses to compensate for protein and edible oil to replenish fat; the preamble of the Bill also mentions: “… the Supreme Court of India has recognized the right to food and nutrition as integral to the right to life”.
The National Nutrition Monitoring Bureau figures show that 76.8 per cent of the population does not receive the prescribed nutrition. We need a strong political commitment; otherwise “growth in hunger” will be our leitmotif.
Increase in Food Subsidy:
Already, we are spending Rs. 67,310 crore on food subsidy, and there will be a tiny increase of another Rs. 30,000 crore if NFSB is enacted, which is a trifle 4 per cent of the taxes being usurped by the corporate- economists-government nexus. But consider the positive impact of this humane expenditure.
It will preserve human values and feed the 770 million people going hungry at present. The Indian government will only be giving a subsidy of Rs. 1,188 per person per year or Rs. 3.25 a day. The welfare politics has become very imperative in the past one decade or so.
The government has been running the Integrated Child Development Services, having a plan to spend Rs. 80,000 crore in the next five years; the Mid Day Meal scheme is already in place. We have 170 million children under the age of six, 45 per cent of them are undernourished but we barely spend Rs. 1.62 per child per day on their growth and nutrition.
There is an argument that it is better for the government to focus on productivity enhancement rather than focusing on doling out subsidies at the expense of tax-payers. But these two things are not mutually exclusive; they are complementary.
Let us understand one thing: India is not a food deficit country; we produce surplus food grains, but due to various reasons it does not reach a large number of our hungry people. If this continues, the argument of productivity will not hold any weight. Yes, it is true that we still have one of the lowest per hectare productivity, but this is also the time to think on the adverse impact of technologies on agriculture.
A part of this discussion is linked to public procurement and minimum support price (MSP) for farm produce. If the government stops subsidising agriculture, profit makers will benefit and consumers will have to pay high prices. Just take the example of pulses.
We pay Rs 36 per kg as MSP to the farmer for tuar dal, but its market price was Rs. 110 some time ago. There is an urgent requirement to ensure maximum public procurement, which can only be done and applied through the Public Distribution System (PDS).
The other aspect deals with policy perspective. For the past 20 years, the per capita food production in India is stagnant at around 460 grams per person per day; pulses are the key source of protein, but the availability has dipped from 70 g per day in the 1960s to 42 g in recent times.
We adopted new technologies: hybrid seeds, chemical fertilizers and pesticides in order to increase agriculture production. Punjab sacrificed its community techniques and blindly used large quantities of chemicals, which has resulted in low soil fertility. Overall, the present draft of the Bill is just a modest beginning. We have to think and decide what our priority is.
Central assistance to States/Union Territories (UTs) under National Food Security Act for meeting expenditure on intra-State movement & handling of foodgrains and Fair Price Shop (FPS) dealers’ margin
The Cabinet Committee on Economic Affairs, chaired by the Prime Minister Shri Narendra Modi, has approved the norms of the expenditure and pattern of central sharing on Central assistance to States/Union Territories (UTs) under the National Food Security Act, 2013 (NFSA). This assistance is used for meeting expenditure on intra-state movement and handling of foodgrains and FPS dealers’ margin.
The norms of expenditure and pattern of Central sharing will be as follows:
Category of States/UTs
Norms of Expenditure
(Rate in Rs. Per quintal)
Central Share(in percentage)
Intra-State transportation and handling
FPS dealers margin
Addl. Margin for sale through Point of Sale (PoS) device
The special category States/UTs are the seven States of North East, Sikkim, the Hill States of Himachal Pradesh, Jammu & Kashmir and Uttarakhand and Island UTs of Andaman & Nicobar Islands and Lakshadweep.
This decision will help in the smooth implementation of the NFSA and will benefit the people.
The assistance will be available to States/UT where implementation of NFSA has started. The estimated financial assistance likely to flow to States/UTs annually, when the Act is fully implemented in all States/UTs, is Rs. 4,341 crore.
Accepting the recommendations of the 14th Finance Commission the Government had hiked the share of States in Central taxes, from 32 percent to 42 percent, increasing availability of funds at their end. Inspite of the reduced share of Govt. of India, the GOI has agreed to this additional burden in the cost of transportation of foodgrains and margins to fair price shops to ensure that the beneficiaries will continue to get foodgrain at subsidised prices.
Implementation of NFSA has so far started only in 11 States/UTs. The period for identification of beneficiaries and implementation of the Act had to be extended twice, upto 04.04.2015 as its implementation is yet to start in the remaining 25 States/UTs. It has again been extended upto 30.09.2015 and it is expected that this decision on Central assistance will incentivise the States/UTs for early roll out of the Act.