Food Security Bill : A Classic Case Of 'Too Many Cooks Spoil The Broth'

Posted in Finance Articles, Total Reads: 3491 , Published on 16 June 2012
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The food security bill was originally introduced by the government as a populist measure to address the basic necessity of Indian citizens who are 'poor' & can't afford basic nutrition on a daily basis which includes pregnant ladies & children in the rural part of India.

But I now feel,the whole bill is lost in technicalities & opinions of 'food fighters', intellectuals, writers & economists.


Let us look at the chronological order of the see-saw of the bill:

1] Initially National Advisory Council (NAC) under Mrs Sonia Gandhi came up with, which I believe were genuine if implemented in true spirit, recommendations to cover every family below the poverty line under the purview of the bill by offering subsidized grains (wheat or rice) at Rs 3/kg upto 25 kgs/month (Currently 35 Kgs). However, the primary purpose being to introduce systemic reforms in the PDS which essentially is the culprit behind all evils related to hunger, suicides etc

The 10 kg difference came under huge criticism from the whole planet , across intellectual spectrum accusing the government of killing the poor in times of high Inflation.They dint see the point & fundamentals of the bill which essentially wanted to bring greater number of people under its purview by marginally reducing the quantity to 25 kgs/month.

2] Then the NAC was stuffed with many 'food champions', economists who drew up a 'grand plan' of bringing 75% of Indian Population under the blanket.

It proposed to cover about 90% of Urban & about 50% of Rural population by dividing the population into two categories 'Priority' which will be given 35kgs/month of grains at (Rs 1,2,3 of millets,wheat,rice resp.) & 'General' which will be provided with 20kgs/month of grains at half the price of corresponding Minimum Support Price of grains.

Priority forms 40 % & general forms 35 % of whole population.

This bill if implemented would pose serious problems such as doubling of procurement of food grains by the government.Currently Govt. procures about 35% of grain production which would be increased to 70%. Imagine only 30% of grain production available in the free market.It would wreck havoc in the market with hoarding & over-pricing due to high demand & less supply. I can't even imagine what would it do Inflation figures.

More over, If the govt. does not properly utilize 70% of produce which I am pretty confident it wont given the pathetic storage,transport & distribution infrastructure then only god can help us.

3] After this the bill goes to a panel headed by Mr Rangarajan (PM's economic advisor) which criticizes the bill top to bottom quoting the  enormous pressure such a bill would put on the government, around Rs 100000 crore every year. I guess we need to understand even though we are charting around 8% growth,we still are no so rich & cant afford it.

This committee recommends removal of the 'general' category of population from its purview which sounds very resonable. I understand Mrs Gandhi's intention of a such a generous act, given the plethora of scams unearthed during its regime, to earn 'good will'

But i guess its too generous as to just not reasonable.

This article has been authored by Havyas Chandragiri from IIM Indore.

Image courtesy of FreeDigitalPhotos.net


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