Posted in Finance Articles, Total Reads: 2127
, Published on 08 January 2014
While India’s GDP has shown a growth of 5-9% in last 12 years, its growth story has an unseen edge. The present level of malnutrition results in a 2-3% decline in GDP. Every year, 70% of the children are malnourished and about 10 million die of hunger and such related diseases.
Today about 22% i.e. 35.46 crore of India’s population is living below poverty line and getting a square meal a day is the biggest challenge they face. The Food Security Bill aimed at providing this basic necessity to the poor and hence encourage economic welfare by reaching about 70% of the population.
Image Courtesy: freedigitalphotos.net, Simon Howden
The National Food Security Bill 2013 seeks “to provide for food and nutritional security in human life cycle approach, by ensuring access to adequate quantity of quality food at affordable prices to people to live a life with dignity and for matters connected therewith and incidental thereto”.
The Antyodaya Anna Yojana (AAY) would be continued along with the Food Security Bill. And special attention would be given to under-nourished children and pregnant and lactating mothers. This legislation was passed in the Parliament on 2nd September, 2013 for fulfilling the 2009 election promise of the current ruling party which is Congress.
Entitlements of the Bill:
• To provide 5 Kg of food grains per person per month at subsidised prices from State Governments under the targeted public distribution system.
• The eligible households will be entitled to food grains at a subsidised price which will not exceed Rs. 3/Kg for rice; Rs. 2/Kg for wheat and Re. 1/Kg for coarse grain. This is intended to support 800 million poor across the rural and urban areas.
• An appropriate meal free of charge to the children from age of 6 months to 6 six years at local anganwadi.
• One free meal on every working day of school by local bodies, Government or Government aided schools, up to 8th standard for children of age 6 to 14 years.
• Children suffering from malnutrition will be checked by local anganwadi in the respective villages and will be provided with free meals.
• Pregnant and lactating mothers to be given free meal during pregnancy and six months after delivery and maternity benefit of Rs. 6000 in small instalments.
How good is the bill for the targeted people?
• The Bill aims at targeting the people below the poverty line. However, over the years the successive Governments have failed to draw a clear line of distinction between people living below poverty line and those living above poverty line.
• An average human being requires 14 Kg a month to fulfil his basic food requirement. This is much more than what the Bill entitles.
• Undernourishment in India prevails due to deficiency in protein and fat requirement. The Bill does not propose nutritional security.
• Over last 20 years, agricultural production cost has increased by 189%. The reason being, millions of hectares of land being transferred to real estates and industrial houses, declining natural resources and increasing pollution. Giving by taking what belongs to them is definitely not the solution.
• The economy is already infected with corruption resulting from thousands of scams and scandals by the bureaucrats. In such a situation what exactly will reach the targeted people will be a big question.
• The targeted audience will be more dependent than they used to be, this will reduce their tendency to work.
How good is the bill for the economy?
• India’s Fiscal Deficit stood at 4.89% of the GDP in the financial year 2012-13. The cost of maintaining the Food security bill with the rising population and the rising fiscal deficit would be a big challenge.
• The Government was spending Rs. 67310 crore on food subsidies. The National Food Security Bill will increase this expenditure by Rs. 30000 crore.
• One of the arguments is that instead on exceeding the food subsidies at the cost of taxpayers, concentrating on increasing the agricultural productivity is a better option.
• Also levelling out the difference between Minimum Support Price (MSP) and the Market Price would leave farmers with more disposable income in their hands.
• The Food Security Bill would require 70-80 million more food grain production every year. In case in a year, the food produced in less and there is a shortfall of food grains in the economy, then the Government will be left with only one option and that is importing food grains. With a growing CAD and falling Rupee, this will not be a good option.
• Reports show that poverty ratio over the years has fallen. The Food Security Bill would make people reluctant to work hard earn and save.
• It is stated that the Food Security Bill will cover about two-thirds of the population. This means that those who are not really need too can reap the benefits. It also implies that over the years the amount the Government spends will increase.
• Policymakers say that the government can cut down cost by reducing or ending oil subsidies to match up for Food Security Bill. But the government is unlikely to do that, as it will not go down well among the voters in an election year.
It is said that the Bill is an attempt made by Congress to get votes for 2014 elections. However, a few hundred million starving people will get food at the cost of nation’s development. Therefore it could be said ‘Food Security Bill- Good for Politics But Bad for Economy’.
This article has been authored by Nirali Damania from SIMSREE
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