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Cost Of The Food Security Bill 2013 - Disabling Or Enabling India?

Posted in Finance Articles, Total Reads: 1978 , Published on November 17, 2013

The food security bill 2013 has faced severe criticisms from its opponents regarding its cost. The govt. estimates suggests that food security bill will cost another additional 25,000 crores i.e., an increase from Rs.1, 00,000 crores to Rs.1, 25,000 crores. The commission for agricultural products (CACP) puts the cost of the bill spread over a three year period at Rs.6, 82,163 crores including Rs.1, 10,000 crores for up scaling food production. Economists have estimated it to be around 1.35-3% of the GDP. But, is this bill worth it? Fairly Yes Or a No?

The Food Security Bill which set off seismic levels of terror in the stock markets but the Government on the other hand seems to see it as a dogmatic game-changer.

The question arises that the transformation from a request for a hand full of wheat and the actual attainment by the concerned beneficiaries is decreasing or not.

And moreover the cost of the Bill is highly argumentative.

Image Courtesy: adamr, freedigitalphotos.net

According to Food Minister Mr. Thomas says, "Are we not bound to invest more in agriculture? This investment in agriculture is not because the Food Security Bill has come. We are bound to invest more in agriculture because we are an agricultural country and we have to feed crores of people."

Today development is understood only in the narrow sense of economic growth and GDP. But how can we accept a growth trend when severe malnutrition and hunger persists in our country? While India’s economy has been growing at varying rates in the last decades, under nutrition among the children has dropped a mere 1% during the same time. Should we accept this 1% decline in childhood hunger as it is? Every year, India loses 1.3 million children under the age of 5 due to body mass index (BMI) and inaccessibility to basic healthcare. Have we ever estimated this cost of inaction on hunger and malnutrition? We need to understand that underfed people are unable to contribute, even if provided with opportunities, because of lack of capability. We must therefore build an environment of empowerment with nutritional security. Secondly, the government annually spends large sums of money on storing the food grains.

Now the stored grains go to the poor and they are at least giving Rs.2 or Rs.3 per kg for the cereals we are paying money to store. This is surely a better option than allowing the food grains to rot away. Moreover, the allocation of food grains under the Act will in fact go up by 2 mn tonnes from 60 mn tonnes to 62 mn tonnes. How is this going to take procurement levels to impossible levels when the allocations are at three different issue prices for the Above the Poverty Line, Below Poverty line and Antyodaya Anna Yojana population and the reduction from the monthly allocations of 35kg per household to 5 kg-per-person will bring down the grain requirements? Despite this, the implementation of the new bill will help to fix leakages in PDS as is evident from the success stories of PDS in Chhattisgarh, Tamil Nadu which have overhauled their system. Another basis on which the food bill is criticised is the increasing cost of agricultural investment. However, I believe that investment in agriculture is needed no matter there is PDS or no PDS. Increased productivity and modernisation in agriculture is needed to enhance our GDP levels anyways.

The list of questions which can arise from this bill is endless. If people have everything in an apple pie order but don’t have a strong base to hold it, then the best of efforts go in vain.

Same is the case with The Food Security Bill 2013, if the Government back the bill with strong game changers which can actually turn the conter and help India to come above from the status of a country where only hunger prevails, and then only this Bill will be valuable enough.

The developments whose benefits do not trickle down to the disadvantaged sections seem less important. Surely, this new bill tends to be beneficial in the long run if supported with a strong leadership, effective implementation and transparency.

This article has been authored by Akansha Gandotra from Institute of Management, Nirma University




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