By Pradyut Hande:
In a landmark development, President Pranab Mukherjee cleared the ordinance on the highly contentious Food Security Bill, paving the path for multi-lateral political ramifications and a potentially game-changing legislation in the long run. The timing of President Mukherjee’s decision has taken many quarters by surprise considering his outlook towards the concerned issue thus far. Also the fact that he chose to clear the ordinance in its current form even in the face of mounting criticism from the BJP and other major national parties, has raised a few eyebrows.
In its present form, the Food Security Bill will provide 5 kgs of rice, wheat and coarse cereals per person per month at a Rs. 3, 2 and 1 respectively; subject to revision every 3 years. This would essentially make it the largest food security programme ever undertaken, costing the exchequer Rs. 125,000 annually whilst catering to almost 67% of the entire population – 75% of the rural and 50% of the urban population.
Already facing torrents of censure from myriad quarters following a protracted period of tumult and with the general elections around the corner; the UPA – II is understandably in the dire need to score some major “political brownie points“. Thus, the legislation assumes even greater significance as it constitutes a vital component of the Congress’ pro-poor election plank. Every reform – populist or otherwise – in a democratic setup seldom comes tinged without a political hue – direct or tangential.
Now coming to the legislation itself. On prima facie evidence, the Food Security Bill sounds like a laudable attempt at guaranteeing the nutritional security of a majority of the country’s population. The underlying endeavour at the equitable distribution of the fruits of economic progression is noteworthy. However, the Bill fails to delineate the means and channels through which these resources will be allocated to the targeted population on a monthly basis. The lacunae and inherent inefficiency of the existing Public Distribution System (PDS) is well documented. How the Government plans to work with and/or around the current setup remains to be seen.
The programme calls for an extensive overhaul and restructuring of the country’s sluggish supply chains and storage facilities that collectively cause losses running into billions of Rupees every year. This will involve a sizable investment of initiative, capital and effort on behalf of the Government if it really wants the legislation to translate into something tangible. The added expenditure, especially in the existing volatile economic climate, promised to exacerbate the escalating fiscal deficit and poses yet another challenge on that front.
However, the problems with the Bill in its present form run deeper than that. The legislation promises to adversely affect the farmers by reducing the market prices for staple food crops. Creating a robust market for subsidised food grains driven by healthy consumption patterns will also be challenging. At a time when the Agricultural sector is in pressing need of proactive, progressive market driven incentives and reforms, this development will only add to the farmers’ woes. Thus, a Bill originally designed to benefit the rural poor may paradoxically become a major liability on the same. The Government appears to have blundered in its comprehension of basic economics in this regard.
Undertaking populist reforms with scant regard for their multiple ramifications on the country, its people or its economy to serve a political agenda is an unfortunate by-product of democracy. For a Government often blamed for its lack of direction and assertiveness resulting in a state of “policy stasis“, the Food Security Bill may not be the most prudent legislation to throw its weight behind. The sheer magnitude of the project coupled with its investment and logistical implications are enough to give any Government a veritable headache. However, only time will tell whether the Food Security Bill is just another political gimmick or social benefit undertaking backed with purpose and proper planning.