Business Today

Provisioning for more

twitter-logo Shweta Punj        Print Edition: Nov 13, 2011

What is proposed:
The Empowered Group of Ministers recently cleared the draft National Food Security Bill, 2011 which aims to cover 67.5 per cent of India's 120 crore people, including threefourth of the rural population and half the people in urban areas.

Broadly, the Bill proposes free food grain for the very vulnerable sections, and food grain at subsidised rates for households categorised as 'priority' and 'general' under the targeted public distribution system, or PDS. Priority households will get seven kg of food grain per person per month at Rs 3 per kg for rice, Rs 2 per kg for wheat, and Rs 1 per kg for coarse grain, while general households will get three kg of food grain per person per month at 50 per cent of the minimum support price, or MSP, for wheat and coarse grain, and the derived MSP for rice.

After eliciting comments from the public, the final draft is expected to be tabled in Parliament in the winter session. But given the political nature of the Bill, further delays are possible.

What will change:
The Bill makes the right to food a legal right. It promises succour to two-thirds of the nation, expanding an existing food subsidy scheme that covers 180 million of the poorest people.

"For the first time in the history of India, the chronically hungry will get food for free," says Yogendra Alagh, a former union minister and economist.

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India is ranked 67 among 81 countries on the International Food Policy Research Institute's Global Hunger Index 2011. Better food security will mean more productive labour, higher wages and better opportunities - essentially inclusive growth.

One, the provision of food grain for the general category at half the MSP could mean that such people might end up paying higher prices in the long term due to the annual upward revisions in the MSP.

Two, according to agriculture economist Devinder Sharma, the legislation will cover fewer people, as currently there are 90 crore holders of ration cards eligible for access under PDS, or 75 per cent of the population.

Three, the Bill does not adequately address nutrition. "People don't eat only grain. If you look at the consumption pattern, people are consuming more vegetables, pulses, milk. This is a big deficiency in the Bill," says Sharma.

Two key challenges are ensuring the targeted groups get the benefits and the leakages that have plagued the PDS are plugged. Also, given the controversy over India's poverty line, the task of separating the weakest from the weaker sections will be daunting.

"Leakages happen when there is a temporary system with exceptions and no universal coverage. Under the new system leakages could come down from 40 per cent to 5 to 7 per cent," says Alagh.

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