1. Who is not covered?
  2. Who gets benefit?
  3. Arguments: Chhattisgarh Food Security bill
  4. National Food Security Bill fiasco =Direct Cash transfer?
  5. Some Food Quotes for thought

Who is not covered?

Following families have been excluded from the benefits of Chhattisgarh Food security Bill:

  1. Those who pay income tax or property tax
  2. Those who own over 4 hectares of irrigated or 8 hectares of non-irrigated land in non-scheduled areas

Given these conditions, only 10% of Chhattisgarh residents will be excluded, and 90% of the public will get the benefits of Food security.

Who gets benefit?

  • Everyone who doesn’t fall in above category, is covered under Food security bill.
  • The people are then classified into three categories and given benefits accordingly
household Antyodaya priority General
foodgrain 35 kg for Rs.1/kg 35kg for Rs.2/kg Rice @9.50,Wheat @Rs.7.50,Max 15 kg
iodized salt free free NO
black gram 2 kg for Rs.5/kg 2kg for Rs.5kg NO
Pulses 2kg for Rs.10 2kg for Rs.10/kg NO

Cost to the State treasury= Nearly Rs 2,500 crore.

That is almost 6% of Chattisgarh state’s GDP.

Other features:

  1. covers the public distribution system, school meals, anganwadis (including take-home rations for pregnant/lactating women and children under three
  2. free meals for the destitute and homeless.
  3. It provides for not just food grain (what, rice etc) but also gram, iodized salt.
  4. Plus the food given to children (under mid-day meal) pregnant women and lactating mothers, will have additional nutritional standards like calorie and protein value.
  5. Ration cards would be issued on the name of the eldest woman in a family. (Women empowerment)
  6. Panchayat and Municipalities will be responsible for implementation of the Act.
  7. entitlements will be given on the basis of per household and not on per person.
  8. Going beyond the Centre’s definition of Antyodaya, the Chhattisgarh Government has declared as “Antyodaya households”= all families of “vulnerable social groups” including tribal groups, widows or single women, terminally ill persons, physically challenged persons, elderly-headed households with no assured means of subsistence and persons freed from bonded labour.

To prevent such leakage and corruption, the Bill provides for

  1. Computerisation of records and publication of all beneficiary and benefits given to them.
  2. Gram Panchayats will be allowed to run ration outlets.
  3. Officials will be punished for non-compliance, under Essential commodities act.
  4. Vigilance committees
  5. social audits by Gram Sabha etc.

Arguments: Chhattisgarh Food Security bill

Anti

Pro
  • No need to give them actual food.Just transfer cash directly transferred to poor families’ bank account and let them purchase stuff from market.
  • Not enough bank/post-office branches in Rural areas, particularly Maoist affected areas of Chattisgarh. Besides, no guarantee that if cash transfer is done, poor man won’t waste it on desi-liquor.
  • This bill covers everyone except those who pay income tax, property tax or own big farm land.
  • But a lot of people who can otherwise buy food at market rate, are also covered for vote-bank purpose.
  • This will unnecessarily increase fiscal deficit of the State.
  • Government should only care for extremely poor people and not everyone, who can afford to live without state support.
  • Inflation has eroded the purchasing power of lower middle class people. Therefore, Government should provide them with cheaper foodgrains, so whatever money is saved, the family can spend it on other things such as education.

National Food Security Bill fiasco =Direct Cash transfer?

UPA Government at the centre, also wanted to introduce National food security. But this dream hasn’t materialized just like those non-serious applicants in UPSC and other competitive exam. Why?

#1: Fiscal Deficit

  • Government doesn’t have enough incoming money (Revenue) to buy so much foodgrain and give it to poor people at cheaper rate. It’d require approx Rs.2 lakh crores per year.
  • Consider it this way: one on side, Mohan wants to keep the minimum support price (MSP) high for the farmers. At the same time, he also wants to sell cheap food grain, so from whose pocket will the difference come out? Obviously tax-payers’.
  • But people cannot be taxed beyond a level. And Government’s outgoing money (Expenditure) is already high thanks to fuel, fertilizer subsidies and defense purchases.
  • One can look at the recent hike in petrol, LPG as a measure to reduce outgoing money, to make room for affording the Food security Act (or similar other scheme.)
  • Government tried to increase the incoming money by disinvestment (that is selling Government’s shares in PSUs) but investors are not interested in buying shares at high price, hence ‘money collection target’ is not achieved.

#2: Identification of Beneficiaries

  1. There is already disagreement between Planning Commission and various ministries over “who should get how much subsidized foodgrain.”
  2. UPA wants the National Food security Act to have a “Comprehensive coverage” (=“marketing-shock–value” during elections).
  3. For example Chhattisgarh Food security gives benefit to everyone except those who pay income tax/ property tax/ own big farm-land= 90% public covered, only 10% people are not-eligible. So this is wide coverage.
  4. Similarly States such as Tamilnadu already have provision for very cheap food grains.
  5. So, if beneficiary coverage is ‘small’ (e.g. only those earning less than Rs.3000/month are covered), then it won’t create the marketing shock value for elections.
  6. Hence “wide-coverage” necessary but to do such ‘wide-coverage’ on a national-scale=>need truckload of cash, which central Government doesn’t have.
  7. And if Government tries to implement food security without increasing its incoming money (Revenue), it’ll lead to huge fiscal deficit= other problems such as inflation, depreciation of rupee, decline in IIP etc. (more explained in earlier fiscal deficit article).
  8. So Mohan will have to nit-pick on who should get how much cheap foodgrain = new survey, new ID cards need to be issued= lengthy and time consuming process, cannot be finished before 2014 Lok Sabha election.

#3: lack Manpower and Administrative machinary

  • Chhattisgarh is a small state, so not very difficult to administer such food security scheme.
  • But for a country large as India, Central Government doesn’t have the infrastructure or manpower to implement Food security on its own.
  • And doing this food security work via State Government’s machinery = opens up room for all sort of corruption, leakages.
  • Therefore Mohan seems to have concluded that Food Security is an implausible idea in its present form. Better just to send money directly to bank accounts of poor people, rather than relying on State Administrative machinery to run a full-fledged food security Act.
  • Hence he recently announced “Direct cash transfer” prior to Gujarat, HP elections which basically hints that food security has taken a backseat for “Direct cash transfer” scheme.

Some Food Quotes for thought

on Centrally Sponsored Schemes

  1. The (Punjab) state government is of the view that the centrally-sponsored schemes do not serve desired purpose and should be abolished and the state should be given their earmarked allocation as un-tied grants. States are in a better position to leverage their strengths and utilise the funds according to their development needs. (Statement of Punjab CM Prakash Singh Badal in NDC meeting.)
  2. 12th Five Year plan document spoke of one more sham exercise in which the so-called centrally-sponsored schemes are to be abolished with fund transfers to states. Undoubtedly, they would be reborn in another guise. (Tamilandu CM Jayalalitha @NDC meeting)
  3. States have different priorities from the centre and should not be asked to partially fund central schemes. (Madhya Pradesh CM Shivraj Singh Chauhan @NDC)
  4. 12th Five Year plan document is just an approach to centralise the public resources with government of India in terms of deciding priorities and nature of development schemes. Country’s resources should be allocated to the state and central plans equally”. (Karnataka Chief Minister Jagdish Shettar).
  5. An impression has been created that the government is all set to launch UID-enabled cash transfers on a mass scale before the 2014 elections. This is very misleading, and looks like an attempt to make people rush to UID enrollment centres. (Statement made by Four members of the NAC — including Aruna Roy + former NAC members Jean Dreze and MS Swaminathan)