Loopholes of the food security bill
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The National Food Security Bill was signed into law on the 12th
of September 2013. Its aim is to try and eradicate hunger in
India by providing cereal grains at highly subsidized rates of Rs
3, Rs 2, Rs 1 per Kg for rice, wheat and millets respectively.
The entitled quota is 5Kg of food grains per person per month.
The bill covers 67% of the population and will provide food to
about 820 million people at these subsidized rates.
The major question is whether 67% of the people of India really need this subsidy? The planning commission of India makes claims that only 22% of the population is below the poverty line and according to the world bank in 2010 only 32.7% of the population were living below 1.25$ a day. This question is linked directly to the cost of the bill. Currently, predicted by the government to be Rs 1.25 lack crore. And another estimate made by the commission for agriculture cost and prices states that the total expenditure on the bill will be Rs 6.82 lack over a three year period. The major questions regarding the cost of the bill are:
1) Do we have sufficient money to implement the bill?
2) What effect is this going to have on fiscal deficits and inflation in India?
The money required to implement the bill is going to come undoubtedly from the tax payers and it is going to increase the fiscal deficits, which then leads to inflation. The increase in prices of goods indirectly caused by this bill will hit the middle class, the highest as there will be a rapid increase in the cost of most imported products.
The implementation of this bill is to be carried out through the PDS which is to be reformed. However the track record of the PDS in the last 50 years is not very promising. One of the biggest loopholes of the bill is that the people of India being covered by the Antyodaya Anna Yojana, which gives a quota of 35 Kg of food grains per person per month to 1 crore poor families at rates of Rs 3 and 2 per Kg, will continue to do so under that scheme. In other words the Food Security Bill will not have any effect on them.
A matter of concern is the principle of the bill. To provide people with food directly at subsidized rates has never proved to be successful in combating poverty; this is evident from the examples of other countries that tackle poverty head on by giving the people income security through jobs rather than food security. Providing people with jobs rather than food is a better long term guarantee of food. The bill can increase the complacency of people who will then be unwilling to work as they can afford food at the subsidized rates. It will also considerably increase the dependency of people on the government.
The solution to these loopholes of the Food Security Bill is that the bill should be modified to target only the poorest of the poor who cannot work and require the subsidy the most. The government can create more jobs instead to guarantee income security and thus guarantee food security.