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#GiveItUp versus FSA PDF Print E-mail
Thursday, 27 April 2017 06:07
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Ishaan's edit

Food Security Act needs fixing, focus on that

 

Prime minister Narendra Modi’s personal exhortation—‘if you give up your subsidised LPG, I can give this to a village woman using wood/coal-fired chulhas’—helped get over 1 crore Indians to join #GiveItUp directly and another 50 lakh who did not link their LPG connections with their bank accounts to get the subsidy. To that extent, the government’s plan to try something similar for food subsidies may just work. The initial plan is to get ration-shops to display the real value of the grain—Rs 21 per kg for wheat and Rs 30 for rice. Presumably, this is to embarrass the better-off availing of the subsidy to voluntarily give it up—given his expert communication, chances are the prime minister will find more inventive ways to achieve his goal like possibly talking of starving children who could be fed. There are, though, some vital differences in that, in the case of LPG, three centrally-owned PSUs could follow up with users while, in the case of rations, it is the state governments that call the shots.

While a personal appeal by the prime minister may help, this is beating around the real problem of the UPA’s National Food Security Act (NFSA) that gives highly subsidised grain—it will cost Rs 3 per kg of rice and Rs 2 for wheat—to two-thirds of the population. The really poor will get 35 kg per month while the rest will get 25 kg, assuming a family of five. Contrast this with India’s poverty, or the number that really deserve the subsidy. In 2011-12, based on the 30-day recall, 22% of the population was poor, but this fell to 14% based on the 7-day recall. Based on that—the next survey will be out next year—and GDP growth since then, chances are not more than 10-15% of the country’s population will be poor depending upon which recall period is used.

If the NFSA is amended to include only the poor, this means just 18 crore people will be entitled to the almost-free grain (using the higher 15% poverty number); if even 30% of the population gets the grain, that’s 36 crore people as compared to 80 crore right now. Unless the prime minister’s exhortations can get 44 crore people to give up their monthly entitlement of vastly subsidised ration-shop grain, it is clear amending the NFSA is the superior option. Whether he chooses the personal appeal to the legislative route will depend upon whether the prime minister is ready to demonstrate that political will he told bureaucrats he had plenty of the other day.

 

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