Chapter 11 The National Food Security Bill 2013 – Indian Economy

11

The National Food Security Bill 2013

One of the adverse effects of underdeveloped economies of the world is the disproportionately large amount of incomes their people spend on their necessities, especially on food articles, compared to what people in advanced countries spend on theirs. India is no exception to this general rule. For centuries, Indian masses were afflicted by famines and back of nutritious food. After Independence, the country’s planned economic development brought about a certain degree of reversal of poverty and famines people were exposed to during the colonial era, but still it left a sizable chunk of our population craving for food. Food security was a major issue for the country’s government planners and economists. Some states such as Tamil Nadu and Kerala had introduced measures to give their poor people food either gratis on at a highly subsidized low price. There were also several half-hearted attempts to provide food to the poor through agencies such as the public distribution system (PDS) and Antyodaya Anna Yojana Scheme (AAYS).

The situation in which the United Progressive Alliance (UPA) Government has initiated the Food Security Bill 2013 is particularly daunting. Food prices have been skyrocketing especially after the commencement of the second half of the financial year 2013. ‘Cereal inflation is hovering at 18 per cent vegetable prices soaring at 46 per cent and protein goods at 11 per cent1 (from July 2012 to July 2013)’.

The UPA Government led by Prime Minister Manmohan Singh under the guidance of congress President Sonia Gandhi initiated a series of pro-poor policies that included the Mahatma Gandhi Rural Job Guarantee Scheme (MGRJGS), Forest Rights Act (FRA) and Right to Education Act (RTE). The National Food Security Bill (NFSB) is the fifth in a series, of which is termed as the Governments Rights-based approach. In the words of the congress President, ‘This approach is bringing about an empowerment revolution in our country in as much as it provides legal entitlement to people puts pressure on the executive to be more responsible and accountable and also puts in place credible mechanism to regards grievances’.2

The NFSB 2013 aims at providing highly subsidized food grains to nearly 70 per cent of Indians population. It will legally entitle 67 per cent of the population (including 75 per cent rural and 50 per cent urban) to get subsidized food grains under the Targeted Public Distribution System (TPDS). A beneficiary under TPDS will be eligible for 5 kg of rice, wheat or coarse cereals at Rs 3, Rs 2 and Re 1 per kg a month, respectively. The recipients will be identified by the State Governments based on parameters prescribed by the Union Government.

Earlier, the Government of India had promulgated an ordinance embodying the substance of the NFSB in July 2013, which needed to be replaced by the Bill in the monsoon session of the Parliament to make it a law. The opposition, though was supportive of the Bill they could not do it otherwise lest they lose their vote bank, moved a number of amendments which the Government did not agree to incorporate in the Bill. After a six-hour debate on the Bill, it had gone through the Lok Sabha. Once the process is over the Bill would have to be approved by the Rajya Sabha, after which it would be sent to the President for his imprimatur. Once this length process is gone through, the Bill will become the law.

Though the proponents of the FSB consider it as a landmark legislation in the march towards poverty alleviation, it is not a piece of legislative activity that has the concurrence of all sections of society. It has its own sceptics and opponents, who ‘believe that it will have dire consequences on the fiscal situation, further eroding India’s business confidence slowing down growth, further tumbling of the rupee and higher inflation.3 The following are some of the issues raised by critics of the NFSB:

  1. The quantity of food grains offered per person in the Bill is inadequate taking into account the average consumption of cereals in the country which is estimated to be 10.7 kg. On the other hand, NFS promises basically just 5 kg of cereal per person per month (PPPM). This means that even in case of essential food items such as cereals, consumers will have to secure them in open markets for more than half their needs.
  2. As of now, the largest chunk of food items of most Indian consumers are procured from open market and it will still remain so even after the NESB becomes operational moreover, there has been a considerable diversity in the consumption of food items by Indians in recent times in addition to cereals. For instance, Indian consumers nowadays have been going after vitamins such as fruits and vegetables and protein foods like milk, eggs, sea food and meat. All these foods which constitute the bulk of food items on which considerable amount of money is spent are beyond the purview of the NFSB.
  3. If the NFSB is supposed to ensure the ‘right to food’ of the poor with sufficient and nutritious food, it is imperative that such balanced food is made available at an affordable price. Presently food inflection hovers around 12 per cent. Unless it is brought down to a manageable 4 per cent, NFSB cannot realize its lofty objective.
  4. At this juncture of economic fluctuations and fiscal volatility, can the country effort the huge cost of FSB? In 2011–12, itself the cost of providing free and subsidised food grains to the poor stood at Rs 80,000 crore. In 2012–13 prices, it is estimated to hover around Rs 1,30,000 crore. By 2013–14, we need to add at least another 8 to 10 per cent more to this cost that include support prices and costs of procurement, storage and distribution. For the financial year 2015, the NFSB cost will be around Rs 1,40,000 crore excluding additional investments required to modernize P.D.S. at the state level cost of warehousing and in farming operations with a view to stabilizing production of food grains. If all these costs are added up to make then FSB realize the objective of enabling the country’s Aam Admi the right to food for the full year of 2015 will not be lower than Rs 1,40,000 crore. We may have to add Rs 50,000–Rs 60,000 crore for all incidental expenses to be incurred realistic. Table 11.1 below provides a bird’s eye view of the staggering cost involved in making the NFSB work for the poor of this country.

Table 11.1 Estimated Cost of Implementing the Food Security Bill, 2013

Bar Diagram

Affordability

National Food Security Bill

At this stage of recession hit and flown during economy, India affords the staggering cost the NFSB envisages? When this realistic question was posed to the Congress President Sonia Gandhi, the prime mover behind the NFSB, whose ambition it was to steer it through the parliament made the following political statement. ‘Many people ask if we have resources for this. I just want to tell them that the issue is not if we have resources—we will have to find the resources. Some ask if this can be done. I tell them the issue is not if we can do it or not. We have to do it.’4 But given the large fiscal deficit and the highly unfavourable balance of payments situation, this assertion seems to be unrealistic and impractical.

Apart from the justification provided by the proponents of the NFSB, there are others who support this pro-poor legislative initiative on the basis of equity, social justice and economic fairness. A decade of economic prosperity has enabled millions and millions of middle-class families to realize their upwardly revised aspirations and life experiences; at the same time, the UPA saw to it that the welfare state kept expanding the ‘social agenda’, providing a safety not against the vagaries of the market’.5 With the economic boon petering out and the worldwide recession having its unavoidable impact on the Indian economy, the UPA Government seized this opportunity to pay its attention to the needs of the underprivileged to salvage its name as non-perform Government. The NFSB was viewed by them as the other side of the stimulus coin. The 2008–09 stimulus was used by the country’s super rich to enjoy luxuries, amenities and appurtenances of life here and abroad. The NFSB has been enacted to protect the poor from hunger and the pangs of misery. ‘If subsidised food can reduce the food spending of the poor, and place some surplus money in their hands, which would be then spent in India, that may end up stimulating domestic consumer demand. It would be a kind of stimulus lite for the poor.’6

In the given circumstances of allegations of poor governance maladministration and non-performing economy all of which were attributed to the UPA Government, the NFSB has come as a good-send piece of legislation. With the opposition in a disarray with a majority of them include to support the NFSB as a face-saving device and an Act, they can oppose at their own peril, the ruling coalition used the opportunity to pilot the populist measure. There are many problems and issues; the NFSB is likely to throw up in future while it is put in operation. It is yet to be seen how the Government manages the economy beset with in numerable problems and the new ones likely to be created by the NFSB.

There were other drawbacks as well. For instance, projects were neither chosen keeping in mind the needs of the local populace nor was there any provision for the maintenance of the assets created. In the case of social forestry scheme, the survival rate of saplings was pretty low since the local community was not involved in the choice of the saplings which led to very poor interest evinced by them in maintenance of the trees planted. Likewise, the incomplete road works was increasing, while lack of technical and administrative supervision had resulted in technically poor quality of projects implemented under Integrated Rural Development Organization (IRDO).

National Institute of Rural Development

The Programme Evaluation Organization of the National Institute of Rural Development (NIRD), the Indian Institute of Public Administration and the Gandhi Labour Institute conducted evaluation studies of the IRDP programme. On the positive side, these studies pointed out features such as prompt payment of wages, creation of durable assets and implementation of works through Panchayat Raj Institutions rather than through government departments. At the same time, they also pointed out some negative features such as the fact that the employment provided was for a short duration and did not make an impact on the standard of living of the rural folks. Besides the wages paid under the National Rural Employment Programme (NREP) were often lower than the market rates. The selection of the beneficiaries too was not appropriate in as much as the target group the poorest of the poor for whom the programme was meant was sometimes left out altogether.

Moreover, like other government programmes, the selection of the projects was not ideal in as much as the needs of the local people were not taken into account. There was also no machinery created for the maintenance of the assets created. The number of incomplete road works was on the increase. Likewise, lack of technical and administrative supervision had resulted in technically inferior quality of the works.

Rural Landless Employment Guarantee Programme

The Government of India launched the Rural Landless Employment Guarantee Programme (RLEGP) during 1983–84. The objective of the programme was to improve and expand employment opportunities for the rural landless labour, household up to 100 days in a year and create durable assets for strengthening the rural infrastructure so as to meet the growing requirements of the rural economy. To meet the financial needs of the programme, an outlay of Rs 1,743.78 crore was provided in the Central sector in the seventh plan with a target to generate 1013 million man-days of employment. The criteria for financial allotments to the States were similar to that under the NREP. In fact all the conditions governing the programme such as the kinds of projects, preparation of district plans, material-wage cost ratio, mode of wage payment, food grains component of the total wages and ban on contractors were as per the NREP and RLEGP.

Table 11.2 below shows the progress of the implementation of the programme during the first four years (1985–86) to (1988–89) of the Seventh plan, as the fifth year (1989–90) of the programmes NREP and RLEGP had been merged with the Jawahar Rozgar Yojna (JRY).

Table 11.2 Performance of RLEGP during the Seventh Plan Period

During the Seventh Five Year plan period, the physical and financial targets set out in the annual plans have been more than achieved. Partly because of several administrative and financial reasons, it was not possible to provide employment guaranteed under the programme. The Seventh Plan envisaged 82 to 100 days employment in a year to one person in a landless labour household. ‘The implementation of an employment guarantee programme for the landless ever on a pilot basis in a few selected blocks had not been found feasible as it becomes difficult to refuse to work to the unemployed who report for work’.7

During the year 1989–90, NREP and RLEGP were merged into the JRY with the following stated objectives:

  1. Generation of additional gainful employment for the unemployed and underemployed in rural areas;
  2. Creation of sustained employment by strengthening rural infrastructure and also assets in favour of the rural poor for their direct and continuing benefits;
  3. Improvement in the overall quality of life in rural areas. People below the poverty line are the target group under the JRY. ‘Preference under the Yojana is given to scheduled castes, scheduled tribes and freed bonded labourers and 30 per cent employment opportunities are reserved for women’. During the Seventh Plan Period, wage employment programmes (NREP/RLEGP and JRY) generated 3497 million man-days of employment. The biggest anti-poverty programme is JRY, whose outlay has risen from 0.38 per cent of GDP in 1990–91 to 0.59 per cent in 1993–94. Man-days of work under JRY declined from 874.6 million in 1992–91 to 781.8  million in 1992–93, but then shot up to 1100 million ion in 1993–94 and 1150 million in 1994–95. This is an all-time record’.1

As the programme had not been in operation for a sufficiently considerable period, an objective evaluation of its impact on the rural economy is not available. However, a few sample studies that were made revealed that the programme had helped stabilize wage rates, created durable community assets and generated employment opportunities. On the negative side, it was observed that there were deficiencies in the implementation of the programme. For instance, the planning and preparation of a shelf of projects on the basis of an area approach was not done. The guarantee of 100 days of assured employment was not provided; muster rolls had been manipulated by contractors entrusted with the operation of the scheme and the wages were invariably lesser than what were shown in the account books. Besides, there was no systematic selection of landless labourers.

Employment Assurance Scheme

In 1993–94, the Government of India launched a new programme christened Employment Assurance Scheme (EAS) with the objective of giving a fillip to rural employment generation. The EAS was implemented in 1778 backward blocks where the revamped PDS was in operation. The scheme aimed at providing 100 days of unskilled manual work to the rural poor who were in search of jobs especially during the loan agricultural season. The scheme was funded in the ratio of 80:20 by the Centre and State, respectively. The works under the scheme were undertaken departmentally where no contractors were hired. Part of the wages was paid in food grains. Since it was a need-based programme, no target of employment generation was fixed. In the year 1994–95, Rs 1200 crore was sanctioned for EAS. Man-days of employment generated under EAS were 140.49 lakh, 123.67 lakh and 63.96 lakh for the years 1992–93, 1993–94 and 1994–95, respectively.

Indira Awaas Yojana

Indira Awaas Yojana (IAY) aimed at providing houses, free of cost to SC/ST people, freed bonded labourers. During 1989–90 to March 2001, 67.5 lakh houses were built with a total expenditure of Rs 11,324 houses. Average cost of construction of a house was Rs 1,61,776. From the year 1993–94, the scheme was extended to other categories of poor people. The permissible expenditure for each house under IAY which was fixed at Rs 14,000 was enhanced to Rs 20,000 from 1 August 1996 so as to meet the increased cost of building materials.

Innovative and Special Employment Projects

Under the JRY, special and innovative projects with the objective of prevention of migration of labour, promotion of women’s employment, special programmes through voluntary organizations aiming at drought proofing as well as watershed development were undertaken. Apart from these projects, ‘Operation Blackboard’ was launched with a view to providing assistance to the construction of classrooms and school buildings. During the five year period 1989–90 to 1993–94, as against the target of 4,332 million man-days, the States provided employment of 4283 million man-days, as against the targeted 4332 million man-days, achieving nearly of 97 per cent of the target. The total amount spent was Rs 14,010 crores. This worked out to Rs 32.7 per man day, which was an encouraging achievement.

Inadequacies of Anti-Poverty Programmes

The above cited anti-poverty programmes to ameliorate the conditions of the poor have been found to be inadequate to meet their objectives. These have not yet made substantial impact on poverty. One of the reasons for this inadequacy apart from the poor implementation of the projects has been the unchecked growth in rural population, which is larger among the poor than the all India rate unfortunately. This is largely due to their poverty. ‘With poor nutrition, inadequate medical facilities, unhealthy living, etc., the mortality rates as also infant mortality rate are also high. With survival rate very low at both the ends of the lifespan, the family size tends to be large as happens in the backward economies. The reproductive capacity of the poor women is also higher. The close relation between high fertility and poverty is caused by the degeneration of some vital organs that raise fertility. Further the psychological effect of chronic hunger makes sex an important emotional compensation for the shrunken nutritional opposite. Again, poor people are steeped in illiteracy and much attached to old unscientific attitudes. As such, they abhor birth control or are ignorant of birth control devices or do not want to use them or are unable to use them. ‘With little employment and large-sized families, the incomes are low and consumption inadequate’.1

Conclusion

As an outcome of the various anti-poverty projects, the government has undertaken, some progress has been made in the reduction of poverty. For example, the poverty ratio, which was 54.9 per cent in 1973–74, declined to 44.5 per cent in 1983, 36 per cent in 1993–94 and 26.1 per cent in 1999–2000. In absolute terms, the number of poor declined from 321.3 million in 1973–74 to 307.1 million in 1987–88 and further to 260.3 million in 1999–2000. There was a considerable fall in this number since 1993–94. Though National Rural Employment Guarantee Act (NREGA) is conceptually a very significant national programme, its poor and inefficient implementation has not brought much benefit to the rural households. Besides, like many other rural development projects, this programme too is beset with widespread complaints of corruption, pilferage of funds and very low level of utilization of budgeted provision.

Key Terms

Antyodaya anna yojana scheme 63

Economic stimulus 66

Face-saving measure 66

Food security 63

Forest rights act 63

Mahatma Gandhi rural job guarantee scheme 63

National food security bill 63

Public distribution system 63

Right to food 64

Social agenda safety net 66

United progressive alliance 63

Discussion Questions

11.1. Discuss the salient features of the National Food Security Bill. What are the problems the Government will have to face while implementing it?

11.2. Can the economy afford the cost of implementing it?

11.3. Discuss the merits and demerits of the NFSB. Suggest an alternative to the NFSB with a view to alleviating the problems of food insecurity to the poor.

Footnotes

1 Ashok Gulati, Chairman, Commission for Agricultural costs and Prices in the article ‘Muddling Through Food Security’ in Times of India, Chennai.

2 Ibid.

3 Ibid.

4 Media Reports on 27 August 2013.

5 Harish Khare (2013), ‘This Perverse rage against the poor’, The Hindu, Chennai, 30 August.

6 Ibid.

7 Ibid, p. 107.