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Cabinet clears food security via ordinance
-The Times of India


NEW DELHI: The Union Cabinet on Wednesday cleared an ordinance to implement the politically significant national food security bill without waiting for Parliament's monsoon session that is about a month away.

The decision to press ahead with the ordinance - delayed after the government sought to enlarge political support for the bill - is rooted in Congress's determination to project commitment to food security as an key aspect of its 2014 campaign.

Once the ordinance is signed into law by President Pranab Mukherjee, it will be incumbent on the government to provide 5 kg of subsidized rice and wheat to 67% of India's population.

Seen to have Congress chief Sonia Gandhi's backing, the move is intended to refurbish the party's aam aadmi credentials by adding another entitlement with the government embossing its political stamp on the law.

Read with initiatives like Aadhaar-linked transfer of subsidies and benefits to the socio-economically disadvantaged, food security is Congress's bid repeat the success of rural employment guarantee and loan waiver in the 2009 poll.

Experts, however, say the Food Security Act will have an enormous impact on the cereals market and the farm economy and presents significant operational challenges. The Act will also impact government finances and widen the subsidy bill.

The cost is budgeted at around Rs 124,000 crore a year. Some estimates say to implement the Act in a sustainable and reliable manner can cost Rs 200,000 crore a year keeping in mind investment for stabilizing production, creating infrastructure for storage and railways and upgrading public distribution system as well as an expected increase in the minimum support price.

"The objective of providing food and nutritional security to the masses is laudable one but the challenge is getting it right, fixing the leaky public distribution system and providing adequate infrastructure for storage and movement," said Ashok Gulati, chairman of the Commission for Agriculture Costs and Prices.

"It will impact the finances of the government unless there are commensurate cuts in other subsidies," Gulati said.

Congress managers are fairly confident that the ordinance will be passed by Parliament even though several parties have sought amendments like extending the coverage to 100% as already provided by states like Tamil Nadu.

BJP was quick to attack the ordinance, saying the haste to pass it reveals Congress's political motive in pulling off an "election gimmick" in the last leg of its tenure in office.

Yet, the government does not think even the main opposition will block the ratification of the ordinance in Parliament even of it criticizes it for being inadequate or opportunistic.

The ruling coalition's comfort levels in Parliament have increased with Janata Dal (U) parting company with the BJP-led national democratic alliance and a thaw in ties with estranged ally DMK. This reduces dependence on supporting parties like the Samajwadi Party, although no political outfit would want to be seen opposing passage of the law.

The rollout of the food security law still faces hurdles as beneficiary lists remain disputed with states arguing over exclusion criteria. The Centre's below poverty line list has not been updated as a socio-economic and caste survey remains incomplete.

The Planning Commission puts the number of BPL families at 6.5 crore while the states lists add up to a shade over 10 crore households.

In its latest avatar, the ordinance has done away with distinctions between BPL and above poverty line families, stipulating that 50% of urban and 75% of rural population be covered by the law.

The law will further increase government's role in the food grain market as it will need a procurement of 61 million tonnes to meet its commitments. It does not need to do so at one go, since India has large food grain reserves.

Some ministers like agriculture minister Sharad Pawar have had reservations on the law as they feel it will completely squeeze out private players from the food grain market. They feel the enhanced procurement will skew the market.