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Resource centre on India's rural distress
 
 

Despite growth, hunger pangs reality for millions by Subodh Varma

Although finance minister Pranab Mukherjee had promised food security and inclusive growth in his budget speech last year, hunger continues to stalk over 300 million citizens of the country. India slipped to 67th place in the Global Hunger Index 2010 rankings of 122 countries prepared by International Food Policy Research Institute. An Oxford University report said that 410 million Indians live in poverty. While there may be nit-picking over the actual numbers, but one thing is clear — there is widespread if not alarming hunger and malnutrition in the country despite a high growth trajectory.

The situation dramatically worsened in the past year with vegetable prices zooming up by over 24%. Since March last year, potato prices rose by over 75% and onion rocketed up by a jaw-dropping 300% for a few months pushing these staple vegetables out reach of large sections of people. Inflation had become a vehicle for sustaining malnutrition and hunger in the country.

Yet, the government continues to drag its feet on such crucial measures as providing cheap food grain to the people according to a study by the Centre for Budget and Governance Accountability (CBGA), a Delhi based think tank. The single biggest step that could reduce hunger and bring down prices of essential food items - universalisation of the public distribution system - has been stuck in wrangling between policy wonks.

CBGA’s study points out that providing cheap wheat and rice to about 24 crore households in the country would cost the exchequer Rs.1,44,141 crore. The government is already spending Rs.55,578 crore on providing food subsidies as per 2010-11 budget estimates. So, the net additional cost would be Rs.88,563 crore per year.

Many economists argue that India can ill afford spending such huge amounts on food subsidies. But calling such arguments “unsubstantiated”, CBGA said that food subsidies amount to less than 1% of India’s GDP and less than 4% of the combined expenditure incurred by state governments and Union government annually.

“Financial constraints can never be an excuse for denying the basic needs of the masses, and even less so when the government is prepared to forego tax revenue (as exemptions and deductions in both direct and indirect taxes) to the extent of Rs.5,02,299 crore for a single fiscal year (2009-10),” says the CBGA study.

The argument that there are not enough foodgrain to distribute to all the people too comes in for criticism in the study. As per the Second Advance Estimates released on 12 February 2010, the procurement of wheat and rice was 253.9 lakh tonnes and 236.9 lakh tonnes respectively last year, which accounted for only about 23 percent of the total food production. Universal public distribution would involve procurement of 1008 lakh tonnes of foodgrain. Enhancing the procurement levels can easily do this, the study says.

Last year in August, the Supreme Court had directed that 17.8 million tonnes of grain in danger of rotting in government godowns should be distributed to the people. This was after there were reports that 67,000 tonnes of wheat had been spoiled in the rainy season due to insufficient protection in godowns. Such tragic waste could be avoided if the government were to streamline the public distribution system, plug leakage and build infrastructure to deal with storage and transportation issues.