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LATEST NEWS UPDATES | NAC: PM's panel got its economics wrong by Nitin Sethi

NAC: PM's panel got its economics wrong by Nitin Sethi

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published Published on Feb 10, 2011   modified Modified on Feb 10, 2011
The Prime Minister-appointed Rangarajan Committee reviewing the draft food security bill has got its economics and logic wrong, a majority of members on the National Advisory Council has said as part of a draft report.

Ready to take on the PMO, the council is nearing finalization of the report that will point out errors in the Rangarajan report and defend the NAC's food security bill. The rebuttal is bound to widen the rift between the PMO and the NAC, which is headed by Congress chief Sonia Gandhi.

The council had drafted the food security bill, which the PM asked his chief economic advisor to review. The committee was packed with economists and bureaucrats seen agreeable to the PMO's insistence on keeping subsidies low. Expectedly, it criticised the bill for under-estimating costs and recommended a more minimalist version — reducing the number of beneficiaries and keeping those above the poverty line out. It also ignored proposals that required turning government's nutrition schemes into legal entitlements.

NAC members, taken aback at even the setting up of the committee, decided to defend their proposals and got the go-ahead from Sonia to put a counter-viewpoint out before the public. The council's working group on the food bill then drafted the response in consultation with all the members. The report, yet to be adopted formally by the entire NAC, has been accepted by a majority with the exception of some such as Planning Commission member Narendra Jadhav.

In its analysis, NAC claims Rangarajan panel erred in calculating the subsidy involved, wrongly argued that the proposed bill would lead to inflation and was off the mark in predicting that the government would never have enough foodgrain to distribute in the first place.

NAC members analyzed Rangarajan's calculations and found them lacking in rigour and logic. It's shown how the PMO panel inflated the costs and under-estimated government's ability to provide grain. The draft report will have to be adopted by entire NAC and cleared by the chairperson before it is released.

The Times of India, 10 February, 2011, http://timesofindia.indiatimes.com/india/NAC-PMs-panel-got-its-economics-wrong/articleshow/7464839.cms


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