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UPA blinks, paves way for food security law by Anil Padmanabhan & Sangeeta Singh

Bowing to pressure from the political leadership of the Congress, the government will consider making food security universal, but at a higher price for the rich.

Food security was an electoral promise of the Congress before the 2009 polls, but the initial draft of the Bill said that it would apply only to the poor. After Congress president Sonia Gandhi refused to accept the Bill in that form, an empowered group of ministers (eGoM) set up to refine it directed the Planning Commission to make it more inclusive.

This could mean the Centre, which had pledged to supply 25kg of foodgrain a month at Rs3 per kg to households eligible for this under the law, may now be more flexible in terms of pricing.

The new draft of the Bill compiled by the Planning Commission last week will be discussed on 1 July by the new National Advisory Council, a body that seeks to serve as the government’s conscience and ensure that its development and social programmes are well crafted and directed. The new draft proposes that the public distribution system (PDS) should move to a smart-card based system that ties in with Aadhaar, the government’s programme to provide a unique identity to all residents.

It also proposes to index PDS foodgrain prices, both for the poor and those living above the poverty line (APL), to the minimum support price (MSP)—the floor price offered to farmers after harvest—and determine entitlement on a per capita basis. There will be universal entitlement, but differential pricing for the poor and the not-so-poor.

Saumitra Chaudhuri, member, Planning Commission, while declining to divulge details about the proposal, said: “The final decision shall be that of the eGoM. Planning Commission has given some options which the eGoM can consider.”

The proposals include moving to an individual monthly requirement as opposed to fixing an amount of 25 kg per household. The logic, the commission explains in the draft, is that this will help poorer households that tend to have more members.

The new draft also suggests the mandatory use of unique numbers to be issued under Aadhaar from later this year. According to the panel, this will, since the identity is based on biometric verification, eliminate the problem of bogus cards and thereby help ensure that the legislation benefits those whom it seeks to. Currently, the official estimate of below the poverty line (BPL) households is 65.2 million, but state governments have issued as many as 112 million BPL cards. The Centre supplies foodgrains sufficient to meet the official estimates of poor people.

The panel has also made a case for differential pricing and argued against specifying a fixed price in the Food Security Act. It has suggested that this be flexible, and linked to MSP, which the government revises every year. It has proposed that the price of APL grain, which has not changed since 2002, be fixed at 75% of MSP.

The panel has in fact linked a variable APL price to the ability of the government to deliver on the promise of food security. “If we don’t raise the APL price, we will have to arbitrarily limit supply, but in that case we cannot claim to have delivered food security at all,” it says in one of its proposals.

Y.K. Alagh, an economist who defined poverty in the 1970s, has favoured the per capita approach. “The extreme malnourished should be subsidized the most and first, then the moderately malnourished ones and then those who can afford. The extremely malnourished population would be around 20%, for which the government needs to pay special attention,” he said.