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Resource centre on India's rural distress
 
 

Work in Progress

In its final recommendations on the proposed Food Security Act, the Sonia Gandhi-led National Advisory Council finally has acknowledged the twin constraints of the budget and the availability of foodgrains by stopping short of “universalisation” of a government-guaranteed right to subsidised food. Given the NAC’s composition and remit, its recommendation is likely to influence the final draft.

The NAC still leans in favour of spreading the targeting net too wide, and too indiscriminately. Under the latest recommendations, 75 per cent of India’s population will be given the right to access subsidised foodgrains by 2010 — disaggregated, this will include 90 per cent of the rural population and 40 per cent of the urban population. This will be double the number of people classified as below the poverty line by the Tendulkar Committee (and accepted by the government), which had in any case raised the poverty estimate from 26 per cent to 37 per cent. The NAC has, however, chosen not to categorise beneficiaries as BPL or APL. Instead, the beneficiaries are to be divided into two new categories, “priority” and “general”. The priority category (46 per cent of rural and 28 per cent of urban), which more or less coincides with the Tendulkar Committee’s BPL category estimate, will be entitled to 35 kg of grains a month at the following prices: rice at Rs 3 per kg, wheat at Rs 2 per kg and millets at Rs 1 per kg. The general category (44 per cent of rural and 22 per cent of urban), which is above the Tendulkar poverty line, will be entitled to 25 kg per month at a price which doesn’t exceed half of the minimum support price for these grains.

By just redoing nomenclature, the NAC has not come any closer to solving the identification problem — who exactly will fit into which category? Also, if the government begins to procure foodgrain to feed 75 per cent of Indians, very little may remain in the open market, driving up general price levels. What is perhaps most worrying though is that a massive quantity of foodgrain acquired through massive spending by the government will still pass through the very leaky and completely unreformed public distribution system (PDS) to reach the beneficiaries. The NAC has made some suggestions to overhaul the PDS, but these may take longer than the suggested roll-out of the Food Security Act in the next financial year. In the interim, there could be significant leakages, more even than in the present system. This concern needs to be addressed.