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NEWS ALERTS | A rough guide to India’s Food Security Bill
A rough guide to India’s Food Security Bill

A rough guide to India’s Food Security Bill

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published Published on Mar 7, 2013   modified Modified on Mar 14, 2013

Introduced in the Lok Sabha in December 2011, the UPA government’s Food Security Bill is finally going to be discussed in the current (Budget) Session of Parliament. The proposed legislation is now slated to see many additional amendments from the government, following criticism from the States, NGOs and diverse stake-holders working on access to food and child health. Attempt here is to summarise in a Q & A format the ‘who, what, why and how’ of the Right to Food legislation for media persons. Please note that each section is followed by several links of documents, papers and reports which throw more light on the subject.

What’s the criticism?

Some state governments have expressed doubts over coverage, while others have asked the central government to fund the bulk of the proposed law’s entitlements, instead of passing on costs to the states. Non-governmental groups have largely criticised the bill for not paying adequate attention to turning existing child nutrition provisions into legal entitlements. The Parliamentary Standing Committee’s report on the bill has come under additional fire for ignoring benefits under the ICDS program on the grounds of the government citing operational gaps. Another key gap in the proposed legislation is the absence of well-defined grievance addressal mechanisms which vulnerable groups could invoke if their entitlements went unmet.

Who is entitled?

The most intense debate around the PDS pitch the benefits of targeting versus universalism. Advocates of the latter argue that targeting is based on impractical, widely varying and under-reported poverty estimates (percentages which are currently centrally determined, and then handed down to the states). Further, it also excludes many legitimate beneficiaries. They point to the universal PDS systems put in place by states like Chhattisgarh and Tamil Nadu to argue that such a principle ensures self-selection as well as lesser diversion and siphoning from the poor  - since in theory, everyone is eligible for subsidised grain.

Those who want a targeted system based on poverty cut-offs point to the fiscal costs of making every citizen eligible for subsidised grain. They also worry about the price distortion universal subsidised grain might create in the food market.

The government has recently stated that bill will be altered to do away with its earlier clauses of 75% rural and 50% urban entitlements and instead include 67% of the overall population in each state as recipients of the subsidies. (Within this, there will also be the Targeted PDS, a section of families eligible for even cheaper grains). The inclusion criteria are still to being worked on, according to the government, and there is no clarity on how findings of exercises like the Socio-Economic Caste Census will feed into efforts to ensure no needy family/individual is denied subsidised food.

However, the bill also leaves the door open for individual states to extend PDS benefits to a wider population, including making it universal. The Chhattisgarh government has already taken steps towards this by passing its own food security act, citing delays at the Centre.

Recent NSS studies have shown that compared to 2004-5, there is a distinct rise in PDS purchases in states, which have implemented reforms and improved access in their PDS schemes, and universalised their schemes such as Tamil Nadu and Chhattisgarh.

Links:
 

Confident of passing food security Bill this session: Thomas- Ragini Verma and LizMathew, Live Mint, 22 February, 2013,

http://www.livemint.com/Politics/RPyZGwouWVSHKVtzNe2A8K/Co
nfident-of-passing-food-security-Bill-this-session-Thomas.
html

 

NSS 66th Round Report titled: Public Distribution System and Other Sources of HouseholdConsumption (July 2009-June 2010),

http://mospi.nic.in/Mospi_New/upload/nss_report_545.pdf

 

Food Security Act: Should Centre emulate Chhattisgarh? -NO by MR Subramani, The HinduBusiness Line, 28 December, 2012,

http://www.thehindubusinessline.com/opinion/food-security-
act-should-centre-emulate-chhattisgarh-no/article4249372.e
ce 


How much will it cost?

An estimated 65 million tonnes of grain would have to be procured, and then provided at subsidised rates. The program’s cost estimates, by the government and independent institutions and scholars, range from 1,12,205 crore  rupees to 1,43,000 crore rupees, with the higher forecasts including costs such as leakage of grains and maternal and child benefits under the ICDS program.  (By way of comparison, India’s defence budget in 2012 was 1,93,407 crore rupees. ) These food and fiscal estimates are based on current demand levels, which will rise in the coming years, leading to concerns about the growing tab. The latest official estimates are putting the cost at Rs 1,20,000 crore to the exchequer, which means an increase of about Rs 40,000 crores.
 
Recent statements from the Planning Commission Chairman indicate that the government is willing to expand the amount spent on food subsidies if it cuts other subsidies such as fertiliser and fuel so that India’s fiscal deficit does not widen.

A break-up of current and projected future costs are provided by the authors in their paper here:
 

Food subsidy bill: the larger picture-Rajiv Kumar and Soumya Kanti Ghosh, Seminar, http://www.india-seminar.com/2012/634/634_rajiv_kumar_&
;_soumya.htm 

 

Additional links:

 

Confident of passing food security Bill this session: Thomas- Ragini Verma and LizMathew, Live Mint, 22 February, 2013,

http://www.livemint.com/Politics/RPyZGwouWVSHKVtzNe2A8K/Co
nfident-of-passing-food-security-Bill-this-session-Thomas.
html 

 

Report of the Expert Committee on National Food Security Bill


How should it be implemented?

The government has stated the need to cut leakages by cash-for-food transfers into bank accounts of those eligible for PDS entitlements, and route these transfers through the Aadhaar numbers. (The diversion happens mainly through bogus cards and siphoning of grain – 37% according to a Ministry of Food study in 2004-5.) Replacing food with cash is part of a larger scheme of money transfers, dubbed by the Congress-led government as the Direct Benefits Transfer or Aapka Paisa Aapke Haath. In the official take,
 
“The DBT programme aims that entitlements and benefits to people can be transferred directly to them through biometric-based Aadhaar-linked bank accounts, thus reducing several layers of intermediaries and delays in the system. The last-mile of the initiative is the most important — the system will allow actual disbursements to take place at the doorstep of the beneficiaries through a dense, interoperable network of business correspondents (BCs) using biometric micro-ATM machines. Thus, the yardstick of success is not going to be that the money has reached a bank account, but that it has reached the hands of the intended beneficiary — a student, a pensioner, a widow, an elderly person, a disabled person, a poor family.”

However there has been little clarity, transparency and accountability accompanying the move on the ground as well as official awareness about its potential requirements, with the government seeming to be in a distinct hurry to push through the measure, as well as forcibly link entitlements to individuals enrolling in Aadhar, despite this identity scheme claiming to be voluntary.

As per latest reports, the government will implement a pilot project for PDS in cash in six union territories including Delhi. It will extend the measure to other areas once 90% of the beneficiaries have got bank accounts.  A pilot study in Delhi pointed to the willingness among some families for cash over entitlements in kind. On the other hand, reports from the ground in Rajasthan where a cash-for-kerosene pilot has taken place brought to light a raft of implementation problems that are inevitable is administrations do not lay adequate groundwork, as well as locals voicing a desire for in-kind transfers over cash.

Other states like Chhattisgarh have categorically told the centre that they would like to opt out of cash transfer measures in PDS, and instead continue to use other technologies and monitoring measures to ensure needy families get their monthly entitlements.  

The government’s official line is that it can move to cash transfers only when 90% of the beneficiaries in an area have bank accounts, and the whole delivery system has been computerised from end to end.
 

Do poor people in Delhi want to change from PDS to cash transfers? A study conducted bySEWA Delhi, October 2009,

http://www.sewabharat.org/Delhi%20cash%20transfers%20english.pdf

 

No need for hype but certainly a hope-Jairam Ramesh and Varad Pande, The Hindu, 11December, 2013, http://www.thehindu.com/opinion/op-ed/no-need-for-hype-but
-certainly-a-hope/article4185360.ece

 

'Cash transfer more efficient than PDS'is efficient way for extending food subsidy',The Times of India, 20 January, 2013,

http://articles.timesofindia.indiatimes.com/2013-01-20/pun
e/36445534_1_cash-transfer-food-subsidy-fair-price

 

Cash transfer in PDS put on hold-Ajith Athrady, Deccan Herald, 26 January, 2013,

http://www.deccanherald.com/content/307955/cash-transfer-p
ds-put-hold.html

 

New day, new start-Abhijit Banerjee, The HIndustan Times, 1 January, 2013,

http://www.hindustantimes.com/News-Feed/AbhijitBanerjee/Ne
w-day-new-start/Article1-983389.aspx
 
Will the new bill reverse India’s high incidences of malnutrition and hunger?

India has some of the worst nutrition standards in the world, including having 46% of its children under 6 years malnourished, thus stunting their prospects for the rest of their lives. India’s socio-economic inequalities also directly reflect in the phenomenon: in poor areas, such as districts with adivasi populations, social worker Binayak Sen points to National Nutrition Monitoring Bureau data from 2009 to argue that that 40 per cent of men and 49 per cent of women have BMI below 18.5, and can be considered as suffering from chronic hunger.  

The bill, and the report of the standing committee that examined it, have been roundly criticised for ignoring the country’s problem of infant and child nutrition by not making ICDS entitlements part of the bill’s enshrined rights. Bodies like the National Commission for the Protection of Child Rights have also criticised the parliamentary committee for stating that benefits will only accrue to a couple’s first two children, thus  making a crude and misplaced bid to link this to population control.  

In addition, the bill does not pay adequate attention to decentralised procurement of grains, nor does it look beyond rice and wheat to procure and distribute more nutritious grains such as coarse grains, jowar, bajra and other millets, which are part of the local diets in rain-fed areas.

 

The Coming Famine in India-Binayak Sen, Mainstream Weekly, VOL L No 46, November 3, 2012, http://www.mainstreamweekly.net/article3798.html

 

Ending Hunger, June, 2012, http://www.india-seminar.com/2012/634.htm

 

Food Entitlement Act 2009,

http://www.righttofoodindia.org/data/rtf_act_draft_charter
_sept09.pdf

 

http://www.ddsindia.com/www/pdf/MINI%20Letter%20to%20MPs%2
0on%20FSB.pdf
 


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