Published: Monday, September 9, 2013

PRAFUL BIDWAI COLUMN
Democracy With Rights For The Poor

Food Bill is a first step

AFTER vacillating for four years, India’s United Progressive Alliance finally did something worthy and had the National Food Security Bill (NFSB) passed. It won a big 100-vote majority in the Lok Sabha because many non-UPA parties felt they had to support it. It sailed through the Rajya Sabha too.
The stage was set by a rare, spirited speech by Congress president Sonia Gandhi, which described the legislation as India’s chance to “make history” by abolishing hunger: “The question is not whether we can [raise the resources] or not. We have to do it.”
The NFSB has invested public purpose and legitimacy into the UPA’s corruption-ridden, shoddy and often appalling performance. It put the Bharatiya Janata Party on the mat. BJP leaders were reduced to making thoughtless statements about the Bill as “vote security”, not food security.
The BJP has nothing to offer but obscurantist programmes like building a temple at Ayodhya and predatory pro-corporate agendas, with Narendra Modi’s rabidly communal leadership.
The Bill is open to the criticism that it doesn’t go far enough. Instead of universalising subsidised food provision, it confines it to two-thirds of the population. It limits the grain quota to five kilos per capita per month instead of the 35 kg per family demanded by right-to-food campaigners. This puts small households headed by single women at a disadvantage.
A Public Distribution System covering the entire population has proved superior and less leakage-prone than one targeting “below-poverty-line” (BPL) groups. The relatively well-off select themselves out of the PDS.
Besides, “targeting” misses up to 40 percent of the poor who don’t possess BPL cards. The National Sample Survey reveals that 51 percent of virtually landless rural people (possessing less than one-hundredth of a hectare) have no ration cards; less than 23 percent have BPL cards.
Identifying the poor remains a problem. Nevertheless, the NFSB’s broader coverage — and the attractive formula of rice at Rs 3 per kg, wheat at Rs 2, and coarse grains at Re 1 — is a step towards reducing acute hunger. It creates a right for the poor.
However, Right-wing commentators, including neoliberal economists, big business, and media writers/anchors, have attacked the NFSB as recklessly “populist”. Some claim it won’t relieve the malnutrition prevalent among one-half of Indian children.
The critics say the NFSB will entail “wasteful” expenditure of Rs 1.25 lakh crores. This will aggravate India’s fiscal crisis and further depress already faltering GDP growth. Eventually, this will work against the poor.
These arguments are specious, elitist and misanthropic. Apart from failure to tax the rich, India’s fiscal deficit is attributable to government profligacy — a huge gap between current revenues and spending, high interest outgo on public debt, massive subsidies, and unproductive projects.
India’s current economic slowdown is explained by the global recession, withdrawal of “hot money” by speculators, falling domestic investment, greater capital outflows, and panic from the falling Rupee. None of these constitutes a legitimate argument against the NFSB.
The NFSB’s likely additional annual expenditure will be just about Rs 30,000 crores, a fraction of all subsidies totaling Rs 2.6 lakh crores. Fuel subsidies — largely enjoyed by the rich — alone claim Rs 1.6 lakh crores.
Even greater are the Rs 5.74 lakh-crore tax write-offs and exemptions for affluent people, industry and exporters — a sum larger than the entire fiscal deficit.
Surely, spending just 1.25 percent of GDP on food security isn’t exorbitant: India spends about the same on the Central paramilitary forces and three times as much on the military. Feeding people cannot be such a meagre component of comprehensive or human security.
There’s another way of seeing the NFSB — an investment in people, or as delayed compensation for spending their own money on healthcare and education because public expenditure on these has repeatedly fallen short of the targets, respectively 3 and 6 percent of GDP.
Some critics argue that the NFSB should focus on high-protein foods, not cereals. True, the share of cereals in total food expenditure has fallen. But cereals and pulses still remain nutritionally central. There’s a strong argument for boosting the consumption of pulses, a relatively cheap protein source by including them in the PDS.
Some economists have proposed that the PDS should be replaced by cash or Direct Benefits Transfer (DBT) because that will be cheaper and more efficient, and give the beneficiary “multiple choices”. As the “sovereign consumer”, s/he can buy eggs or meat instead of grain.
But there’s no such thing as a free market with abundant choices in rural South Asia. Often, the state alone can deliver essential commodities.
The proposal assumes that all people have bank accounts, or that “Aadhar” (digital unique-identity number)-based cash-transfer will work flawlessly.
But just about 40 percent of Indians have bank accounts. And “Aadhar” is full of holes. Its iris and fingerprint scans are unreliable. Identity cards have been issued bearing pictures of trees and dogs; men have been misidentified as women.
Worse, DBT is itself deeply flawed — as shown by a major scandal involving DBT-based delivery of state-sponsored insurance and health schemes for farmers. Insurance company ICICI Lombard has been accused of recruiting fictitious beneficiaries, collecting premiums on bogus certificates, and rejecting genuine damage claims.
Right-wing criticisms of the NFSB are thus fallacious. They reveal a dogmatic reluctance to make the state accept responsibility for providing public goods, and an obsession with corporate-oriented “free-market” solutions.
This elitist approach militates against the public interest and will perpetuate dualism in a society marked by obscene and growing inequalities. India’s rich are among the lowest-taxed anywhere, with a top income-tax rate of just 30 percent — compared to 50 percent-plus in the UK, Spain, Belgium or Sweden.
Only 3 percent of Indians pay the income tax; and there’s no death duty. This must change. Our elites must realise that India’s poverty has damaging consequences for them; and that they can help decrease poverty. The NFSB, despite its limitations, will hopefully help raise such awareness.

The writer is an eminent Indian columnist.
E-mail: bidwai@bol.net.in