NAC moots food net for 75% of population

The National Advisory Council (NAC) has recommended a two-tiered food security net that will cover 75% of the country’s population and cost an estimated Rs80,000 crore.

“The NAC recommendations have been sent to the government and now it is for the Union cabinet to decide the Food Security Act,” said NAC member Narendra Jadhav.

The NAC held a meeting on Saturday, which was chaired by Congress president Sonia Gandhi.

Briefing reporters after the meeting, Jadhav said that existing criteria of splitting the people into categories of above the poverty line (APL) and below the poverty line (BPL) had been dispensed with.

“Now households shall be categorised as priority and general for the purposes of differential allotments of the subsidised food grains,” he said.

Jadhav agreed that the existing public distribution system (PDS) through which subsidised foodgrains are distributed, needed reform.

“We have suggested measures and hope that all the elements like PDS reform and the categorisation of households will be put in place before the scheme is implemented during the next financial year,” he added.

With this recommendation, which has been hotly debated within the NAC as well as the government for quite some time, the Congress has moved a step forward in implementing one of its key electoral promises of providing subsidised foodgrains to the needy.

The NAC has sought to blend its political populism with the pragmatism of efficient governance and also argued that it would only involved an additional burden on the government exchequer of Rs25,000 crore per year and 58 million tonnes of foodgrains.

The scheme will also have a rural bias as the NAC wants to cover 90% of the families in rural areas while aiming for only 50% of city-dwellers.

To effectively deliver the food items, the NAC has also suggested nationalising all the fair-price shops in the country, which currently are privately owned.

Critics of the government’s move for universal food subsidy, including many within the food ministry, point to numerous surveys which show that more than half the food meant for the poor is leaked into the black market.

Many critics point out that ration dealers turn away eligible customers - most of whom are the uneducated and powerless - with excuses like non-arrival of stock.

The PDS grain - subsidised to the extent of 80-85% by the government - is diverted to wholesale grain buyers and the excess revenue shared by the merchant and the fair-price shop operator. Even when grain is issued, it is often substituted with very poor quality or rotten grain from the open market and the PDS grain diverted.

This conundrum has prompted many state governments, such as Bihar and Madhya Pradesh to move away from the provision of actual food-grains. They are experimenting with direct subsidy in the form of cash-equivalent coupons - to eligible families through the post office.

The coupons can be used to purchase food items from any of the fair-price shops in the locality. This also becomes an incentive for fair-shop operators to retain quality grains.