Food for all is food for thought

The recommendation of the National Advisory Council (NAC), that the proposed food security bill should include 75% of the population, is populist. The measure, if implemented, will entitle nearly 800 million people to some kind of subsidised food. It will drive a big hole in the budget, which finance minister Pranab Mukherjee has tried hard to rebuild after the spending excesses of 2007-09.

This is not to say that the poor do not deserve subsidies. The NAC proposal is that the extremely poor (dubbed “priority” cases) should get 35kg of foodgrain a month at throwaway prices: Re1 a kg for millets, Rs2 a kg for wheat, and Rs3 a kg for rice. For the rest, the subsidised price is to be half the rate at which the government buys grain from farmers as part of its procurement operations.

There are three relevant aspects which need to be discussed before deciding on the issue. The first is about entitlement. Is 75% of the population so vulnerable that it needs a subsidy? No poverty estimate so far has come anywhere near this figure. One can take this at face value if we are talking not just about absolute poverty, but what ought to be a reasonable standard of living in a fast-growing economy. The Suresh Tendulkar committee placed the numbers of the absolutely poor at 40% of the population. One can quibble with the numbers, but one can assume that Tendulkar’s estimate is not too far off the mark. This is the number any subsidy scheme ought to try and address, not 75%.

The second issue relates to ideology. On the one hand, we have the welfare-state advocates who believe it is the state’s absolute duty to feed its citizens whatever be the cost. The market-wallahs, on the other hand, believe poverty cannot be abolished by mere handouts. More efficient ways of supporting the poor are needed that will incentivise them to lift themselves out of poverty. The ideological issues can be resolved if subsidies and handouts are time-bound and there is a robust system to monitor the efficacy of food security policies.

The third aspect relates to politics and the electoral mileage to be derived from it. The NAC, headed by Sonia Gandhi, is obviously a pro-Congress vehicle being used by the party to gain political mileage with taxpayers’ money. But it is by no means certain that its rivals will allow Congress to run away with all the glory.