Prime Minister Manmohan Singh’s economic advisers are arguing universal food security may come at a price the government might not be able to pay. A panel headed by C Rangarajan says the country does not produce enough grain to be sold cheap to three-quarters of India’s billion-plus population. If we do manage to find the grain, we don’t have the granaries to stock it.
Building new ones will add to the food subsidy. By itself the food subsidy will balloon to unmanageable levels because the government would be buying most of the grain coming into the market at prices higher than it pays now and selling it to more people cheaper than it does now. In sum, if the UPA wants to push ahead with calorie entitlements, it ought to begin with small bites. That would logically involve building upwards from the existing food subsidy scheme on all parameters: coverage, procurement and price.
UPA chairman Sonia Gandhi’s advisers, on the other hand, are pushing for a top-down approach. Food security is meaningless, they argue, unless it is universal. Hence coverage must extend to anyone who is vulnerable. The National Advisory Committee’s estimates of how much grain is needed, and the tab the government will have to pick up, are significantly lower. Creating a bigger procurement machine is also an opportunity to fix the bugs in the one we have.
Ms Gandhi’s advisers feel that the government is assessing food entitlements purely from an accountant’s view, ignoring the economic spin-offs of a scheme this size. If it gets off the ground in the shape proposed originally, the food security law will become the keystone of the ruling alliance’s inclusive agenda.
There are persuasive arguments on both sides. Incalculable political gains are pitted against very real economic costs. India’s experience shows politics prevails in most situations like this. A limited roll-out of the food security scheme, without limiting its ambitions, is a very likely outcome. But the political mileage would derive when the scheme covers all parts of the country.
And like the UPA’s other flagship welfare programme, the job dole for villagers, food entitlement will also be held hostage by the state governments that will have to administer it. The UPA is nearing the halfway point of its second term and needs to step on the gas to get an undertaking of such proportions going. The government and party bosses have to be on the same page soon so far as universal food security is concerned.