This is not a pipeline | Latest News India - Hindustan Times

This is not a pipeline

Hindustan Times | ByAshok Kotwal, Milind Murugkar and Bharat Ramaswami
Sep 01, 2011 10:31 AM IST

There is no issue that is more significant in its moral implications and in the magnitude of its political impact than the issue of food security, write Ashok Kotwal, Milind Murugkar and Bharat Ramaswami.

There is no issue that is more significant in its moral implications and in the magnitude of its political impact than the issue of food security. And yet the present course of the national Food Security Bill is headed in a direction that does not bode well for the poor in India.

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The National Advisory Council (NAC) would like near-universal coverage but insists that it be delivered through the public distribution system (PDS). The Rangarajan Committee, set up to review the NAC recommendations, would like to scale it down on the grounds that it’s not viable. It says the government would be unable to procure so much grain and the subsidy required would be unaffordable too. All of this is under the assumption that the subsidy continues to be delivered through the PDS.

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What is proposed is the worst of all possible worlds — a continuation of limited coverage under a wasteful system. Once again we are on the brink of creating another expensive token that will leave a vast number of the poor without the cover of food security. The act will be passed. But the poor won’t notice much change in their lives.

It is important to know two things about the PDS. First, targeting has failed. More than half of poor households (defined so by the official poverty line) do not have the below poverty line (BPL) cards that entitle them to maximal food subsidies. Most importantly, given that the poverty line measures bare subsistence, how can we tell apart households that are just above the poverty line from those just below it?

The second thing to know about the PDS is that most of the food subsidy expenditures by the government never reach households, much less the poor among them. About 70% of the food subsidy cost is dissipated as rents to black marketers or as payments towards excess costs of state agencies. Massive exclusion errors question the continuance of targeted programmes.

Near-universal coverage is necessary to avoid these errors. The staggering inefficiency of the PDS means that alternatives to it must be tried. Food subsidies can be directly transferred to consumers through food coupons or smart cards. This would get rid of illegal diversions and reduce excess costs. It would, therefore, be both foolish and tragic to legislate the PDS as the only instrument for food subsidies.

Perhaps, the two decades of fast growth have been responsible for creating aspirations for a better quality of life that never existed before. A party that seizes this opportunity and finds practical solutions to key problems like food security will be the party of the future.

In our minds, protecting the interests of the poor is the raison d’être for the Left. By default, the role has been taken up by dedicated members of the non-governmental organisation (NGO) community some of whom are members of the NAC. Indeed, NAC has performed a valuable advocacy role in proposing some of the most progressive legislation in recent times. But if those who consider themselves on the Left defined themselves in terms of the ends rather than the means, there would be much faster progress on the issues they care about.

What we need is a new leadership — one that is sincere about the promises it makes to the poor and is not ideological about the means of delivering them. We need a new leadership that asks whether it is necessarily a sacrilege to talk about the poor and a market-based delivery system in the same breath especially if the alternative is the travesty that the food security bill is in danger of becoming. We need a leadership that recognises that the cost of food security would be high but is able to defend it as a matter of high priority; a leadership that appreciates that it is impossible to sort out the poor from the rest without excluding millions from the coverage; a leadership that can actively look for a way to do right by the poor without breaking the treasury.

Why should we not have some pilot projects or experiments with alternative systems like smart cards that, at least in principle, indicate that they would be flexible and advantageous to the poor? After all, is this not how innovation occurs — through little experiments that throw up new ideas, and those that succeed replacing the old ideas that have failed?

We ardently hope that such a leadership emerges, and if it does, it will leave a stamp on the future of India. It will be remembered not for its rhetoric but for its achievements.

Ashok Kotwal is a professor at the University of British Columbia, Canada; Milind Murugkar is a policy analyst at Pragati Abhiyan, Nasik; and Bharat Ramaswami is a professor at the Indian Statistical Institute, Delhi The views expressed by the authors are personal

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