@Ike - I trust your reading of things as fair and very professional. Is the 'Food Bill' good or a cheap effort by Congress to buy votes ?
Professor --------, it is so very kind of you to ask me this, you are an international expert on this subject yourself, mine can only be a philosophical bird's eye view and that is I suppose, what you want. A wish list of what 'would be, could be and should be !!' I will make this email public on a confidential basis.
Preamble: India's upper house of parliament today approved an ambitious plan to subsidise food for two-thirds of the population. President Pranab Mukherjee is expected to approve the bill. The Food Security Bill will help make food a legal right and seeks to provide 5kg of grain every month to some 800 million poor people. The bill will help provide a kilo of rice at three rupees (six cents; four pence), wheat at two rupees and millet at one rupee. It will help millions living below the poverty line and many children who are malnourished. The scheme is likely to cost 1.3 trillion rupees ($19.7bn; £12.6bn) every year. India already support financially food to a certain section of its population. The new bill will enlarge that exposure at a cost of 1.35% of the GDP.
What is it? For me a mix of 'holy and unholy' Politics: Yes, you can say it is a populist bill, I would rather endorse a mass vocational training, huge volunteer training programs aimed at the bottom 500 m to be fully integrated in the society, associated with mass enhancement of basic health. UPA strategy to wedge the country with an uneconomical and costly food security Bill in these thriftily times is based on populist politics. Their thinking that 'no party' would challenge to really go up against the populist food security Bill in Parliament was proven to be correct, Sonia was on the ball.
Sadly, Food stamps and food bill is an easy way out, a good one would have been supplementary basic fine tuning of the huge unlimited human potential, a kind huge plan to induct these very same BPL people into a 200 m disciplined work force in next five years, should have been a far more nobler but a difficult target for the political mandarins of New Delhi. That is actually what is required if India needs to go head to head with China in this decade. Great nations cut their succession of deprivation with great slogans and great politicians, I see none on the horizon most regrettably. This food bill is not a ground breaking idea, this is a populist thing. Rising HDI should be the prime objective of any state.
Where the cut were most needed: You know what could have been ground breaking next to mass training programme, India's any forward thinking government would address to improve the lot of the country's poor by having a close look at its defense budget, stop following the rat race of a huge standing army. India is a nuclear nation, it is an original nation, a cradle of civilisation, it needs to project that image of self confidence proving Cohen wrong. It has no threat of bifurcation, it is a 5000 year old reality, no one can take it over or amalgamate it, it is a veracity and a certainty like all great original nations are, it really doesn't need this massive defence budgetary measures. Rather India should adopt its nuclear umbrella boldly and exactly like Swiss developed a national defence volunteers of 200 m, that alone will not leave much room for any aggression from any side.
Sadly India is making exactly the same mistake made by Pakistan, as they competed with India, as Indian GDP rocketed Pakistan was caught short, now a trillion rupee defence spending leaves nothing for mass education or health. I wrote about it first time in 1989, they called me a dooms day predictor. Indians by competing with China on $ to $ matching of the defense spending are digging hole for themselves, though in percentage of GDP spent is relatively the same but Chinese GDP is double than India , in long-term it will debilitate India exactly like what happened to Pakistan, all these super defence weapons are non-sensical toys, empires implode when economies collapse, look at overnight implosion of great USSR in 1990's. It is Indian HDI that is your greatest asset. If it goes up from 128 to say 70, that will make nation 1000 times more stronger. My father sold everything he had to educate us, his greatest assets were us, same is good for every child born today in the sub-continent. What was the point of few sqaures of land if we remained uneducated?
Merits of the Bill: Notwithstanding the ecstatic ideas I have set out above , I am a firm advocate that if a nation has to advance, the fate of the lowest common denominator has to be radically be improved, we cannot have a nation stuck with a very low human development index. If you closely watch India score card on HDI, it is the premature children death and the gender inequality that has hit the nation hardest, it has consequential results on low score of life expectancy and education enrolment. A well fed 800 million will help less premature children death and improve life expectancy better. Also a well fed nation is ready to learn educate, train and grow better. How many Srinivasa Ramanujan, who was a great Indian mathematician and autodidact (with almost no formal training in pure mathematics, made extraordinary contributions to mathematical analysis, number theory, infinite series, and continued fractions) are suffering and dying young. We don't know. Poverty of childhood results in lifelong neglect? Srinivasa Ramanujan was diagnosed with tuberculosis and a severe vitamin deficiency that plagued his health problems throughout his life. Absence of key cereals in a young age does lead to severe vitamin deficiencies. A nation's biggest assets are its people, I am happy that a safety net has been provided, we cannot fail the poverty stricken segment of our children, it would and is a criminal neglect.
On impact on the budget: Surjit Bhalla stressed lately that the Food Security Bill will cost 3% of GDP. A figure that was thrice the estimates offered by the government. Bhalla’s calculations were found to be erroneous, once the errors are corrected, the estimate of costs does increase but by only 18% and not by 336% as projected by Bhalla. I think the soft belly of the bill is 'how can leakages be stopped?'
The Bill without circumventing corruption and leakages will not result in any change. It is something that needs addressing. Leakages from the public distribution system, which are estimated at a horrendous sky-scraping of 40% need to be eliminated. With leaks we know the other downside is that a PDS mould does eliminate indigenous more nourishing cereals from the household budgets.
Facilitating improvements in food production and distribution is the major obstacle that this bill faces urgently. India bought 72 million tons of food grain in 2012-13 and 63.38 million tons the year before. The issue is equity in distribution. Households should be the main benefactor, what we all know well is that 'central planning' rarely works, leakages from the public distribution system are endemic, they were estimated at a whopping 55% in 2005. The leaks in the system at were 55% for the financial year ending 2012 did drop to 35%, a good thing, but 35% of leaks in 72 million ton is not a leak, it is mass incompetence and endemic entrenched corruption. Though, I read that the number of households that were buying cereal went up from 23% to 50% in rural India and 31% in urban India.
The black-marketers shall siphon off these essential supplies along the way, the major worry ought to be how to guarantee that the full benefits are received by households. Twenty five million tons of the last year of the purchases were lost, i.e. nearly 7 billion $ lost in subsidies, it is a double loss as those who should have received remained poor and the racketeers became richer. The subsidised never reached the households and this is a calamity, pilferage of subsidized food should be legislated as a 'food terror crime' against the unfortunate and disadvantaged, put the person who does it at least 'in' for ten year, an enormous custodial crime.
But who will bell the cat, it is being done through an unholy license an unwritten alliance and a collusion of the bureaucracy and the politicians. They rape the underprivileged any which way they can. What a calamity.