Why India’s Food Security Bill is needed

We are in the midst of an ideological battle over a legislation which is a rare welcome initiative in our complicated national discourse usually muddled within the finite contours of caste and religion.   It’s a battle between greatest Indian Economist of our generation Nobel Laureate Dr. Amartya Sen and equally formidable duo of Dr. Jagdish Bhagwati and Dr. Arvind Panagariya on the Food Security Legislation. It is a social sector legislation of unprecedented magnitude. 800 million people will get subsidized access to grains.

In this cruel globalized world of inter-connected commodity markets where some incident a world away can lead to a borderline BPL family skipping a meal due to a spike in prices; subsidized grains can save lives.

According to Dr. Sen, this legislation will add one percent more to our expenditure while subsidized fuel and power to the middle classes which cost a lot more to our expenditure and do not raise a hue & cry with the right wing intelligentsia as their air-conditioned glitzy office spaces are itself subsidized by the State. If the price of LPG cylinders is increased, then the first people to cry wolf are the right wing as their appeal is mainly to the urban voter base. It can be deducted that as the BJP is an upper caste, urbane voter base, any positive rural social policy move which is a political killer app for the Congress will be discredited. Modi Evangelists have even started to discredit a national icon such as Dr. Sen in their petty politicking. My humble request to my friends who believe in the Modi Doctrine will be to excuse Dr. Sen of their rant. We fundamentally need to respect our Gurus. It is our Culture.

I do not discredit the Gujarat Model of Development totally, as an ideologically heterodox man; I understand that the space required for different economic development models the Indian social rubric. Rather, Mr. Modi has done a great job in creating World Class Physical Infrastructure in his state and has good ideas for the Nation as his Fergusson College address has shown.

It is indeed a bold move by Dr. Sen to stick his neck out and support radical social sector legislation such as the food security bill which is a political minefield just before the 2014 polls. As an academic, he could have played safe and lived out his twilight years at Harvard churning out research papers. He is a man who was offered the Finance Minister’s post during the United Front dispensation by Jyoti Basu of the Left, but he declined. As a man who lived through the Bengal Famine of the early 1940’s and saw the brutal partition we need to respect his perspective on development issues. A chartered accountant named Piyush Goyal who happens to be a BJP Rajya Sabha MP in his economic times editorial dated 24.7.13 has just succeeded in demonstrating his shallow thought process by maligning Dr. Sen.  The BJP should attack the chinks of the food bill and not attack intellectuals.

But, the Food Bill is not without legitimate concerns which my friends from the right churn out in an acerbic fashion. The Checks & Balances are woefully inadequate in our Public Distribution System and pilferages have lead to have massive corruption in the process. We do not have good cold storage infrastructure which has resulted in millions of tones of food grains rotting in Food Corporation of India godowns. India is urbanizing at a blistering pace, and has resulted in internal migration on an unimaginable magnitude. Agricultural spends have been stagnant and we are currently an importer of food grains. All these above elements, add to the question of the overall effectiveness of this social legislation.

The Practice of Power called Electoral Politics drives all discourse in our country. State Governments such as in Tamil Nadu and Karnataka have already introduced subsidized grains schemes which have historically reaped positive rewards for the political dispensation in place.  The pioneering social sector act; Mahatma Gandhi National Employment Guarantee Legislation brought back UPA to power in 2009.  A combination of Aadhar, Direct Cash Transfer and Food Bill will be the 2014 electoral plank as envisaged by the Congress Strategists. Social Policies are critical to Inclusive Economic Growth and Nation Building.

Legislation is not cast in stone and has an iterative feedback loop of learning and thus progressive alterations can be made as the cracks in the implementation program will surface and eventually be plugged by amendments.

But to deny the poor food to eat, because legislation is not theoretically full proof is just callus.  Often, welfare is the option of the last resort of the poorest of the poor. The poor are not just statistics but are souls with agency.

The wonks at Takshashila and American Enterprise Institute just won’t understand as they are blinded by cold statistical logic. Sometimes empathy is the most needed ingredient in policy formulation.

 

Welfare 2.0 : Direct Cash Transfer as a Killer App?

When Nandan Nilekani’s Biometric Identification card initiative : Aadhar commenced in 2009, it seemed to be an ambitious public information infrastructure project, without any political pay off for the ruling establishment. Well, it was Nandan Nilekani- India’s celebrated IT CEO turned cabinet minister level technocrat, having repeated run in’s with the Home and Finance Ministry’s over security concerns and budgetary allocations. Turf Wars in the Bureaucratic mess of Delhi.

I am an advocate of State based welfare schemes and have been pro MNREGA and other big ticket schemes (folks might call them mega scams generating options too). Well, because scams might take place because of leakages in the system, the state should not abandon its  Public Goods Deliverable’s. Welfare is often the only resort of the poorest of poor.

Steps might be implemented in terms of plugging in the leakages via adequate implementation of existing policies or even introduce a legislation such as Lok Pal. One of the four basic services which the Government should provide are Public Goods such as Subsidy. Diesel subsidy for running SUV’s is a blatant exploitation of the loopholes.

Applying large scale IT solutions can help track loop holes, but local level innovative solutions are required to monitor graft and leakages. Manpower is in shortage to implement existing programmes, so additional heads are required that such a mega project can work. Announcing a scheme and executing it with the allocation of relevant resources; local and central are a pre-requisite. Involvement of civil society and private sector are paramount in bridging the skills shortage.

Direct Cash Transfer can help cut out the middle man in disbursing pensions and scholarships where financial infrastructure is absent. I am not really confident if it can replace the Public Distribution System for Subsidized grains in the near future. Entitlement based welfare has to be multi pronged in strategy.

This initiative has given Nandan Nilekani’s project a political life and Congress a life line for 2014. Aapka Paisa aapke haath, sounds empowering to the common man but it leaves him also at the mercy of the market forces of demand and supply as the cash transfer is a rigid and finite event.

Who said Technology cant drive political innovativeness? never underestimate the likes of Jairam and PC to pull out a trick out of their hat. Did i mention that Jairam and Nandan were batchmates at IIT Bombay?