That's the new plan, anyway.
By Jason Overdorf - GlobalPost
Published: June 7, 2009 12:04 ET
NEW DELHI — In a move some are hailing as the boldest — and most needed — action taken by any administration since the country gained independence in 1947, India's new government has promised to eliminate hunger and malnutrition nationwide with a powerful National Food Security Act.
In her June 4 speech to parliament outlining for the first time the agenda for Prime Minister Manmohan Singh's new United Progressive Alliance government, President Pratibha Patil said, “My government proposes to enact a new law — the National Food Security Act — that will provide a statutory basis for a framework which assures food security for all. Every family below the poverty line in rural as well as urban areas will be entitled, by law, to 25 kilograms of rice or wheat per month at three rupees (about 6 cents) per kilogram. This legislation will also be used to bring about broader systemic reform in the public distribution system.”
Even usually trenchant critics of the nation's policies toward its farmers and its poor were cheered by the pledge. “After independence, this will be the most important program any government has ever thought of launching,” said agriculture policy expert Devinder Sharma. “It should at least allow us to put our heads up for the first time of being a democracy. How could democracy coexist with such appalling hunger?”
India's starvation and malnutrition problems have always been as perplexing as they are horrifying. With more than 200 million people classified as hungry by the Washington-based International Food Policy Research Institute, India has the world's largest population of the starving and malnourished — despite being the world's second-largest grower of rice and wheat and boasting a surplus of 56.5 million tons of food grains in government warehouses.
“If you put one bag of grain over another bag of grain, you can walk to the moon,” Sharma said. “That's the quantity of food lying in India, and we have the largest population of hungry also in India.”
Sharma gives credit for this program, last year's massive farm loan waiver, and a jobs scheme that guarantees rural laborers at least 100 days of work each year to Congress Party President Sonia Gandhi. And he points out that the scale of these programs is unprecedented. “She has launched the world's largest social security program with the NREGA, and this is the world's largest food security program,” he said. “I can tell you she deserves the Nobel Prize.”
Part of a breathtaking array of landmark changes to public policy — many of which will also present a hefty bill to the exchequer — the new food security law will cost the government more than $10 billion at today's exchange rate. To foot the bill, the government will need to push forward with the sale of stakes in state-owned companies in the oil and gas sector and complete the sale of 3G telecom licenses. In a sense, therefore, it is both the mother of all social welfare policies and the biggest impetus for the growth-spurring economic reforms that business has long demanded.
More importantly, together with the UPA's groundbreaking Right to Information Act, which was passed in 2005, the national food security guarantee will be used to bring about broader systemic reform in the Public Distribution System (PDS) through which India already distributes subsidized food to the poor. Notorious for corruption — yes, people steal from the starving, too — the PDS was vulnerable to exploitative vendors because nobody was able to track where the food actually went.
But with the introduction of national identity cards with biometric and radio frequency technology to prevent fraud, which is also part of an anti-terrorism initiative of the home ministry, many believe there is a real chance of plugging the holes in the sieve.
Not everyone is convinced. According to Bibek Debroy, an economist at the Centre for Policy Research, a New Delhi-based think tank, the vague plan to reform the PDS doesn't go nearly far enough to succeed. “It's a terrible idea,” Debroy said.
Citing the silence about just how the distribution system will be reformed and drawing attention to several past efforts that have failed ignobly, he argues that the solution is actually much more simple. Instead of funneling even more money through the PDS and making an unwieldy behemoth still larger, he said, India should put the monster out of its misery.
“The simple point I'm making is that it's far more efficient to have direct cash transfers,” he said, echoing an argument that has recently gained credence in international development circles.
Through the NREGS, India already has a database of the working poor, including their bank accounts, so it would be easy to transfer food subsidy money directly to them in the form of cash — a move that would slash the government's bill by as much as two-thirds and put thousands of corrupt officials out of business overnight. It would also eliminate an internal conflict between India's food policy and its farm policy: For farmers, the government continually tries to push prices up, while for the poor it struggles to push prices down.