CPI(M) leader Sitaram Yechury, Congress leader Abhishek Singhvi, BJP leader Piyush Goyal and economist, Dr Arvind Panagariya speak to NDTV's Sonia Singh on the Food Security Bill. Here is the full transcript of the interview:
NDTV: Good evening and welcome to the NDTV dialogues. On this show there are no face offs, there are no political clashes but a conversation of ideas. Ideas that are essential for India. This week we look at food for all. Can it actually end hunger in our country? Does it not go far enough as some have said? Does it go way too far? Is this a cost India should welcome or is it a cost, which will damage India beyond repair? Joining me tonight are Sitaram Yechury, Abhishek Singhvi, Piyush Goyal and Dr Arvind Panagriya.
Mr Yechury, can this bill actually end hunger in a country where over 40% of children are malnourished?
Sitaram Yechury: Well, it will not end and I think it is a little below what I would have wanted for instance. But it is definitely a beginning. I would have actually wanted greater quantity, a greater coverage and a lesser price. These are the three amendments which we will be moving when it comes to the Parliament, but nevertheless it is a step in the right direction, but we would want to push it to be, actually be able to achieve what all of us would want, that there is food for all and malnutrition that you mentioned, PM is on record to say that this is a national shame. I mean the levels of malnutrition in children. Now, to address this problem, primary concern is availability of food but it should lead up to availability of required nutritional levels and at affordable prices.
NDTV: But when the Left says universal entitlements, the worry of course is what about people who don't deserve entitlements? How much are we propounding a theory of free food for all? Is this a route to disaster?
Sitaram Yechury: Not at all, not at all. In fact not now, but when we were students way back in the '60s and '70s we had an economist who was telling us unfortunately in India if you want to give enough for the poor you end up giving more than enough for the rich. I mean unless you do that you don't give enough for the poor. You have to have a system by which those who don't need it don't deserve it, will not access it. But even if they were to access it, if you have a situation where food is available to all what will they do? There won't be a black market for them to sell it, I mean if you have that sort of a situation. I don't think that will be a problem at all. That won't ever happen and I don't think we're going too far. What do you mean can we afford it, and who will afford it? Whom are we talking about? When we are talking about 'we the people', then what people need is elimination of hunger. One of the important things they need. So of course I mean we have to afford it. There is no other way.
NDTV: Let me actually turn that question on its head. Prof Panagriya if you come in on that point. Forget whether India can afford the Food Security Bill, can we afford the unacceptably high levels of hunger in our country? You've actually challenged that whole theory completely. You've said even the figures of hunger are wrong
Arvind Panagariya: What I wrote about was child nutrition and that is a separate debate. We could actually go that route but even on this particular issue I have a very different view from what Mr Yechury has said. What I've challenged is the actual numbers on malnutrition. I'm not saying there is not malnutrition, there is enormous amount of malnutrition and a lot of effort is required but that as I said, is a separate debate. On this let's take Chhattisgarh. Everybody says it is a huge success in terms of already implementing in the PDS what the Food Security Bill is trying to do. Compare at any income level the consumption of let's say, levels of cereals in Chhattisgarh to those, lets say, in Maharashtra. They are lower than Maharashtra at every income level. Just because you give subsidized food, or even free food to people in certain quantity, which is in this case 5 kg per person per month, doesn't mean that they will consume more. They have the option to take subsidized food of 5 kg and then cut their open market purchases in parallel by 5 kgs. Save that money that they would have otherwise spent in the open market and use that money for something else. And that is the game that has played out in this Chhattisgarh case where we see no improvement in cereal consumption per person over let's say 2004-05, so 2004-05 survey we did. In fact the consumption levels have been declining and that trend is no different, first Chhattisgarh than it is for the other states or the average of India. Food consumption has been, the carbohydrate consumption taken through the series has been declining. Where the real problem is, which nobody seems want to focus on, is milk, eggs, fruits and vegetables. Milk consumption you go to the bottom 30 percent about 1 to 2 kilograms per month. Go to top 30 percent, 7 to 8 kilograms per month. You go to Haryana of course it is way more, you know it goes up to 20 kilograms per month. That is where the big difference is. What is this Food Security Bill going to do for that consumption and you want balanced diet? Problem is not whether they are getting enough to eat but whether they are getting a balanced diet. We have done nothing here.
NDTV: So you are saying that its misconceived on what it actually aims to do, but Chhattisgarh, I want to bring in Piyush Goyal there, because Chhattisgarh has really been looked upon as BJP's success. Many of the objections made have been, have cited the Chhattisgarh model as well. In fact Professor Amartya Sen has also praised the Chhattisgarh model, though he didn't entirely praise the Gujarat model. Do you agree with what Professor Panagriya, raised as a point? And one interesting aspect also of the Food Security Bill point is how the BJP often is talking the language of the Left, so many divisions seem to have gone completely
Piyush Goyal: See you must realize we are in country where poverty is there. There is no denying it and there is malnutrition and there are people who are not getting two square meals a day. So there can be no denying that we do need to provide for their security and in that respect, already there are enough laws. We have the essential commodities Acts for many years. We have the target, the Public Distribution System and subsequently the targeted public distribution system, which has been prevailing for years and years. Earlier they used to give 10 kilograms per household, it was increased to 25, subsequently to 35. So if you look at the country today we already had 35 kilograms of food grain going to the poor and even people above the poverty line that is the APLs to about 82 crore people, it is existing. In terms of distribution, that model, actually the planning Commission themselves have acknowledged. The Supreme Court has suggested to the government, 'why don't you have a look at it?'
NDTV: On paper at least.
Piyush Goyal: In terms of distribution, that model actually the Planning Commission themselves, are acknowledging. The Supreme Court suggested to the government why don't you have a look at it and there is no politics in it. If something good for example on Insurance, Andhra Pradesh did wonders in the Health Insurance. I tell all my chief ministers why don't you learn from them. So it's not about which State did it, but the fact is that and I have a book here which describes how they did it and it's beautifully done, involve the local people and they have managed to actually eliminate leakages, the lowest cost PDS in the country per capita. That apart, I am saying the system already is there. 61 million tonnes of food grain have been procured in 2012-13 as against 54 million-54.9 million envisaged in the Food Security Bill. So really the Food Security Bill neither does it involve any additional outlay in terms of money, 10,000 crores is what Mr. Chidambaram has provided and Mr KV Thomas in our house on one week ago has confirmed that. So really this is only about converting an entitlement into a right. So I think the discourse in the nation about the cause, the fiscal deficit, the potential cost to the nation, deteriorating conditions is really wrong. This is no cost additional, this is existing cost being repackaged and in that sense it is nothing for the economist to be worried about. I only hope a little less politics was played around it. Because of which you will see all the discourses, you will see all the attacking and then you go all the way as Sitaram is saying, why not 100 percent of the people and all those other issues? I think if there was less politics around it and if it was recognized only as an entitlement, existing entitlement being converted to a right, then I think there was nothing was wrong it is good, give the people the right to food.
NDTV: But leaving aside the politics part you mentioned, your former Finance Minister Yashwant Sinha has said, has gone into records to say, "I disagree slightly, I feel this will be a fiscal disaster". And many economists, when we say economists of not left of Centre, have pointed out the fact that they felt that BJP with at least Mr Modi talking of the language we need, a different language, a language of markets, a language of growth, that on the Food Security Bill you all have talked a very different language.
Piyush Goyal: Well, we have talked the language of in fact, let's say the Bill says the right to nutrition, so we have raised, we have flagged off the issue that nutrition is not going to be satisfied to some extent as Dr Panagriya said only by these 2 or 3, 2 items, rice and wheat and coarse grain, it needs much more. So Chhattisgarh for example gives one kilo of free salt, they give some amount of dal so they have added a few things to make it look a little wholesome. Milk is an excellent idea Dr Panagriya just gave. I think some thought could be given to some such new out of the box ideas. But our attack has not been per se that you don't give food security, obviously you have to. Our issues were more on what is food security? Does it adequately provide nutrition to the below poverty line and then of course some amount of politics is going to play out, once any such move...
NDTV: Dr Singhvi the three main criticisms of this Bill are well known, but the focus really, and I think with the events this week especially of the rupee and how it has fallen, comes back to that issue. We can look into whether India cannot have it but lets look at real aspects of, if the economy, if the rupee is crashing, where you will find money from to fund the ambitious bill like this? Piyush Goyal says, "Look it won't be much more". But here are other views. You have heard Surjit Bhalla and others argue that it would be as high as 3% of the GDP"
Abhishek Singhvi: Sonia just step back for a moment. The first issue is the need, is there a need for it? I don't think anybody can deny that some form of food security in a formal consolidated legally entitled form should be there in this country and I think I largely agree with my friend Mr Piyush Goyal's point, that even assuming that it was mere consolidation, which it is not, it is something more than that. But a large part of this initiative is consolidation, that itself is a sufficient virtue by itself, because to tie up innumerable programmes into one Act. Secondly, for the first time ever to give a legal right to demand it, to go to a redressal officer, to go and appeal to a district officer, to go to a magistrate, to have a food allowance where you can't get food, to have a penalty, to have a fine, to have other coercive steps is a huge change in mindset, so I think the need you have to then consider whether you at all need it. Secondly there's huge number of contradictions on some of the criticism. He very rightly said, that it is largely a consolidation, the Finance Minister has done the math census 10,000, the real maths is about 23,800 crores because 125, 1 lakh 25 crores, 1 lakh 25 thousand crores will involve an additional expenditure of 23,800 crores.
NDTV: But it went up by another 5,000 because you have raised states' entitlements
Abhishek Singhvi: Lets, lets, lets assume within 30,000. I mean this math is changing because somebody goes to 67% but say lets say 30,000 crores. So, the question is in this country if you're having virtually a revolutionary new thing in terms of guaranteed legally entitled food security, can this country turn its nose up and say, it is not affordable for 30,000 crores? And it is over a period of time. Look such legislations Sonia are always work in progress. They are never a finished product. You will always have an, I am the first to admit huge drawbacks, who says not but many of these drawbacks in a cause and effect mixture get removed as you want. You know in MNREGA even their worst critics today accept that the 70% fault level is now down to by at least 50% or 70%. People, when MNREGA had started, had very serious problems, it has improved considerably. Now in this case, I think we should not cavil on the nitty-gritty. Nutrition is a vital part, but the fact that there is leakage in this country, the fact that the food grains rot, the fact that we don't have rakes, the fact that our distribution system is faulty. Why do you blame the Food Security Bill for that? You will in fact end up improving all those four things once you have Food Security Bill.
NDTV: But the...
Abhishek Singhvi: I have the figures Sonia and I am quite astonished that this whole argument about rotting food grains which sounds terrible when you read it in the press, of course its terrible. You know so many thousand tonnes have rotted. The percentages of rotting have come down dramatically over the years, of rotting food grains and they are now...
NDTV: They say there are 44,000 crores according to Sharad Pawar
Abhishek Singhvi: No, no, no. But look at the figures in terms of quantum. I have the figures here from 2007-08 when it was point 34 lakh tonnes damaged. It is now down to point zero 3 lakh tonnes in 2013, 12-13, and I have each year's figures, so...
NDTV: But 44,000 crores...
Abhishek Singhvi: Look, I am not on the value part, I am on the quantum part...
Piyush Goyal: No the quantum and value are different. She's talking of fruits, vegetables, everything
Abhishek Singhvi: Exactly, I am talking of food grains because we are concerned in this Food Security Bill with food grains. Now you know these things are there, they are part of a systemic culture and its structural problem in this country, but once you have a fine and a grievance cell, let me tell you we already have a storage programme, we have now done some 70 lakh additional quintals out of a 210 target. With this impetus, it is the best impetus to build that as well, faster and quicker. We will have rakes. The point is you can't throw the baby out of the bath water. I mean the bath water may be dirty but the baby is still a shining example of goodness, so you need to be careful in your criticism and one last point Sonia...
Abhishek Singhvi: I think the important thing is these things are progressive. They take time. You cannot let the perfect be the enemy of the good. This is a good scheme; there are a lot of angularities. The angularities will in fact go in the very working out of it and when you have an addition of 23,800 crores and you have broadly a matching of procurement and availability and demand then what is so terrible about having it into one full Act?
NDTV: No, but Dr Singhvi can we have it both ways? One is just, Mr Yechury we had, the newly released poverty figures which were touted to seen that India is eliminated a large number, look at how much we have come down, we have dropped by 15% in poverty, yet we find that we want to give food security to 67% of the population in rural areas. Isn't there a contradiction?
Sitaram Yechury: There is none at all, because I don't think you've got to bring in with any contrast as in the poverty field. Please don't bring that in because they are extremely disputable. On that there is a lot of controversy that's going on even within the government itself, between the Planning Commission and everybody else and the ridiculous levels at which you are maintaining poverty. For instance, let's take one basic....
Abhishek Singhvi: Poverty is not just a food deficit.
Sitaram Yechury: No, no.
Abhishek Singhvi: Food levels and poverty are not synonymous at all.
NDTV: No but the most of the spending was going on food. Most of the spending on this poverty line figure was going on food...
Abhishek Singhvi: Two different concepts...
Piyush Goyal: Deprivation figure, which is higher...
Sitaram Yechury: You see, poverty, let's say even if you take the most minimal of the requirements it is estimated to be 21,000 in urban areas, 22,000 in rural areas, of calories; what is intake of calories. If you're going by that measure poverty has not fallen. If you're going by statistics and Tendulkar Committee and the figures that you have worked out, that's a different figure. I don't think we should enter into that debate. The point at issue is that whatever be the percentage levels, we have a certain commitment. We, in the sense the GOI and the authorities in India, have a certain commitment. Whoever is there in power have a certain commitment of eliminating hunger from our country. It has been a promise of our national movement and of our freedom struggle that this will be a country, post Independence, in which nobody will suffer from hunger. Now what we are trying to aim at is to achieve that purpose. From that you have to build upon it, to achieve a proper healthy population. To achieve that purpose also, I mean our criticism of the Bill would be that it is a little halting. We haven't gone all the way that we could have gone or we should have gone. And one criticism that you're pointing out, in terms of the availability of funds, the funds availability always has to be seen in the macro picture. Now if you want to take the macro picture, I mean, let's say I'll give you one other example, it won't be a holistic thing, for instance in the last 3 years the tax foregone by the economy has been to the tune of 5 lakh crore plus. Last year your tax foregone is 50,000 crore more than your entire fiscal deficit. Now your tax foregone, if you're not foregone, there is no fiscal deficit. Okay, in that tax foregone, maybe even if you take 50% cannot be recovered, even if 50% be recovered, that is around two and a half lakh crores, what are we talking about, per annum, per annum, I am talking about per annum. You are talking about 30,000 crores now, 23,000 odd crores now. Now you have given those tax concessions as incentives for the corporate sectors, industries. As a result of these incentives in the last three years now, you have minus1.6% growth as in your industrial production; you know growth index minus 1.6. What incentives? And now you talk of the fiscal problems, it is a fiscal disaster. You used that word somewhere
NDTV: Mr Yashwant Sinha used it. I am quoting it...
Sitaram Yechury: You say it's going to be a fiscal disaster. Now if you have this sort of money, which has gone into incentives. Now, incentives for the Corporates and the rich are incentives for growth, these are nothing but subsidies, these are nothing but subsidies for the rich, but the subsidies for the poor are burden for you.
NDTV: Yes, but....
Sitaram Yechury: No, no, hang on. There is a certain mindset involved in it. Now that is what is said. If you give incentives and what you call stimulus packages, the subsidies for the corporate sector or the rich those are good for the economy, but subsidies for the poor are bad. Now that is where I think we have to come to a certain term with reality and this I am saying not because of the Left or being Communist or anything, but I think a lot many more creative minds in the world are now coming to that conclusion, what we have been saying for a long time. For instance Joseph Stiglitz in his latest book, he titles it the Price of Inequality. No, you know, you will have all sorts of viewpoints, but the point is even inequality and poverty there is an economic price. It is not only a humanitarian question, there is an economic price you are paying and the economic price is the greater the inequality the lower the growth. Now that has been established today, I mean, not by the Left alone or by the right of the Right, in terms of the economy. No. Therefore let us come to terms with certain realities that eliminating inequality for which eliminating hunger is the minimum, I mean is the basis, is an absolute economic requirement.
NDTV: In fact that's what interests me that Dr Panagriya, as Mr Yechury said, even the right of the Right; that on this there is complete unanimity among all political parties on it. That's why I think this is one of the few Bills that actually got through.
Arvind Panagariya: Sonia, let me address first, first your immediate question.
NDTV: Election timing?
Arvind Panagariya: I don't think it's the election timing. When it comes to these rights and benefits for the poor, nobody can say no. You can keep expanding these social programmes. You have started with education, you have started with food, you can do that. Go to health and then you know once we get there, go to giving people houses, go to giving people two-wheelers or an automobile at the expense of the exchequer. I think people will have a difficult time or political party will have a very difficult time.
NDTV: But you already have petroleum and LPG subsidies, which have improved, Amartya Sen has also pointed to those subsidies...
Arvind Panagariya: Let me come to you. We haven't cut them. We haven't cut them...
NDTV: No that's his point exactly. We don't cut those then why are you against these?
Arvind Panagariya: No, no, no. The point is that this is the difficulty, this is the difficulty, you can keep expanding the programmes. Ultimately it is the responsibility of the party in power to be careful before they put these subsidies, these programmes on the table. Once you put them on the table, no political party has the guts to say that I am against food security. I am against right to education; I am against right to health; I am against right to such and such. Ultimately your resources are limited, somewhere you'll have to stop. But let me get to a few other things that have been said around this table, which I have very different views. First of all inequality; so Kerala in India is the most unequal state; Bihar is the most equal state. Where do you think people are migrating from and where to, from Bihar to Kerala and not from Kerala to Bihar. So to think that inequality is the worst problem, you got to worry about the levels of income and there is no such; Mr Yechury says that somehow more inequality means less growth. That's simply not true. Actually the richer can get, it can go either way, it can go either way, but there is no clear, strong relationship economically one or the other way. But I can point to you, you know, you got America which is the richest country, one of the richest countries anyway, it is highly unequal, much more unequal than India is
Sitaram Yechury: No the point is...
Arvind Panagariya: Sir, it is my turn, just a minute, just a minute
NDTV: I will give you a chance to rebut that right after this
Arvind Panagariya: Now come to these regressive subsidies of course we should eliminate them, but who is eliminating them? Isn't that the responsibility of the ruling party? We should eliminate the fertilizer subsidy, water subsidy, the diesel subsidy, petroleum subsidy, the cooking gas subsidy. Most of the beneficiaries are the richer ones. I mean even on the fertilizer, it is the large farmers who get the subsidies. It is not the small little farmers or the landless worker who is getting that subsidy. So we should eliminate them, why are they not doing it? Why does the government not do it? Everyone says Amartya Sen says it, "Oh, if we give subsidies to these, why not, what's wrong with this?" No, nothing wrong with this; yes we should do it. But are we cutting those subsidies? So let us be responsible. Finally on empowerment, I mean we say that we are empowering the poor man. You think the poor man is able to go in and fend for himself or herself? He or she is at the mercy of the PDS shopkeeper with all the corruption that's going on. You go to the shopkeeper, the shopkeeper says, sorry the wheat did not get delivered or rice did not get delivered, I haven't got it. Give him cash, give the money you are trying to spend, give it to the poor fellow directly. He will then get empowered, he will then call shots and that look it is my money and I am going to spend it. If you, the PDS shopkeeper, cannot give me the food, I will go to the private guy. We ran that experiment in Delhi recently and where the cash transfers were given, actually the PDS shop behaviour and the availability suddenly improved because they knew that they had to now compete against the private providers.
NDTV: I'm going to just have Mr Yechury rebut you on that specific point and then I'm going to take this whole issue of empowerment, but Mr Yechury, go ahead, you wanted to say something.
Sitaram Yechury: Yes, you see the point is it is not question of richness and inequality. The question is of course, I mean, I mean, the most unequal societies are also the richest societies and they are rich because of the inequalities
Arvind Panagariya: Then you are saying growth. What about the growth?
Sitaram Yechury: Hang on. Hang on. The potential for growth Mr Panagriya, Professor, after all thought we are discussing a little seriously, they could have grown more if this inequality was less than, what they have grown? It's not the question of saying today they are a rich country but they have inequality. Therefore inequality has got nothing to do with the growth or the other way around. Saying the higher the richness, the higher the inequality so they were positively related. I mean, you take Darjeeling district in our country for instance, it has a very high per capita income but then who has it? The few and the rest of them are impoverished. So don't go by, the point is inequality impedes the growth potential. It's not at any point of time that, like we always say, if you have a shining India, you have a suffering India as well and the luminosity of shining India is directly dependent on the degree of the suffering of the suffering India. Now therefore the point at issue what we are talking of, if we're talking of food entitlement, if we are talking about food entitlement for the people, then I think there is no dearth of resources in India to actually give this food entitlement. You are talking of cutting the subsidies because they are not reaching the people they are reaching or reaching the wrong people. What am I talking of address that question. Giving these huge incentives tax incentives your growth is minus 1.6, why don't you stop them? Why don't you argue for that?
NDTV: Let me get to Dr Singhvi, on that point that no government, and his point being since you are that the ruling government in power that no government will eliminate any subsidy. Mr Yechury makes a point that why didn't you make that tax being forgone, the government won't do that. When I say about the cost, forget anything else and the critics etc. the rupee seems to have given a very clear answer to what they feel about the Food Security Bill and the fact that it does seems to be spiraling out of control, does seem a loss of confidence in this government's ability to, on the fiscal burden of this...
Abhishek Singhvi: I want to say three or four things but let me start with the last point first. I think it is very unfair to load all the ills of our country on this poor one poor Food Security Bill
Abhishek Singhvi: I have been hearing the last three days, definitely for this poor Food Security Bill, rupee has been in a free fall well before this was about to be passed or was likely to be passed.
NDTV: But it's dropped at record levels with in these last 2 days
Abhishek Singhvi: The Food Security Bill has been something in the making for quite a long time. Surely even the worst critic of the Food Security Bill will not ascribe the rupee fall on this thing. This may have added a little bit of this and that but first thing, let's be clear there are a lot of problems in this country, distribution problems, other problems. Please don't think that this is a magic wand to even address them, much less solve them. This is an additional feature. It is partly dependent on those structural features which I think are the cause-effect basis will improve, but don't kill this Food Security Bill because this one month or one week prognosis is that the rupee is falling. That can't be the reasoning. There are a lot of structural issues in the economy. I think we should address them. They are not at all happy, I think the Finance Minister, the Government of India are most concerned and worried about the free fall of the rupee and something will have to be done and is being done about it. But this becomes a very large debate then if I start debating the rupee. Secondly, we are going far away from the point because we are now discussing the overall issue of subsidies. Whether this country should have subsidies and I am reminded that India being a country this large, with so much poverty and inequality, the most right wing party in India will still be left of the most Leftist party of USA. I can guarantee that the BJP or even the Shiv Sena will be to the Left of the Democratic Party in USA. Why? Because it's an Indian context in functioning, in Indian context, you cannot do without welfare measures because when we talk of inequality, it's not a word, its numbing poverty at one level equal to one small meal in a five star hotel by the rest of the people.
NDTV: But why are they increasing rather than getting less?
Abhishek Singhvi: Therefore, therefore now the question is, food and poverty are different things. This is a very small part of the problem. Food and now let's restrict only to food; I think on the contrary something very remarkable has been attempted. It is not fully successful yet. It is attempted in this Food Security Bill; actually reduced the quantity to BPL families, I say so. We have reduced it. Why? Because the idea is to make it into one consolidated legislation, increase the coverage to 67%, although the quantum is somewhat reduced they get it at cheaper prices. Protect the poorest, the Antyodaya. Keep the availability and the procurement more or less matching at some 61 millions odd tonnes and add only a bit of about 23 to 25 thousand crores. Now I think this is a minimalist approach and it has been managed in a balancing. I mean it is obvious that the balancing is being done because they are conscious of the fact that the country has to afford things as well. Otherwise it could have been done away, and this balancing has been done very carefully. So I think that should be applauded. And about empowerment, my last point is that you know these things take time. I don't think we have ever imagined the empowerment, which we now have in the RTI Act. We did not imagine. When I go to Rajasthan I find people who don't know how to, the first word about it. But they know how to get this.
NDTV: But that's what being diluted Dr Singhvi
Abhishek Singhvi: That's a different debate. In its most diluted form, the RTI is a revolution. In it's most diluted form, let me tell you today and that empowerment is great. Today even in MNREGA, there is empowerment. I can tell you that in Food Security Bill, it's a culture, which takes time to develop. Let us have 5 class actions in a state where you deny Food Security or you have a fine imposed on your government officer or you have a chorus in front of the Magistrate, you'll see the sea change but it doesn't happen now. During the passing stage...
NDTV: Though the fine is much less. In Chhattisgarh you have ESMA and you have only five thousand as the fine in the Food Security Bill
Abhishek Singhvi: The fine is a small part of it. There is a calumny that goes into your record, there is appeal, the magistrate can be approached, there are four or five things and most important it comes out of the pocket to pay the food allowance. If you don't give me food I get a food allowance, so I think that will have an impact.
NDTV: But I just want to bring in Piyush Goyal, he has been smiling as he has been called left of Centre, but Piyush, just to appeal to your right of Centre, when we look at all the schemes and the model of empowerment that we are now seeing, for instance the new figures that have now come out in the implementation of MNREGA, we have seen that not one state has been able to give 100 days employment according to records faced...
Piyush Goyal: Similarly in education...
NDTV: One other worrying aspect is again all these schemes that are announced, there is no end day. For instance there is no logic that if you deliver or if there is, we find that hunger is reduced by xxx, so then this bill will last only for ten years; this right will last for only ten years. How can we function like that; and the point being made by Professor Panagriya, that no government will resist this. Tomorrow even if it is the NDA government I doubt that you all will change it. In fact you introduced the amendment for no cash transfers, which Prof Panagriya is saying that we should have
Piyush Goyal: I will just take 3 or 4 things that have come up. One of course the revenue foregone, which Sitaram talks about, we must have another dialogue on that because that's an issue which has been very, very much misunderstood in the whole nation but it really needs to be deliberated. I am glad that the Finance Minister yesterday did try to elaborate on that what that means. I have been asking the government to do that for a long time. As regards the newness, Dr Singhvi eluded to some newness in this scheme. I have studied it word to word, end to end, there is absolutely no newness. I have a list here of six schemes which are budgeted that's been included and that figure tallies exactly with an answer that the Minister gave in the House. So these six schemes have been combined, repackaged as I said earlier from an entitlement to a right, to make the person feel that now you have a right, you didn't have it before. Reality is the essential commodity is at; control the availability, the people would get that and the TPDS made sure that it reached the people. There were problems in implementation in certain states, some did very well, that is there, and the new Bill is not doing anything to change that, it's going to go through the same process. The problem lies in politicising this issue. If we had not politicised it, all we needed to do was probably look at the TPDS. We needed to look at how that can be made better, implemented better and people would have been far better off. I think in the, because it's an election year, we are soon getting into that mode. He is right, no political party can be seen because we won't be able to reach out to any last man out in the village and explain look you are not getting anything new. It's just old wine in a new bottle. Unfortunately if we had kept the politics out of it, if we had kept the large advertisements out of it and we had really sat down all of us with the Chief Ministers to address this problem, we could have done far better within the available resources. When my leaders say that the thing should be expanded, I'll explain why. If you have a product available at Rs 3, and at Rs 20 in the same market place, it is bound to be misused. We have the Vadhwa Committee in Delhi, which showed that the PDS shop earned Rs 3000 as commission. He can't run a shop earning Rs.3000 or Rs.4000 as commission, so obviously there is going to be mixing of coarse grain, there is going to be corruption, there is going to be leakage and even if you do the cash transfer which Dr Sahab is saying it is not good enough, people are going to take that cash. We don't know whether they will buy the food grain for their child or go to have liquor. I think, I think what really is required, if you ask me, is two things, not empowerment by Acts. We need to empower them with jobs. If we have to focus as a nation on solving the problem, this can be temporary measure and for that we didn't need a law, there were already existing mechanisms to provide food grains to the poor. In fact better so as Dr. Sahab said it has reduced from 35 to 25. I think what we needed to focus was on clearing up the corruption in the system, the leakages, actually making sure the people got it and we needed to focus on jobs so that more and more people have dignity of life, more and more people can afford to buy a larger variety than rice and wheat alone. They can look at fruits and vegetables and they can look at milk.
And the second focus should have been, good suggestion he has made, that instead of corruption in subsidies and fertilizers and all of those things, if you could have moved towards a better yield for the farmers, so improve the quality of seeds, improve the mix of the fertilizers. Today we have a situation where the soil quality is just deteriorating, because urea is very low priced and other fertilizers have shot up by 300%. I think all parties need to sit down, go beyond politics now, its 6 months left so maybe it will happen after the 2014. But I would think Dr Singhvi, Yechury, me, all of us with eminent economist whether Dr Panagriya, Amartya Sen or both we all need to sit down, we need to look composite ways, how we are going to give people jobs, how are we going to give people food at affordable prices and see how it can, we can eliminate corruption in this system. Maybe, we need to have these essential food grains at a fixed low price for everybody in the nation so there can be no corruption in this system and it will not be very costly. If we provide a decent price to the farmer, if we focus on his yield, can we not double the productivity? We have almost seen some states doubling the agricultural productivity in the last ten years. That's where the focus of the nation should be.
Abhishek Singhvi: I have to hold him to his promise, not before the elections, but after the elections, that this consensual approach must be there.
Sitaram Yechury: But Abhishek he is actually trying to prove you right. But I just wanted to get in at that point, but if you link the Food Security Bill with the free fall of the rupee, at this rate if you do that kind of an analogy you will also have to extend it further to say that we are really providing leadership to the BRICS countries of the world. The South African rand has fallen more than the Indian rupee...
Piyush Goyal: But China has appreciated...
Sitaram Yechury: China you leave it.
Piyush Goyal: That's no argument...
Sitaram Yechury: South African rand falling because of the Food Bill, is that the argument?
NDTV: But the last...
Sitaram Yechury: Are you trying to say that because of the Food Bill the Indian rupee is falling?
NDTV: Let's take the, let's take the last two days. Since we have recorded the last two days since the Food Bill has been out, even the Finance Ministry didn't expect the fall of this rupee these last 2 days since the Food Bill has been passed.
Sitaram Yechury: You see the fall of rupee and currency is in a free fall situation is something that has got a lot to do with the international movement of your finance markets. Now you see it's not all expectations. For instance let me tell you, supposing there is a lot of surplus available with any corporate, you remember the Prime Minister, Finance Minister calling the CEOs of all the Public Sector enterprises and saying that you have more than one lakh cash surpluses with you, why are you not investing here? What is the answer they got? We invest and produce what Sir? Where is the market to sell it? There is no global market to sell. Indian market is not expanding and people, with this price rise, and the disposable incomes are shrinking. Where would you invest? If you have the money you will have to park it somewhere. Why is the price of gold rising? Why is the price of real estate rising? Why is it being parked in foreign currencies? Because where will you park the money you have? That is the big factor going into the big fall of the rupee. Rupee is being parked in your foreign currency because there are no investment opportunities here. Now the point is that is where we all have to be looking and here I tell you BJP, Congress, if you really want to improve you all have to look at how to expand your domestic demand and on that base your growth strategy. World is not going to improve immediately for you to start exporting. You have to empower your Bill and that is empowerment. Empowerment is economic empowerment of the country. Legal right etc. is a minor part of it. The economic empowerment of our people, that is what you have to aim at because without that there is no sustainable growth trajectory at all.
NDTV: Let's just look at the final of this round of this Dialogue. Really when we identify the kind of India we wanted to be in and looking forward again, you have been critical of MNREGA etc. But we've seen that rural incomes have risen, you've seen that in government figures of '12 which was that rural spending power is now almost at par in some levels with urban spending power, with how the figures have risen, so there has been impact of what we've seen in so called welfare schemes, which have been beyond what is seen, if in following a particular growth model as well, or would you agree?
Arvind Panagariya: Look if you're telling me that here are two options, MNREGA or no MNREGA, of course, I will take MNREGA. There's no doubt.
NDTV: Really. Okay, that's new.
Arvind Panagariya: No, no, it's written in my book. But why should those two be the only options? There are alternatives that will deliver a lot better outcomes. So you can't really judge MNREGA by no MNREGA. Here is a huge pot of money that you are spending. I want a better outcome for these poor people, not what MNREGA is delivering, number one. Number two on the connection to free fall of the rupee let us not deny that there is no connection. It's fine we should not go by that connection; Food Security Bill or you know, I stand for cash transfers instead. They are for the poor, and if that leads to the fall in the rupee, so be it. But to say that there is no signal in the Food Security Bill, which comes on the heels of rising expenditures over a long period of time with nine years of zero reforms. I mean NDA handed over a flourishing economy, growing at 8 or 9 percent a year in 2003-04 to the UPA government, and what has happened in nine years? So certainly UPA 1 reaped what NDA had sown. Now UPA II is reaping what UPA I had sown and so we are seeing the outcomes. Now what has happened here in the rupee free fall is that it was in the free fall, but it gave yet one another push. Markets see that look, in the end, this government is not going to stop its spending.
NDTV: So much of interest in the UPA is of course the dual-leadership model, so, on the one hand, there's a Prime Minister Manmohan Singh version, which I think may be UPA I had slightly more of, and the UPA II model seems to be the Sonia Gandhi model more.
Arvind Panagariya: I personally think that UPA I also didn't do very much; it started off, even Prime Minister started off saying that we want reforms with human face, as if the reforms the NDA had done...
NDTV: What's wrong with that? Surely that's a given
Arvind Panagariya: No, no, no, no, no, wait a minute, wait a minute. Reforms did have a human face. Why are you telling me? Reforms did have a human face. They are the ones that created jobs, they are the ones that gave revenues that the UPA actually got to spend.
NDTV: No, sure, but the people, India Shining hit the BJP. The other thing, even the BJP would agree with, with that fate, it didn't buy that argument.
Arvind Panagariya: That's the issue of what face you put in, what politics it is you know, so may be politically that these guys were not so savvy. But the basic point is that it was the reforms of 10-12 years that we did consistently that delivered 8 percent growth for nine years. Let me just finish and so in the ultimate when, I mean, it's great that the UPA started the social programmes; we needed to do those, there's no question of course, but that were made possible by the growth that had happened. But at the same time, when the UPA also stopped doing any of the reforms we saw the outcome growth tanked now. Now, where are we standing here? Can you think we can really do the Right to Health in the next ten years at this pace?
NDTV: That Dr Singhvi is a valid point, that what you could do with 8 percent growth, the NDA legacy, as Prof. Panagriya and I'm sure Piyush would agree you can't do the same with 5 percent growth.
Abhishek Singhvi: I think Mr Piyush Goyal will have to rise to the level, which the BJP has been made to rise by Dr Panagriya. I'm not sure he's so supportive of the BJP.
Piyush Goyal: Let's see, Dr Singh has an argument, which is completely flawed.
Arvind Panagariya: I will correct that argument. Just to take politics out of this, I am as much an admirer of PV Narsimha Rao, in fact more of an admirer of Mr Rao, than I am of...
Piyush Goyal: I know you used to be a great critic of the NDA I remember...
Arvind Panagariya: Yes, yes, yes, yes.
NDTV: But now an admirer of Mr Modi's economics, so the interest...
Arvind Panagariya: I totally agree, If Mr. Modi does that he is actually diluting his own brand
Abhishek Singhvi: It's good that this last segment of programme we can be little political. I just heard Dr Panagriya suggesting that 9 years of UPA has been an unmitigated disaster. I humbly beg to differ. One statistic that stands out in my mind and I know the counter answer to it that, it is established, recorded, that the lowest growth in our time which is now close to 10 years has been higher than the highest growth rate of NDA. The only answer to that I can possibly have which is purely speculative is that our lowest growth rate be higher than the highest of the NDA is because...
Piyush Goyal: That's absolutely wrong...
NDTV: Okay, Mr Yechury final thoughts to make.
Arvind Panagariya: Accha I'll have to come back, your choice.
Sitaram Yechury: No, no, no, no, no, final nahi hai. I mean the point is that all three politicians here refrain from bringing in politics, and I mean the professor was more eager to take a political policy; please, of course nobody is denying him the right.
Arvind Panagariya: I'm not standing for either political party, either in admiration, or in criticism.
Sitaram Yechury: Yes, yes that the reader, I mean that the viewers will know, but the point at issue is that it's not a question of you see, what are these reforms you are talking of? Honestly, I want, I want an answer, I mean more from the professor than anybody else. 22 years of reforms you've had. When the reforms were initiated....
Arvind Panagariya: No, no, twelve years, last ten we had none.
Sitaram Yechury: That's your opinion Mr Panagriya. You are free to stick to it. My only point is, twenty two years since the reform process has begun. When the reform process started Dr Manmohan Singh was Finance Minister, said 2.5 percent of our GDP is the CAD, unbearable. You have to open up. Today it's 4.8 percent. At that point of time he said four things for initiating the reform. That point of time he said 24 odd percent of your debt servicing, I mean 24 percent of your total revenue earnings is your debt servicing. Today the figure in the last Budget paper is 35.01. Then the third thing he said, the rupee had to be depreciated by 20 percent in a dual tranche in 1991. Today the free fall is more than 20 percent. The fourth thing he said the inflation is unsustainable. You require reforms, and the inflation is led by rise in prices of essential commodities, exactly what it is happening today. So what are these reforms you are talking of, reforms for what? More, greater entry of foreign capital, greater entry of all these things? If that is the reform that is going to result in this after two decades, now is that the reform process you want? So let us be if you want to be serious.
I think you have to address serious issues. The serious issues here are the fact of what is the actual economic empowerment of the people of our country. That is what, I'm sorry I am concerned about. I'm not really concerned about what are the levels of your interest whether the share market is going, I wish it continues to grow and grow, grow as fast as it can, but the point is that what are these reforms that you are talking of, if what as the end result of these reforms. Now if this is the end result, this is the economic reality today. Now you can do a tu-tu mein-mein, you know, first when the Vajpayee government was wonderful and they've brought in reforms, last ten years, Narsimha Rao, I mean Manmohan Singh government did not do anything, I mean nobody is going to buy that. These studios in at that time when India Shining was happening and when we were fighting it out, the question posed by the anchor then directly to me was why are you so against India Shining, Mr Yechury? I said shining for whom? I meant to whoever the anchor was. For a section it may be shining. For a large section, it is not. You are creating two India's. That is the real story of reform. The two India's, the hiatus between them is widening. That is the real story of reforms and because of no reforms, if you have not grown, what, I mean I find that an amazing statement, this hiatus is growing and this is the hiatus that is actually slowing down our growth potential, because that is where economic empowerment of the people becomes the most essential issue and that is the issue on which I think everybody has to sit down together and do it. It's not a question of a tu-tu mein-mein saying you did not do reforms, I did reforms, and therefore this is what has happened, that is not the answer.
NDTV: I think the word economic empowerment should be, in fact even as we end the word economic empowerment is crucial. But the difference is really in how we get that economic empowerment and Professor Panagriya's point that Modi diluted his brand by any sense of supporting his status on Facebook...
Piyush Goyal: You may first let me respond to what the two gentlemen have said.
NDTV: No, I'm just putting his thought out there, you can go ahead.
Piyush Goyal: MNREGA, you have rightly said MNREGA nobody can be against but could MNREGA not be an infrastructure-creating programme? Why did it not be the road programme, the highway, the power plants, which Vajpayee did? The reforms, reforms are not about FDI. Vajpayee empowered Indian entrepreneurs. He made ease of business better. He allowed Indian entrepreneurs to come in the private sector in insurance, in banking, in power. He brought in reforms supplemented with technology and foreign capital in some cases, but largely, his reform was focused towards infrastructure creation, private entrepreneurship. The number of Indian entrepreneurs who've come into all these sectors, the telecom revolution, connectivity: road, air, rail connectivity, the connectivity in terms of creating the highway program, the interlinking of rivers with...
NDTV: Given that but I don't want to go into this UPA 1 thing. I've given both of you a sense, benefit of the doubt that both of you all have done wonderfully...
Piyush Goyal: Since both of them trying to say Vajpayee was not good, and they're saying he inherited high inflation, he inherited high interest, he was able to bring all of it down. What unfortunately has happened is, as Mr Chidambaram yesterday acknowledged in the economic state of the economic debate; I think around 2008 when the world crisis came, the country lost that direction. The country went in for very high fiscal stimulus, and that could have been infrastructure and investment-led like China did. Now China also did a fiscal stimulus but they focused on investment. So it was an investment led growth. We sustained 8-9, 9-10 at 9 percent, which he often quotes, but that was consumption led, and that money was borrowed, and went down the tube. Today's problem of the rupee by the way is because of our forex reserves versus external debt. Again Vajpayee inherited a minor 78 billion external debt, relative to the forex reserves. He brought it down to a situation where we had three years of current account surplus, and the external debt was less than the forex and today, we've come to minus 120 forex. So this is the cause of the rupee going down.
Sitaram Yechury: Now what are we you know, competing between what Vajpayee did and what Manmohan Singh did?
Piyush Goyal: I'm saying the policy, the philosophy...
Sitaram Yechury: No, no, no, no, the question is, unfortunately it was brought in by the professor, but the question right now is if we're talking of the Food Bill, if that is the issue, if we're talking of the economic empowerment of the people, you know, let us talk of the future, what you're going to do.
Piyush Goyal: Nobody is denying that. Nobody denies that
Sitaram Yechury: The point Piyush is that if all that you're saying is true, then either people were fools in 2004, they voted wrongly, or they're becoming greater fools now. I'm sorry I don't have such contempt for people. I mean they have the judgement. They have the judgement on the basis of their livelihood, their actual life, not on what we preach they should think on how their life has improved under so and so, or not improved. So the point at issue is, we're going in for elections, let the people settle it. No, no here is, if you're talking of the empowerment of our people, now what is best in terms of policy that we can do, what is it that can be improved and what is it that can be done. The Food Bill in my opinion can be further improved even on this particular draft here, which I said. The price can be less, the quantity can be more, the coverage can be more.
Piyush Goyal: Perfectly uniform.
Sitaram Yechury: Perfectly possible according to me within the, yes, I mean it's perfectly possible within the fiscal parameters that we have today and I don't think this is going to be a waste or going down the drain, and this is going to be the basis for which a healthier population for me is a greater contribution.
Piyush Goyal: No. But there's no change. It is what is already there, so it's no cost, no change, it's the same thing.
Sitaram Yechury: I'm going a step beyond it.
Piyush Goyal: It could have been better, actually back to square one.
Sitaram Yechury: What it is today is a combination of all that, giving a right instead of an entitlement, but it could have gone beyond. I mean we had that opportunity.
NDTV: As I said, there are very interesting points of agreement between the Left and the Right here, but I think we've had a very interesting dialogue from different perspectives. The final arbiter of course will be the elections, so lets see how that goes, but thank you all very much for joining me tonight.