The Food Security Bill's passage in Parliament set off seismic levels of panic in the stock markets. The Government on the other hand seems to see it as a political game-changer.
NDTV takes a hard look at 4 big questions surrounding the Bill. WILL THE FOOD BILL SINK THE ECONOMY ?
The cost of the Bill is highly contentious. The Government claims it's only going to cost marginally more than the existing food subsidy but others say hidden costs are not being considered.
According to Food Minister Thomas, the current food subsidy is Rs 1.09 lakh crores. Adjusted according to the recent census, it will go up to Rs1.13 lakh crores. The Food Security Bill will according to him cost only another Rs 10,000 crores.
The Bill hopes to increase coverage from 45% to 70% of the population with cheaper grain from Rs 5 per kg to Rs. 2 per kg.But the minister says the grain needed is negligible. He says currently we need 60 million tons, and after the Bill, the increase will be 62 million tons, just 2 million tons extra.That's because the amount of grain being distributed is coming down.
According to Mr Thomas, from 35 per kg to a family, it is down to 5 kg per person. So a wider spread in terms of population, but a drop in the amount of grain.But not everyone is convinced by these numbers. The head of Government's Commission for Agriculture Prices, says their calculations suggest the government will spend not Rs. 1.25 lakh crores, but almost double, that is Rs. 2.4 lakh crores every year. The report claims the biggest expense: almost Rs. 66,000 crores spent on the first year to increasing agricultural production, to meet the Food Security Bill's demands.
Mr Thomas says, "Are we not bound to invest more in agriculture? This investment in agriculture is not because the Food Security Bill has come. We are bound to invest more in agriculture because we are an agricultural country and we have to feed crores of people."
In balance, it is fair to say that the Food Security Bill will come at a cost, not significantly higher than what we already spend on the existing public distribution system. A more legitimate question to ask is, when poverty is shrinking, by the government's own estimates, why is the Food Bill expanding the scope of the Public Distribution System?
The Food Minster says the government was responding to pressure from states that refuse to accept the reduction in poverty. But activists like Reetika Khera say that the "Bill should not be linked to the poverty estimates because hunger and poverty are two different things. And even though both those things have been going down over a period of time, the fact is that many people still remain very vulnerable to hunger and their lives remain still very fragile."WILL THE BILL SOLVE HUNGER?
Some argue that the problem of hunger in India has dwindled.The real problem is malnourishment which the Food Security Bill can't tackle since it provides only rice and wheat, not the more nutritious cereals and proteins needed to tackle malnutrition.
But defenders of the legislation claim it will. They say the bill includes maternity entitlements which will give Rs 6000 for every pregnancy to women for nutritional needs.
Even the Integrated Child Development Scheme where children till the age of six get nutritional supplements like eggs, daliya
in the anganwadi
, is now a law under the Food Security Bill.
But there are concerns that the Bill will hasten the decline of nutritious coarse cereals like jowar
(millets). Activist Milind Murugkar says, "In a state like Maharashtra from where I come or most of the dry land agriculture in India, the cereals are coarse cereals and these farmers are in arid and semi-arid areas without irrigation.The farmers there don't get any subsidy and on top of it, they have to face what we can call the dumping of subsidised PDS grain."WILL THE FOOD BILL CREATE A GRAIN SHORTAGE?
Critics of the Bill worry that the additional demand of grain necessitated by the new law will create a food shortage. This in turn will push the government to import wheat and rice, which will hurt an already strained economy.
The government says 62 million tonnes needed to ensure food security for people targeted by this bill is only a third of India's annual production. The balance 70% will be available for the open market. But as some critics point out, making food an entitlement will need measures to ensure that there is no shortfall. This may push up already high rates of agricultural labour.
But that may be an upside to this law as the Chairman of the Commission for Agricultural Costs and Prices Ashok Gulati points out.
"In the last three years the labor cost alone in agriculture the farm wages are increasing 20% per annum. Now that is great in one sense because the agriculture labor which is the bottom of the economic pyramid is getting wages which are much higher than the rate of inflation." Mr Gulati said. WILL THE FOOD BILL INCREASE CORRUPTION?
The backbone of the Food Bill is the public distribution system (PDS) which by the government's own admission is prone to corruption. But it's unclear how the Food Bill will repair the PDS, especially since this is in the domain of the states?
Food Minister KV Thomas says there is a nine-point programme in the Bill to modernize the PDS. But the steps like doorstep delivery, de-privatising ration shops are all in the nature of recommendations.
Activists who support the Bill say that the two compulsory clauses of the Bill - expanding coverage and reducing prices - can reduce corruption. "When you reduce the price from the current levels of 4 rupees and 6 rupees to 2 rupees and 3 rupees, what happens is that people become more interested in the system And therefore I am much more likely to you know to fight with the dealer and try to get my full quota from him. And we have seen this happening in states like Chhattisgarh and Orissa and to some extent, now even in Rajasthan," Reetika Khera, an activist said.
Defenders of the Bill point to success stories like Chhattisgarh, which has brought down corruption dramatically by covering almost 70% of its population with rice at Rs 3 per kg and wheat at Rs.2 per kg. And as NDTV found on the ground, it has meant a bigger rush on the ration shop and better accountability
Chhattisgarh spends Rs 1200 crores each year from its own pocket. But it's success is not just because of more coverage and cheaper grain. The state is also taken a series of steps which are not mandatory in the Food Security Bill- like handing over control of the ration shops to gram panchayats and co-operatives, a highly efficient and heavily monitored back end supply chain, regular crackdowns on corrupt officials, all driven by the Chief Minister Raman Singh himself.
The success of states like Chhattisgarh, which have more to do with political will and less with a Food Bill, begs the question, how will a piece of national legislation ensure that states like Uttar Pradesh, with the highest levels of corruption in its public distribution system in India, ever become like Chhattisgarh?
UP currently has leakage of a whopping 57%, largely unchanged over the years. The new bill will at best ensure that the state can cover 70% of its population with steeply reduced rates of grain. But will this be enough to create enough pressure from below, to lessen corruption and fix the problems plaguing their PDS?
To witness these NDTV didn't have to go too far. About 70 kms away from Lucknow, in Unnao district is Andheliya, a village of mostly landless Dalits. For years some the villagers have not got grain, like Ram Babu who has a family of 9 and was issued a card in 2006 but received no ration till 2011. Finally with the help of activists and RTI the villagers got the ration shop owner raided and suspended. But no new shop was appointed leaving them at the mercy of similar corrupt ration shop owners.
At the state government's godown which stocks PDS grain for Andheliya, NDTV found grain lying in the open and the person in charge with a political affiliation.
The bottom line is that there is no guarantee that the Food Security Bill will lead to basket case state's like UP improving their inefficient PDS system. But at least, by widening the coverage and reducing price, might nudge them in the direction of better performing states like Chhattisgarh and Tamil Nadu.
As Mr Thomas told NDTV what was not a welfare measure is now a right. "There is a substantial change between coming with a bowl with a request 'Give me rice' and now I can say 'Bring the rice'. That is the difference."