The Food Security Bill has been debated on the issue of where the boundaries of entitlement to food security should be drawn. There are minimalists, driven by fiscal concerns, and universalists, who would exclude no one, and rely upon the non-poor voluntary opting out to limit the fiscal bill. Then there is the issue of whether the transfer should be in the form of foodgrain, or a cash equivalent.
Except for universalists supporting foodgrain transfer in kind, all others require exogenous identification of the poor, through some variant of below poverty line (BPL) identification. This is most especially needed for a cash transfer, since no one would choose not to self-select into cash. The universalist case for access to foodgrain in kind rather than cash is predicated precisely on the high transaction costs of externally identifying the poor, and monitoring the movement of households into and out of poverty over time.
The surprising feature of all sides to the debate is their exclusive focus on what is called the food subsidy, without embedding that subsidy in the larger set of Central schemes for subsidised or direct provision of food. It is only when all these schemes are pieced together that we can understand the present budgetary pattern for redressing hunger and nutritional deprivation, and judge its adequacy.
Going with the Budget numbers for the current year 2011-12, regardless of their plausibility, the food subsidy is budgeted at Rs 60,573 crore. This merely covers foodgrain. There are four other price subsidy schemes, for sugar, pulses and edible oil, which add up to nearly Rs 800 crore, but let us ignore those, since they are general subsidies not targeting the poor specifically.
There are four other major schemes for food security, not involving price subsidy. Three of these involve direct transfer of foodgrain, along with other foodstuffs and medicines, but to designated groups, not to households. The Integrated Child Development Scheme (ICDS) of the Central Plan, for pre-school children and pregnant and lactating mothers, has a budgetary provision of Rs 10,000 crore, with foodgrain and nutritional supplements at its core, but covering much else besides, including salaries at its anganwadi centres.
The mid-day meal scheme (MDM) of the Central Plan, now covering school children up to class eight, involves transfer of foodgrain, with a supplementary fund flow to state governments for meal preparation costs, budgeted at Rs 10,380 crore. The National Social Assistance Programme (NSAP) for the elderly, a scheme in the State Plan sector, has an Annapurna food component, and gets Rs 6,107 crore from the Centre.
These three food security schemes for targeted groups together get Rs 26,487 crore.
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The fourth food security scheme is operated through rural households. The Mahatma Gandhi National Rural Employment Guarantee Scheme (MNREGS) is a wage and 100-workday guarantee on public works. It is an income transfer to those willing to self-select into manual work on public projects, budgeted at Rs 39,974 crore.
The food subsidy and MNREGS, the two schemes for food security through household-based entitlements, together add up to more than Rs 1 lakh crore. Food security schemes through targeted groups get only a quarter of that. Clearly, the present budgetary pattern overwhelmingly favours household-based food security over group-based security.
The fundamental issue is whether this resource allocation pattern is the best response to the incidence of food deprivation. The most recent National Family Health Survey shows the percentage of stunted children under age three at 45 per cent in 2005-06. Is this best addressed through a household-based entitlement, or through enhanced allocations and reform of the ICDS, which directly targets children of this age, along with the health of pregnant and lactating mothers?
These are the questions that need to be most urgently posed rather than just the configuration of the food subsidy by itself. The ICDS as it is structured at present probably leans too heavily in favour of anganwadi centres already in existence. We do not unfortunately place any of our schemes on a Geographical Information Systems (GIS) platform. A GIS database would show us the present spatial pattern of the ICDS, and point to how its reach might be enhanced.
If household-based food security is to continue in the immediate future, the basic question that needs to be answered is whether household targeting should continue to run on the present two-track system. The MNREGs has the advantage of its self-selection mechanism. At the first stage, only households with members willing or able to engage in manual labour on public works opt for a job card. Then from year to year, the number of days sought within the limit of 100 days is inversely related to the food status of the household.
MNREGS has had its share of scams, from ghost muster rolls, wages underpaid or deferred, to wholesale hijacking of funds. The issue is whether, with a self-selecting scheme like MNREGS in place, there remains a case for continuation of the food subsidy in its present form in the rural sector. MNREGS carries the additional advantage that the rural works chosen could potentially enhance water conservation and agricultural productivity. If the workfare scheme is chosen as the preferred form of household targeting, the rural food subsidy budgetary provision can be re-directed towards an enhanced ICDS. The household-based food subsidy can be continued in the urban sector, which does not have the public works option.
MNREGS will need to be supplemented in the rural sector for those who cannot self-select into it. The scattered poor without sufficient numbers to justify a worksite have a provision for compensation within MNREGS itself. The disabled and elderly can be covered through NSAP, administered through panchayats. With that, and with better monitoring, we will finally have a food security net that carries coherence, and the promise of better outcomes.
The author is honorary visiting professor, Indian Statistical Institute, Delhi