The debate on food security is remarkable for its focus on the desired objective, while ignoring the question of effective delivery. The Congress leadership and many activists are in favour of a maximalist food security law that promises 35 kg of grain per family every month, at the subsidised price of Rs 3/kg. The government, more cautiously, proposes to restrict the quantity to 25 kg per family. I would agree with the critics who argue that a scheme which proposes to reduce the existing supply of subsidised food to the poor can hardly be called a food security system. Providing 35 kg per family is also well within the capability of the public distribution system (PDS), which already handles about 50 million tonnes of grain in a year. The activists go a step further, and argue that the subsidised food should be enough to provide 2,400 calories per day—but that would mean asking the PDS to deliver the entire marketed surplus of rice and wheat, and is manifestly not feasible.
Meanwhile, both the government and its critics assume that the grain must be distributed through the PDS. How this can guarantee universal coverage is not clear, since the PDS has fewer than 5 lakh outlets, in a country with more than 6 lakh villages (and PDS coverage is known to be particularly poor in the areas where the poor live!). In any case, the Supreme Court-appointed Wadhwa committee has reported that half the grain meant for poor families is getting diverted. This will not surprise anyone. So it is odd that the people concerned about providing food security are not focused on the delivery question.
The Wadhwa committee recommends abolishing the supply of PDS grain to non-poor families (since the leakage of grain from poor to non-poor is one major problem); simultaneously, it recommends doubling the income cut-off for a family to qualify as poor, to about Rs 4,000 per month. How many additional people this will cover is anyone’s guess. But we know already that, against the official estimate of there being 60 million poor families, we have 80 million “below the poverty line” cards issued. If the identification process is defective to begin with, doubling the qualifying income limit is not a solution.
That raises the question which neither the Congress leadership nor the activists ask: is there a superior alternative to the PDS? A food subsidy of Rs 55,000 crore that goes mostly (not wholly) to 80 million “poor” families means a monthly benefit per poor family of about Rs 500. If half that money is not reaching the target poor, the real benefit is only Rs 250. But even this benefit does not really reach the poor, because a lot of it consists of operational costs and overheads. One study found that for every rupee of benefit that reaches the target poor, the effective cost is Rs 4.27 (substantiation therefore of the famous Rajiv Gandhi declaration about only 15 per cent of the money reaching the poor).
It is surprising that this issue is not being debated with the same passion as the question of 25 or 35 kg per family. Are we focused on the chimera of food security, or the reality? If the latter, can we evade the option of a straight cash transfer: giving Rs 500 per month to even 100 million families (half the population) will cost only 10 per cent more than the present food subsidy. Targeting beneficiaries is much easier in a cash transfer, and will be even more so after the unique identity programme rolls out.