The need for ensuring food security for the poor is indisputable. However, the means to do so have to be practical and fiscally sustainable. That is what the prime minister’s economic advisory council Chairman C Rangarajan and a group headed by him, which looked into the proposed food security law, seem to think. Most of the points raised by this panel about the recommendations of the Sonia Gandhi-led National Advisory Council (NAC) in this regard seem well founded. For one, it is doubtful whether enough foodgrains can be arranged locally to provide 35 kg subsidised foodgrains per family per month to 75 per cent of the population (90 per cent rural and 50 per cent urban). The Rangarajan Committee reckons the annual grain requirement for implementing this norm would be close to 74 million tonnes, and not 64 million tonnes as estimated by the NAC. Increasing grain procurement to that level would require not only more production but also a big hike in minimum support prices, creation of more transportation and storage capacity and substantial expansion of grain distribution network. In fact, part of the requirement may even have to be met through imports. Consequently, food subsidy will swell to over Rs 92,000 crore, worsening the fiscal deficit. With the subsidies on oil, fertilisers and several social sector schemes also rising steadily, it may become difficult for the government to contain overall subsidy outgo to below 3 per cent of the gross domestic product (GDP) by 2015.
Such fiscal concerns aside, foodgrain procurement of this order would distort the availability and prices of foodgrains in the open market. This will impact even the poor who, despite getting their food quota under the food security law, will have to rely on the market for meeting the rest of their needs. This suggests that the Rangarajan panel’s recommendation scaling down the coverage under the food security law to 41 per cent of total population (46 per cent rural and 28 per cent urban) sounds more practical. This will lower the foodgrain requirement to around 52 million tonnes which can easily be met, given the present annual grain procurement of over 56 million tonnes. However, a better idea mooted by the Rangarajan panel is to revamp and fine-tune the present public distribution system (PDS) itself to serve as an effective mechanism for ensuring food security. In its present form, the PDS is neither comprehensive nor efficient and hardly an instrument of equity. But the idea of a well-functioning PDS is a good one and worth pursuing. Several state governments have managed to reform the PDS and there is much that most states can learn from the example of the few that have done so. Tamil Nadu, for instance, has begun using the Global Positioning System (GPS) for tracking the movement of PDS grains to prevent leakages and diversion. Gujarat is using bar-coded grain bags and some other states like Madhya Pradesh and Uttar Pradesh are experimenting with a system of issuing SMS alerts about the PDS supplies. Computerisation of PDS operations and the use of smart card, instead of paper ration cards, are the other options being tried out in different states. All this lends credence to the Rangarajan Committee’s recommendation that focus should really be on boosting foodgrain production, creating a stable procurement regime and reforming the PDS, which state governments must do. This would help ensure food security for all.