Food Security Ordinance will cost additional Rs 3000 crore to Tamil Nadu Govt: Jayalalithaa

The Tamil Nadu Government has said that the consequence of the proposed Food Security Ordinance, by the Government of India, will not only lead to decline of about one lakh tonnes of food grains, but also lead to a net additional Rs 3,000 crore per annum to the cost the State exchequer.

Tamil Nadu Chief Minister J Jayalalithaa said that the monthly allocation of food grains for Tamil Nadu will decline by nearly 1 lakh tonnes from the present level of 2.96 lakh tonnes due to the Government's move. Preserving the Universal Public Distribution System in Tamil Nadu will then cost the State exchequer a net additional Rs 3,000 crore per annum. 

'An even graver concern is the uncertainty of availability, which would expose the State to higher vulnerability of physical shortage, especially during scarcity periods,' said the Chief Minister.

She added, this will be compounded by the fact that Schedule-I of the Ordinance assures even the limited allocation of subsidised food grains only for a period of three years from the commencement of the Ordinance.  There is no clear-cut indication on how the Union Government will maintain the level of subsidy on the supply of food grains to the States thereafter.  This will only increase the uncertainty in ensuring food security over the long run and expose the State’s finances to an even greater risk.

Tamil Nadu has been successfully implementing a Universal Public Distribution System (PDS) for the last several decades.  Through this system, the State has been able to address the issue of food security for all without exception.  Historically, the system has been built on a combination of procurement of rice within the State and a reliance on assured allocations from the Central Pool of food grains. 

'To preserve this hard earned food security, it is essential to ensure that the present level of allocation of food grains from the Central Pool is retained without any diminution.  Therefore, we had repeatedly requested that a proviso be inserted in the relevant clause of the Food Security Bill to protect the existing level of allocation of food grains for Tamil Nadu. I am deeply dismayed to find that the Ordinance as promulgated contains no such proviso,' said the Chief Minister.

She noted, Section 3(2) of the Ordinance envisages that nationwide, 75% of the rural population and 50% of the urban population are to be covered as households eligible for allocation of subsidised food grains.  This is a totally arbitrary allocation principle with no rational basis. When the edifice of food security in a State is based on a much applauded Universal PDS, clumsy attempts at targeting and arbitrary cut off points of this nature will severely compromise food security and cause great hardship to the people.

'I just cannot comprehend how a lower level of allocation in urban areas can be justified,' said the Chief Minister, who said there is no food production in urban areas to supplement household consumption. 

In such a situation, the urban coverage should be 100% or at least 75% on par with rural areas.  It should not be forgotten that the PDS was originally put in place to ensure affordable supply of food primarily in urban areas. Tamil Nadu with an urban population of 49% has the highest level of urbanisation amongst major States in the country and is going to be particularly hard hit by this ill-conceived and invidious discrimination against urban areas in the Ordinance.

What is even more galling is that Tamil Nadu is not likely to receive even the nationwide average allocation based on the population proportion. 

Express her shock, she said there is a further drastic reduction in eligible population in Tamil Nadu. Only 62.55% of the rural population and 37.79% of the urban population would be covered in Tamil Nadu.  Arbitrarily chosen metrics have been applied to the data collected in the Large Scale Sample Survey of monthly Household Consumer Expenditure conducted by the National Sample Survey Organization in  2011-2012.

Such a desk exercise based on a convoluted methodology completely ignores ground realities and pre-existing historical circumstances.   The overall status of food production in the State, quantity retained by households for own consumption, the net surplus available for the market, and current reliance on the PDS are all crucial and relevant factors for food security which have been totally ignored in determining the State-wise allocation. The arbitrary allocation made is a huge penalty slapped on the better performing States which have provided greater Food Security to their entire population, said the Chief Minister.