Eminent economists have shot off a letter to National Advisory Council (NAC) Chairman Sonia Gandhi to ensure that the proposed Food Security Bill is quite comprehensive and excludes only a few rich people. They also want Sonia to get the Bill legislated in such a way it is not based on the current public distribution system (PDS) for all times to come as direct subsidy transfer could also be an option later.
These views are also supported by Planning Commission Principal Advisor Pronab Sen, who went a step forward and wanted every Indian to be included in the PDS. The letter assumes importance in the light of reports the draft Bill has diluted NAC recommendations for subsidised foodgrains for above poverty line (APL) families in rural areas.
The group of 40 global and Indian economists, which comprises Maitreesh Ghatak of London School of Economics, Ashima Goyal of Indira Gandhi Institute of Development Research, S Madheswaran of Institute of Social and Economic Change, Bangalore and Rajiv Sethi of Barnard College, Columbia University favoured exploring alternative models of subsidy delivery such as cash subsidy or food stamps.
“Expanding coverage of foodgrains to a majority of the population through the PDS is problematic. More than two decades of research is remarkably consistent in showing large illegal diversions of subsidised grains to the open market,” the economists said in the letter addressed to the Congress president. They said case studies have shown that even when the poor possessed the ration cards, they faced problems with respect to the low quality of grain, unpredictable availability and irregular hours of operation of the PDS shops.
The group also supported the move towards near-universal coverage under the draft Food Security Bill.
“Experience has shown that any less inclusionary programme inevitably leaves out large numbers of poor people and thus defeats the goal of food security,” the letter said.
They said the inclusion of “middle classes” creates a body of relatively empowered citizens who would protest whenever the benefits stop coming.
When contacted, Sen, who served as chief statistician before moving to the Planning Commission, said personally he was against targetted PDS and believed everyone should be given the food security. “Targetted PDS breeds corruption and encourages people to divert grains. Food distribution should be for every Indian and no class should be excluded,” he opined.
Sen said experience showed upper decile of the population, as defined by the National Survey Sample Organisation (NSSO), does not in any case use the PDS. The draft Food Security Bill, currently under preparation by the food ministry, has proposed scaling down the legal entitlement to 29 per cent of APL families in rural areas as against the NAC’s recommendations of 44 per cent. It is also believed to have favoured bringing down the quantum of grains to be distributed to APL families classified as general category by the NAC from 20 kilograms per month to 15 kilograms.
“We believe the new Food Bill should provide entitlement to a fixed basket of food or its monetary equivalent to all but the rich individuals,” the economists said. They said the method of delivering subsidy should be left open to change as the available technology and associated infrastructure change.
The signatories to the letter include economists from leading institutions in India like Delhi School of Economics, Indian Statistical Institute, Jawaharlal Nehru University, Indira Gandhi Institute of Development Research and Centre for Development Studies.
Signatories from abroad include economists from institutions such as Harvard, MIT, Columbia, Princeton, London School of Economics, University of British Columbia, University of California and University of Warwick. Many of the signatories are well known for their research on poverty, economic development and the Indian economy.
